Every year, millions of people die from preventable and treatablediseases, especially in poor countries. In many cases, lifesaving medicines canbe cheaply mass-produced, but are sold at prices that block access to those whoneed them. And many die simply because there are no curesor vaccines, because so little of the world’s valuable research talent andlimited resources is devoted to addressing the diseases of the poor.

This state of affairs represents afailure of economics and law that urgently needs to be corrected. The good newsis that there are now opportunities for change, most promisingly through aninternational effort headed by the World Health Organization that would beginto fix the broken intellectual-property regime that is holding back thedevelopment and availability of cheap drugs.

Two main problems limit the availability of medicinestoday. One is that they are very costly; or, more accurately, the price charged for them is very high, though thecost of producing them is but a fraction of that amount. Second, drug development is geared toward maximizing profit, notsocial benefit, which skews effortsdirected at the creation of medicines that are essential to human welfare.Because the poor have so little money to spend, drug companies, under currentarrangements, have little incentive to do research on the diseases that afflict them.

It doesn’t have to be this way. Drug companies argue that high prices arenecessary to fund research and development. But, in the United States, it is actually the government that finances most health-relatedresearch and development – directly, through public support (NationalInstitutes of Health, National Science Foundation), and indirectly, through public purchases of medicine, both in theMedicare and Medicaid programs. Even the part that is not government-financedis not a conventional market; most individuals’ purchases of prescriptionmedicines are covered by insurance.

Government finances health-care research because improved medicines are apublic good. The resulting knowledge benefits everyone by stopping epidemicsand limiting the economic and human toll of widespread illness. Efficiencyrequires sharing research as widely as possible as soon as it is available.Thomas Jefferson compared knowledge to candles:when one is used to light another, it does not diminish the light of the first.On the contrary, everything becomes brighter.

Yet, in Americaand most of the world, drug prices are still exorbitantand the spread of knowledge is tightly limited. That is because we have createda patent system that gives innovators a temporary monopoly over what theycreate, which encourages them to hoard theirknowledge, lest they help a competitor.

While this system does provide incentives for certain kinds of research bymaking innovation profitable, it allows drug companies to drive up prices, andthe incentives do not necessarily correspond to social returns. In thehealth-care sector, it may be more profitable to devote research to a “me-too”drug than to the development of a treatment that really makes a difference. Thepatent system may even have adverse effects on innovation, because, while themost important input into any research is prior ideas, the patent system encouragessecrecy.

A solution to both high prices and misdirected research is to replacethe current model with a government-supported prize fund. With a prize system,innovators are rewarded for new knowledge, but they do not retain a monopoly onits use. That way, the power of competitive markets can ensure that, once adrug is developed, it is made available at the lowest possible price – not atan inflated monopoly price.

Fortunately, some USlawmakers are taking a strong interest in this approach. The Prize Fund for HIV/AIDSAct, a congressional bill introduced by Senator Bernie Sanders, is justsuch an initiative. His bill also contains an important provision aimed atencouraging open-source research, which would move the current research modelaway from secrecy toward sharing.

But, globally, our innovation system needs much bigger changes. The WHO’sefforts to encourage broad reforms at the international level are crucial. Thisspring, the WHO released a report that recommends solutions similar to thoseproposed in the US Senate bill, but on a global level.

Importantly, the report, “Research andDevelopment to Meet Health Needs in Developing Countries,” recommends acomprehensive approach, including mandatory funding contributions fromgovernments for research on developing countries’ health needs; internationalcoordination of health-care priorities and implementation; and a global observatory that would monitor where needs aregreatest. In late May, the international community will have a chance to beginimplementing these ideas at the WHO World Health Assembly – a moment of hopefor public health around the world.

Reforming our innovation system is not just a matter of economics. It is,in many cases, a matter of life and death. It is therefore essential to de-link R&D incentives from drug prices, andto promote greater sharing of scientific knowledge.

For America,the Sanders bill marks important progress. For the world, the WHO’srecommendations represent a once-in-a-generation opportunity to remedy along-standing and egregious inequity in health care, and, more broadly, to seta model for governance of global public goods befittingan era of globalization. We cannot afford to let this opportunity pass us by.