Can medical products be developed on a non-profit basis? Exploring product development partnerships for neglected diseases

Reliance on market forces can lead to underinvestment in social welfare enhancing innovation. The lack of new medical products in the area of neglected diseases is a case in point. R&D for neglected diseases has increased with new funding and collaborations taking place mainly through product development partnerships (PDPs). PDPs are self-governing, private non-profit R&D organizations. In contrast to push and pull instruments designed to address private-sector R&D underinvestment, PDPs have emerged voluntarily to address this public health challenge. In this study we examine how non-profit R&D collaboration for neglected diseases takes place through PDPs. We find that PDPs act as 'system integrators' that leverage the resources and capabilities of a network of public, philanthropic and private-sector partners. This paper contributes to an understanding of R&D in a non-profit context and highlights the importance of collaboration and nonmarket institutions for promoting innovation where market failures occur.