THOMAS POGGE| THE HEALTH IMPACT FUND ducts are moral crimes that any just legal system ought to suppress. But the defenders of this view have not man­aged to provide a convincing argument to show why the fact that one person has made a new product should give her a natural right to bar others from making a like product out of their own raw materials. 5 2. A Question of Incentives In view of the difficulty of formulating a convincing nat­ural-law argument, most defenders of TRIPS resort to pragmatic arguments that appeal to the need for eco­nomic incentives. Pharmaceutical R&D is expensive and would not be sustainable if innovators could not make a decent profit on their successful innovations. Therefore the prospect of hefty mark-ups, at least for a certain period, is necessary for stimulating the introduction of new medicines. Such mark-ups require blocking access to cheap generic copies of advanced medicines. Despite its popularity, this pragmatic reasoning fails for the simple reason that the introduction of important new medicines can be adequately incentivized and rewarded without mark-ups harmful to the poor. Diverse such mechanisms have been discussed in the last decade, at the World Health Organization and in other forums. Let us here focus on one such mechanism that would dra­matically improve health outcomes for humankind – not by spending even more money on medicines, but by changing the incentive structure so as to produce more equitable and just outcomes. Conceived and critically tested by an international and interdisciplinary team of experts, the Health Impact Fund(HIF) holds out the pro­spect of massive global health improvements at a net cost that is negligible or even negative. 3. What Is the Health Impact Fund? Financed mainly by governments, the HIF is a proposed pay-for-performance mechanism that would offer inno­vators the option – no obligation – to register any new medicine or, under certain conditions, also a traditional 5. And, if there were such a moral right, does it last exactly as long as the local patent law protects it? For a more detailed discussion, see Aidan Hollis and Thomas Pogge: The Health Impact Fund: Making New Medi-cines Accessible for All(Oslo and New Haven: Incentives for Global Health 2008, freely available at www.healthimpactfund.org), chapter 6. medicine or a new use of an existing medicine. By reg­istering a product, the innovator would undertake to make it available, during its first 10 years on the mar ­ket, wherever it is needed at no more than the lowest feasible cost of production and distribution. The inno­vator would further commit to allowing, at no charge, generic production and distribution of the product after this decade has ended(if the innovator still has unex­pired patents on the product). In exchange, the regis­trant would receive, during those ten years, annual reward payments based on its product's health impact. 6 Each reward payment would be part of a large annual pay-out – initially perhaps around EUR 4.5 billion – with every registered product receiving a share equal to its share of the assessed health impact of all HIF-registered products in the relevant year. If the HIF were found to work well, its annual reward pools could be scaled up to attract an increasing share of new medicines. The HIF would bring enormous moral gains: n It would greatly mitigate the most obvious injustice of the present system by limiting the price of any registered medicine to the lowest feasible cost of production and distribution: This price ceiling would enable the poor majority of humankind to gain im ­mediate access to the fruits of pharmaceutical inno­vation – either through their own funds or through national health systems, NGOs, international agen­cies, or insurance programs(all of which would be able to serve more patients more cheaply thanks to much lower medicine prices). n The HIF would foster the development of new high­impact medicines against diseases concentrated among the poor. Pharmaceutical innovators are now neglecting such diseases because they have no real­istic hope of recovering their R&D costs from sales to the poor. n The HIF would also motivate registrants to ensu­re that their products are widely available, perhaps 6. Health impact can be measured in quality-adjusted life years(QALYs) saved. Giving a patient an additional year in good health is worth one QALY. Appropriate fractions of QALYs are awarded for additional years in less than good health and also for life years in which patients are in better health than would otherwise have been the case. QALY awards for periods longer or shorter than a year are proportionately adjusted. The QALY metric has been refined over the last 20 years and is already exten ­sively used in many contexts, including by public and private insurers for deciding which new drugs to cover. 3