[Ip-health] HIF Newsletter - full text

Matt Peterson matt.peterson at yale.edu
Thu Jun 24 09:49:55 PDT 2010

You can read a formatted version of this newsletter online at http://eepurl.com/Du41


In this issue:

German SPD Calls for a HIF Pilot
How NICE Is the HIF?
New Scientific Advisory Committee Chair
Piloting the HIF
Recent Presentations around the World
What's Ahead?
Viewpoint: Differential Pricing and the HIF

The Incentives for Global Health team has had a busy couple of months. We
want to update you on our activities before summer vacations begin!

_German SPD Calls for a HIF Pilot_

Political support is critical for the Health Impact Fund to move from theory
to reality. It is exciting to report that the German Social Democratic Party
has officially endorsed the HIF. In a [1]policy document, the SPD called for
Germany to play an active role in the piloting of the HIF, and, once
effectiveness is demonstrated, to financially support and encourage the
establishment of the HIF. This endorsement comes alongside the SPD’s strong
commitment to fighting neglected diseases, improving child and maternal
health, and supporting the Global Fund.

_How NICE Is the HIF?_

The UK [2]National Institute for Health and Clinical Excellence (NICE)
hosted a one-day conference on April 27 focusing on measuring health impact
in the HIF.  The conference was attended by NICE experts, as well as
epidemiologists, health economists, and public health experts from around
the UK. The meeting was extraordinarily productive in exploring the
relevance to the HIF of the lessons from NICE’s experience with
cost-effectiveness research over the past ten years, and demonstrating how
health impact can be measured in practice. The conference was organized by
Dr Kalipso Chalkidou, Prof. Karl Claxton, Prof. Tony Culyer, [3]Aidan
Hollis and [4]Thomas Pogge. Sir Michael Rawlins opened the conference, and
Prof. Andrew Stevens chaired the day’s proceedings.

_New Scientific Advisory Committee Chair_

As we move forward, Incentives for Global Health is expanding the team
through a Scientific Advisory Committee that will shape the development of
both the pilot and the Health Impact Fund proposal.

Since our last newsletter, Dr.
[5]Harvey Rubin has been appointed as chair of the Scientific Advisory
Committee.  Rubin holds professorial appointments in Medicine, Microbiology,
and Computer and Information Sciences at the University of Pennsylvania and
also directs its Institute for Strategic Threat Analysis and Response
(ISTAR). We will share the membership and work of the Scientific Advisory
Committee with you as we progress.
_Piloting the HIF_

We are continuing to develop an innovative pilot of the Health Impact Fund.
The key step forward in validating the HIF concept will be one or more
pilots of the assessment methodology. A pilot will involve arranging for a
patented drug to be sold in a country at cost, with the patentee being
rewarded explicitly on the basis of health impact. It is anticipated that
such a pilot will not only provide an invaluable demonstration of
feasibility, but will also offer many lessons in contracting over rewards
based on health impact.

If you would like to be involved in developing the pilot, please [6]contact
us. We are actively exploring partnerships and funding opportunities now.

_Recent Presentations around the World_

  * Thomas Pogge and Aidan Hollis presented on the Health Impact Fund at the
    annual meeting of the [7]Advisory Committee on Health Research at the
    World Health Organization in Geneva on May 3. The committee offered both
    suggestions and criticisms. One member felt that the existing system
    works very well and that the HIF might undermine it. Another argued that
    it was so difficult to measure the health benefits of pharmaceuticals,
    even for widely used classes such as statins, that it was impossible to
    make rewards dependent on health impact. Partly in response to this
    criticism, others encouraged further analysis and piloting of the HIF.

