THOMAS POGGE| THE HEALTH IMPACT FUND even below the price ceiling, and that they are com­petently prescribed and optimally used. 7 Registrants would be rewarded not for merely selling their pro­ducts, but for making them effective toward impro ­ving global health. If some pharmaceutical R&D were financed through HIF rewards, most of the cost would be borne by affluent populations and people – just like today. But by funding innovation through health impact rewards rather than through patent-protected mark-ups, people in affluent countries avoid excluding the poor. Including the poor in this way costs nothing because the cost of manu­facturing additional doses is covered by their price. The expansion of production may even benefit the affluent through lower unit costs as well as through generally im­proved global health. The HIF would benefit the affluent also by changing profoundly the marketing and promo­tion of new medicines. The HIF would pay nothing for the creation or promotion of a»me-too« product that merely takes market share from a competitor's earlier no-less-effective medicine. And even with a highly su­perior product, a HIF registrant would receive no reward for mere sales but would profit only insofar as its medi­cine were actually made effective toward improving pa­tient health. Thanks to this new incentive, all patients would be more likely to receive medicines that will actu ­ally improve their condition. 4. The Global Fund, UNITAID, Compulsory Licensing and AMCs – What Is the Added Value of the HIF? The initiative for and design of the HIF owes much to other global health initiatives, such as the Global Fund, the patent pool initiated by UNITAID, and advance mar­ket commitments. The HIF would nonetheless play a unique role that cannot be filled as well by these other approaches. The four initiatives mentioned all fit the la ­bel»development aid«: predominantly funded by the affluent, they are designed to benefit poor populations. By contrast, the HIF is jointly funded by rich and poor countries, with each funding partner contributing accor­7. A registrant would want to offer its product to poor populations below cost if and insofar as the additional health impact rewards due to reaching additional poor patients are expected to be larger than the loss on the sales price. A registrant would want to promote the wide and proper use of its product(esp. by those who can benefit the most from it) if and insofar as the additional health impact rewards due to such efforts outweigh their costs. ding to its gross national product. The HIF also bene­fits rich and poor populations alike through lower drug prices and much greater efforts toward ensuring that medicines are directed to the right patients and used to optimal effect. While the Global Fund supports large purchases of med­icines, it does not aim to incentivize innovation. One might say that its purchases do have an incentive effect: innovators can now expect that, if they develop a high­impact medicine for AIDS, TB or malaria, they will earn money from mark-ups on sales supported by the Global Fund in behalf of poor patients. This is true, but the HIF provides more suitable incentives because its funding is locked in for a longer time period and also because it offers rewards based not on how much a new product can achieve but on how much more it does achieve than the current standard of care enjoyed by the various pa­tient groups. The present system provides large rewards to a new medicine that is only slightly better than the treatment that patients would otherwise have had: as buyers(including the Global Fund) switch over to the better medicine, this medicine now comes to earn the entire mark-up. The HIF would reward a new medicine only for the improvement it brings relative to the treat­ment that patients would otherwise have had. In this way, the HIF incentivizes innovators to concentrate their efforts to where they can realize the largest incremental health benefits. This is not a criticism of the Global Fund, which was not designed as an innovation mechanism. But it shows how the HIF usefully complements the Glo­bal Fund by rewarding more accurately the innovation component of new drugs. The Global Fund can then purchase these new drugs without any mark-up. The HIF has been designed in close collaboration with the Global Fund, which is ready to host the HIF in Geneva much like it is now hosting the Medicines for Malaria Venture. UNITAID has created a patent pool intended to facilitate licensing by pharmaceutical innovators to generic firms. Initially limited to HIV/AIDS medicines, the pool is im ­proving access to existing or slightly modified HIV/AIDS treatments. So far, this improvement has typically been tightly limited, excluding the populations of many low­and middle-income countries. The benefits of this pool are likely, over time, to be extended to more countries and more therapies. But the patent pool does not(and is not meant to) stimulate pharmaceutical R&D and there­fore does not obviate the need for the HIF. Conversely, 4