COMPAS Lecture, Ohio State University
World
Poverty
Thomas Pogge
Leitner Professor of Philosophy and International Affairs, Yale
1
World Poverty Today
Among 7+ billion human beings, about
868 million are chronically undernourished (FAO 2012),
2000 million lack access to essential medicines
(www.fic.nih.gov/about/plan/exec_summary.htm),
783 million lack safe drinking water (MDG Report 2012, p. 52),
1600 million lack adequate shelter (UN Special Rapporteur 2005),
1600 million lack electricity (UN Habitat, “Urban Energy”),
2500 million lack adequate sanitation (MDG Report 2012, p. 5),
796 million adults are illiterate (www.uis.unesco.org),
218 million children (aged 5 to 17) do wage work outside their household — often
under slavery-like and hazardous conditions: as soldiers, prostitutes or domestic
servants, or in agriculture, construction, textile or carpet production. ILO: The End
of Child Labour,Within Reach, 2006, pp. 9, 11, 17-18.
2
At Least a Third of Human Deaths
— some 18 (out of 57) million per year or 50,000 daily — are due
to poverty-related causes, in thousands:
diarrhea (2163) and malnutrition (487),
perinatal (3180) and maternal conditions (527),
childhood diseases (847 — half measles),
tuberculosis (1464), meningitis (340), hepatitis (159),
malaria (889) and other tropical diseases (152),
respiratory infections (4259 — mainly pneumonia),
HIV/AIDS (2040), sexually transmitted diseases (128).
WHO: World Health Organization, Global Burden of Disease: 2004 Update, Geneva 2008,
3
Table A1, pp. 54-59.
Millions of Deaths
416
Worldwide Poverty
Deaths 1990-2013
World War Two
1939-45
60
Mao's Great Leap
Forward 1959-62
30
Stalin's Repression
1924-53
20
World War One
1914-18
17
Russian Civil War
1917-22
9
Congo Free State
1886-1908
7.5
Korea and Vietnam
1951-54, 1965-74
5.5
0
50 100 150 200 250 300 350 400
4
Global Household Income Distribution
Segments
Poorest Tenth
Second Tenth
Third Tenth
Fourth Tenth
Fifth Tenth
Sixth Tenth
Seventh Tenth
Eighth Tenth
80-95th Percentile
Richest 5 Per Cent
1988
0.337
0.514
0.668
0.850
1.154
1.689
2.902
6.056
42.958
42.872
2008
0.251
0.414
0.587
0.840
1.244
1.993
3.442
6.340
39.137
45.751
Change in %
-25.3%
-19.5%
-12.0%
-1.2%
+7.7%
+18.0%
+18.6%
+4.7%
-8.9%
+6.7%5
Key Facts
In just 20 years, the richest five percent of human beings have gained
about as much (3%) as the poorer half had left at the end of this period.
The ratio of average incomes of the richest five percent and the
poorest fifth rose from 202:1 to 275:1 in this 1988-2008 period.
Had the poorest 30% held steady, its 2008 share of global household
income would have been 21% higher (1.52% instead of 1.25%).
Had it been allowed to gain the 2.9% of global household income that
was in fact gained by the richest five percent, the poorer half would
have nearly doubled its share — sufficient to end severe poverty.
6
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.
Profit-Maximizing Pricing
(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.
Advisory Board
Kenneth J. Arrow
Nobel Prize in Economics; Professor Emeritus, Stanford University
Noam Chomsky
Institute Professor Emeritus, MIT
John J. DeGioia
President, Georgetown University
Ruth Faden
Director, Berman Institute of Bioethics, Johns Hopkins University
Paul Farmer
Harvard Medical School; co-founder, Partners in Health
Robert Gallo
Institute of Human Virology
Paul Martin
Former Prime Minister of Canada
David Haslam
Chair, UK National Institute of Health and Clinical Excellence
Christopher Murray
Director, University of Washington Institute for Health Metrics and Evaluation
Baroness Onora O’Neill
House of Lords; former British Academy President & Newnham College Principal
Sir Gustav Nossal
Former Director, Hall Institute of Medical Research, University of Melbourne
James Orbinski
Former International President, Médecins Sans Frontières
Sir Michael Rawlins
Former Chair, UK National Institute of Health and Clinical Excellence
Karin Roth
Member of the German Parliament
Amartya Sen
Nobel Prize in Economics; Professor, Harvard University
Peter Singer
Professor, Princeton University
Judith Whitworth
Chair, WHO Advisory Committee on Health Research
Heidemarie Wieczorek-Zeul
Former German Minister of Economic Cooperation and Development
Richard Wilder
Associate General Counsel, Bill and Melinda Gates Foundation
(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.
Financing the HIF
Willing governments contribute 0.03% of GNI
through long-maturity or perpetual bonds with
interest pegged to inflation or GNI/capita.
Alternatively, a dedicated international tax, for
instance on financial transactions or pollution,
whose future revenue stream could be securitized.
Such taxes would also moderate speculative excesses
in financial markets / slow climate change.
Financing the HIF
Either way, the HIF could create a diversified
endowment, managed to generate a stable income
stream that would cover a substantial and growing
portion of the annual reward pools.
The endowment could accept contributions also
from international and non-governmental
organizations, foundations, corporations,
individuals, and estates — following the example
of private universities.
Piloting the HIF
A crucial challenge is the uniform measurement of
health impact across diverse medicines and cultures.
This is especially difficult with drugs for infectious
diseases where health impact depends on population
effects which in turn are influenced by the extent to
which resistance to the drug can be avoided.
In partnership with Janssen (part of J&J), we hope to
do a pilot involving their Sirturo (bedaquiline), the
first new drug against tuberculosis is over 40 years.
The HIF Would Benefit All Parties
Innovators: moral and reputational gains, large
new markets, new R&D opportunities.
Patients: broader arsenal, greater affordability,
much stronger health-care focus on results,
population effects of including the poor.
Governments/taxpayers: reduced need for
expensive care, reduced human and economic
burdens of disease, North-South partnership for
an important global public good.