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Der Zugang der Ent­wick­lungs­län­der zu den Errun­gen- schaf­ten des medi­zi­ni­schen Fort­schritts ist viel­fach defi- zitär. Beson­de­re Pro­ble­me berei­tet dabei der Zugang zu patent­ge­schütz­ten Arz­nei­mit­teln. Das Span­nungs­ver- hält­nis zwi­schen den inter­na­tio­na­len Regeln des Patent- schut­zes einer­seits und den phar­ma­zeu­ti­schen Bedürf- nis­sen der Ent­wick­lungs­län­der ande­rer­seits ist das The- ma des Bei­trags von Hol­zer. Schwer­punkt ist die Aus­ein­an­der­set­zung mit den rechts­po­li­ti­schen Vor­schlä- gen zur Lösung der Pro­ble­ma­tik. OdW ist für Dis­kus­si- ons­bei­trä­ge zu die­sem wich­ti­gen wis­sen­schafts­po­li­ti- schen The­ma offen.

Dem Jour­nal of Sci­ence, Huma­nities and Arts (josha. org) dan­ken wir für die Geneh­mi­gung der Über­nah­me in OdW.

I. Intro­duc­tion

Patents are cur­r­ent­ly the most com­mon mecha­nism to sti­mu­la­te phar­maceu­ti­cal inno­va­ti­on. They are con­side- red an effi­ci­ent allo­ca­ti­on mecha­nism and a sys­tem in which fewer resour­ces are squandered.1 Patents are of impor­t­ance for phar­maceu­ti­cal com­pa­nies, sin­ce inno- vati­on is expen­si­ve with deve­lo­ping cos­ts per new drug at more than 2 bil­li­on U.S. Dollars.2 In 1995, mem­bers of the World Tra­de Orga­niz­a­ti­on (WTO) signed the agree- ment on Tra­de Rela­ted Aspects of Intel­lec­tu­al Pro­per­ty Rights (TRIPS) to stan­dar­di­ze patent rights in an inter- natio­nal context.3 The tra­de agree­ment ent­ails strict patent pro­tec­tion laws, i.e. a mar­ket exclu­si­vi­ty for paten- ted drug over a peri­od of at least 20 years.4 One of the main incen­ti­ves to design the TRIPS agree­ment was to crea­te a reward mecha­nism for phar­maceu­ti­cal compa-

  1. 1  Hol­lis (2008: 124–125). All risk of R&D cos­ts is effi­ci­ent­ly impo- sed on the phar­maceu­ti­cal com­pa­ny that deve­lo­ps new drugs.
  2. 2  DiMa­si et al. (2014). The­se cos­ts inclu­de mar­ke­ting appro­val, R&D, out-of-the pocket and time costs.
  3. 3  WTO (2001), Hol­lis (2008: 124).
  4. 4  Rav­vin (2008: 110), Hol­lis (2008: 124). The TRIPS agree­ment was­ful­ly imple­men­ted by most of the WTO mem­ber sta­tes in 2005.
  5. 5  Rav­vin (2008), Pog­ge (2009: 543–546), Buchanan et al. (2011: 307–310, 131), see Pog­ge (2009).
  6. 6  Pog­ge (2008, 2009).
  7. 7  Faun­ce and Nasu (2008: 146).
  8. 8  Pog­ge (2005, 2008, 2008b, 2009) argues that also poor pati­ents­from aff­lu­ent coun­tries can­not afford expen­si­ve medicines.

nies in order to reco­ver cos­ts, to make pro­fits and impor- tant­ly, to pro­mo­te rese­arch and deve­lo­p­ment (R&D) for dise­a­ses that affect deve­lo­ping nations.5

Howe­ver, the adop­ti­on of the TRIPS agree­ment exa- cer­ba­ted two pro­blems that are per­sis­tent in the dis­cus- sion about essen­ti­al medi­ci­nes for the glo­bal poor.6

