[Ip-health] suggestions for a HIF pilot drug

Riaz Tayob riaz.tayob at gmail.com
Mon May 24 01:20:58 PDT 2010

Given the barriers to entry, high costs, level of basic research,
willingness and the attractiveness of pure patent models (even if the
recipients cannot pay for the meds) there is a need for greater
experimentation. But it seems like BigPharma seems to push for models
that it finds appropriate.

If the system is broke, don't fix it is the mantra because it is
profitable in other areas.

There are many alternatives, including the prize fund, the HIF,
publicly funded research with patents owned by companies but granted
to publicly run boards on an exclusive marketting basis (Novartis
proposal killed by other BigPharma), patent pools etc. The major
problem with the more experimental (although no less rigorous and
studied of these like prize funds and patent pools) approaches is that
it hits the wall of BigPharma which cannot admit ANY problem with the
current system. This short termism has effected international
political processes to a great extent even though it is acknowledged
by even conservatives that the rate of innovation on new chemical
entities has collapsed (even though the number of patents used as
proxies for innovation has been relatively stable).

Why the international community cannot agree to processes that allow
for public (or decommodified) solutions to problems faced by
non-market (that is too poor to pay, which often means too poor to
matter in any realistic sense) participants is amazing. If the tragedy
of the commons was depressing, the tragedy of international health
diplomacy is even worse.

There is room for experimentation (R&D is a hit and miss affair!) but
the possibilities for it are being deliberately limited. There are
range of possibilities, the business as usual models have failed
neglected diseases with 10/90 gap moving from an initial mathematic
critique to a symbolic one.

Neither the patent pool nor progressive prize funds have made much
headway, and they are essentially market based solutions! This is a
sure sign from which to guage the capability of international fora to
address these issues. Even the Public Health, Innovation and IPR
deliverables are mostly quantitative (as lobbied strenuously for by
WHO staffers)

As aid decreases the palliative solutions are going to be less
effective perhaps the pressure for real solutions will likely


On 23/05/2010, Patrick Bond <pbond at mail.ngo.za> wrote:
> Thanks for this important work, Aidan.
> But I'm wondering about its appropriateness, as I've always felt there
> are two directions for global public policy on health R&D:
> 1) creative incentivization strategies that further *commodify* drug R&D
> (albeit by performance not effective demand) as along the lines below
> (Thomas Pogge has also set out the case in detail);
> 2) creative public investment in *decommodified* drug R&D, production
> and distribution - e.g. NHI for early ARVs, TRIPS exemptions (Doha
> 2001), and the Global Fund for subsidized supply of generics and
> assistance in establishing local production facilities, all prompted by
> civil society activists, exemplified by South Africa's Treatment Action
> Campaign;
> While we have so many public health disasters, it makes sense to try as
> many strategies as possible, as each disease needs a different approach.
> However, it strikes me that these two foundational approaches above are
> fundamentally opposed, at some stage. Is that correct? And if so, isn't
> the TAC model preferable, and proven?
> Cheers,
> Patrick
> Aidan Hollis wrote:
>> ****Seeking suggestions for a HIF pilot****
>> Incentives for Global Health is working towards a pilot of the reward
>> mechanism for the Health Impact Fund (http://www.healthimpactfund.org).
>> The goals of the pilot are (1) to enable the distribution of a medically
>> valuable drug at a low price in a developing country; and (2) to explore
>> the feasibility of making reward payments depend explicitly on the
>> measured health impact of a drug. We are now seeking suggestions for a
>> suitable drug.
>> (1) How would the pilot work?
>> The pilot would consist of a contract between a country, a pharmaceutical
>> company, and probably a third-party payer. The contract would require the
>> company to supply a specified product at a specified low price in the
>> country during a specified period. In return, the company would be
>> eligible for a supplementary payment explicitly based on the assessed
>> health impact of the product in the country during the period.
>> (2) What products are suitable?
>> We are particularly interested in identifying patented products that have
>> a substantial therapeutic potential but are currently underused because of
>> high pricing.
>> (3) What countries are suitable?
>> We would like to run pilots in a variety of countries at different stages
>> of development and with different health systems.
>> (4) What value would such a pilot have?
>> First, such a pilot would help to increase access for patients in the
>> country to the pilot product. Second, the pilot would enable a real test
>> of contracting over assessed health impact. The HIF is one of several
>> proposals that delink the reward for innovation from prices, and that make
>> the reward for innovation conditional on assessed health impact. The pilot
>> would offer some practical lessons on how to write contracts in which
>> payments are based on health impact.
>> (5) Who will be involved in the pilot?
>> This will depend on the pilot, but the actors could involve: (1) The
>> country government, (2) the company, (3) In-country health experts, (4)
>> Incentives for Global Health, (5) A qualifying international health or aid
>> organization granting financial or technical support to the trial, and (6)
>> various technical experts including epidemiologists, health economists,
>> lawyers, etc.
>> If you have ideas about what drugs would be most suitable for a test of
>> assessing health impact, please contact me at the address below. I would
>> also welcome other comments or suggestions on the pilot.
>> Aidan Hollis
>> Professor of Economics
>> University of Calgary, 2500 University Dr NW Calgary AB T2N 1N4 Canada
>> tel: +1 403 220 5861  fax: +1 403 220 5861
>> email: ahollis at ucalgary.ca
>> web: http://econ.ucalgary.ca/hollis.htm
>> Incentives for Global Health
>> http://www.healthimpactfund.org
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