REWARD

A new track towards drug development The patent system gives pharmaceutical companies an exclusivity period on newly-developed drugs, yet this can mean that drugs are priced beyond the reach of poorer populations. The REWARD project is investigating a performance-based reward mechanism to encourage pharmaceutical innovation and help bring drugs to more of the people who need them, as Professor Thomas Pogge explains.

The

pharmaceutical

industry

has an important role to play in helping to raise health standards across the world by developing new drugs, yet at the same time companies are of course keen to maximise profits. Pharmaceutical companies invest a lot of time, money and expertise in research, and it often takes a long time before a new drug reaches the market. “It takes several years before you see any return on the initial investment, while clinical trials are also extremely expensive,” points out Thomas Pogge, Professor of Political Philosophy at the Universities of Central Lancashire and Yale in the US. Under the existing Intellectual Property Rights (IPR) system, pharmaceutical companies get 20 years of exclusivity on a patented drug, which provides an incentive to invest in research and development, yet this is rarely targeted at those diseases that mainly affect the world’s poor. “Some diseases do a lot of damage but they are not lucrative areas of R & D, as the patients who have these diseases tend overwhelmingly to be poor,” explains Professor Pogge. “Another point is that profitability is not really well-correlated with urgency. For example, it may be very profitable for a company to create a drug

to treat a disease for which a good drug is already available.”

REWARD project These issues lie at the core of Professor Pogge’s work in the Health Impact Fund (HIF) and the REWARD project, an ERC-funded initiative which brings together researchers from several disciplines to investigate restructuring the way pharmaceutical companies are rewarded. The current IPR system helps

his colleagues in the project are looking at a new payment mechanism. “We want to establish a second track, beside the usual monopoly-pricing track. On this second track, a pharmaceutical company can engage in research and development of a new medicine, and be rewarded in a wholly new way,” he says. “The company would sell the drug at the cost of production and distribution, and get a reward from public funds proportional to its health impact. We are looking at

Even in the richest markets there are mis-matches between the drug that’s best suited to a particular patient and the drug that a patient actually gets companies recoup their initial investment in R & D through patent-protected high prices, yet this can mean drugs are priced beyond the reach of poorer populations, while there are also insufficient incentives to encourage companies to investigate those diseases which primarily affect these populations. It’s also important to consider the increasingly heavy burden that high prices place on healthcare systems in affluent countries; a new approach is required to close these gaps, believes Professor Pogge, now he and

how to measure the health gains from the introduction of a new drug, for the purpose of rewarding the introducing company in proportion to the health impact.”

There are two main components to this work, the first of which is the metric to be used in assessing the health impact of a new drug on the wider population. Thomas Pogge and his colleagues are using quality-adjusted life years (QALY) for this purpose, a measure that is commonly used in global burden of disease studies. “When a person’s life finishes, we can Partners in the REWARD project discuss ways of promoting community engagement in health planning, provision and monitoring.

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ASHAs implement India’s public health programmes.

Accredited Social Health Activists (ASHAs) learn how to collect data on drug provision and consumption, using tablet computers.

measure the QALYs that they had over their lifetime. We might find that while they lived to the age of 79, some of those years were in poor health, so we would adjust it accordingly,” he outlines. The QALY metric itself is fairly wellestablished, so the aim in research is not to revisit its underlying methodology, but to use it for measuring the health gains attributable to the introduction of a new medicine much like it is currently being used by health insurers around the world to estimate health gains of patients in the context of making reimbursement decisions. “The idea is that we look at the state of the world as it would be without the introduction of these new medicines – and then compare the real world to that counterfactual state,” he explains. “So we look at how much better people’s health outcomes are than they would have been in the absence of these new medicines.”

This work involves the extensive use of statistical sampling and statistical methods, which are essential to measuring a drug’s health impact.

These measurements are by nature somewhat imprecise, which should not impede or distract innovators and pharmaceutical companies from focusing their energy on maximizing health impact. “As long as they cannot game the measurement in some way, then the best thing for them to do is to generate as much health impact as possible, which is exactly what we want,” he points out. Researchers in the project are designing a new mechanism by which the company behind a drug can be rewarded in proportion to its health impact. “The HIF would create a series of reward pools. Each annual pool will reward all participating medicines for the health impact that they have achieved in a given year,” he says. “The size of the reward will depend on the health impact that the participating drugs collectively produce. If a reward pool has $3 billion in it and there are ten drugs registered, then on average each of the companies will earn $300 million a year for example.”