Access to medi­ci­nes: First, the­re is a dis­tri­bu­ti­on prob- lem of exis­ting inno­va­tions. As Tho­mas Faun­ce and Hi- toshi Nasu put it, “the moral and prac­ti­cal pro­blem of how poor peop­le will con­ti­nue to gain afford­a­ble access tome­di­ci­ne­si­soneof­t­he­mo­st­pres­sin­gis­su­es­cur­r­ent­ly con­fron­ting humanity”.7 Oft­en­ti­mes, essen­ti­al medi­ci­nes are not acces­si­ble for poor pati­ents, sin­ce phar­maceu­ti­cal com­pa­nies set high pri­ces for drugs under the cur­rent patent regime.8 After the imple­men­ta­ti­on of the TIRPS agree­ment, the gene­ric indus­try for new drugs was effec- tively shut down in deve­lo­ping coun­tries due to the strict patent pro­tec­tion on a glo­bal sca­le. Thus, the acces­si­bi­li- ty of new inno­va­tions under the TRIPS regime has been shifted bey­ond the twen­ty-year pro­tec­tion of patents. Tho­mas Pog­ge argues that in con­se­quence, an even hig- her per­cen­ta­ge of the glo­bal poor is nowa­days exclu­ded from drug use than during the pre-TRIPS era.9

Lack of R&D for neglec­ted dise­a­ses: Second, under high pri­ce patent regimes, in which drugs are sold under a monopoly10, most R&D is dedi­ca­ted to dise­a­ses pre­do- minant in deve­lo­ped nati­ons whe­re the purcha­sing pow- er for expen­si­ve phar­maceu­ti­cals is the highest.11 Hence, due to a lacking mar­ket in deve­lo­ping coun­tries, phar- maceu­ti­cal com­pa­nies do not deve­lop a suf­fi­ci­ent amount of essen­ti­al medi­ci­nes that would be life-saving for type II and III dise­a­ses like tuber­cu­lo­sis, HIV/AIDS and tro- pical diseases.12 Among other fac­tors, this imba­lan­ce in glo­bal R&D finds expres­si­on in the “10/90 gap” – only 10

Pog­ge (2008: 73–76, 2009: 543–546).
10 Mono­po­ly pri­ces are usual­ly asso­cia­ted with inef­fi­ci­ent market

solu­ti­ons from a macroeco­no­mic stand­point. Baker (2004: 2–3) esti­ma­tes that for every dol­lar spent on R&D in the phar­maceu- tical sec­tor, one dol­lar is lost in dead­weight los­ses – poten­ti­al­ly bene­fits to con­su­mers that are not rea­li­zed due to high prices.

11 See Davis (1995), Hol­lis (2008), Pog­ge (2008), Pog­ge (2009), Rid­ley and Gra­bow­ski (2006).

12 The World Health Orga­niz­a­ti­on (2012:1) defi­nes type I dise­a­ses as inci­dent in both rich and poor coun­tries with lar­ge num­bers of vul­nerable popu­la­ti­ons, and type II dise­a­ses as more sub­stan­ti­al­ly inci­dent in poor coun­tries. See Buchanan et al. (2011:307), see WHO (2006).

Feli­ci­tas Holzer

Inter­na­tio­nal Patent Regimes and Access to Medi­ci­nes: Is the Health Impact Fund an Effec­ti­ve Solution?

Ord­nung der Wis­sen­schaft 2016, ISSN 2197–9197

162 ORDNUNG DER WISSENSCHAFT 3 (2016), 161–168

per cent of the glo­bal R&D is devo­ted to dise­a­ses that ac- count for 90 per­cent of the glo­bal dise­a­se burden.13 Like- wise, the­re is a bias towards sym­ptom reli­e­ving drugs under the cur­rent patent regime. This means that pro­fits for phar­maceu­ti­cal com­pa­nies depend on the num­ber of tre­at­ments sold – which incre­a­ses with the tre­at­ment of sym­ptoms – and not necessa­ri­ly on the health impact on the glo­bal bur­den of disease.14

