- Email: [email protected]
The Health Impact Fund
Correspondence
The views expressed herein are those of the authors and do not necessarily reflect those of the Japan International Cooperation Agency (JICA). We thank Tomoyuki Odani of JICA for his sincere support. We declare that we have no conflicts of interest.
*Kayako Sakisaka, Jiro Nakamura [email protected] Takemi Program in International Health, Department of Global Health and Population, Harvard School of Public Health, Boston, MA 02115, USA (KS); Department of Community and Global Health, Graduate School of Medicine, University of Tokyo, Bunkyo-ku, Tokyo, Japan (KS); and Chagas Disease Control Project Phase 2, Japan International Cooperation Agency, Tegucigalpa, Honduras (JN, KS) 1
2
3
4
Conteh L, Engels T, Molyneux DH. Socioeconomic aspects of neglected tropical diseases. Lancet 2010; 375: 239–47. Molyneux DH. Neglected tropical diseases— beyond the tipping point? Lancet 2010; 375: 3–4. Ministry of Foreign Affairs, Japan. Japan’s Official Development Assistance white paper 2007. http://www.mofa.go.jp/policy/oda/white/2007/ ODA2007/html/column/cl02006.htm (accessed Jan 28, 2010). Aiga H, Aragon HR, Zúniga C, Montoya MV, Bolaños FJ, Who EC. Donor agency commitment to Chagas disease. Lancet 2009; 373: 2024–25.
for International Development, and the Carter Center. In 2009, the US President’s Emergency Plan for AIDS Relief celebrated the 100th antiretroviral drug on WHO’s Prequalification Programme certified as a true generic by the US Food and Drug Administration (FDA). Most applications came from manufacturers in India. Since the files represented drugs covered by patents, the FDA had to extend to right-holders the legal opportunity to challenge every application. None did so. These examples all show that drug manufacturers need no incentive to develop drugs for hundreds of millions in poor countries, nor are intellectual property rights a barrier to their access. I declare that I have no conflicts of interest.
Jeremiah Norris [email protected] Center for Science in Public Policy, Hudson Institute, Washington, DC 20005, USA
The Health Impact Fund
1
Amitava Banerjee and colleagues (Jan 9, p 166)1 propose that a US$6 billion annual Health Impact Fund is needed as an incentive to drug manufacturers because “intellectual property rights provide little incentive for innovation in the diseases of lowincome countries”. This statement ignores the record of product development, absent from such a fund. In 1969, a drug manufacturer developed oral rehydration therapy for diarrhoeal diseases, which WHO proclaimed as “possibly the most important advance of this century”.2 In the 1980s, this same manufacturer developed Mectizan (ivermectin), for river blindness, contributing it at no cost. Although both products were patented, the manufacturer never challenged generic suppliers that entered the market. The costs of product development were soon eclipsed by distribution costs. These were borne by the World Bank, WHO, USAID, UNICEF, the UK’s Department
2
www.thelancet.com Vol 375 March 13, 2010
Banerjee A, Hollis A, Pogge T. The Health Impact Fund: incentives for improving access to medicines. Lancet 2010; 375: 166–69. Rubin RH. A comparative analysis of some drugs on the EDL: a discussion paper on the issues raised by a WHO resolution vis-à-vis US trade interests. Boston: Harvard Medical International, 1996.
Second, although both designs leave patents “exactly as they are”,3 the HIF makes their capacity for monopoly pricing irrelevant, because profits arise from maximising health gain. With an AMC, patent and intellectual property protections continue as powerful tools for higher prices and profits both outside the AMC and in negotiations with AMC funders. The HIF continuously seeks to achieve the lowest possible price through several means.4 Third, the pneumococcal AMC enables companies to make blockbuster profits in affluent markets, plus large extra profits from additional doses for the poor,5 whereas the HIF is designed to prevent such double-dipping. Paradoxically, a key document about the how the HIF is like a comprehensive AMC identifies several other differences.3 The HIF will thus fare best by standing on its own foundations and not likening itself to an AMC. I declare that I have no conflicts of interest.
