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  • Brendan Shaw

Space X and NASA: lessons on public-private R&D for the health debate

Brendan Shaw

On 30 May, the Space X Dragon rocket blasted off from the Kennedy Space Centre in Florida and delivered two NASA astronauts to the International Space Station in orbit around the Earth.

Elon Musk's space project achieved many major milestones, but one less obvious lesson for critics of the pharmaceutical industry is the collaboration between the public and private sectors needed for this success.

The flight is expected to be the first of many where NASA, a US government agency, is paying the private sector to take its astronauts up to the space station. It is the first time that astronauts will become paying passengers on a commercially owned and operated vehicle that can transport people reliably and cheaply into space.

Why have NASA partnered with private companies like Space X and Boeing to do this? Because by using commercial incentives and market competition NASA will drive down the price of getting into space.

It is using its procurement power to stimulate the involvement of multiple companies and market competition to make space flight more accessible and affordable.

And here's the crucial bit for public health experts .... many of the technologies that Space X is relying on were pioneered by government space programs over the last 60 years. According to a former White House adviser on space, therefore, the company is "standing on the shoulders of giants".

Just let that sink in for a minute.

While in global health circles we often get caught up in arguments about the private sector piggy backing off publicly-funded R&D, in other industrial and scientific sectors this is regarded as normal and a good thing that drives new innovation.

Pharmaceutical industry critics have sometimes suggested that the price of medicines is too high because the community 'pays twice' - once when the public sector funds some scientific research and R&D and then again when health systems pay for the resulting treatment developed and commercialised by the private sector. Commentators have lamented this as a sign that the system is broken and needs to change.

Yet this public-private R&D collaboration seems just fine to NASA. They seem to think they're getting a good deal out of it.

And the phenomenon of the private sector leveraging off publicly-funded research is not limited to space flight.

The internet was created by the US Department of Defence and exploded after it handed over the internet to the private sector.

In other industries, too, the pattern of private sector companies leveraging publicly-funded R&D to bring new technologies to market occurs in areas like digital technology, green technologies and defence industries.

Trends in business expenditure on R&D funded by business and government

(index 2000 = 100)

Source: OECD, 2018, Science, Technology and Industry Outlook, Excel datasheet,, acccessed 31/5/2020.

It's considered a normal part of the process of innovation in many industries that has triggered much technological development and improvement in humanity.

Back in the space race, the prediction is that with more companies like Blue Origin and Sierra Nevada will enter the market. This will increase competition and as commercial space flight becomes more standardised the price of a space flight into Earth's orbit could fall below US$ 10 million. Previously, NASA had been using a cost-plus pricing method to pay the Russians for putting its astronauts into space up to $US 90 million per trip.

In some circles of the health policy community this collaboration is viewed as a bad thing.

However, the collaboration between the public and private sectors in developing space travel could teach a few lessons to those in the health sector who decry such collaboration.

To be clear, there is absolutely no doubt that discussions about the pricing of medicines need to continue.

And public sector research agencies in the health sector need to be good at negotiating their fair share of the returns from the technology they develop. Some agencies don't have a great track record on this.

But rather than some blanket attempt to punish or ban life science companies altogether from building on publicly-funded research, the public and private sectors should continue to work together in developing new treatments.

Maybe there's a lesson or two here the health sector could take from the space sector.

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