Rethinking the economics of medical innovation

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here. 

Dates of the project: 2020-2022

The Challenge 

Despite major advances in biomedicine and biotechnology, the current health innovation system is failing to meet the most pressing public health needs. Innovation is too often driven by profit rather than purpose, leading to inequities in access, misaligned research priorities, and rising costs. 

Key issues include: 

• Direction: Innovation skews toward blockbuster drugs, neglecting prevention, delivery models, and broader public health priorities.
• Rate: R&D productivity declines, hindered by secrecy and restrictive intellectual property regimes.
• Access: Treatments developed with public funding are priced out of reach, with value narrowly defined by market mechanisms.
• Finance: Financialisation and short-termism in pharma prioritise shareholder returns over genuine innovation. 

Our Approach 

At UCL IIPP, we conduct theoretical and empirical research to redefine how value is understood and created in health innovation. Our work: 

• Develops a mission-oriented framework for health innovation that prioritises public value.
• Analyses the evolution of value in health from economic, historical, sociological, and political perspectives.
• Proposes new models for financing and governing innovation that reflect the co-created nature of value and the central role of the public sector.
• Addresses systemic failures by promoting collaborative, open, and purpose-driven innovation ecosystems. 

This foundational research feeds directly into major policy initiatives: 

• The flagship policy report The People’s Prescription: Re-imagining Health Innovation to Deliver Public Value, which sets out alternative approaches to redefine health innovation in the public interest.
• The WHO Council on the Economics of Health for All, established in 2020 and chaired by Prof. Mariana Mazzucato. The Council reimagines how to put “Health for All” at the centre of economic policy, emphasising health as a human right and health financing as investment. Its final report, Health for All – Transforming Economies to Deliver What Matters, provides governments and international organisations with new economic thinking to align innovation, investment, and growth with human and planetary health. 

Why This Matters 

Health innovation must serve people, not just markets. By rethinking the economics of medical innovation, this project lays the groundwork for systemic change in how health is financed, governed, and delivered. 

IIPP’s work helps ensure that breakthroughs in science and technology translate into accessible, equitable, and impactful health outcomes. It supports a broader shift toward innovation systems that are inclusive, sustainable, and aligned with societal needs – from ageing and antimicrobial resistance to climate-related health challenges. 

This research is foundational for global policy work, shaping high-level discussions across governments and multilateral bodies, and informing concrete recommendations through The People’s Prescription and the WHO Council on the Economics of Health for All. 

Resources 

Video: Health for All: Transforming economies to deliver what matters
Speakers: Mariana Mazzucato, Tedros Adhanom Ghebreyesus, WHO Council on the Economics of Health for All.
Description: This video presents the work of the WHO Council on the Economics of Health for All, chaired by Mariana Mazzucato, advocating for health as a human right and reimagining economic policy to prioritize human and planetary wellbeing.

Video: Public Banks at a time of COVID-19: Opportunities, threats, just transitions
Speakers: Thomas Marois, Judith Clifton and Olga Mikheeva.
Description: Thomas Marois presents his research on public banks during the COVID-19 crisis as part of the IIPP Seminar Series 2020–21, with discussion from Judith Clifton and moderation by Olga Mikheeva.

Video: The Global Commission on the Economics of Water
Speakers: Ian Hogarth, Carol Sinclair and Rainer Kattel.
Description: Rainer Kattel chairs a discussion with Ian Hogarth and Carol Sinclair on how AI is transforming health innovation - from drug discovery to healthcare delivery—and what it means for patients, systems, and society.

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here.