"Whereas pharmaceutical companies lack incentives to aid the poor in developing countries"
PRINCETON – The deadly outbreak of Ebola in Liberia, Sierra Leone, and Guinea that began last year highlighted a problem in the production of pharmaceuticals. Once it became clear that the epidemic would not be rapidly contained, several firms quickly arranged for clinical trials of potential treatments and vaccines, indicating that they already had the ability to produce plausible candidates.
Ebola is not a new disease: it was first identified in 1976. Prior to 2014, however, the largest outbreak was in Uganda, in 2000, when 425 people were infected and 224 died. Though Ebola was known to be both contagious and often fatal, it was thought that only Africa’s impoverished rural population was at risk. For pharmaceutical firms, the development of a vaccine or treatment was not commercially attractive, and so it did not warrant investment.
All that changed with the latest outbreak. In September 2014, the United States Centers for Disease Control and Prevention predicted that, in the worst case, 1.4 million people could be infected within four months. Media-fed fears that the disease could spread to affluent countries led to extraordinary precautions. In the United States, President Barack Obama asked Congress for $6.2 billion, including $2.4 billion to reduce the risk of the disease becoming established in America and set up 50 US Ebola treatment centers.
The worst-case scenario did not materialize. As of April 2015, the best estimate is that about 25,000 people have been infected, with approximately 10,000 deaths. Outside West Africa, there have been fewer than 30 cases, and only five deaths. Nevertheless, the fears, and especially the prospect of a new and lucrative market, set pharmaceutical firms scrambling to develop Ebola-related products, while health officials lamented that nothing had been done beforehand.
I am not criticizing pharmaceutical companies for not producing an Ebola vaccine when there was no market for it. They are not charities. If we want them to make products that will help the poor in developing countries, we need to find ways of giving them – and their shareholders – a return on their investment.
Whereas pharmaceutical companies lack incentives to aid the poor in developing countries, they have strong incentives to develop products for people in affluent countries. One drug, Soliris, costs $440,000 per patient per year. In contrast, GiveWell estimates that the cost of saving a life by distributing bed nets in regions where malaria is a major killer is $3,400. Given that most of the lives saved are those of children, who even in developing countries have a life expectancy of at least 50 years, this equates to a cost of $68 per year of life saved. Should we really be valuing the life of a person in an affluent country at more than 6,000 times the value of the life of an impoverished child in a developing country?
Because the overwhelming majority of medical and pharmaceutical research is directed toward products that affect people in affluent countries, it targets only part of the global burden of disease. Some government- and foundation-funded research addresses diseases that primarily affect poor people, but these efforts are not systematic and do not use the incentives that work well to drive pharmaceutical innovation elsewhere.
One promising attempt to correct this imbalance is the proposal for a Health Impact Fund that Thomas Pogge, director of the Global Justice Program at Yale, and Aidan Hollis, an economist at the University of Calgary, launched seven years ago. If the Health Impact Fund could be adequately financed, it would provide incentives to develop products in proportion to their impact in reducing the global burden of disease.
It is not certain that the existence of such a fund prior to the recent Ebola outbreak would have led to the development of vaccines or treatments for the disease. But pharmaceutical companies would have been considering such products – as well as other treatments to save lives or improve health anywhere in the world, regardless of people’s ability to pay.
Pogge and Hollis have now refined their proposal to the point that it is ready for a real-world trial. A company that develops a product would earn a share of reward money based on its share of the health improvements achieved by all the products competing for the available funds. What is still needed, however, is sufficient reward money – perhaps $100 million from governments, NGOs, foundations and the pharmaceutical industry – to stimulate serious investment.
Such a pilot program would benefit poor patients and would test scientists’ ability to measure health impact fairly and accurately. It would also provide the evidence needed to go to governments, foundations, and global institutions for the much larger sums required to expand the present system of incentives that guide pharmaceutical companies’ decisions. If the pilot is successful, we will have found a way to support the development of drugs and vaccines that gives equal weight to protecting the lives and improving the health of all human beings, irrespective of their nationality or wealth.
Copyright: Project Syndicate, 2015.
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by Jim O'NeillAdded 07.05.2015