The­re have been various attempts to over­co­me the out­lined weak­nes­ses of inter­na­tio­nal patent regimes du- ring the past deca­de. One of the most pro­mi­nent pro­po- sals by Tho­mas Pog­ge and Aidan Hol­lis is the Health Im- pact Fund (HIF).15 The HIF is desi­gned to address the essen­ti­al medi­ci­nes pro­blem while pre­ser­ving the cur- rent patent regime. The reform pro­po­sal of the HIF is based on Pogge’s defence of a glo­bal health reform. Nota- bly, he pur­su­es a human rights approach to jus­ti­fy the ur- gent need for alter­na­ti­ves to the cur­rent patent regime that, in his view, vio­la­tes the human right to health by de- pri­ving the poor.16 Accord­ing to arti­cle 25 of the Uni­ver- sal Decla­ra­ti­on of Human Rights, ever­yo­ne has the right to a stan­dard of living ade­qua­te for health and well-being which also inclu­des medi­cal care. Like­wi­se, the World Health Orga­niz­a­ti­on defi­nes the right to health as enjoy- ment of the hig­hest attainab­le stan­dard of phy­si­cal and men­tal health, which is embed­ded in inter­na­tio­nal and domestic legal systems.17 While legal obli­ga­ti­ons of gran- ting the right to health were his­to­ri­cal­ly impo­sed on na- tio­nal duty-bea­rers, broa­der theo­ries of jus­ti­ce have been evol­ving during the past 15 years and encom­pass a glo­bal approach to health obligations.18 For instance, Pog­ge gi- ves an his­to­ri­cal account for a duty of the aff­lu­ent coun- tri­es to actively impro­ve the health situa­ti­on of the glo­bal poor. He infers this duty from the fact that the deve­lo­ped world has been respon­si­ble for the cur­rent unjust glo­bal order.19 Nevertheless, the human rights approach may be more com­mon­ly con­si­de­red a robust ethi­cal framework

  1. 13  Luchet­ti (2014: 731).
  2. 14  Rav­vin (2008:112), Faun­ce and Nasu (2008), see Hil­ary (2001),see Far­mer (2004).
  3. 15  Hol­lis (2005, 2007, 2008), Pog­ge (2005, 2008, 2009).
  4. 16  Pog­ge (2009: 554, 2005, 2005b).
  5. 17  The Uni­ver­sal Decla­ra­ti­on of Human Rights (1948) art. 25 (1),WHO (2008), Inter­na­tio­nal Covenant on Eco­no­mic, Social andCul­tu­ral Rights (1966) art. 12, Hunt (2008: 1–9).
  6. 18  See Clapham (2006), Pog­ge (2002, 2005, 2005b).
  7. 19  See Pog­ge (2002).
  8. 20  See Sen (1999), see McDo­nald (2006), Pog­ge (2005, 2005b, 2009).Even liber­ta­ri­ans like Nozick (1974: 178–182), ack­now­ledge the li- mits of pri­va­te pro­per­ty in the light of human rights vio­la­ti­ons by

which is roo­ted in the strong belief that the­re is a social value for the respect for human digni­ty and con­cep­tua- lized as an inter­na­tio­nal human rights norm.20

As a mat­ter of sti­pu­la­ti­on with the scope of this essay, I will not dwell on Pogge’s human rights approach or his his­to­ri­cal argu­ment for a glo­bal health reform as phi­lo- sophi­cal foun­da­ti­ons for the HIF. Like­wi­se, I will not re- spond to the liber­ta­ri­an defence of pro­per­ty rights.21 In this essay, I will dis­cuss the design of the HIF and prob- lems that ari­se with respect to its prac­ti­cal imple­men­ta­ti- on. In this regard, I will fol­low the main line of argu­ment in the lite­ra­tu­re on the HIF.

