[Ip-health] Washington DC HIF meeting

[Judit Rius Sanjuan]

http://www.keionline.org/blogs/2008/12/02/washdc-hif/

Washington, DC HIF meeting
Knowledge Ecology Notes
By Judit Rius Sanjuan

Yesterday December 1 2008, professors Aidan Hollis and Thomas Pogge
presented their Health Impact Fund (HIF) proposal at Georgetown
University in Washington, DC.

The meeting convened and moderated by the President of Georgetown
University, Jack deGioia, was attended by 50/60 people and was
structured with two presentations by the co-authors and a panel
discussion by :

Paul Antony, M.D., Chief Medical Officer and Executive Director, PhRMA
Lawrence Gostin, J.D., Associate Dean and Timothy and Linda O=92Neill
Professor of Global Health Law, Georgetown University Law Center
Ruth Levine, Ph.D., Senior Fellow & Vice President for Programs and
Operations, Center for Global Development
John Osborn, J.D., Member, United States Advisory Commission on Public
Diplomacy

The co-authors of the HIF proposal presented a good moral case for the
need of new incentives to ensure access and new innovation to loss
cost medications. They characterized the HIF proposal as a way to
stimulate biomedical R&D through prizes, and said the main advantages
were that it was an optional and market based mechanism that would
reward pharmaceutical companies for addressing the last mile or drug
delivery issues.

The HIF is in fact one of several proposals to introduce prize
mechanisms to reward drug development, with the valuation of the
prizes based upon incremental impacts on health outcomes. Other such
proposals would include KEI=92s early (2002 =97 ) work on prizes,
including work with Senator Sanders on two legislative proposals in
the U.S. Congress, work on voluntary prize mechanisms that Hollis and
Pogge made separately in 2005, and a series of voluntary and non-
voluntary prize mechanisms proposed by the governments of Bolivia and
Barbados, in an ongoing World Health Organization (WHO) negotiation on
new financing mechanisms. For others that have written on prizes see
our annotated bibliography.

I arrived somewhat late but according to persons who attended the
entire meeting, Hollis and Pogge did acknowledge that there was some
earlier thinking on these issues, but in their initial presentations,
they did not mention other specific proposals. The HIF Book did not
mention the Bolivia/Barbados prize proposals, and I did not hear any
mention of the proposals during the talk. Professor Hollis was quite
generous about the contributions of KEI and other experts working on
prizes and AMCs during the Q&A.

Hollis and Pogge described for the audience how the HIF would reward
efforts to promote proper prescribing, compliance, management of drug
resistance and counterfeit problems, and, like several other prize
proposals, would link R&D rewards to the impact of inventions on
assessed health outcomes.

Hollis and Pogge estimated the costs of health assessment will be
approximately 600 million a year, or 30 million per drug per year =97 a
number that surprised some of the participants.

Professor Pogge eluded to some of the criticisms that the proposal has
received and announced that were considering some design changes.
Pogge specifically mentioned they were being asked to revisit the
issue of requiring open licensing and generic competition from drug
developers that benefited from the reward mechanism.

During the Q&A section, I followed up on this issue and asked the
authors about the criticism that KEI and others have made that the HIF
was essential a voluntary prize fund out without open licensing, and
that it would undermine generic competition in developing countries. I
also noted the decision to rely on price controls to protect consumers
was controversial, and ran counter to much of the recent work during
the WHO IGWG negotiation (resolutions WHA 60.30 and WHA 61.21), as
well as some government proposals, like the Barbados & Bolivia
proposals for prizes without exclusive rights, or the UNITAID patent
pool.

Professor Hollis, although recognizing that there are advantages to
open licensing and generic competition and saying he personally
supported the UNITAID patent pool, answered that in his opinion this
was not the most important issue when dealing with incentives and that
health impact assessment was really the most difficult and important
component of their proposal.

During the panel discussion, John Osborn, Member of the United States
Advisory Commission on Public Diplomacy and former counsel of a
pharmaceutical company (Cephalon, Inc), expressed strong concerns of
the viability of the HIF from a business perspective. He asked the
authors to consider why the 1983 Orphan Drug Act, which provided 7
years of exclusivity, had disappointing results.

Paul Anthony, speaking for PhRMA, applauded the HIF proposal,
emphasizing that it was voluntary and =93complementary=94 to the existing
system, while expressing some skepticism on some of the details.

Ruth Levine, Senior Fellow & Vice President for Programs and
Operations at the Washington, DC based Center for Global Development
mentioned that the proposal was ambitious and potentially
transformational and that the economic and moral arguments were
powerful but also highlighted the following difficulties:
1. Estimating incremental QALYs and the focus on individual value
versus social value.
2. The danger of negatively affecting the health sector with the last
mile or delivery aspects of the proposal by shifting the focus from
prevention, education and other initiatives to pure drug delivery.

Levin invited everyone to continue considering and working on the AMC
model that her group has helped pilot and highlighted that their work
on AMCs has shown how difficult is to estimate long-term marginal
costs of production because the industry does not know or they do not
want to share this information.

Answering to the question about the difficulties of estimating long
term marginal cost of production, professor Hollis explained that they
believe a system of accepting tenders by generic producers could allow
them to solve this difficulty.

In my opinion, the notion that one could continually invite tenders to
produce generic drugs, without actually granting licenses to generic
companies, or that a tender at any one moment would reveal longer run
costs under efficient manufacturing processes and scale, is not
persuasive, to say the least.


Judit Rius Sanjuan
Attorney
Knowledge Ecology International
www.keionline.org / www.cptech.org
Phone: +1.202 332 267, ext 18