chapter  7
40 Pages

Health innovation and latecomer development

This chapter re-examines the key findings of each one of the chapters in a comparative light in order to derive results of relevance to the discourse on health

innovation. The chapter focuses on four main issues. First is the question of institutional capacity that is so central to the framework for health innovation created and elaborated upon in Chapter 2. Institutional capacity was defined as not just the capacity of the sector to borrow rules and regulations, but the capacity of the sector to respond both to external (global rules, IPRs, new markets) and internal stimuli (local diseases and availability of local knowledge infrastructure). Institutional capacity therefore is determined by: (a) the ability of the country to deal with a sector’s potential by providing physical and knowledge infrastructure at the basic level, but also by providing rules that diminish information asymmetry and promote mutually beneficial exchange (local “push” institutions), (b) the ability of the country to balance the local “push” with the global “pull” institutions in a way that the local interests prevail and, finally, (c) regulatory capacity to enact new rules and regulations that achieve this balance and change inefficient rules at the margin. The six countries that have been analysed at length in Part II of the book demonstrate different levels of institutional capacity and these are comparatively analysed in the first part of this chapter. Second, can latecomer countries hope to develop capacity in health innovation? Gerschenkron’s suggestion (1962) that relatively greater backwardness requires much more support to overcome and the technological and managerial sophistication applies well to health innovation and seems to point towards the fact that latecomers might not be able to invest and build sustainable health innovation systems that can compete globally in today’s context. However, the data presented in Part II seems to suggest that as opposed to the latecomers that rank higher on the knowledge and institutional capacity indexes (such as Kenya and Nigeria), it is the very latecomers (Bangladesh and Vietnam) that perform better in health innovation. How can this be explained and understood, and what implications does it hold for policy? Third, is the issue of promoting global access to medicines a separate one from that of promoting industrial capacity in latecomer countries? In other words, are these completely different goals in global health innovation, and, if so, what motivations separate the two policy goals? And finally, what is the evidence from the six-country comparison on the impact of IPRs on access to knowledge as is needed for health innovation? Are IPRs a significant barrier to building health (and biomedical innovation) in latecomer countries as literature seems to suggest or does one need to take a more cautious view? Although evidence from all countries have been discussed, due to difficulties in presenting and comparing econometric data across all countries, econometric analysis presented in this chapter is only for India (as a fast follower), Kenya (as a latecomer) and Bangladesh (as a very latecomer), whenever comparative evidence is presented as graphs or tables. These three country comparisons are used to throw light on the differences in stages of development and how that impacts health innovation capacity. This, however, is substantiated with evidence from the other three countries of Part II to enrich the analysis.