  * The [8]Graduate Institute Global Health Program in Geneva hosted an
    afternoon seminar on the HIF on May 3. Antony Taubman, Director of the
    Intellectual Property Division at the World Trade Organization, served
    as chair. Aidan Hollis and Thomas Pogge presented on the Health Impact
    Fund, with panel responses from Dr. Hans Hogerzeil, Director, Essential
    Medicines and Pharmaceutical Policies, World Health Organization; Dr.
    Nina Schwalbe, Managing Director, Policy and Performance, at GAVI
    Alliance; and Dr. Tido von Schoen-Angerer, Director, Campaign for Access
    to Essential Medicines, Doctors Without Borders/Médecins Sans Frontières
    (MSF). The panelists offered a skeptical view of the HIF. Dr. Hogerzeil
    expressed concerns about whether investing in new medicines was the best
    way to address public health needs, and whether instead simply relying
    on differential pricing wouldn’t be adequate. Dr. Schwalbe observed that
    there were important governance issues with organizations such as the
    HIF. Dr. von Schoen-Angerer expressed a view that generic competition
    was a critical component in getting prices down. The seminar thus
    offered a healthy and stimulating discussion!

  * Jocelyn Mackie of [9]Gilbert's LLP and Thomas Pogge gave a full day of
    presentations at the [10]Wharton Business School on April 14. As a
    result of these meetings, we were invited to propose two HIF-related
    [11]Field Application Projects that student teams will be able to pursue
    next fall term as part of their credited studies. One of these projects
    will aim to specify the legal relationship between the HIF and its
    registrants as well as the method through which the health impact of
    registered products is to be assessed. The other project will aim to
    design a marketing and fundraising strategy for the HIF. Given the
    intelligence, creativity, and enthusiasm of the students we encountered,
    we expect good ideas to emerge from their work.

  * The University of Melbourne, in collaboration with the Australian
    government and the [12]InnovaP2 team, hosted a [13]conference on
    pharmaceutical innovation and access (March 24-6). The conference was
    organized by Prof. Doris Schroeder. Speakers included Tikki Pang of the
    World Health Organization, Klaus Leisinger of the Novartis Foundation,
    Prof. Peter Singer, and Aidan Hollis.

  * [14]Matt Lindauer, a graduate student at Yale, presented on the Health
    Impact Fund at the Yale [15]Unite for Sight conference on April 17.

  * On May 7, Thomas Pogge gave a lecture on the HIF at a Sanofi-sponsored
    workshop that was part of the annual Hauptstadtkongress Medizin und
    Gesundheit. In this context, Pogge met several Sanofi managers whom we
    hope to work with in the future on possible pilot projects.

  * On May 18, in connection with lecture at the Hague [16]Peace Palace,
    Pogge also participated at a Peace Palace seminar about the HIF with
    commentators Ville Päivänsalo, David Koepsell, and Paul Hunt (until
    recently the [17]UN Special Rapporteur on the right to Health) along
    with a select group of other invitees. The three-hour session produced
    interesting ideas about the design of the HIF as well as new leads for
    how to increase public awareness of the proposal.

  * [18]Amitava Banerjee, Medical Advisor to Incentives for Global Health,
    presented on the Health Impact Fund at the [19]Oxford Global Health
    Group in May.

  * On June 1, the Austrian TV program Hangar 7 had a [20]90-minute
    discussion with Advisory Board member Heidemarie Wieczorek-Zeul, Thomas
    Pogge, Helmut Reisen (OECD) and Kunibert Raffer (University of Vienna).
    The first of four segments was devoted to discussing the HIF. The
    program aired June 10.

  * In the last few months, Thomas Pogge has also given three lectures on
    how the reward mechanism of the HIF might be replicated in other domains
    – to stimulate innovative seed varieties and especially new clean/green
    technologies without mark-ups that invariably lead to their
    underutilization. The basic idea would be to pay agricultural innovators
    on the basis of reductions in the use of pesticides and fertilizers as
    well as increases in nutrient yield — and to pay green innovators on the
    basis of emissions averted — all on condition that they sell their
    products at the lowest feasible cost of production and/or provide
    zero-priced licenses to other manufacturers.

