A novel idea to spur life-saving drugs

Male pattern baldness is a progressive thinning of the hair. At age 30, approximately 25 percent of men have begun balding. By age 80, more than 75 percent of men are afflicted by this progressive, degenerative disorder. An active research program is providing hope as new drugs and treatments are showing efficacy, though no cure has yet been found.

Malaria is a life-threatening disease spread by mosquitoes. Each year 300 million to 500 million people contract malaria. Each year about 1 million people die from malaria. Seventy-five percent of these deaths occur in African children who are under the age of 5. While there are some new treatments on the market, no cure has ever been found for malaria.

While pharmaceutical companies are active in the search for cures for both malaria and male pattern baldness, their commitments to each are not the same. The general reason for the difference reflects the nature of the industry: Pharmaceutical research efforts vary with the expected value of the patents that may — or may not — emerge. Two factors are especially important in determining that value: who the patients are and how the drugs are intended to work.

Think about it this way: From the companies’ standpoint, the most profitable patients are those who never get well and yet do not die. Hence, drugs that combat symptoms but leave the underlying condition intact are the most attractive to develop. A 20-something bald man is a gold mine; a 4-year-old malaria victim is not.

The difference in incentives becomes greater still when we consider that, while hair loss does not correlate with income, the likelihood of contracting malaria — or tuberculosis or diarrheal diseases — does. In view of massive income disparities, it should not surprise us that pharmaceutical companies are more interested in hair loss than in malaria.

Nor should it anger us. If there is a problem here, it is not with the behavior of the companies themselves. Concentrating on cures for hair loss is no more problematic than pouring research dollars into other consumer items such as cell phones or video games. The name of the game, after all, is to make money, not to improve health.

If change is required, then, it is to the game itself. What we need is a way of unlocking the energy of private enterprise to find and develop new life-saving drugs, drugs that would not only treat illnesses such as malaria, but that would also be affordable to its sufferers worldwide — by and large, the poor.

A new and surprisingly simple proposal offers hope in this regard. It involves the creation of a Health Impact Fund (HIF), with which innovators could register their new product. By choosing to register a product with the HIF, a company would become entitled to 10 annual reward payments in exchange for selling it worldwide at the lowest feasible cost of manufacture and distribution.

The fund would allocate its fixed annual reward pools among registered products according to their global health impact. Thus a drug that saved 100,000 lives would earn twice as much as one that saved 50,000. Of course, to make it worthwhile for firms to register their products, the fund would have to be large — paying (at least in the) billions of dollars annually.

Fortunately, the net cost of the fund would be relatively small, since governments (and private citizens) would realize large savings through lower prices on registered drugs. This is not a plan to rip off the drug companies or to enhance their profits: It is designed to restructure the way that we pay for medicines so as to create incentives to develop the most therapeutically valuable drugs while enabling widespread availability at low prices.

This is also a plan in which all countries can participate. The fund could be financed through contributions from each country proportional to its national income. In other words, this wouldn’t be just another form of international aid, but would constitute a new form of international cooperation in which every country could play a meaningful role.

The World Health Organization recently picked out the health impact fund as a promising approach for addressing the problem of getting both innovation and widespread access to new drugs. The first step towards implementation of the fund is a trial in which a drug would be rewarded in one country on the basis of measured health impact. This trial will need financial and technical support, but would constitute meaningful progress towards a fairer system that will develop the drugs we need at affordable prices. It deserves widespread support.

Thomas Pogge is the Leitner Professor of Philosophy and International Affairs at Yale University.

Peter Lindsay is an associate professor of political science and philosophy at Georgia State University.