WHAT IF: A health impact fund rewarded innovation and managed spending on new drugs?

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Aidan Hollis, University of Calgary

Aidan Hollis, University of Calgary

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Transcript

  • 1. Health Impact Fund Aidan Hollis Vice-President, Incentives for Global Health
  • 2. Key problems
    • Incentives for innovation in drug markets are incomplete
      • Weak incentives for investment into drugs for important diseases that primarily affect the poor (eg malaria, TB, chagas)
      • Weak incentives for investment into other drugs where patent protection is incomplete (eg new uses for old drugs)
    • High prices exclude billions of poor people from access
  • 3. Proposed Option: Health Impact Fund
    • Governments would finance the HIF to pay rewards to drug innovators.
    • Firms could optionally register new drugs (or new uses) with the HIF, retaining their IP.
    • Registered drugs would be eligible for rewards paid by HIF; in exchange, drugs would be priced at cost of production globally.
    • Rewards would be based on the assessed health impact of the drug.
  • 4. Reward structure
    • Rewards paid for 10 years for new drugs, 5 years for new uses.
    • Key: each firm’s reward would be equal to its share of the total health impact achieved by all registered drugs in each year.
    • Health impact to be assessed each year, based on total global sales volume and health benefits of product in practice, so rewards would evolve.
    • To make this work, the rewards would be billions of dollars annually.
  • 5. Benefits
    • Accessibility and affordability of drugs is improved with lower price and stronger incentives to deliver to patients in need
    • HIF creates incentives for R&D to be conducted for important diseases that primarily afflict the poor by rewarding the development of drugs with large health impact.
    • In addition, the HIF could provide incentives to develop new uses for older drugs for which there would otherwise be no significant reward.
  • 6. Who would fund this?
    • Governments are the only feasible funders, given the scale and the importance of long-term commitment
    • The net cost would be relatively small, since governments would also have large savings from low prices of registered drugs.
  • 7. Is the HIF only for poor countries?
    • We have problems with drug affordability even in Canada
    • Often people don’t get optimal drug therapy because their provincial plan doesn’t cover a drug with a price far above its cost of production.
    • And it is unknown what therapeutic benefits might be obtained by having clinical trials done on new uses for old drugs.
  • 8. Progress and next steps
    • The WHO “Expert Working Group” on R&D Financing (2009) indicated the HIF is one of the most promising proposals.
    • The German Social Democratic Party has officially endorsed the HIF.
    • Incentives for Global Health is currently in discussions with a number of pharmaceutical companies about possible pilots.
      • A pilot would test the health impact measurement in a pilot with one drug, one country.
      • It might make sense to do a pilot in Canada for a new use for an existing generic drug since incentives are lacking even in developed countries for such cases.
  • 9. Thanks!
    • For more information, see
    • www.health impact fund.org