Medical innovation provides an acid test for policymakers


There are two broad models of the process of innovation. Both systems work, though both are imperfect. When science and technology policy is framed, both examples should be held in mind.

A generation ago, many people suffered from stomach ulcers that caused continued discomfort and, in severe cases, required surgery. Dyspepsia was not just a medical condition but a term used to describe general irritability: behaviour characteristic of people with too much acid in their stomach.

In rich countries medicine has made these problems history. There are two reasons. Modern drugs regulate the level of stomach acidity in most patients. And we know the main cause of stomach ulcers and can therefore cure them inexpensively. Barry Marshall and Robin Warren, two Australian scientists, were awarded this year’s Nobel Prize for medicine for this latter discovery.

There are two broad models of innovation. In a proprietary, or closed system, model, businesses invest in research in the hope of discovering profitable new products. Success is determined by the market. In an open systems model, individual scholars make incremental contributions to an evolving stock of knowledge. Success is determined by peer review. The battle against stomach ulcers illustrates the contrast between the two systems.

The first generation of modern antacids included SmithKline’s Tagamet and Glaxo’s Zantac. The most successful second-generation drug has been Astra’s Losec. These have been among the most profitable of all blockbuster drugs. Generating billions of dollars in profits for the companies that patented them and transforming Glaxo and Astra from minor local pharmaceutical companies into leading international businesses, they have been among the most commercially successful innovations in history.

Chemical compounds are patentable; treatment protocols are not. Dr Marshall and Dr Warren established that most ulcers were caused by stomach bugs, helicobacter pylori, and could be eliminated by large doses of already available antibiotics. However, peer group recognition was slow to come: there was considerable initial resistance to the idea that a problem – fashionably attributed to stress – that had engaged so many doctors so lucratively for so long had a simple cause and cure.

Pharmacology exemplifies the proprietary system model of innovation, while surgery and treatment protocols are an open system. The very different research environments and business organisation have little to do with underlying differences in the nature of the relevant knowledge: they are an accident of history and the operation of intellectual property rules.

Both systems work, though both are imperfect. The closed system model secures more investment, because it promises large profits and attracts private capital as well as public funding. But it also requires more investment, because it secretes knowledge rather than shares it, and demands very large expenditures to meet regulatory requirements. It would be surprising, if it were not so familiar, that there is more control by government over what physicians can do to you with pills than over what surgeons can do to you with a knife. Regulatory agencies fulfil the role in the proprietary model that peer review performs in open systems.

Open systems are not necessarily superior to closed systems, nor vice versa. Linux works and so does Windows. Both open and proprietary models produce innovation and indigestion sufferers, as well as computer users, have benefited from both. There is a danger that closed systems drive out open systems because they have well organised and well funded lobbies behind them. The creeping extension of copyright and patents in medicine and in software, the pressure on universities to seek private funding through industrial co-operation and the European Union’s clinical trials directive, which insists that responsibility for monitoring experiments must lie with an organisation rather than the community of scholars, are all symptoms of this pressure.

The discoveries of SmithKline, Glaxo and Astra relieved the misery of millions. The discoveries of Barry Marshall and Robin Warren cured the misery of millions. When science and technology policy is framed, both examples should be held in mind.

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