Companies prodded to develop medicines to help the poor

Posted on January 9, 2010 in Health Debates – National – Companies prodded to develop medicines to help the poor: Canadian economist spearheading the Health Impact Fund, which would see pharmaceutical companies compete for an annual share of a $6-billion (U.S.) based on a drug’s ability to reduce global death and disability
Published on Saturday, Jan. 09, 2010.   By Lisa Priest

A new approach to solving an old problem – how to encourage drug companies to develop medicines for diseases that afflict the poor – is being spearheaded by a Canadian economist and gaining an academic A-list of supporters.

The Health Impact Fund would see pharmaceutical companies compete for a share of a $6-billion (U.S.) annual fund, based on a drug’s ability to reduce global death and disability. New medicines would sell at cost – a low price identical for poor Africans and rich Americans.

Canada is seen as a country able to push the issue forward, given its reputation as an innovative economy and its status as co-host of the G20 summit in June, said Aidan Hollis, a professor of economics at the University of Calgary, who wrote in today’s Lancet about the fund with colleagues from Oxford and Yale universities.

“It’s a chance for the Canadian government to put this on the agenda internationally and to take a leadership role in investigating and exploring it and really seeing if they can make something happen,” Prof. Hollis said.

Since the fund would provide economic incentives to drug companies, it is considered more workable than the Access to Medicines Regime, designed five years ago by the previous Liberal government to make it easier for generic drug companies to copy brand-name medicines for sale to impoverished countries; that program has been fraught with problems.

Most money spent on medical research is not focused on finding cures for diseases that cause death and disability in developing countries, but on richer nations, where pharmaceutical companies target diseases that affect the affluent. That can cause the chasing of cures for male pattern baldness but not necessarily for malaria.

The fund has drawn an impressive roster of supporters who include Peter Singer, professor of bioethics at Princeton University; Jim Yong Kim, president of Dartmouth College; John DeGioia, president of Georgetown University; and Onora O’Neill, a member of Britain’s House of Lords who is also a University of Cambridge professor. They sit on the advisory board to the Incentives for Global Health, the organization developing the Health Impact Fund proposal.

Prof. Hollis estimated that if countries with half the global income joined as partners – the United States, Canada and Japan, for example – Canada’s share would amount to $272-million (U.S.) annually. He said that equates to about .04 per cent of Canada’s gross national income.

“The [Health Impact] fund is fundamentally a rational reorganization of how we pay for drugs that is designed to foster innovations we most want while enabling the widest access,” Prof. Hollis wrote, “rather than being merely another call for money to help the world’s poor.”

Tim Gilbert, a patent litigator based in Toronto who is also involved in the initiative, noted that “even in Third World countries, you need to be able to make a profit.” The key is that citizens would not pay high drug prices; medicines would be sold at the cost of production and distribution, without a monopoly markup.

Reached in Montreal, former prime minister Paul Martin, whose government introduced the Access to Medicines Regime, said the need to create drugs in the developing world is “incredibly urgent.” He described the new initiative as very interesting.

“I’m now spending a lot of time in Africa,” Mr. Martin said. “And you don’t have to spend very much time going out into small villages to see just how dire the whole medical situation is, not only in terms of issues such as AIDS but very common diseases that are not common to the rest of the world.”

Thomas Pogge, Leitner professor of philosophy and international affairs at Yale University, another author of the article, believes the incentives for drug companies to come up with new medicines will be stronger, in part because the process is voluntary.

“If we don’t offer you a better deal,” Dr. Pogge said, “you [pharmaceutical companies] will simply not register your drug.”

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