_What’s Ahead?_

HIF team members continue to deliver presentations on the Health Impact Fund
around the world this summer. Upcoming presentations include:

  * July 2: Annual lecture of the Society of Applied Philosophy (Thomas Pogge).
  * July 15: Keynote on the HIF in Toronto at the annual meeting of the
    North American Society for Social Philosophy (Thomas Pogge).
  * July 20: Invited plenary lecture on the HIF at the 16th World Congress
    of Basic and Clinical Pharmacology in Copenhagen (Thomas Pogge).
  * July 31: Lecture on alternative funding mechanisms for science research 
    and development at the Open Science Summit in Berkeley (Aidan Hollis).
  * August 30-31: Two-day workshop on the HIF proposal at the University of
    São Paulo (Thomas Pogge).
  * August: Presentation at the United Nations Economic and Social Commission 
    for Asia and the Pacific in Bangkok (Aidan Hollis).


Viewpoint: Differential Pricing and the HIF

The increase in companies choosing to price pharmaceuticals differently
across countries is a positive development for access to medicines. Some
companies have offered “at cost” prices for many products in the
lowest-income countries, and modified pricing for medium-income countries.
At the same time, countries such as Greece, facing budgetary constraints,
have been imposing lower prices too. We think that differential pricing is
generally desirable, since it will typically lead to improved access for
people in developing countries, and we encourage firms to use it. The HIF
achieves something similar: everyone pays a low price, and people in
countries with higher incomes contribute more to the reward fund through
their taxes. So how does the HIF improve on differential pricing? There are
three important distinctions.

First, differential pricing does nothing to address the need for incentives
to develop drugs for diseases that primarily affect the poor. In contrast,
the HIF is designed to value contributions towards alleviating the burden of
disease among the poor just as much as among the rich.

Second, differential pricing may fail to be able to distinguish between
people who are relatively rich and those who are relatively poor within a
country. Most developing countries have enormous disparities in personal
income and companies may find it profitable to price at levels that chiefly
address the needs of relatively rich people within the country.
[21]Effective differential pricing may require substantially different
prices within a country, and this can be difficult to achieve. The HIF
addresses this problem by requiring a low price for everyone.

Third, if prices are very low for the poorest countries, the company has no
commercial motivation to optimize use of the product, since the price
includes no profit component. This may lead to sub-optimal use of the
product. Again, the HIF helps to resolve this problem by making the reward
payments conditional on the global health impact of the product, including
the impact in the poorest countries.

Matt Peterson edits this newsletter. We welcome your input and questions 
on this newsletter and all aspects of the project. Email us at 
contact at healthimpactfund.org, and visit www.healthimpactfund.org for 
more info.


    1. http://dip21.bundestag.de/dip21/btd/17/021/1702135.pdf
    2. http://www.nice.org.uk
    3. http://www.yale.edu/macmillan/igh/about_us.html#hollis
    4. http://www.yale.edu/macmillan/igh/about_us.html#pogge
    5. http://www.istar.upenn.edu/about/director.html
    6. mailto:contact at healthimpactfund.org
    7. http://www.who.int/rpc/advisory_committee/en
    8. http://graduateinstitute.ch/globalhealth
    9. http://www.gilbertslaw.ca
    10. http://www.wharton.upenn.edu
    11. http://fap.wharton.upenn.edu
    12. http://www.uclan.ac.uk/health/research/rae2008/ethical_issues_in_human_health/ongoing_projects/innovap2.php
    13. http://uninews.unimelb.edu.au/news/6108
    14. http://www.yale.edu/macmillan/globaljustice/lindauer.html
    15. http://www.uniteforsight.org/conference
    16. http://www.vredespaleis.nl/default.asp?tl=1
    17. http://www2.ohchr.org/english/issues/health/right
    18. http://www.yale.edu/macmillan/igh/about_us.html#banerjee
    19. http://www.oxfordghg.co.uk
    20. http://www.servustv.com/cs/Satellite/Article/Talk-im-Hangar-7-011259276607980
    21. http://ideas.repec.org/p/clg/wpaper/2009-01.html

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