Sukhun, you and I share an interest in how innovation and entrepreneurship can advance the availability of important, life-saving drugs for patients in low-income countries.   Can you tell us a bit about how you became interested in studying this issue as a management scholar?

My career started with an interest in venture capital.  I wanted to be the next big entrepreneurship person.   But then I found out during my PhD program that a family member had cancer.  There were lots of puzzles and problems that arose about treatments and options.  I started asking questions about why it takes so long for drugs to get approved.   In my scholarly work, I then turned toward biopharma to learn more about these issues.  I learned that some of the diseases don’t have enough treatment options. Why not?  There should be time and energy to at least try.

What have you found in your early work on how incentives fail to stimulate value creation through the distribution of drugs that have already been developed?    Is this a problem caused by investors that don’t want startups to give away valuable technology?  Or is the problem downstream in the distribution chain of the targeted countries?

I can’t speak to all the issues here, but let me tell you what we have considered.   Firms often focus on launching in high-income countries because there’s a private-interest system where prices can be established later.  In public-interest systems like Canada or UK, they have to negotiate prices and they’re often lower, and that slows distribution.   We can’t blame them because that’s the system of incentives, but it creates a barrier.  Implicitly, this problem could be even more intense in low-income countries.

In a recent paper that you have with Sungyong Chang of Cornell you characterize the limited availability of live-saving drugs as a grand challenge.  We’ve had many conversations about this challenge when diseases are infectious and when patients are low-income.  There are problems with administering treatments consistently, and for using the for-profit distribution chain effectively given the tenuousness of payment systems.  But why can’t we get these medicines even in high-income countries?

The paper analyzes an expanded access problem for patients to access drugs outside clinical trials that was designed to make various types of drugs in trial available to those who might not be eligible for the trials themselves.   This means that FDA-mandated firms that are conducting trials, and who find some efficacy or potential efficacy, can provide drugs to patients outside those clinical trials who may need them because they are in late stages of illness, or because they have tried something different but its not working or its not appropriate.

In our work, we’ve found that only about 30% of companies even offer expanded access despite legislation that encourages this.    Only about 4% of drugs have been made available this way.   Why has the uptake been so limited?   Interviews and other conversations have led to the insight that pharma companies are worried that late-stage patients may not benefit much.  It costs a lot.  Often they say that they have limited supply.   In our analysis, we find that biotech – which is more cash constrained than big pharma – often is more restrictive than larger drug companies because of the expense required to provide expanded access.

How can we get them to do more of this?   Could there be a centralized system?  The FDA tried to create a navigator for expanded access for patients.  There are also private companies that do this.   Some physicians are interested in helping, but many don’t have the capacity.  The problem is that its difficult to make money doing this.

In your new paper with Songyong, you study this problem for a non-infectious disease, namely cancer.    Cancer is not a neglected disease as defined by the World Health Organization.    There are large markets for breakthrough drugs in high-income as well as low-income countries.   Why can’t these drugs be made available to low-income patients?  What gets in the way?  Can regulators solve this problem?

I have a project in which we are trying to understand what makes some medicines available more readily under some systems than others.  We might be able to understand better which cancers are being diagnosed better in some situations than others.   This allows us to understand whether we are developing drugs appropriately based on the prevalence of the underlying disease.

Given the landscape of the underlying diseases, there’s a lot of crowding in the development of the drugs.   Once a breakthrough occurs, there’s a rush to enter the space.  Are those companies really trying to solve patient problems?  Do we need 100 companies working on the same problem?

The broad message is that we can’t rely on the private system of incentives to allocate effort in ways that are not likely to lead to a return on investment for them.   It’s not enough to leave every decision about the allocation of effort to these incentive structures.

What makes you optimistic?

Im an optimistic person.  I think that there is real hope for problem identification followed by solutions.  People that I talk with this in this industry all are so dedicated to finding solutions to the problems that they are working on.  We need to keep going on this path so that additional researchers can make headway on a broader range of diseases.

Im very much motivated to have impact not just academically, but also with researchers and clinicians and others who want to improve patient outcomes.