[Ip-health] suggestions for a HIF pilot drug

James Love james.love at keionline.org
Tue May 25 05:33:39 PDT 2010

The Health Impact Fund is designed to undermine efforts to eliminate
legal monopolies on life saving drugs.  Pogge and Hollis took the
signature marketing claim for the anti-monopoly prize funds -- that the
reward would be based upon the impact of the product on health outcomes,
and called their copycat/remix version "the health impact fund."  They
were working with one of Pfizer's PR firms, so maybe that's not

Our blogs about the HIF from 2008 are on the web here


Read the first reason that Thomas Pogge gave for not backing an open
license, so developing country generics manufacturers could produce the


From: Thomas Pogge To: James Love , iplusa
Date: Tue, 18 Nov 2008

In exploring reform ideas, Jamie, it seems to me reasonable to take
prospects of implementation into account. The pharmaceutical industry
has a lot of political influence. Other things equal, therefore, a
reform proposal is improved when it is modified so that the
pharmaceutical industry has less reason to oppose it.

In previous work, Aidan and I have both explored the possibility of
requiring immediate open licensing as a condition of receiving health
impact rewards. In long discussions we have come to the conclusion that
allowing innovators to retain IP is actually the better way of
specifying the Health Impact Fund. One reason is that the proposal is
then less unacceptable to pharmaceutical companies and therefore more
likely to be adopted.

Everything about the HIF is strategically designed to help big pharma
maintain its monopolies in developing countries.   The HIF was launched
when the UNITAID patent pool was getting off the ground, and issued a
statement against voluntary licensing of patents.

The 2008 HIF denounced compulsory licensing of patents, even after
Hollis and Pogge had earlier supported CLs.

The HIF is designed to present Pogge and Hollis as the originators of
the de-linkage ideas, that they have taken from our work, so they can
try to frame the debate in a pro-monopoly way -- even though the
original proposals for the R&D treaty, open source drug development and
prize funds were based upon the elimination of legal monopolies.  

I assume the HIF has not yet copied the open source dividend because
this would offend Microsoft - which is now happy to support the HIF as a
more IPR/monopoly friendly version of prize fund ideas. 

Last week the New York Times reported that Abbott was paying $3.7
billion to buy the Indian drug maker Piramal Healthcare, adding to yet
another major developing country generics producer being bought up by
big pharma.


Meanwhile, Abbott is aggressively seeking super high prices for its
ritonavir/lopinavir aids drug, in developing countries. 

The premise of the HIF fund is no voluntary license ask, and no
compulsory licensing, and pretty much, a weaker developing country
generics sector.  At that point, the voluntary buy-in for the HIF
becomes super expensive, as the monopoly price is not under much of a

The HIF is now focusing on AIDS drug precisely because the
pharmaceutical industry understands the WHO and northern donors will be
focusing on some version of this proposal:


"A Prize Fund to Support Innovation and Access for Donor Supported
Markets Linking Rewards for Innovation to the Competitive Supply of
Products for HIV-AIDS, TB, Malaria and Other Diseases for Humanitarian

The donor prize fund will get serious attention simply because donors
have few places to go --- they can either raise taxes to pay for
patented medicines, cut back on treatment, or deal effectively with the
IPR/business model problem.  

The HIF apparently will try to be a bad/pro-monopoly version of the
donor proposal.  It is not a realistic solution to the monopoly pricing
problem and is a threat to millions of AIDS patients worldwide.


On Mon, 2010-05-24 at 16:33 -0600, Aidan Hollis wrote:
> Dear Patrick,
> As you know, there is considerable interest in de-linkage between the price of new drugs and the cost of innovation. If innovation is not rewarded on the basis of price -- which is generally related to willingness (and ability) to pay -- then it should be rewarded on some other basis. In my view, measured health impact makes the most sense as the basis on which to reward innovation. 
> Perhaps you disagree with the concept of de-linkage. Or perhaps you feel that there is a better basis on which to base payments for innovation -- such as willingness to pay.
> But if you like the idea of de-linkage, and you like the idea of paying for the thing that we actually value -- health impact -- then the proposed pilot is a sensible way to explore how to operationalize these ideas. Of course, it may not do as much as you would like in terms of opening up patents. But it is an important step to learn about making payments depend on assessed health impact. 
> As you may be aware, the prize fund proposals of Bangladesh, Barbados, Bolivia and Suriname on chagas disease and cancer also rely on the idea of payments based on assessed incremental health impact. I think that these proposals could therefore benefit from the experience gained from the proposed pilot. 
> I don't see how the approach of the HIF is fundamentally opposed to any of the approaches you mention. For certain products, it might be an alternative way of achieving a desired outcome. For example, one way of achieving a given innovation is for government to engage in the research, run clinical trials, and openly license the relevant technologies to enable generic production. The HIF approach, by offering a reward, attempts to induce private persons or corporations, to engage in research and invest in clinical trials, based on their private information about the likely success of the R&D project, and then rewards them on the basis of achieved health impact, given mandated low pricing (which could include generic production). There is evidently room for both approaches, and both are aiming to achieve wide access to new drugs. I am unaware of any evidence that shows that one approach is superior to another, given that the HIF approach hasn't even been tried; most likely each would have advantages in different areas.
> Thanks for your comments. And of course, if you have some ideas about products that would be suitable for a pilot, please let me know.
> 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
> On 2010-05-22, at 10:18 PM, Patrick Bond 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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> > 
> >  
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James Love, Director, Knowledge Ecology International
http://www.keionline.org | http://www.twitter.com/jamie_love
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