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Tuesday, February 21, 2012

Guest Blogger Carl H. Coleman: What to Look for at This May's World Health Assembly: An International Convention on R&D for the Developing World?

ColemanI spent most of last week participating in the second annual Executive Course on Intellectual Property, Diplomacy, and Global Public Health, co-sponsored by Seton Hall Law School and the Graduate Institute of International and Development Studies in Geneva.  One of the key issues discussed in the course was a World Health Organization (WHO) working group’s recent recommendation for the adoption of a binding international convention to promote research and development related to diseases predominantly affecting developing countries.  The proposal is expected to be on the agenda for the May 2012 meeting of the World Health Assembly (WHO’s governing body), where it is likely to generate significant discussion.

The recommendation is grounded in a recognition that our existing intellectual property system—under which companies recoup their R&D costs by patenting their products and selling them to end users at high monopoly prices—provides no incentive to develop products that will be used primarily by individuals who have no money to spend.

Creating an alternative financing system for medical products predominantly used in developing countries raises several challenging issues.  First, funding for R&D has to come from somewhere; companies cannot be expected to invest the resources necessary to invent medical products for developing countries if they have no reasonable expectation of recovering their costs.  While voluntary donations can help in the short term, a stable and sustainable system will depend on binding financial commitments by WHO members.  In a time of global financial insecurity, convincing governments to make these commitments may be a hard sell.

Even if governments can be convinced to make the necessary financial commitments, a second challenge remains: determining where the funds are best directed.  Ideally, funding should go to developing products that actually result in significant health improvements for the world’s population, but it is impossible to know in advance whether a particular line of research will end up producing public health gains.  One possible solution to this problem is awarding prizes to researchers who achieve pre-defined objectives.  Unlike traditional research grants, which are awarded prospectively based on judgments about a project’s potential, a prize system does not pay anything unless the research actually succeeds.

The trick with a prize system is determining the circumstances under which prizes should be granted.  At one extreme, prizes could be offered for fully achieving public health outcomes that are undeniably important—for example, a prize for creating a safe, effective, and inexpensive vaccine for HIV, tuberculosis, or malaria.   The problem is that, from the perspective of a particular research team, the likelihood of achieving such a broad objective in a reasonable period of time is likely to be too low to warrant a significant investment of resources up front.  An alternative approach is to award “milestone” prizes for achieving smaller steps along the product development pathway.  This approach provides more realistic incentives, but achieving a milestone is no guarantee that a successful product will result.  As such, a milestone system is likely to result in some prize money going to research that ultimately produces no public health benefits at all.

An intriguing approach that has received a great deal of attention in the academic literature is the Health Impact Fund, championed by philosophy Professor Thomas Pogge of Yale University.  Under that approach, funds would be awarded based on the demonstrated health impact of new medical products, as measured by the extent to which using the product causes individuals to experience additional quality-adjusted life years.  Because Health Impact Fund payments would depend on a product’s demonstrated impact on the health status of the intended beneficiaries, companies would have an incentive not only to create the product and put it on the market, but also to engage in activities that promote the product’s accessibility and correct use.   Unfortunately, the latest report from the WHO working group suggests that the members were not enthusiastic about adopting the Health Impact Fund model, perhaps based on concerns about the complexity of administering it. 

However the details of the system are ultimately worked out, the fact that serious attention is being given to incentivizing the development of medical products for developing countries is an encouraging development.   Let’s hope that this May the process of creating a binding international agreement will finally begin in earnest.

- Carl H. Coleman

 

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