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


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Aidan Hollis, University of Calgary

Published in: Health & Medicine, Business
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WHAT IF: A health impact fund rewarded innovation and managed spending on new drugs?

  1. 1. Health Impact Fund Aidan Hollis Vice-President, Incentives for Global Health
  2. 2. Key problems <ul><li>Incentives for innovation in drug markets are incomplete </li></ul><ul><ul><li>Weak incentives for investment into drugs for important diseases that primarily affect the poor (eg malaria, TB, chagas) </li></ul></ul><ul><ul><li>Weak incentives for investment into other drugs where patent protection is incomplete (eg new uses for old drugs) </li></ul></ul><ul><li>High prices exclude billions of poor people from access </li></ul>
  3. 3. Proposed Option: Health Impact Fund <ul><li>Governments would finance the HIF to pay rewards to drug innovators. </li></ul><ul><li>Firms could optionally register new drugs (or new uses) with the HIF, retaining their IP. </li></ul><ul><li>Registered drugs would be eligible for rewards paid by HIF; in exchange, drugs would be priced at cost of production globally. </li></ul><ul><li>Rewards would be based on the assessed health impact of the drug. </li></ul>
  4. 4. Reward structure <ul><li>Rewards paid for 10 years for new drugs, 5 years for new uses. </li></ul><ul><li>Key: each firm’s reward would be equal to its share of the total health impact achieved by all registered drugs in each year. </li></ul><ul><li>Health impact to be assessed each year, based on total global sales volume and health benefits of product in practice, so rewards would evolve. </li></ul><ul><li>To make this work, the rewards would be billions of dollars annually. </li></ul>
  5. 5. Benefits <ul><li>Accessibility and affordability of drugs is improved with lower price and stronger incentives to deliver to patients in need </li></ul><ul><li>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. </li></ul><ul><li>In addition, the HIF could provide incentives to develop new uses for older drugs for which there would otherwise be no significant reward. </li></ul>
  6. 6. Who would fund this? <ul><li>Governments are the only feasible funders, given the scale and the importance of long-term commitment </li></ul><ul><li>The net cost would be relatively small, since governments would also have large savings from low prices of registered drugs. </li></ul>
  7. 7. Is the HIF only for poor countries? <ul><li>We have problems with drug affordability even in Canada </li></ul><ul><li>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. </li></ul><ul><li>And it is unknown what therapeutic benefits might be obtained by having clinical trials done on new uses for old drugs. </li></ul>
  8. 8. Progress and next steps <ul><li>The WHO “Expert Working Group” on R&D Financing (2009) indicated the HIF is one of the most promising proposals. </li></ul><ul><li>The German Social Democratic Party has officially endorsed the HIF. </li></ul><ul><li>Incentives for Global Health is currently in discussions with a number of pharmaceutical companies about possible pilots. </li></ul><ul><ul><li>A pilot would test the health impact measurement in a pilot with one drug, one country. </li></ul></ul><ul><ul><li>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. </li></ul></ul>
  9. 9. Thanks! <ul><li>For more information, see </li></ul><ul><li> impact </li></ul>