User:Mbp123/Health Impact Fund

The Health Impact Fund or HIF is a proposed international agency that would incentivize research and development of new pharmaceutical products that make substantial reductions in the global burden of disease. It is the creation of a team of researchers lead by the Yale philosopher Thomas Pogge and the University of Calgary economist Aidan Hollis, and is promoted by the non-profit organization Incentives for Global Health.

Design of the Fund
The fund would operate on a $6 billion annual budget. This sum would be contributed by governments in proportion to their gross national income; if all governments contributed, this would constitute 0.01 percent of global income. Pharmaceutical patent-holders would receive financial rewards by opting to register their new medicines with the fund. By registering, a patent-holder agrees to distribute its medicine at cost wherever it is needed and to provide sales data to the HIF. In return, the firm receives an annual reward based on its measurable contribution to reducing the global burden of disease (GBD). A firm's reward is equal to the proportion of its medicine's contribution to the GBD out of all other registrants' contributions, multiplied by the total amount of available reward funds. For example, if in a given year a registrant's medicine saved 10,000 quality-adjusted life years (QALYs), and all other registrants saved a total of 90,000 QALYs, then the registrant would receive 10 percent of the reward funds, or $600 million in that year.

Registrants are eligible for reward payments for ten years starting at the date of marketing approval of their product. Following the ten-year reward period, registrants agree to allow generic manufacturing of their medicines, in order to prevent price spikes. Registrants retain their rights to control follow-on innovation.

Motivation
The Health Impact Fund is designed to ameliorate flaws in the global pharmaceutical patent system established by the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS. Prior to TRIPS, developing countries were free not to enact intellectual property laws covering medicines. India was such country. Following TRIPS, however, all World Trade Organization members were required to institute strict, American-style intellectual property rights. As a result, the supply of generic medicines to poor countries has sharply diminished.

Patents provide incentives to conduct expensive research and development by granting innovators temporary monopolies over their inventions. This system breaks down when it comes to diseases concentrated among the poor, however, because the poor cannot afford to pay for monopoly-priced medicines. As a result, innovators need an additional set of incentives conduct R&D for these medicines. A reward fund is the optimal solution to this problem.