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Proposal and Pilot


The Health Impact Fund Proposal

The Health Impact Fund (HIF) is a new way of stimulating research and development of life-saving pharmaceuticals. To provide wide access to the most effective pharmaceuticals, prices need to be affordable. Low prices, however, do not create strong incentives for innovators to invest in research and development. Financed mainly by governments, the HIF would offer pharmaceutical firms the option to be rewarded according to a new product’s health impact, if they agree to sell it at cost.

How Will the HIF Work?

Pharmaceutical innovators holding valid patents can elect to register their products with the HIF and then sell those products globally at cost. The HIF will evaluate the health impact of registered drugs annually, and will distribute payments to firms based on each drug’s health impact.

The HIF would foster the development of new high-impact medicines. The incentives would be greatest for treatments of diseases concentrated among the poor, such as tuberculosis, malaria, and other tropical diseases. These diseases are now neglected because innovators are not able to recover their research and development costs from sales.

Financing the HIF

The Health Impact Fund requires long-term funding from governments and other donors. Firms will receive an annual payout from the reward fund, which will be divided in proportion to the assessed health impact of their registered drugs in the preceding year. Those funding the HIF thereby facilitate much lower prices for new medicines as well as the development of medicines and medical knowledge that would not otherwise exist.

Next Step: A Pilot

Performance measurement is at the heart of the Health Impact Fund. Measurement needs to be robust across different products and in diverse settings. Working with leading health care assessment organizations such as the George Institute for International Health, NICE International, and the Institute for Health Metrics and Evaluation, Incentives for Global Health will perform evaluations of the health impact of products in a variety of countries. The HIF would expand assessment beyond pre-approval clinical trials, using epidemiological data from actual usage, practical trials, physician surveys, and patient demographics, as modifiers to the core health impact assessment. We aim to pilot the proposed HIF mechanism by rewarding a pharmaceutical manufacturer on the basis of measured health impact in a region. This will allow the pay-for-performance approach to be field-tested and refined before it is implemented on a wider scale.

Outcome and Benefits of a Pilot

  • Create a comprehensive metric to evaluate the health impact of medicines based on the actual reductions in mortality and morbidity each achieves.
  • Determine how to apply this metric reliably through a field-test that focuses on a new drug’s introduction into a specific area. No attempt has ever been made to measure the health impact of a newly introduced medicine.
  • Benefit people in the field-test area by giving them access to an important new product at an affordable price and by rewarding the innovator promoting its wide and effective use by those who can benefit from it.