Yale GJP Human Rights & Economic Justice:
Essential Elements of the Post-MDG Agenda
Piloting the
Health Impact Fund
Thomas Pogge
Leitner Professor of Philosophy and International Affairs, Yale
1
Human Progress
… has two interlinked components:
Innovation — creation, invention, discovery; and
Diffusion — dissemination, uptake.
Insofar as either component is stifled, humanity’s
progress is impeded.
The Dilemma
We have learned that the speed and quality of innovation
can be substantially raised by granting innovators
temporary monopolies (patents, copyrights) that enable
them to profit by charging high mark-ups.
But such temporary monopolies facilitate innovation
at the expense of diffusion.
Rules Governing the Development
and Distribution of New Medicines
At present, pharmaceutical innovation is
rewarded through product (vs. process) patents
of minimally 20-year duration which the World
Trade Organization — under the Trade-Related
Aspects of Intellectual Property Rights (TRIPS)
Agreement — requires its member states to
grant.
(1) The Present System Does
Poorly in regard to Access
Universal access is gravely undermined, even in
affluent countries, by large mark-ups and, after the
patent period, by inadequate incentives for the
competent provision of generics to patients who
are poor or hard-to-reach.
(2) The Present System Does
Poorly in regard to Targeting
Focused innovation is distorted by huge economic
inequalities, which steer innovators away from
diseases predominantly affecting the poor and also
excessively reward the development of new “me-too”
and maintenance drugs.
(3) The Present System Does Poorly
in regard to Cost-Effectiveness
Overall efficiency is greatly diminished by
lobbying and gaming, by patenting and litigation,
by wasteful marketing and counterfeiting, as well as
by huge deadweight losses.
The Health Impact Fund
www.HealthImpactFund.org
The HIF is a complement to TRIPS, offering
• voluntary registration of any new medicine
• for participation in ten consecutive fixed
annual reward pools
• each of which is divided among registered
products according to their health impact
(in QALYs) around the world.
The Health Impact Fund
www.HealthImpactFund.org
• Savings from lower drug prices help governments fund
the HIF at initially $6 billion annually (0.01% of ΣGDP).
• Registrant may keep intellectual property rights, but
must sell the new medicine at the lowest feasible
average cost of manufacture and distribution
and grant cost-free licenses after the reward period.
• This price ceiling is generally to be determined by a
tender, which generic manufacturers in developing
countries are favored to win.
(1) The HIF Avoids High Prices
All HIF-registered products are available at
or below cost from day one. Poor people get
better access to important new medicines:
through their own funds or through national
governments, NGOs or international agencies.
(2) The HIF Ends the Neglect
of the Diseases of Poverty
The HIF adds powerful targeting incentives to
develop new medicines with the greatest health
impact — regardless of the socio-economic
composition of the patient population.
In regard to these diseases, research firms in the
developing world are at peak competitiveness:
no head start by “Big Pharma,” easy availability
of patients (trials), highly committed work force,
supportive political and social environment.
(3) The HIF Boosts Cost-Effectiveness
By reducing costs and losses due to:
• Patenting in many jurisdictions
• Litigation
• Marketing
• Counterfeiting
• Gaming
• Lobbying
• Deadweight losses
Bonus: The HIF Alleviates Last-Mile
Problems in Drug Delivery
By combining substantial rewards with low product
prices, the HIF encourages efforts toward:
1 Efficacy (freshness, transportation, storage)
2 Targeting of patients who can benefit the most
3 Affordability (price below ceiling to boost reach)
4 Careful prescribing with proper instructions
5 Promotion of high compliance and adherence.
Piloting the HIF
We have a USD 2m commitment toward a joint HIF
pilot from Janssen (part of J&J), involving their new
drug against multi-drug-resistant tuberculosis: Sirturo
(bedaquiline), which is already FDA-approved.
Because J&J will contribute the drug at zero cost, this
pilot will only refine the measurement of health gains
and of the preservation of the drug’s efficacy.
Waiting for drug approval in India, we are establishing
— with € 2m from the European Union — the baseline
against which health gains will be measured.
Benefits of this Pilot
• Develop an integrated metric & measurement methodology
for comprehensive health impact assessment.
• Establish defined procedures for its reliable application.
• Promote integrative and regional systems in health care:
from innovation to health care delivery.
• Serve pilot-area patients who gain access to a needed
product, competently provided at an affordable price.
Three Adaptations
Extension to clean/green technologies: free access
to patented knowledge in exchange for rewards
proportioned to emissions averted.
Extension to agricultural innovation: pay innovators
on the basis of incremental nutrients delivered or use
of pesticides and fertilizers avoided.
Extension to educational innovation: free www
learning platform where competing providers can
offer courses toward diverse qualifications.