Founders of a new initiative seeking to revolutionize drug research and compensation to more widely distribute life-saving medicines held the American launch of the Health Impact Fund at Georgetown as a part of a World AIDS Day symposium.

The Health Impact Fund, founded by Thomas Pogge and Aidan Hollis, asks pharmaceutical companies to opt out of patent-based profit schemes in favor of a yearly award based on the total health impact individual drugs have on the world’s population. Supporters of the proposal see the award as a way to get more effective drugs in the hands of needy patients for little or no cost.

“It recognizes our moral imperative to help the neediest, the most vulnerable and the most wounded fellow members of our global community,” Georgetown President John J. DeGioia said of the Health Impact Fund. “If implemented, it will help the three-quarters of humanity, mostly in the developing world, who cannot afford the patented medicines we may take for granted.”

As proposed, the fund would initially contain $6 billion, financed by governments worldwide. Pharmaceutical companies would voluntarily opt into the fund for certain drugs they develop and then pledge to offer those drugs at cost to participating countries.

Rather than draw money from a patent and charge high rates for their drugs, pharmaceutical companies would be paid from the fund for a 10-year period. The health fund would use studies and observation to measure a drug’s worldwide impact and how well it is being used by patients. The more “well used,” the more the fund would award to the drug company.

After 10 years, the drug companies would agree to release the intellectual property rights necessary for generics to be manufactured.

“This is intended to be good for drug firms, and they will only opt in if they can make a profit,” said Hollis, co-director of Incentives for Global Health nonprofit. “Firms can use the awards to cover their research and development and satisfy their shareholders, while also concentrating on public health.”

Hollis and Pogge said the thinking is that more drugs will get into the hands of patients, and companies will strive to better explain medicinal administration to health care workers and patients in order to get a better score on the fund’s analysis of drug use. Because the awards are based on total health impact, the fund’s founders believe it will spur more innovation in drug creation.

Holding the impact fund launch and discussing how to get medicine into the hands of disadvantaged patients on the 20th anniversary of World AIDS Day held particular significance, DeGioia added.

“While major advances have been made in the treatment and prevention of the disease, too many of the neediest in our global community still do not have access to the medicines that could help save their lives or alleviate their suffering,” he said.

Pogge, the Leitner Professor of Philosophy and International Affairs at Yale University, and Hollis unveiled the Health Impact Fund before the discussion.

By drug firms using award money for more research and development, the health fund founders hope to create a cycle of more effective drugs entering the market. This is key since there is no denying that developing new medicines strains the wallet. Estimates for the creation and distribution of a new drug ranges from $200 million to $1.3 billion, said Pogge, who also serves as co-director of Incentives for Global Health.

“Patents are an incentive for profits, but they’re not necessarily medically valuable,” Pogge explained. “We’re proposing a payment plan that would depend on the overall health impact of the drugs.”

The fund may even create a “strategic gamesmanship,” where drug companies compete to get more innovative medicines on the market, upping their award, Hollis said.

“We may have more concentration on drugs for neglected diseases, not just those that make the most money (from patents),” he said.

Following the launch announcement, Pogge and Hollis participated in a panel discussion with health and pharmaceutical experts. The panelists included John Osborn, a member of the U.S. Advisory Commission on Public Diplomacy and a former executive at two pharmaceutical companies. He called the Health Impact Fund a good example of private-public partnerships, but questioned its financial viability.

Osborn pointed to issues including unknown award amounts and the health impact assessments being difficult to administer and subject to interpretation.

“Drug companies’ highest duty are to their shareholders,” he said. “I question whether those fiduciary duties can be reconciled with the Health Impact Fund.”

Another panelist, Larry Gostin, the Timothy and Linda O’Neill Professor of Global Health Law and director of the O’Neill Institute for Global Health Law, acknowledged those challenges.

“But it is far more beneficial than the current system that we have,” Gostin said. “This idea is compelling morally because, unlike so many other ideas, it tries to confront global ethics and global social justice.

-- Lauren Burgoon, Blue & Gray Assistant Editor

(December 2, 2008)