Something like an ETF open to anyone with an investment account is the idea, but I have seen one of the authors pitch such a mechanism specifically for pharmaceuticals and in that case they said the resulting instruments would be prime targets for index and retirement funds. So I infer the target is regular institutional investors, including investment banks and hedge funds, rather than individuals like you or I.
This is definitely a devil in the details problem. Expanding on the specific pharmaceutical pitch I saw, for comparison with the cancer example: pharmaceuticals have also seen a lot of funding, but in fact there is less overall research being done; fewer drugs are even put forward through the process then previously. Most drug discoveries do not even start it. This is because only the ones that make it all the way through the process are profitable, so all of the development money has to go to the few best-chance drugs (as the company estimates it).
The way they say that their funding method solves this problem is because FDA approval has phases; so what they do instead is put a bunch of drug patents together in a bundle (like the mortgage backed securities), and then once that bundle goes through Phase 1 the survivors are re-bundled for Phase 2, and again for Phase 3. As a result, all the drugs get pushed as far as they can go. This makes a certain adjustment of the industry more feasible as well. Currently the pharmaceutical company must be the whole pipeline to capture any value, and it is hard to succeed as a research lab that just produces drug discoveries because any individual drug is so unlikely to pay out. Under the research backed security system they would be able to sell their discoveries into a bundle (or as a bundle) because there is a Phase 1 payout that is faster and more predictable. This is analogous to how mortgage companies do not collect mortgage payments, they create the mortgage and then sell the mortgage on.
Something like an ETF open to anyone with an investment account is the idea, but I have seen one of the authors pitch such a mechanism specifically for pharmaceuticals and in that case they said the resulting instruments would be prime targets for index and retirement funds. So I infer the target is regular institutional investors, including investment banks and hedge funds, rather than individuals like you or I.
This is definitely a devil in the details problem. Expanding on the specific pharmaceutical pitch I saw, for comparison with the cancer example: pharmaceuticals have also seen a lot of funding, but in fact there is less overall research being done; fewer drugs are even put forward through the process then previously. Most drug discoveries do not even start it. This is because only the ones that make it all the way through the process are profitable, so all of the development money has to go to the few best-chance drugs (as the company estimates it).
The way they say that their funding method solves this problem is because FDA approval has phases; so what they do instead is put a bunch of drug patents together in a bundle (like the mortgage backed securities), and then once that bundle goes through Phase 1 the survivors are re-bundled for Phase 2, and again for Phase 3. As a result, all the drugs get pushed as far as they can go. This makes a certain adjustment of the industry more feasible as well. Currently the pharmaceutical company must be the whole pipeline to capture any value, and it is hard to succeed as a research lab that just produces drug discoveries because any individual drug is so unlikely to pay out. Under the research backed security system they would be able to sell their discoveries into a bundle (or as a bundle) because there is a Phase 1 payout that is faster and more predictable. This is analogous to how mortgage companies do not collect mortgage payments, they create the mortgage and then sell the mortgage on.