Say the word 'prize,' and most people think of gold medals, blue ribbons and carnival games. But prizes are not just for country fairs.
Throughout history, prizes have solved some of the world's toughest scientific and technological challenges. In 1765, a clockmaker won a £10,000 prize when he invented a way to measure longitude at sea. Nearly 250 years later, a team of inventors won a $10 million 'X-Prize' when they developed a commercial spacecraft.
In our troubled economic times, there has been growing interest in prizes as a powerful, cost-effective way to stimulate innovation. The Obama administration and Congress are taking a closer look at prizes after passing last year's America COMPETES legislation, which empowers federal agencies to conduct prize competitions. Already agencies have presented dozens of challenges to the public, including a $15 million prize to develop high-efficiency light bulbs to replace the incandescent bulb and a $10 million prize to produce vehicles that exceed 100 miles-per-gallon. Even Google has gotten into the game with prizes.org -- a new website where users can post open contests to create the best workout plans or the most exciting travel itineraries, with cash as the prize.
Now, it's time to launch a prize to save lives.
Almost 4 million children in developing countries die each year from infectious diseases, largely because the drugs, vaccines and diagnostic tests that could save their lives don't yet exist. If these diseases affected children living in the U.S. or Europe, the commercial marketplace would snap to action. But the marketplace often fails to deliver solutions for children who live in poor countries.
As foreign aid budgets shrink, prizes can offer an efficient solution by stimulating private sector investment in global health. Such market-based prizes can also draw new ideas from unexpected quarters -- like the biotech sector.
Some of the brightest scientific minds in the biotech industry gathered at the BIO International Convention last week in Washington, D.C. Biotech companies have transformed health with cutting-edge scientific innovations. Imagine if these companies spent as much time and resources finding solutions to malaria and pneumonia as they do for cancer and human growth hormones.
At the convention, I heard from leaders of companies who were seeking ways to engage in global health. But smaller biotech companies often do not have the resources to invest significant capital in global health products with uncertain markets. Why would a biotech in San Francisco develop a product for a patient in Nairobi who could never afford it? High-risk, low-reward ventures, however philanthropic, do not make good business.
The problem is a lack of incentives. A prize might be just the ticket.
Prizes can be even more effective than traditional global health funding mechanisms, like grants and product development partnerships, which are non-profit organizations that work to develop treatments for neglected diseases through public-private arrangements. Grant funding is not results-driven. Donors have to pay upfront, regardless of whether results are achieved.
A prize would allow leading donors to invest their money in a competition that would entice a range of companies to develop a product that meets a specific need -- for example, a diagnostic test that could accurately diagnose five or six common diseases in developing countries, including leading killers of children like malaria and pneumonia. There is urgent need for such a test; without a fast and accurate diagnostic, sick or dying children are often treated based on guesswork. This costs us hundreds of thousands of lives, wastes money on useless treatments and potentially increases resistance to antibiotics.
A number of organizations in global health, including ours, are looking at prizes to stimulate research and development for desperately needed products. The prize we are designing targets biotech companies and works by rewarding companies that successfully develop this diagnostic and other products that are suitable for developing countries.
The prize could help smaller and mid-size companies overcome barriers to investing in global health tools by mitigating the risks and offsetting the opportunity costs of development. The advantage for donors is that they only pay for success, resulting in significant value-for-money.
The ultimate impact would be measured in terms of lives saved. The diagnostic test that could diagnose a variety of diseases in developing countries could save 350,000 lives each year and a significant amount of resources. That's a terrific investment any way you look at it.
Prizes are not the answer to every global health problem. But for certain challenges, prizes can harness our competitive spirit to drive innovation in a time of limited resources.
Now, we need the Obama administration and other donors to invest in prizes to help meet the urgent challenges of global health. This could transform the way we meet the health needs of developing countries and use foreign aid funding more wisely. Now that would be prize-worthy.
Melinda Moree is Chief Executive Officer of BIO Ventures for Global Health, a non-profit organization that works to accelerate the development of novel drugs, vaccines and diagnostics coming from the biotechnology industry that address the unmet medical needs of developing countries.