FIGURE F-1. A) Innovation may occur in several ways.

FIGURE F-1

A) Innovation may occur in several ways. One input may lead to a higher quality output, with each generation of innovation bringing a successively better product. Alternatively, a single input may spawn several outputs, as one target receptor may lead to several new drugs. Finally, several inputs may be required to produce one output; these inputs may be innovations themselves or simply research tools (adapted from Scotchmer, 2004).15 B) Tiering may segment the marketplace between a paying market and a resource-limited one that may receive a discounted price or other preferential access. C) Inputs may also be pooled, thereby reducing transaction costs to innovation and more readily enabling socially useful bundles. Such pooling—particularly when strategically done by the public and/or philanthropic sectors—may be structured to influence positively the norms and the licensing by which other inputs are also made available for innovation. Such an arrangement characterizes a technology trust.

From: Appendix F, COMMISSIONED PAPER Sharing Knowledge for Global Health

Cover of The US Commitment to Global Health: Recommendations for the Public and Private Sectors
The US Commitment to Global Health: Recommendations for the Public and Private Sectors.
Institute of Medicine (US) Committee on the US Commitment to Global Health.
Washington (DC): National Academies Press (US); 2009.
Copyright © 2009, National Academy of Sciences.

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