Donald W Light [email protected] Department of Psychiatry, University of Medicine & Dentistry of New Jersey, Cherry Hill, NJ 08002, USA 1
Although Amitava Banerjee and colleagues1 liken the Health Impact Fund (HIF) to an advance market commitment (AMC) writ large, the HIF differs in fundamental ways that make it better than an AMC. First, the HIF is based on rewarding pharmaceutical companies by the actual health gain that their products achieve, not by profiting from preset prices after a product meets technical specifications chosen in advance by a committee.2 The AMC is a one-time payoff within the current paradigm of gross profit arising from the difference between cost and price. With the HIF, companies continuously profit more the lower the price is, because more people experience more health gain—a radical new business model that aligns profits with health gain.
2
3
4
5
Banerjee A, Hollis A, Pogge T. The Health Impact Fund: incentives for improving access to medicines. Lancet 2010; 375: 166–69. Center for Global Development. Making markets for vaccines: ideas into action. Washington, DC: Center for Global Development, 2005. http://www.cgdev.org/ doc/event%20docs/4.7.05-Vaccines/ Making%20Markets%20for%20Vaccines%20 -%20From%20Ideas%20to%20Action.pdf (accessed Feb 22, 2010). Hollis A. Prize, advanced market commitments, and pharmaceuticals for developing countries. http://www.iprsonline. org/ictsd/Dialogues/ 2007-10-22/7%20ThinkPiece_Hollis.pdf (accessed Feb 22, 2010). Hollis A. The health impact fund and price determination. New Haven: Yale University, 2009. http://www.yale.edu/macmillan/igh/ files/papers/DP1_Hollis.pdf (accessed Jan 26, 2010). Light DW. Advanced Market Commitments: current realities and alternate approaches. Amsterdam: HAI Europe/Medico International, 2009. http://www.haiweb.org/31032009/ 27%20Mar%202009%20AMC%20Current%20 Realities%20&%20Alternate%20Approaches %20FINAL.pdf (accessed Jan 22, 2010).
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The views expressed herein are those of the authors and do not necessarily reflect those of the Japan International Cooperation Agency (JICA). We thank Tomoyuki Odani of JICA for his sincere support. We declare that we have no conflicts of interest.
*Kayako Sakisaka, Jiro Nakamura [email protected] Takemi Program in International Health, Department of Global Health and Population, Harvard School of Public Health, Boston, MA 02115, USA (KS); Department of Community and Global Health, Graduate School of Medicine, University of Tokyo, Bunkyo-ku, Tokyo, Japan (KS); and Chagas Disease Control Project Phase 2, Japan International Cooperation Agency, Tegucigalpa, Honduras (JN, KS) 1
2
3
4
Conteh L, Engels T, Molyneux DH. Socioeconomic aspects of neglected tropical diseases. Lancet 2010; 375: 239–47. Molyneux DH. Neglected tropical diseases— beyond the tipping point? Lancet 2010; 375: 3–4. Ministry of Foreign Affairs, Japan. Japan’s Official Development Assistance white paper 2007. http://www.mofa.go.jp/policy/oda/white/2007/ ODA2007/html/column/cl02006.htm (accessed Jan 28, 2010). Aiga H, Aragon HR, Zúniga C, Montoya MV, Bolaños FJ, Who EC. Donor agency commitment to Chagas disease. Lancet 2009; 373: 2024–25.
for International Development, and the Carter Center. In 2009, the US President’s Emergency Plan for AIDS Relief celebrated the 100th antiretroviral drug on WHO’s Prequalification Programme certified as a true generic by the US Food and Drug Administration (FDA). Most applications came from manufacturers in India. Since the files represented drugs covered by patents, the FDA had to extend to right-holders the legal opportunity to challenge every application. None did so. These examples all show that drug manufacturers need no incentive to develop drugs for hundreds of millions in poor countries, nor are intellectual property rights a barrier to their access. I declare that I have no conflicts of interest.