After recon­struc­ting the design of the HIF along­side other recent approa­ches to impro­ve the health of the glo- bal poor, I will cri­ti­cal­ly scru­ti­ni­ze the expec­ted effec- tive­ness of the HIF in terms of its health impact on the glo­bal bur­den of dise­a­se. I will then give a gene­ral over- view on the prac­ti­cal pro­blems that the HIF poses and recon­struct the main points of cri­ti­cism by Jorn Son­der- holm, Allen Buchanan et al., and Micha­el Selgelid.22 Sub­se­quent­ly, I will dis­cuss the last mile pro­blem in more detail. The last mile pro­blem addres­ses the prac­ti- cal pro­blem of lacking infra­st­ruc­tu­re in low-inco­me coun­tries and con­sti­tu­tes a major obsta­cle to the acces­si- bili­ty of medicines.23 I will build upon Son­der­holm who refor­mu­la­tes the last mile pro­blem as collec­ti­ve choice pro­blem. Howe­ver, my aim is to go bey­ond Sonderholm’s cri­tique by embed­ding the last mile pro­blem into the broa­der con­text of glo­bal pover­ty traps. More pre­cise­ly, I will argue that a solu­ti­on to the last mile pro­blem would ent­ail the access to phar­maceu­ti­cals and the access to in- for­ma­ti­on, edu­ca­ti­on, tech­no­lo­gy and eco­no­mic par­ti­ci- pati­on, which are cru­cial fac­tors for the dis­tri­bu­ti­on and acces­si­bi­li­ty of drugs on the last mile. As a result, I will argue that the HIF can poten­ti­al­ly con­tri­bu­te, but not ful­ly sol­ve the last mile pro­blem and con­se­quent­ly, the access to medi­ci­nes pro­blem per­sists under the HIF.

say­ing that tho­se in con­trol of the remai­ning resour­ces must not depri­ve peop­le from essen­ti­al goods. See Exdell (1977: 144–145), see Gor­don (1992).

21 In his phi­lo­so­phi­cal foun­da­ti­on, Pog­ge (2009: 559–566) dis­cus­ses the liber­ta­ri­an appeal to intel­lec­tu­al pro­per­ty rights. Pog­ge (2009: 364–365) denies the moral per­mis­si­bi­li­ty of intel­lec­tu­al pro­per­ty rights by arguing that intel­lec­tu­al pro­per­ty sup­pres­ses the poor people’s free­dom to use essen­ti­al resources.

22 Son­der­holm (2010), Buchanan et al. (2011), Sel­gel­id (2008)
23 Son­der­holm (2010: 171). Even if a drug is avail­ab­le on the local

mar­ket at cheap pri­ces, a lack of infra­st­ruc­tu­re can lead to deli­ve- ry pro­blems over the last mile.

II. The Health Impact Fund in the con­text of other approa­ches to impro­ve the health situa­ti­on of the glo­bal poor

Sta­tes, inter­na­tio­nal orga­niz­a­ti­ons and NGOs have made various attempts to impro­ve the health situa­ti­on of the glo­bal poor. Most nota­b­ly, the Doha Decla­ra­ti­on on the TRIPS Agree­ment and Public Health sta­tes that tra­de agree­ments should be inter­pre­ted and imple­men­ted to pro­tect public health and to pro­mo­te access to medi­ci- nes.24 Push-mecha­nisms have his­to­ri­cal­ly been the pri- mary ways to pro­mo­te R&D for social­ly desi­ra­ble but unpro­fi­ta­ble medicines.25 Push-mecha­nisms redu­ce the cos­ts of R&D for rese­ar­chers by pro­vi­ding fun­ding up front. Governments and other fun­ding bodies usual­ly pro­vi­de resour­ces for rese­arch through grants. More recent­ly, other push-stra­te­gies have been emer­ging like Public Pri­va­te Part­ners­hips and inter­na­tio­nal health pro- grams.26 In con­trast to push­me­cha­nisms, pull-mecha- nisms give incen­ti­ves to pro­fit-see­king inno­va­tors to deve­lop phar­maceu­ti­cals that are ali­gned to the social needs.27 For instance, Advan­ces Mar­ket Com­mit­ments are com­mit­ted to reward pay­ments for medi­ci­nes that meet cer­tain criteria.28

