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Table 9.3 Health Impact Fund Interventions in Relation to Intellectual Property Rights System
Problem of IPR System
HIF Intervention
Detrimental effects on the health of the poor
The current incentives system for pharmaceutical research neglects
the interests of the global poor in two ways. First, new products
are priced beyond the reach of the poor. Second, research neglects
diseases concentrated among poor populations because sales to this
group are unlikely to be high enough to cover the research
and development costs
The chief strengths of the HIF are that it would make all registered
products accessible to poor patients from the beginning, and
create an incentive to develop new medicines with large measurable
health impacts, especially in areas where patent incentives are weak
A bias towards maintenance drugs
Under the current system, it is more proitable for a pharmaceutical
innovator to develop symptom-relieving maintenance drugs rather
than cures or, especially, vaccines (which yield the least proit relative
to their health impact)
The HIF would provide an unbiased incentive system, rewarding
all products at a consistent rate according to their health impact
Paying lawyers rather than innovators
Effective patent protection relies on the costly expertise of lawyers at
all stages of the process, from negotiating a patent to litigating in its
defence. In addition, lawyers' expertise is required when defending a
irm against other companies' claims of patent infringement. Litigation
costs per defended patent are on average £0.2-1 million in the UK
and £1-2 million in the USA (Greenhalgh and Rogers 2007 : 561)
One of the attractive features of the HIF is reduced patent litigation
expenses so that innovators' proits can be re-invested or returned to
Excessive marketing
Given the high mark-ups to be achieved in pharmaceutical markets,
innovators ind it worth their while to spend considerable funds on
marketing, which includes inluencing health practitioners to prefer
one out of a class of essentially equivalent products. This drains funds
away from research on current and future health needs
In the same way as the HIF would reduce litigation costs, it would
also reduce marketing costs. Persuading physicians to prescribe
one product rather than another would be proitable only if that
product brought superior therapeutic outcomes, since the reward is
based on the incremental beneit compared to pre-existing therapies
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