A Yale paper published online on Feb. 11 in the Journal of Global Health argues that implementation of a new agency to fund pharmaceutical companies could have decreased the severity of the recent Ebola outbreak.
Professor of philosophy and international affairs Thomas Pogge, who is the paper’s lead author, has developed the Health Impact Fund as a way to motivate pharmaceutical companies to produce drugs that will have the greatest global health impact instead of just those that generate a profit. The idea of the fund is for governments to contribute 0.01 to 0.03 percent of their Gross National Incomes to the fund to support companies in developing drugs that they might not otherwise pursue. This structure would take the buying power of the individuals impacted by a disease out of the equation, making drug development a more equitable process.
“We have to align the incentives with what we want pharmaceutical companies to do,” Pogge said. “We want them to improve human health, so we need to incentivize them in such a way that the amount of money they get is proportional to the health gain they produce.”
Pharmaceutical companies could use their research and development money much more efficiently to have a greater global health impact, he said, adding that too many companies produce drugs that serve the same function as a drug already on the shelf. Using a slightly different molecule for the drugs — which are often referred to as “me too drugs” — companies are able to cut into the market share for a common drug without violating an already existing patent. Though the drugs are profitable, they do not improve health overall, Pogge said.
“The Health Impact Fund would open up a second track for pharmaceutical innovators to be rewarded for their innovations,” he said.
But it would also improve equity for buyers — HIF reward payments are contingent upon companies selling their drugs at market cost, he noted. The profit then would no longer come from a markup to consumers, but from the HIF’s coffers.
Pogge said he thinks incentives in the pharmaceutical industry are distorted, so the intervention through an organization like the HIF is needed.
Drugs usually fall into one of the three categories, Pogge explained — curative, preventative or maintenance. Maintenance drugs make the most money because the patient must buy the drug for an extended period of time, but those drugs often have the lowest health impact. If profit was not the only motive, more research money would be used for cures and preventions like vaccines for deadly diseases like Ebola.
Abraar Karan ’11, the lead author on the paper and a former student of Pogge’s, said the HIF would not pose a financial burden for the contributing nations.
“The Health Impact Fund would be funded through governments that would otherwise be putting their money in aid efforts that don’t always work,” he said.
The key driver of their proposal is finding a way to efficiently help more people. The U.S., for example, has spent $750 million on aid to sub-Saharan African countries for Ebola relief, yet pharmaceutical companies have not brought an Ebola vaccine to the human trial phase, even though one of those vaccines has been shown to be effective in animals. Karan said this is likely due to the fact that those who would need the vaccine cannot pay for it.
“Infectious diseases strike where they can spread, not necessarily where people can afford to pay profitable prices for medicines,” said Kristina Talbert-Slagle GRD ’10, senior scientific officer for the Yale Global Health Leadership Institute. “The Ebola outbreak has forced us all to take a careful look at whether and how we are preparing for infectious disease outbreaks.”
Karan and Pogge plan to continue advocating for the HIF by pointing to examples like Ebola, when a restructuring of incentives could have led to the creation of drugs for those who need it.
“The resistance to HIF are not good arguments, the resistance is inertia,” Pogge said. “Pharmaceutical companies are used to the business model — they like it just the way it is because they make lots of money with it and it’s difficult to change.”
Karan added, however, that some of the resistance to the HIF comes from hesitance about applying predictive models to disease burden and disease spread. These models would be used to calculate HIF reward payments to pharmaceutical companies based on the predicted health impact a drug will have before it is developed.
Despite those limitations, Pogge hopes the HIF would eventually have $6 billion annually to fund drug development. He said it would only take two to three years for the HIF to become functional.
According to the Centers for Disease Control and Prevention, 10,236 people have died due to Ebola in Africa.