Financing Orphan Drugs Through a Blockchain-Supported Insurance Model

Lok Sang HO; Tianle ZHANG; Tony Chun Tak KWOK; Kam Pui WAT; Francisco T. T. LAI; Spencer LI

doi:10.3389/fbloc.2022.818807

Financing Orphan Drugs Through a Blockchain-Supported Insurance Model

Lok Sang HO, Tianle ZHANG, Tony Chun Tak KWOK, Kam Pui WAT, Francisco T. T. LAI, Spencer LI

Research output: Journal Publications › Journal Article (refereed) › peer-review

5 Citations (Scopus)

Abstract

The cost of treatment for rare diseases is notoriously high imposing threats to the global healthcare system. Existing market-based tools for orphan drugs are not designed to reduce drug prices and could be hampered by adverse selection. We propose an alternative insurance mechanism, Massive Group Insurance (MGI), which aims at reducing the prices of orphan drugs through offering separate Intellectual Property Right (IPR) Fees to the drug company from an MGI Agency, which will collect insurance premiums from each country on each orphan drug that the country wants all its citizens to enjoy access to. The premiums will be calculated so as to ensure that the drug company will collect a profit no smaller than what it enjoys under the traditional model. The plan uses the group insurance concept and will generate a significant increase in drug use. Blockchain technology is used to facilitate authentication and effective IPR payments and ensure data security and low administrative cost. This model can potentially be extended to other categories of expensive drugs and vaccines.

Original language	English
Article number	818807
Number of pages	7
Journal	Frontiers in Blockchain
Volume	5
DOIs	https://doi.org/10.3389/fbloc.2022.818807
Publication status	Published - 13 Apr 2022

Bibliographical note

We thank the Pan Sutong Shanghai-HK Economic Policy Research Institute for supporting this research and in particular Dr. Wing Lok Hung for helping to coordinate the meetings among the authors. We also thank the organizers of the HK Public Key Infrastructure Forum Conference—Evolution and Localization of Public Key Infrastructure and Digital Identity—Digital Trust Ecosystem, for inviting the first author to present the concept of Mass Group Insurance based on blockchain Technology to an international audience on 19 January, 2021. We thank the referees for very helpful comments and suggestions.

Publisher Copyright:
Copyright © 2022 Ho, Zhang, Kwok, Wat, Lai and Li.

Keywords

orphan drug pricing
massive group insurance
new financing model
welfare gaines
blockchain

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.3389/fbloc.2022.818807Licence: CC BY

https://www.frontiersin.org/articles/10.3389/fbloc.2022.818807/full

Cite this

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abstract = "The cost of treatment for rare diseases is notoriously high imposing threats to the global healthcare system. Existing market-based tools for orphan drugs are not designed to reduce drug prices and could be hampered by adverse selection. We propose an alternative insurance mechanism, Massive Group Insurance (MGI), which aims at reducing the prices of orphan drugs through offering separate Intellectual Property Right (IPR) Fees to the drug company from an MGI Agency, which will collect insurance premiums from each country on each orphan drug that the country wants all its citizens to enjoy access to. The premiums will be calculated so as to ensure that the drug company will collect a profit no smaller than what it enjoys under the traditional model. The plan uses the group insurance concept and will generate a significant increase in drug use. Blockchain technology is used to facilitate authentication and effective IPR payments and ensure data security and low administrative cost. This model can potentially be extended to other categories of expensive drugs and vaccines.",

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N2 - The cost of treatment for rare diseases is notoriously high imposing threats to the global healthcare system. Existing market-based tools for orphan drugs are not designed to reduce drug prices and could be hampered by adverse selection. We propose an alternative insurance mechanism, Massive Group Insurance (MGI), which aims at reducing the prices of orphan drugs through offering separate Intellectual Property Right (IPR) Fees to the drug company from an MGI Agency, which will collect insurance premiums from each country on each orphan drug that the country wants all its citizens to enjoy access to. The premiums will be calculated so as to ensure that the drug company will collect a profit no smaller than what it enjoys under the traditional model. The plan uses the group insurance concept and will generate a significant increase in drug use. Blockchain technology is used to facilitate authentication and effective IPR payments and ensure data security and low administrative cost. This model can potentially be extended to other categories of expensive drugs and vaccines.

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Financing Orphan Drugs Through a Blockchain-Supported Insurance Model

Abstract

Bibliographical note

Keywords

UN SDGs

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