9 September 2016


Delinkage has many benefits.

  1.  Low prices and expanded access. For many, the most important benefit will be the elimination of high prices on products. Most drugs can be manufactured and distributed at low prices, as commodities benefiting from competition among suppliers of generic alternatives. The high prices for new drugs are enabled by the creation of legal monopolies as the incentive to invest in R&D. As we create new funding mechanisms for R&D, including new cash incentives to reward successful developers of new products, we can eliminate both the monopolies and the high prices associated with the monopolies.
  2. Elimination of price sensitive formularies and high co-payments. When drugs and other products are priced closer to the marginal costs of production, we can expand access and eliminate price-sensitive formularies and high co-payments for drugs.
  3. More efficient incentives. The current system of rewarding innovation through the grant of monopolies is inefficient, for several reasons. For example, companies are rewarded for matching health care outcomes, even when the new products do not improve health outcomes, leading to costly, excessive, and wasteful investments in the development and marketing of products that are relatively unimportant from a medical standpoint. Companies also have incentives to invest in the marketing and inappropriate promotion of products to patients who do not benefit from the drugs. Companies do not have adequate incentives to invest in research that advances science but does not product a monopoly on a commercial product. Under delinkage models, governments can more effectively target incentives to reward products that improve health outcomes (see discussion of end product prizes), and also design incentives for researchers to advance science, and share and provide for royalty-free and non-discriminatory access to data, inventions, and materials (see discussion of the open source dividend and interim results prizes).
  4. Fairness. Under delinkage, prices can be low everywhere, without adverse impacts on innovation, in order to reduce the gaps between the rich and the poor, and making “access to medicine for all” feasible.
  5. Policy coherence. Delinkage aligns the interests of consumers and drug developers, and eliminates the trade-offs between access and innovation. High prices are the enemy of access, the enemy of fairness, and present a fundamental conflict between access and fairness on the one hand, and innovation on the other. Delinkage fixes this problem, by taking high prices out of the equation for innovation. We pay for innovation, but not through artificially high prices under the grant of monopolies.