To Fight Pandemics, Reward Research, by Tyler Cowen, Commentary, NY Times: That frightening word “pandemic” is back in the news. A strain of avian influenza has infected people in China... The outbreak raises renewed questions about how to prepare for possible risks...
Our current health care policies are not optimal for dealing with pandemics. The central problem is that these policies neglect ... “public goods”: items and services that benefit many people and can’t easily be withheld from those who don’t pay for them directly.
Protection against communicable diseases is a core example of a public good, as is basic scientific research... Without government financing for such public goods, the capacity wouldn’t be there if a new pandemic produced a surge in demand. This would amount to an institutional failure.
The government could also take another, more unusual step: it could promise to pay lucrative prices for the patents on drugs and vaccines that prove useful in dealing with pandemics. ...
Over all, the American government seems to be turning its back on its traditional role of producing and investing in national public goods. ... Focusing government on the production of public goods may sound like a trivial issue... But, in fact, we have been failing at it, and the consequences could be serious indeed.
[This extract probably doesn't emphasize the idea in the second to last paragraph above -- offering prizes for ideas that prove useful in dealing with pandemics -- as much as Tyler would prefer.]