In 2008, the World Health Organization's Intergovernmental Working Group (IGWG) released a global strategy and plan of action for boosting R&D of medicines for neglected diseases predominantly found in developing countries. Among other recommendations, the report advocates and prioritizes the promotion of local R&D capacity in developing countries as a solution to the absence of pharmaceutical drug innovation. In response to the primary assumption underlying the IGWG proposal, that innovation is a positive determinant of public health, the purpose of this study is to investigate the socioeconomic determinants of public health in developing countries as well as introduce innovative capacity as a potential factor influencing the level of health. This study will test whether public health is a function of innovative capacity using a cross-country regression that incorporates known determinants of public health. Fifty-nine developing countries are included in the sample, two different measures of public health are used, and nine independent variables are tested. A total of four regression models are used to explain the relationships between the variables. Innovative capacity is quantified in two different ways in order to increase the accuracy of the measure. Ultimately, the results of the study show that democracy, number of physicians, sanitation, infrastructure, and one of the measures of innovative capacity are statistically significant determinants of public health in developing countries. The conclusions of this study provides perspective on the IGWG proposal and enriches the discussion about what socioeconomic factors are most important to develop in order to achieve increased public health in developing countries.
