How a new approach to funding Alzheimer’s research could pay off

More than 5 million Americans suffer from Alzheimer’s disease, the affliction that erodes memory and other mental capacities, but no drugs targeting the disease have been approved by the U.S. Food and Drug Administration since 2003. Now a paper by an MIT professor suggests that a revamped way of financing Alzheimer’s research could spur the development of useful new drugs for the illness.

“We are spending tremendous amounts of resources dealing with this disease, but we don’t have any effective therapies for it,” says Andrew Lo, the Charles E. and Susan T. Harris Professor of Finance and director of the Laboratory for Financial Engineering at the MIT Sloan School of Management. “It really imposes a tremendous burden on society, not just for the afflicted, but also for those who care for them.”

Lo and three co-authors propose creating a public-private partnership that would fund research for a diverse array of drug-discovery projects simultaneously. Such an approach would increase the chances of a therapeutic breakthrough, they say, and the inclusion of public funding would help mitigate the risks and costs of Alzheimer’s research for the private sector.

There would be a long-term public-sector payoff, according to the researchers: Government funding for Alzheimer’s research would pale in comparison to the cost of caring for Alzheimer’s sufferers in public health-care programs. The paper’s model of the new funding approach calls for an outlay of $38.4 billion over 13 years for research; the costs of Medicare and Medicaid support for Alzheimer’s patients in 2014 alone is estimated to be $150 billion.

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