A New Fund Could Revolutionize the Global Health Landscape
June 10, 2011 · By Nikita Lalwani
The way drugs are developed and sold hurts the world's poor.
This week, the United Nations is hosting its General Assembly High Level Meeting on AIDS, for which roughly 3,000 people and 30 Heads of State have flocked to New York to evaluate the past three decades of AIDS research and activism. This meeting provides an excellent backdrop against which to assess the current state of global health. Like many diseases, AIDS disproportionately affects people in developing countries. For example, according to the latest UN statistics, roughly 25 percent of the adult population in Lesotho and Swaziland suffer from the disease, as compared to 0.6 percent in the United States and 0.2 percent in the United Kingdom. The UN reported in 2007 that 95 percent of people afflicted by AIDS live in poor countries, with 76 percent of AIDS-related deaths occurring in sub-Saharan Africa.
But such disparity is preventable, according to Incentives for Global Health, a new NGO. This group — with an advisory board that includes among others philosophers Peter Singer and Baroness Onora O'Neill, economist Amartya Sen, and former Canadian Prime Minister Paul Martin — envisions a future in which everyone may access quality medication through a proposed "Health Impact Fund." The problem, the group's members argue, is that the current system of drug development and sales hurts the poor.
"Despite relatively low manufacturing costs, patented medicines are often very expensive and are therefore unaffordable for most people; and diseases concentrated among the poor attract little or no pharmaceutical research," wrote the group's leaders Yale Professor Thomas Pogge and University of Calgary Professor Aidan Hollis in their Health Impact Fund report. "As a result of both factors, the disease burden among the poor is, avoidably, very high."
The Health Impact Fund aims to solve both problems by giving pharmaceutical companies the option to sell their drugs at a uniform low cost worldwide. In exchange, the companies would for ten years receive payment from the fund — a fixed sum starting at roughly six billion dollars — proportional to the health impact of their drug, giving them incentives to focus on diseases that disproportionately affect the poor. The fund is to be financed by countries supporting the project, so as more and more countries sign on, the fund will grow and attract more pharmaceutical companies. At the conclusion of the tenth year, the company would also concede a royalty-free open license for generic versions of the medicine.
The project is designed to align the incentives of companies with social welfare. We shouldn't be surprised when companies fail to focus on finding treatments or cures for very important health needs if there's no money in it. And there's little point browbeating companies on the basis of "corporate social responsibility" if as societies we're really just passing the buck. Health innovation is a global social responsibility for which all must cooperate — companies will simply respond to incentives. If companies find it profitable to invest in developing drugs for the most pressing health needs, then results will follow.
"All people benefit when pharmaceutical firms organize themselves for optimal health impact: when their innovations target the most burdensome diseases and when they market their products for optimum disease reduction and not merely for sales," Pogge and Hollis continue in their report. "And low prices for advanced medicines will have a large impact on poor people in the United States no less than in Haiti, because high prices deter the poor everywhere from purchasing medicine."
Before the Fund becomes a reality, the group must test its efficacy in a few pilot runs. In particular, they must figure out the best way to assess a given drug's health impact. But the project is underway. If successful, it may revolutionize the global health landscape. As people who care about the well-being of others, we — scholars, activists, governments — have an obligation to get on board.
Nikita Lalwani is an Institute for Policy Studies intern, managing editor of The Yale Globalist, and a Yale Daily News staff writer.