[Ip-health] incentives for covid treatments

Aidan Hollis ahollis at ucalgary.ca
Fri May 22 10:29:17 PDT 2020

The Economic and Public Health Imperatives Around Making Potential Coronavirus Disease–2019 Treatments Available and Affordable

	• Steven Forsythe, PhD, MBA 
	• Joshua Cohen, PhD, MA
	• Peter Neumann, ScD
	• Stefano M. Bertozzi, MD, PhD
	• Anthony Kinghorn, MBBCh, MA
Published:May 21, 2020


"Ideally, there would be a global mechanism that would simultaneously incentivize rapid development of treatments for COVID-19 and ensure very rapid and affordable access for the world’s population. This will require compensating successful innovation and simultaneously unleashing global generic manufacturing capacity. Much has been written about these types of mechanisms. They typically resemble a large prize that is awarded to the innovator in exchange for the intellectual property rights (at least for low- and middle-income countries). For a pandemic of this sort, it might well be more efficient for the access to be universal, with set global prices (that would presumably be different depending on the wealth of the country) obviating the need for country-specific negotiations. There would be a clear role for a multilateral agency such as the World Health Organization or the World Bank to play.

"The complexity of such approaches lies in who is eligible for the prize and how the terms are set. For example, if the prize defines eligibility as a COVID-19 therapeutic that reduces mortality by 50% or more and costs less than $200 per course of treatment and company A is the first to produce and demonstrate the efficacy of such a product, it would win the prize. If a month later company B introduces a second drug that reduces mortality by 80%, would it also be eligible for the prize? What about company C that produces a drug that is also 50% effective, but costs 1/10th of the cost of company A’s drug to produce? Now is the time to contemplate and define these parameters and for countries to immediately commit to a fund that would administer the prizes and negotiate global prices for any treatment.”

The Health Impact Fund model addresses a lot of these questions… Clearly, having a single “prize” is a mistake. We can instead divide a total prize amount between firms that bring their products to patients in need, recognizing that patients in low-income countries are every bit as important as those in high-income countries!

Aidan Hollis
Professor of Economics
University of Calgary
ahollis at ucalgary.ca
+1 403 220 5861

twitter: @aidanhollis

Incentives for Global Health

The University of Calgary is located on the traditional territories of the people of the Treaty 7 region in Southern Alberta, which includes the Siksika, Piikani, Kainai, Tsuut’ina, Chiniki, Bearspaw, and Wesley First Nations. 

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