Creating New Economic Incentives for Repurposing Generic Drugs for Unsolved Diseases Using Social Finance

Repurposing research improves patient lives by taking drugs approved for one disease and clinically testing them to create a treatment for a different disease. Repurposing drugs that are generic, inexpensive, and widely available and that can be taken in their current dosage and formulation in the new indication provide a quick, affordable, and effective way to create "new" treatments. However, generic drug repurposing often provides no profit potential, and so there is no economic incentive for industry to pursue this, and philanthropy and government funds are often insufficient. One way to create new economic incentive for the repurposing of generic drugs is through social finance. This perspective describes how social finance can create a new economic incentive by using a social impact bond, or similar financial structure, to repay for-profit investors who fund the repurposing research from the proceeds of healthcare cost reductions generated when these affordable, effective, and widely available repurposed therapies improve healthcare outcomes.