Howe­ver, the­re are several flaws rela­ted to the­se cur- rent attempts to impro­ve R&D for neglec­ted dise­a­ses. Push-mecha­nisms, for instance, sup­port publicly fun­ded pro­jects that often lead to unsuc­cess­ful R&D. Like­wi­se, fun­ding bodies may not be the most effi­ci­ent agents to accu­rate­ly deter­mi­ne suc­cess­ful projects.29 Fur­ther­mo­re, push-mecha­nisms even­tual­ly lead to drugs that are sold at mono­po­ly pri­ces, sin­ce late-sta­ge R&D is most­ly fun- ded by pri­va­te companies.30 In turn, Hol­lis points out that Advan­ced Mar­ket Com­mit­ments are actual­ly effi­ci- ent mecha­nisms becau­se pri­va­te com­pa­nies bear the full cos­ts of R&D. Howe­ver, at the same time, they exhi­bit a too nar­row scope for pro­duct development.31 Hence, cur­rent push- and pull-mecha­nisms, much the same as

  1. 24  WTO (2003), para­graph 1,4,7; see Faun­ce and Nasu (2008).
  2. 25  Rav­vin (2008: 115–117).
  3. 26  For examp­le, pro­jects by the Inter­na­tio­nal AIDS Vac­ci­ne Initia-tive or the Glo­bal Alli­an­ce for Tuber­cu­lo­sis Drug Deve­lo­p­ment (2007) or the “Trea­ting 2 Mil­li­on by 2005” by the World Health Orga­niz­a­ti­on to tar­get AIDS and Mala­ria (WHO 2003: 4–5, 24), Päivänsa­lo (2009: 101–102).
  4. 27  Rav­vin (2008:117), see Hol­lis (2006).
  5. 28  Hol­lis (2008: 125–126), see Kre­mer and Glen­ners­ter (2004: Ch.7),see Word Bank (2006). Advan­ced Mar­ket Com­mit­ments are­par­ti­cu­lar­ly used to incen­ti­vi­ze R&D for vaccines.
  6. 29  See Buchanan et al. (2011), WHO (2012), Hsu and Schwartz(2007: 26), Pog­ge (2008: 24), see Hol­lis (2007), Johns­ton and Wasun­na (2007).

the TRIPS patent sys­tem, do not sus­tainab­ly sol­ve the two aspects of the essen­ti­al medi­ci­nes pro­blem: the sub- opti­mal access to life-saving drugs due to mono­po­ly pri- cing and the limi­ted R&D resour­ces for drugs that would be of bene­fit to the glo­bal poor.32

The reform pro­po­sal by Hol­lis and Pog­ge is a pull me- cha­nism that addres­ses both aspects of the essen­ti­al me- dici­nes pro­blem. The HIF offers a second patent opti­on along­side the cur­rent inter­na­tio­nal patent regime.33 Un- der the pro­po­sed HIF, phar­maceu­ti­cal com­pa­nies that bring new drugs to mar­ket have the opti­on to eit­her set mono­po­ly pri­ces under patents or to regis­ter new medi- cines with the HIF. The com­pa­ny could patent a HIF-re- gis­tered drug in any coun­try, but would be obli­ged to sell it ever­y­whe­re during the reward peri­od of 10 years at a deter­mi­ned pri­ce, ide­al­ly at pro­duc­tion cos­ts, and to of- fer a free licen­se of the rele­vant tech­no­lo­gy to manu­fac- ture the drug after the reward period.34 Reward pay- ments would have to match the expec­ted pro­fit the firm would make by set­ting mono­po­ly pri­ces. Fur­ther­mo­re, reward pay­ments would be based on the glo­bal health impact of the pro­duct, which could be asses­sed by quan- tita­ti­ve methods to mea­su­re the reduc­tion in the glo­bal bur­den of dise­a­se like Qua­li­ty-Adjus­ted Life Years (QA- LYs),35 a stan­dar­di­zed mea­su­re to assess health inter­ven- tions.36 Hol­lis pro­po­ses two opti­ons to deter­mi­ne the amount of money that would be paid to the inno­va­tor. Eit­her the pri­ce per incre­men­tal QALY would be fixed which would lea­ve the bud­get of the fund inde­ter­mi­na­te, or a total amount of fun­ding for all inno­va­tors would be fixed in advan­ce lea­ving the reward pay­ment per QALY variable.37 Moreo­ver, Hol­lis’ and Pogge’s reform pro­po­sal aims to pro­vi­de a just allo­ca­ti­on mecha­nism of cos­ts to finan­ce the HIF. Deve­lo­ped nati­ons should bear most of the cos­ts nee­ded to build and main­tain the HIF.