Jeremiah Norris [email protected] Center for Science in Public Policy, Hudson Institute, Washington, DC 20005, USA
The Health Impact Fund
1
Amitava Banerjee and colleagues (Jan 9, p 166)1 propose that a US$6 billion annual Health Impact Fund is needed as an incentive to drug manufacturers because “intellectual property rights provide little incentive for innovation in the diseases of lowincome countries”. This statement ignores the record of product development, absent from such a fund. In 1969, a drug manufacturer developed oral rehydration therapy for diarrhoeal diseases, which WHO proclaimed as “possibly the most important advance of this century”.2 In the 1980s, this same manufacturer developed Mectizan (ivermectin), for river blindness, contributing it at no cost. Although both products were patented, the manufacturer never challenged generic suppliers that entered the market. The costs of product development were soon eclipsed by distribution costs. These were borne by the World Bank, WHO, USAID, UNICEF, the UK’s Department
2
www.thelancet.com Vol 375 March 13, 2010
Banerjee A, Hollis A, Pogge T. The Health Impact Fund: incentives for improving access to medicines. Lancet 2010; 375: 166–69. Rubin RH. A comparative analysis of some drugs on the EDL: a discussion paper on the issues raised by a WHO resolution vis-à-vis US trade interests. Boston: Harvard Medical International, 1996.
Second, although both designs leave patents “exactly as they are”,3 the HIF makes their capacity for monopoly pricing irrelevant, because profits arise from maximising health gain. With an AMC, patent and intellectual property protections continue as powerful tools for higher prices and profits both outside the AMC and in negotiations with AMC funders. The HIF continuously seeks to achieve the lowest possible price through several means.4 Third, the pneumococcal AMC enables companies to make blockbuster profits in affluent markets, plus large extra profits from additional doses for the poor,5 whereas the HIF is designed to prevent such double-dipping. Paradoxically, a key document about the how the HIF is like a comprehensive AMC identifies several other differences.3 The HIF will thus fare best by standing on its own foundations and not likening itself to an AMC. I declare that I have no conflicts of interest.
Donald W Light [email protected] Department of Psychiatry, University of Medicine & Dentistry of New Jersey, Cherry Hill, NJ 08002, USA 1
Although Amitava Banerjee and colleagues1 liken the Health Impact Fund (HIF) to an advance market commitment (AMC) writ large, the HIF differs in fundamental ways that make it better than an AMC. First, the HIF is based on rewarding pharmaceutical companies by the actual health gain that their products achieve, not by profiting from preset prices after a product meets technical specifications chosen in advance by a committee.2 The AMC is a one-time payoff within the current paradigm of gross profit arising from the difference between cost and price. With the HIF, companies continuously profit more the lower the price is, because more people experience more health gain—a radical new business model that aligns profits with health gain.
2
3
4
5
Banerjee A, Hollis A, Pogge T. The Health Impact Fund: incentives for improving access to medicines. Lancet 2010; 375: 166–69. Center for Global Development. Making markets for vaccines: ideas into action. Washington, DC: Center for Global Development, 2005. http://www.cgdev.org/ doc/event%20docs/4.7.05-Vaccines/ Making%20Markets%20for%20Vaccines%20 -%20From%20Ideas%20to%20Action.pdf (accessed Feb 22, 2010). Hollis A. Prize, advanced market commitments, and pharmaceuticals for developing countries. http://www.iprsonline. org/ictsd/Dialogues/ 2007-10-22/7%20ThinkPiece_Hollis.pdf (accessed Feb 22, 2010). Hollis A. The health impact fund and price determination. New Haven: Yale University, 2009. http://www.yale.edu/macmillan/igh/ files/papers/DP1_Hollis.pdf (accessed Jan 26, 2010). Light DW. Advanced Market Commitments: current realities and alternate approaches. Amsterdam: HAI Europe/Medico International, 2009. http://www.haiweb.org/31032009/ 27%20Mar%202009%20AMC%20Current%20 Realities%20&%20Alternate%20Approaches %20FINAL.pdf (accessed Jan 22, 2010).
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