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The article examines the implementation by the Italian Ministry of Health of performance-based funding to allocate resources for research to IRCCS (Istituti di Ricovero e Cura a Carattere Scientifico) hospitals. The analysis provides evidence that ten years from its introduction the performance-based funding system has persisted, but it has been implemented rather differently from what had been imagined by its proponents. By drawing on the theoretical frameworks of policy implementation, agency, and relational contracting, the study establishes that the overall design of the system has contributed to this final outcome only to a limited extent. Rather, the lack of procedural fairness, as well as of political leadership in linking the system to national research priorities, has undermined the basis for trust between hospitals and the Ministry of Health. The article discusses how, in this, the governance of performance-based funding and its strong ownership by the ministerial bureaucracy has been determinant.

In the last 20 years, orphan drug legislation (ODL) has been adopted in several countries around the world (USA, Japan, Australia, and the European Union) and has successfully promoted R&D investments to develop new pharmaceutical products for the treatment of rare diseases. Without these incentives, many life-saving new drugs would have not been developed and produced. For economic reasons, the development of medicines for the treatment of diseases prevalent in the developing world (or tropical diseases) is lagging behind. Among several factors, the low average per-capita income makes pharmaceutical markets in developing countries appear relatively unprofitable and therefore unattractive for R&D-oriented companies. The case of ODL may offer some useful insights and perspectives for the fight against neglected tropical diseases. First, the measures used in ODL may also be effective in boosting R&D for neglected tropical diseases, if appropriately adapted to this market. Second, small-sized companies, which have played a successful role in the development of orphan drugs for rare diseases, may also represent a good business strategy for the case of tropical diseases.