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The Health Impact Fund: Boosting Pharmaceutical Innovation Without Obstructing Free Access

Abstract

In an earlier piece in these pages,1 I described the health effects of the still massive problem of global poverty: The poor worldwide face greater environmental hazards than the rest of us, from contaminated water, filth, pollution, worms, and insects. They are exposed to greater dangers from people around them, through traffic, crime, communicable diseases, sexual violence, and potential exploitation by the more affluent. They lack means to protect themselves and their families against such hazards, through clean water, nutritious food, satisfactory hygiene, necessary rest, adequate clothing, and safe shelter. They lack the means to enforce their legal rights or to press for political reform.

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1. Pogge T. Montréal Statement on the Human Right to Essential Medicines. Cambridge Quarterly of Healthcare Ethics 2007;16:97–108.

2. Pogge T. World Poverty and Human Rights, 2nd ed. Cambridge: Polity Press; 2008.

3. Patent life is counted from the time the patent application is filed. Effective patent life is the time from receiving market clearance to the time the patent expires. My calculation in the text assumes constant nominal profit each year. In reality, annual profit may rise (due to increasing market penetration or population growth) or fall (through reduced incidence of the disease or through competition from “me-too drugs” developed by competing firms). For most drugs, sales decline steeply after they have been on the market for 6 years or so, and this strengthens the reasons for limiting patent life.

4. The promise was broken as the high-income countries continue to sabotage the export opportunities of poor countries through protectionist tariffs and anti-dumping duties as well as through huge subsidies and export credits to their domestic producers.

5. Announced in 2003, this joint WHO/UNAIDS program was meant to provide, by 2005, anti-retroviral treatment to 3 million (out of what were then estimated to be 40.3 million) AIDS patients in the less developed countries. In fact, it extended such treatment to about 900,000.

6. A prize is a specific reward offered for the development of a new medicine that meets certain specifications. It can be in the form of a cash payment or in some other form, for instance, the extension of a patent on another medicine that is in high demand by affluent patients. An AMC is a promise to subsidize the sale of a certain large number of doses of a new medicine that meets certain specifications. An advance purchase commitment is a promise to buy, at a preset high price, a certain large number of doses of a new medicine that meets certain specifications.

7. Personal communication from Aidan Hollis, based on his rough calculation. See also Hollis A. An efficient reward system for pharmaceutical innovation; 2005:8 at www.econ.ucalgary.ca/fac-files/ah/dragprizes.pdf (retrieved 2008 Jul 16), where he quantifies the deadweight loss in the region “of $5 bn – 20 bn annually for the US. Globally the deadweight loss is certain to be many times this figure, because in many markets drug insurance is unavailable and so consumers are more price-sensitive.”

8. See the special issue on disease mongering, Moynihan R, Henry D, eds. PLoS Medicine 2006;3:425–65.

9. This corresponds roughly to the profitable period of a patent: Under TRIPS, members of the World Trade Organization must offer patents lasting at least 20 years from the patent filing date, which is typically many years before the medicine receives market clearance after clinical trials.

10. See note 2, Pogge 2008:ch. 9.

11. For further details, see also Pogge T. Medicines for the World. Sur: Revista Inter-nacional de direitos humanos; 2008:8. Additional work by team members is available at www.yale.edu/macmillan/igh/e-library.html. A special issue of the journal Public Health Ethics; 2008(1):2 features critical discussions of the proposal by Gorik Ooms and Rachel Hammonds, Thomas Faunce and Hitoshi Nasu, Devi Sridhar, Michael Selgelid, Aidan Hollis, and Michael Ravvin.

12. Hollis A. The Health Impact Fund: A useful supplement to the patent system? Public Health Ethics 2008;1(2):123–33.

13. The only existing AMC thus far—funded by Italy, the United Kingdom, Canada, Russia, Norway, and the Gates Foundation—is for vaccines against pneumococcal disease, a major cause of pneumonia and meningitis among the poor.

14. For an excellent discussion, see Hollis A. Incentive Mechanisms for Innovation. IAPR Technical Paper; 2007:15–6. Available from www.iapr.ca/iapr/files/iapr/iapr-tp-07005_0.pdf (retrieved 2008 Jul 16).

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Cambridge Quarterly of Healthcare Ethics
  • ISSN: 0963-1801
  • EISSN: 1469-2147
  • URL: /core/journals/cambridge-quarterly-of-healthcare-ethics
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