Accord­ing to Pog­ge, the HIF could be built if deve­lo- ped nati­ons spent around 70 bil­li­on U.S. Dol­lars annu- ally which would make up only 0.27 per cent of the ag-

30 Rav­vin (2008: 111–112, 115).
31 Hol­lis (2008: 125–126).
32 Rav­vin (2008: 115–117).
33 Pog­ge (2005, 2008, 2009), Hol­lis (2008). 34 Hol­lis (2008: 127).

35 The health impact could be also mea­su­red in DALYs (Disa­bi­li­ty- Adjus­ted Life Years), using disa­bi­li­ties as weight for bur­den of dise­a­se. Accord­ing to Hol­lis (2008: 128–129), DALYs are the less appe­aling mea­su­re. Howe­ver, Sel­gel­id (2008: 138) argues that the DALY approach may be pre­fera­ble for the HIF, sin­ce the reli­ef- from the bur­den of dise­a­se is measured.

36 See Gold et at. (2002). 37 Hol­lis (2008: 127).

Hol­zer · Inter­na­tio­nal Patent Regimes 1 6 3

164 ORDNUNG DER WISSENSCHAFT 3 (2016), 161–168

gre­ga­te gross natio­nal income.38 Hol­lis and Pog­ge con­si- der the incre­a­sed spen­ding by the aff­lu­ent coun­tries as rea­listic opti­on for pru­den­ti­al rea­sons: First, pri­ces for phar­maceu­ti­cals would also be con­si­der­ab­ly lower in de- velo­ped countries.39 Second, Pog­ge sta­tes that a “free ride” for deve­lo­ping coun­tries on phar­maceu­ti­cal re- search could show good-will of the aff­lu­ent coun­tries and enab­le the deve­lo­ping world to respond more effec- tively to publi­che­alth problems.40 Accord­ing to Pog­ge, the HIF regis­tra­ti­on sys­tem would be supe­ri­or to the cur­rent sta­tus quo becau­se it con­sists of an addi­tio­nal pa- tent sys­tem that rewards R&D based on the health im- pact of new drugs. The health impact pro­mi­ses to be high when a new drug tar­gets a lar­ge num­ber of dise­a­ses like mala­ria, AIDS/HIV, tuber­cu­lo­sis and other tro­pi­cal dise­a­ses that pri­ma­ri­ly affect the deve­lo­ping world. Thus, the HIF would incen­ti­vi­ze rese­arch for dise­a­ses that cur- rent­ly impo­se a high bur­den across the world and for which the­re are only few tre­at­ment alter­na­ti­ves avai­lab- le.41 Fur­ther­mo­re, the HIF would be more effi­ci­ent than com­mon push-mecha­nisms becau­se only suc­cess­ful in- nova­ti­on would be rewarded.42 Like­wi­se, the reward sys- tem cor­re­spon­dent to the health impact would gene­ra­te incen­ti­ves to sell the drug chea­ply in order to reach more pati­ents, and to encou­ra­ge other com­pa­nies to copy and sell the drug. This would sub­stan­ti­al­ly con­tri­bu­te to im- pro­ve the access to medi­ci­ne pro­blem for the glo­bal poor.43

