The Health Impact Fund is an innovative new plan designed to make life-saving drugs affordable for millions of people around the world. The two main architects of the plan are: Aidan Hollis, an Associate Professor of Economics at the University of Calgary, and Thomas Pogge, Leitner Professor of Philosophy and International Affairs at Yale. The two men point out that pharmaceuticals have become an increasingly important part of our health care, yet the still are responsible for the deaths of millions of people in developing countries. Why? Because many drugs have become so expensive that it’s nearly impossible for people in developing countries to afford them. Even worse, certain drugs (such as cancer-care drugs) are becoming so expensive that even people in developed countries can’t afford them.

See this quote from Hollis:

Currently, funding for drug innovation is based on people in rich countries paying taxes and drug insurance premiums to cover the exorbitant costs. Unfortunately, to sustain this system, poor people get excluded - and the world is mainly comprised of poor people.

Sadly, this is the truth. If our health care and prescription drug systems continue to operate in this way, they will eventually implode, unable to sustain themselves.

The strategy of the Health Impact Fund (HIF) is relatively simple. Essentially, it’s a pay-for-performance system. Drug companies will have the option to register their products with HIF and sell their products for no more than the cost of production and distribution. In exchange, they will receive a stream of payments based on the assessed global health impact of each drug. The bigger the impact the drug has on worldwide health, the bigger the payment to the drug company. And if there’s no measurable health impact, there’s no payout. Interestingly, the system benefits both patients and pharmaceutical companies.

The estimated cost of the program is $6 billion annually, which would be paid through a consortium of governments. Patients and insurance companies would only be responsible for paying the minor costs of production and distribution. However, the only way the plan would work is if multiple governments worldwide agreed to participate. One main advantage of the plan is that it stands to benefit both rich and poor countries.

Both Hollis and Pogge admit that the timing of the plan is less than desirable, with the current global economic crisis. However, the implementation and success of such a plan could ultimately benefit the economy. In the United States alone, many millions of people are without health insurance, and simply can’t afford the drugs they need, which continues to weaken our already-struggling economy.

Over the coming weeks, the Health Impact Fund will be introduced to key government leaders, international aid agencies, NGOs, and pharmaceutical companies at Oxford, Cambridge, London, and Georgetown Universities.