Medical Market Failures and Their Remedy

Abstract

There is a general consensus that market-based medical research has failed in some places, in particular, in diseases of the poor and in diseases that afflict very small numbers of people. With no profits to be made, there is no motivation for research. These are known as market failures. Advanced Market Commitments (AMCs) have been proposed as ways of coping with the former. Governments and other public agencies provide prize money and reward anyone who finds, say, a vaccine for pneumococcal disease. Similar government stimulus is called for to address the problems of so-called orphan diseases. These proposals will, if carried through, improve the current state of medical research and delivery, but they still far short on several key points. The problems are discussed and a proposal to socialize all medical research and remove intellectual property rights is explained and defended.