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Kerala case study A pilot study has been conducted in rural parts of Kerala, a state in South India, to pioneer health data collection and lay the foundations for continued research. There has been some scepticism around whether a drug’s health impact can be measured, particularly in resource-poor settings, so Professor Pogge was keen to show that it can in fact be done.

“We worked with ASHAs (Accredited Social Health Activists), women employed by state governments across India to aid with implementation of existing public health programmes (such as vaccination or maternal and child health), taking responsibility for a particular district, maybe 500 families or so,” he says. ASHAs in Kerala have been enabled to collect data on issues around drug provision using a hand-held tablet computer. “We’ve shown the feasibility of gathering data through ASHAs by digital means. Exploring whether

people are taking drugs as prescribed, we have found that adherence to cardiovascular medications is low and also that there are over 20 brands of atorvastatin, a generic drug, being used with wide variations in price. This work shows how, with a bit of thought and ingenuity, useful data can be collected quite cost-effectively,” he says.

The wider goal in this research is to more closely align what’s good for the patient with what’s profitable for a pharmaceutical company. This is an issue not just in poorer countries, but also in mature economies. “Even in the richest markets there are mis-matches between the drug that’s best suited to a particular patient and the drug that a patient actually gets,” he explains. This might be because a doctor has a strong relationship with a particular pharmaceutical company, leading them to prescribe their drugs even if they are not expected to be effective; Thomas Pogge

says that the HIF system will help to prevent this. “If we are prescribed a drug that doesn’t work for us, under the HIF system then there’s no reward,” he points out. “In the HIF scheme, even the richest populations would get a drug at a very low price. So we would pay less for HIF-registered medicines and we would pay less for health insurance, insofar as our health insurance covers them. The health impact would be measured in similar ways, except that the baseline is likely to be higher in richer than in poorer countries.”

This means that a new drug can have an especially large impact in poorer countries.

While in mature economies there might be

medicines,” he continues. “This could be by creating a heat-stable version that makes the medicine more suitable for the tropics. Or by creating a paediatric formulation that is often sorely needed in poorer countries, where the majority of the population is young.”

The best proposals would be implemented over a three-year period, then a sum of money would be divided among the companies involved, in proportion to the health impact each achieved over those three years. This would not only test researchers’ ability to measure health impact, but also offer new insights into the power of money to incentivise pharmaceutical companies to

The company would sell the drug at the cost of production and distribution, and get a reward from public funds proportional to its health impact. We are looking at how to measure the health gains from the introduction of a new drug. alternatives if a specific drug is not available, that tends not to be the case in areas like Kerala.

“Often if this HIF-sponsored cheap medicine hadn’t come onto the market then the patient would have had nothing at all. So the medicine really makes a very big difference in poorer countries,” he stresses. The project’s work has attracted strong support from both the Kerala state government and the Indian national government, now Professor Pogge is looking towards the next steps. “We are hoping to gain support for a larger pilot, where we would ask pharmaceutical companies to make proposals on how they can achieve more health impact among poorer populations with existing

REWARD researchers with local partners in Kerala, where the project conducted a pilot study.

go beyond their normal approach. “It would show what they would do, and how they would do it. It would also show how much health impact we can actually generate for that money,” he says. This might not incentivise the development of an entirely new drug, but it could encourage a company to develop a new version that was targeted at a low-income setting. “A company may have a drug sitting on the shelf which they haven’t put out yet, because they felt there was not enough profit in it. They might pull it off the shelf and say; ‘now, that there is this extra reward money, we are willing to give this drug a try,’” outlines Professor Pogge.

An ASHA monitors a patient’s blood pressure and collects information on drug intake.

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REWARD REWARD

Project Objectives

REWARD has investigated how to measure the health gains produced by the introduction of any medicine for purposes of making reward payments to pharmaceutical innovators committed to selling their new drug at the cost of manufacture and distribution.

Project Funding

ERC-AG - ERC Advanced Grant €1,922,338.40 for the years 2014-19.

Project Partners

• University of Central Lancashire (lead) • Delhi think tank RIS (Research and Information System for Developing Countries) • University of Calgary

Contact Details

Project Coordinator, Professor Thomas Pogge Yale Philosophy Department P.O. Box 208306 New Haven, CT 06520-8306 T: +1 203-432-2272 E: thomas.pogge@yale.edu W: https://www.uclan.ac.uk/research/ explore/projects/reward.php W: https://campuspress.yale.edu/ thomaspogge Professor Thomas Pogge

Having received his PhD in philosophy from Harvard, Thomas Pogge holds professorships at the University of Central Lancashire and at Yale. He is a member of the Norwegian Academy of Science as well as co-founder of Academics Stand Against Poverty (ASAP) and Incentives for Global Health (IGH).

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