Vision & Origin of the Health Impact Fund

Vision

Medicines can work miracles in treating and averting disease. Humanity can fully realize this potential by working toward an international system in which (i) any important existing medicine is accessible to all patients who need it, regardless of their income and nationality, (ii) substantial research and development (R&D) efforts are always focused on the innovation projects that promise the most cost-effective health gains and (iii) most of the money we spend on medicines flows back into manufacture of medicines and pharmaceutical R&D. Incentives for Global Health is an interdisciplinary team of experts from around the world dedicated to breaking a path toward this ideal. We are convinced that evidence-based rewards for performance could bring greatly increased health gains even while reducing the $1 trillion the world currently spends on medicines.

What are the origins of the HIF proposal?

Many people have contributed intellectually and in many practical ways to the development of the HIF proposal. The proposal continues to be explored, improved and refined by the thoughtful suggestions and criticisms of people of various backgrounds. (If we have missed an important contribution, please don’t hesitate to let us know.)

1. Michael Abramowicz (January 2003) first developed a proposal for a reward system with a fixed fund, in which rewards would be based on the proportion of social value created by the innovation, as assessed after the innovation has been commercialized. He considered the possibility that such a system could be (a) mandatory and universal or (b) optional. Rewards were to be conditional on the patentee renouncing patent rights. Abramowicz’s lengthy paper (122 pages) built extensively on a 2001 working paper version and analysis of other proposals for prizes for innovation.

2. James Love (May 2003, pp. 14-16) and Love and Tim Hubbard (2004) proposed the creation of such a mandatory, universal fund with prizes limited to pharmaceuticals, as in Guell and Fischbaum (1995). Love and Hubbard, in brief papers, suggest some of the improvements that such an approach could achieve. Love and Hubbard note that the starting point of their analysis was in September 2002, after Abramowicz’s paper was submitted.

3. Aidan Hollis (June 2004) proposed that social value in such a prize mechanism to be measured in QALYs or DALYs, much like the approach taken by NICE, Australian PBS, etc. Hollis was introduced to the idea of rewarding pharmaceutical innovation separately from manufacturing by Love.

4. Love (May 2004) proposed that the period of prize payments could be structured over a fixed number of years, much like US Orphan Drug Act, data exclusivity, etc.

5. Thomas Pogge (January 2005) proposed a prize system for drugs that would be voluntary, but without the proportional rewards first suggested by Abramowicz. The paper characterized the ethical properties of such a system. This substantial paper, which was first presented in Birmingham UK in June 2004, was conceived independently of the papers of Abramowicz, Love, and Hubbard. Abramowicz, Love, and Pogge were all in Washington DC, but working in the separate spheres of law, economics, and ethics.[1]

6. Hollis (2005) characterized the economic properties of an optional fund for pharmaceuticals.

7. Hollis and Pogge (2008) described in much more detail a proposal for an optional fund, in which prices are regulated, but open licensing is not required, based on a two-week workshop with many participants in Canberra in December 2007.[2] This collaboration also resulted in the HIF book, which describes possible approaches to many other issues of implementation, including determining ownership of the right to rewards; governance structures; methods for determining incremental health benefits; etc.

8. Talha Syed (2009) pointed out that the system need not rely on patents to qualify innovations for rewards.

9. The team at IGH, including many scholars, experts and practitioners in various areas, has over the last three years attempted to explore the practical implementation of the HIF idea, and to increase the political and social awareness of the proposal. Our current work is focused on measuring health impact for the HIF. To this end we made considerable progress in a collaborative workshop with many health economists and epidemiologists at the National Institute for Health and Clinical Excellence in April 2010.

10. The team’s policy is to be open to suggestions and criticisms and to refine and adapt as needed. No single person associated with Incentives for Global Health takes credit for the ideas, and we deeply appreciate the important contributions of many people to the development of the Health Impact Fund proposal. Our goal is not to take ownership of the ideas, but to bring them to life for the benefit of humanity.

 

References

Abramowicz, M., 2003. “Perfecting patent prizes.” Vanderbilt Law Review; Jan 2003; 56(1): 114-236.

Guell R. and M. Fischbaum, 1995. “Toward allocative efficiency in the prescription drug industry.” Milbank Quarterly 73: 213-229.

Hollis, A. and T, Pogge. 2008. The Health Impact Fund: Making New Medicines  Accessible for All. Oslo and New Haven: Incentives for Global Health.

Hollis, A., 2004. “An efficient reward system for pharmaceutical innovation.” Mimeo, 28 June 2004.

Hollis, A., 2005. “Optional rewards for new drugs for developing countries.” Submission to CIPIH, 5 April 2005.

Love, J. 2003. “From TRIPS to RIPS: A better Trade Framework to support Innovation in Medical Technologies.” Paper presented in Université de la Méditerranée, Marseille, France, May 27th, 2003.

Hubbard, T, and J. Love, 2004. “A New Trade Framework for Global Healthcare R&D”, 2/2 PLoS Biology 147.

Love, J., 2004. “Two approaches to financing R&D with marginal cost pricing, decentralized decision making, and competition” Presentation at Program on Science, Technology, and Global Development, The Earth Institute at Columbia University, May 20-21, 2004

Pogge, T., 2005. “Human rights and global health: a research program.” Metaphilosophy 36 (1/2): 182-209.

Syed, T., 2009. “Should a Prize System for Pharmaceuticals Require Patent Protection for Eligibility?” Incentives for Global Health Discussion Paper No. 2.



[1] Love has repeatedly claimed that Pogge attempts to “pass off” the core ideas of a prize model in which rewards are based on shares of a prize fund as his own idea without attribution. In fact, Pogge (2005) didn’t have such a model, and when he adopted the proportional rewards model in Hollis and Pogge (2008), Abramowicz and Love’s contributions were acknowledged in the preface. Indeed, it is extraordinary that in the context of claiming that Pogge passes off Love and Hubbard’s ideas as his own, Love seems to be missing the point that Abramowicz was the first to develop the idea of a fixed reward fund distributed in proportion to social value.

[2] Hafiz Aziz-ur-Rehman, Christian Barry, Laura Biron, Leila Chirayath, Kieran Donaghue, Jocelyn Finlay, Mike Ravvin, Matt Rimmer, and Michael Selgelid. Many others helped in developing the material in the book.