The Pogge Pull

Pogge presents a fascinating and well thought out proposal for inducing a dramatic yet plausible shift in the current incentive scheme of our global health care system when it comes to alleviating the Global Burden of Disease (GDB). I want to focus on the implications of his distinction between “pull” programs and “full-pull” programs.

Pogge advocates for a “full-pull” program over a “pull” program on page 21, arguing that “pull” programs - or prizes - have “four serious drawbacks.” The four argument against prizes are:

1. Politicians, Bureaucrats, and experts play a substantial role in deciding which diseases ought to be researched, how to specify the remedy to be aimed for, and how large a reward should be offered for a remedy meeting these specifications.”
2. Prizes Involve excess specificity
3. Funding is haphazard, case-by-case, and subject to arbitrary political factors
4. The “last-mile” problem: prizes pull innovators to inventions but not implementation

Pogge then argues that a “GBD” patent, or “full-pull” solution avoids these serious drawbacks and is therefore superior. Because I agree with the moral imperative to bring about change in a broken and misdirected health care system, I think it is economically and politically flawed to choose the “full-pull” program over the “pull” program.

Both pull and full-pull programs have the potential to form the backbone behind Pogge’s Public Good Strategy which requires three components:

1. Open Access to intellectual results of R&D

2. Alternative Incentives - Rather than the existing incentives to treat affluent diseases, increase diseases among the poor, and monopolize the results of research with patents, we should create incentives to achieve results, not customers.

3. Some sort of reliable funding mechanism.

In the last decade, use of prizes to solve social problems has skyrocketed and created massive success. The XPrize foundation, beginning in 2004, placed a $10 million prize to usher in a new era of private space travel (http://ansari.xprize.org/), a $7 million to transform the lives of low-literate adults (http://adultliteracy.xprize.org/), a $20 million prize to create recyclable Co2 products (http://carbon.xprize.org/), and others. Following the success of some of these programs, McKinsey and Co. drafted a report outlining what it takes to create a successful prize for social benefit (http://www.mckinseyonsociety.com/downloads/reports/Social-Innovation/And_the_winner_is.pdf). Notably, as many institutions and government agencies have experimented with prizes over the years, successful prizes - while varying in their implementation - share similar features in their design. Page 37 of the McKinsey report has a diagram outlining when a prize should be used as a tool for social change. It states that there must be a “clear, achievable goal,” many “solvers” who are able to compete for the prize, and the solvers must be “willing to accept the outcome of risk.” While the pull-program would work as a prize, the full-pull program structures a grant as a fee for the provision of an existing good or service from an established supplier. The full-pull would fall into the branch of “Fee/Contract” - suggesting it would be optimal if there weren’t many companies able to compete for the prize. The report stated that their “survey of prize administrators found that they consider ‘specifying the goal or mission’ to be one of the most difficult aspects of effective prize-giving” and “a good prize will not seek to do all the work itself, but to lay the groundwork for further impact by generating new ideas, innovations, capital and interest in a topic” (McKinsey 39). The specificity of a prize’s goal is paramount to its success and - importantly - it shouldn’t seek to solve the problem in its entirety, rather, it should seek to remove essential bottlenecks in the existing market of problem solving.

Here is why a full-pull system will not work and why a more comprehensive pull-system will:

• Prizes have achievable, unambiguous, time-restricted goals.

While Pogge states that pharmaceutical companies and governments will need to collaborate with fleets of experts to determine what the best ways to measure reduction in GBD are, I find it difficult to believe we are capable of quantifying the necessary metrics, assigning appropriate payouts, and maintaining the system in the long run. Pogge argue that prizes are inferior to the full-pull system because they solve the “last-mile” problem (Drawback #4). Prizes however can reward outcomes just as easily as it can reward outputs (implementation vs. inventions/new drugs). Pogge argues that a full-pull program “simply rewards what works in proportion to how well it works” (22). While this might sound nice - if only we could reward everything that works in proportion to how well it works - it seems more like a pipe dream - or at least an asymptotic goal - than a feasible reality. Essentially, we would need to be able to find a perfect, measurable index for every disease we wanted to cure. Even programs with lofty ideas, such as No Child Left Behind or Race to the Top - aimed at improving public education - often fall short of their ideal goals because the metrics used to decide the allocation of funds and determine success are deeply flawed (standardized testing).  It seems the full pull solution is the creation of a GBD stock market - where companies and governments gamble on the growth and spread of disease - rather than a proven prize structured system. Pogge states that companies would only be rewarded based on how much they changed the projected disease growth - yet, we are terrible at accurately and consistently predicting disease (our predictions are only as good as our numbers that go into it (http://www.economist.com/blogs/economist-explains/2015/02/economist-explains-3). Diseases are especially hard to target and predict because they are affected by and defined by nearly every lifestyle variable in existence - diet, environment, medicine, knowledge, genetics, and pure chance. There never was a clear answer to what happens when more than one company claim to be solving the same disease: if company A patented a drug curing diarrhea and company B patented a drug curing diarrhea and they operate in the same region - how do we allocate funds to each company? What if one of the drugs doesn’t actually work (but we don’t know if it is company A’s or company B’s? While the full-pull program solves for one market failure, it creates the potential for a free-rider problem - where companies have incentives to maximize their perceived involvement in curing a disease (as measured by some collaborative metric) while another company actually cures a disease in the short term. Thus, prizes are superior because they require specificity to avoid gaming, inspire innovation, and have some sort of time-based result. They shouldn’t seek the solve the problem wholesale, rather, they should hone in on and provide funding to eliminate barriers to larger change (ie. a prize to find a drug to cure an unprofitable, yet deadly disease). In fact, while Pogge claims the ebb and flow of politics can hamper success in Drawback #3, the haphazard nature of prizes is essential to their success. Further, Pogge never gives a strong argument for why the full-pull system isn’t susceptible to the whims and lobbying of politics (Drawback #1). In reality, most prizes (like the XPrize), aren’t at all subject to political whims - they have been consistently backed for the past decade. In fact, these problems need to be case-by-case. Entrenching a large, full-scale system without specific end goals or time periods is a direct formulation for duplicating the existing system, even with good intentions. Do you really think - in an industry ranked #1 for lobbying since 1998 (https://www.opensecrets.org/lobby/top.php?indexType=i)  - that the few competitors there are won’t fight tooth and nail to game the system? The longer the system is promised to stay around, the larger the incentive to game it and entrench political lobbies. Case-by-case prizes actually circumvent that problem by changing the rules. Also, failed prize designs quickly evaporate into history while successful ones lead innovation. Under the “full-pull” scheme, we would need to continually, evolve, duck tape, and lobby a singular, one-size-fits-all model to meet the quickly evolving and contemporary demands of the GBD.

While the full-pull system sounds nice in theory, the pull system might be better in implementation. Regardless, funding and enforcement of both systems on a large scale are most likely better than status quo.