A market-shaping approach for the biopharmaceutical industry
Governing innovation towards the public interest
11 December 2020
UCL Institute for Innovation and Public Purpose (IIPP) Working Paper Series: IIPP WP 2020-21
- Mariana Mazzucato | Professor in the Economics of Innovation and Public Value, Director, UCL Institute for Innovation and Public Purpose
- Henry Lishi Li | Research Fellow in Health Innovation and Policy Engagement, UCL Institute of Innovation and Public Purpose
Mazzucato, M and Li, H.L. (2020). A market-shaping approach for the biopharmaceutical industry: governing innovation towards the public interest. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP 2020-21). Available at: https://www.ucl.ac.uk/bartlett/public-purpose/wp2020-21
Enhancing research and development, and ensuring equitable pricing and access to cutting-edge treatments, are both vital to a biopharmaceutical innovation system that works in the public interest. However, despite delivering numerous therapeutic advances, the existing system suffers from major problems: a lack of directionality to meet key needs; inefficient collaboration; high prices that fail to reflect the public contribution; and an overly financialised business model. COVID-19 has magnified and focalised these challenges. We review these problems and argue that overcoming them requires a fundamental reframing of the role of the state in innovation, from market-fixing to market co-creation and co-shaping, in which risks and rewards are shared across a symbiotic public-private relationship.