Value for money in health

Sarath takes a wad of rupee notes from the middle-aged man outside his pharmacy store in rural Maharashtra, and hands over a paper package brimming with medicines. “He comes every fortnight. As a diabetic, he not only needs insulin but also tablets for his heart,” Sarath explains, quickly serving the lady next in line.

Over the last decade, the global pandemic of non-communicable diseases has captured the attention of both national and international health policy-makers. Cardiovascular diseases, diabetes and cancers are the largest cause of death and disability worldwide. The United Nations (UN) High-Level Meeting this September represents a culmination of research and policy efforts to recognise that system-wide solutions are needed to tackle non-communicable diseases.

“His mother had a stroke last year and his uncle died of a heart attack three months ago. He is now provider for his own family and their family,” adds Sarath. “It is too expensive to see a doctor every time. People come to me for medical advice and drugs.”

Drugs are the major cost to any health system. In countries like India, almost all costs are borne by the individual, making the cost of drugs a cause and an effect of ill health, poverty and lack of development. These are diseases that cause chronic illnesses and drug therapies can be lifelong.

Stephen Lewis, former UN Special Envoy for AIDS in Africa once said: “…we wouldn’t have this extraordinary run of treatment in Africa now if it weren’t for the generic drugs.” On the outskirts of Nairobi, Dr Matembe, a public health physician, runs an HIV clinic and agrees. He estimates that Indian generic drugs make up more than 75% of the anti-retroviral drugs sold to his patients.

“We are now seeing heart disease in our AIDS patients. Actually we are anyway seeing more people with stroke and heart disease, but without the same hype as for HIV/AIDS. There are no special treatment programmes available for these patients.”

Pharmaceutical companies have made great advances in relation to many non-communicable diseases. Cardiovascular diseases represent the largest growth area in terms of new and generic compounds, including four of the top ten blockbuster drugs in the last decade. Many newer treatments are beyond the reach of developing countries due to high prices, and the same is still true for many off-patent, generic drugs. The huge profits that pharmaceutical companies have made from drugs for non-communicable diseases are in no way linked to their impact on health.

The current intellectual property rights regime has led to innovation but not sustainably, widening the health gaps within developing countries and between developing and developed countries. There is no incentive for companies to go beyond selling and marketing their drug: research, development and delivery are powerful but often neglected levers for changing health systems.

But what would happen if companies were rewarded for the impact of their drugs on global diseases? What if companies had an interest in making their drugs more accessible to patients?

The Health Impact Fund (HIF) was originally conceived to fill this policy gap as a global agency underwritten by governments, offering pharmaceutical innovators the option to register any new drug. Registration of a drug would entitle the innovator to receive, for a defined period, a share of fixed annual reward pools. The fund would distribute at least US$6 billion annually in proportion to the respective contributions that drugs had on global health. In return, companies who had registered would agree to sell the drug wherever needed at the lowest feasible cost of production and distribution, offering free licences to enable generic manufacture and sales after the end of the reward period.

The Fund has gathered momentum in terms of publications, discourse, and publicity in scientific and broader media. The World Health Organisation welcomed it as "promising" and deserving of further examination.

As the world confronts the challenging fiscal climate, all health systems are focusing on value in healthcare. In England, a ‘value-based pricing’ scheme will be rolled out in 2014, tying profits from drugs to their value in terms of health benefit, and a government consultation is underway. Despite real challenges in assessment of effectiveness and data collection, value-based pricing offers an improvement on the existing situation where a huge proportion of the healthcare budget is spent without knowledge of effect. Piloting is necessary to test the underlying hypothesis that drug development and distribution can be incentivised to make the greatest impact on disease burden.

Non-communicable diseases represent a unique opportunity since their global disease burden has united stakeholders in order to produce new solutions, whether in the UK, India or Kenya. By incentivising drug innovation in the direction of greatest health impact, the Health Impact Fund may offer a system-wide solution to access to drugs. It represents a policy intervention that has the potential to change the incentives for drug research and development with far-reaching consequences. And, unlike many policy changes, it is testable and will be based on best possible evidence.

As Sareth said: “People will always spend on the health of their loved ones, but how do you ensure that the money spent by these patients is worth it?”

Amitava Banerjee is a cardiologist at the University of Birmingham and his research concerns the epidemiology of cardiovascular diseases. He is medical advisor to the Health Impact Fund.