III. Gene­ral cri­tique and limits to the prac­ti­cal imple­men­ta­ti­on of the HIF

Several cri­ti­ques of Hol­lis’ and Pogge’s reform pro­po­sal address the prac­ti­cal issu­es of its imple­men­ta­ti­on. Faun­ce and Nasu, Rav­vin and Hol­lis hims­elf argue that the HIF would be pro­ne to firms that exa­g­ge­ra­te the health impact of new drugs under the HIF.44 Hence, use­ful resour­ces that could be spent on R&D, the admi­nis­tra­ti- on of the HIF and the assess­ment of the health impact

  1. 38  Pog­ge (2005: 192). In turn, Hol­lis (2008: 127) sug­gests a mini­mal com­mit­ment fun­ding of 2 bil­li­on to 10 bil­li­on U.S. Dol­lars a year that would incen­ti­vi­ze drug deve­lo­p­ment and commercialization.
  2. 39  Through lower pri­ces, a big­ger quan­ti­ty of medi­ci­nes could be cove­r­ed by the health care sys­tem and pati­ents would have to spend less money on medi­ci­nes (Pog­ge 2005: 192–193).
  3. 40  Pog­ge (2005: 193–194).
  4. 41  Pog­ge (2009: 548–550).
  5. 42  Hol­lis (2008: 126–127).
  6. 43  Pog­ge (2009: 549–550).

would have to be spent on a con­trol sys­tem to fight cor- ruption.45 Fur­ther­mo­re, Buchanan et al. cri­ti­ci­ze two impli­cit assump­ti­ons of the HIF model which they call fun­ding and relia­bi­li­ty assump­ti­on. First, to address the fun­ding assump­ti­on, Buchanan et al. give his­to­ri­cal evi- dence that most publi­ci­zed fun­ding com­mit­ments in the aff­lu­ent world have not been met in prac­ti­ce. Thus, phar- maceu­ti­cal com­pa­nies would rely less on the pay­ment com­mit­ment by the HIF than on the cur­rent patent sys- tem. Also, pro­vi­ding public fun­ding to pri­va­te com­pa- nies is poli­ti­cal­ly unpopular.46 In the same line, Faun­ce and Nasu as well as Son­der­holm ques­ti­on the Pogge’s sug­ges­ti­on that aff­lu­ent coun­tries would bear an annu­al pri­ce tag of 70 bil­li­on U.S. Dol­lars when it remains unc- lear whe­ther the deve­lo­ped world bene­fits from the HIF or not.47 Second, regar­ding the relia­bi­li­ty assump­ti­on, com­pa­nies would have to rely on fair rewards that cover R&D expen­ses and assu­re equal pro­fits com­pa­red to the ordi­na­ry patent regis­tra­ti­on. Accord­ing to Buchanan et al., it remains dif­fi­cult to imple­ment reli­able mea­su­re- ments for the health impact of drugs on the glo­bal bur- den of dise­a­se, in par­ti­cu­lar when dise­a­ses are mul­ti-fac- tori­al or trea­ted with several drugs.48 Sel­gel­id simi­lar­ly points out that des­pi­te the pro­gress in the glo­bal dise­a­se bur­den (GDB) rese­arch, mea­su­re­ment sys­tems like tho- se ones using QALYs or DALYs are wea­kest in deve­lo- ping coun­tries whe­re they would be nee­ded most.49 Thus, appro­pria­te methods of data collec­tion for the estab­lish­ment of the HIF do not exist. Also, Sel­gel­id sys- tema­ti­cal­ly shows the pro­blems that ari­se when the dec- line in GDB occurs due to effects cau­sed by more than one drug. Based on coun­ter­fac­tu­al examp­les, he demons- tra­tes that the actu­al effect of a drug is inde­finab­le when the­re are syn­er­gistic or addi­ti­ve effects of a second drug.50 He con­clu­des that the eva­lua­ti­on of the real effect of a drug would requi­re a huge amount of data collec­tion and ana­ly­sis in prac­ti­ce. Hence, an effec­ti­ve imple­men­ta- tion of the HIF remains high­ly chal­len­ging and pos­si­b­ly unrealistic.51

44 Hol­lis (2008: 128), Rav­vin (2008: 121), Faun­ce and Nasu (2008: 150).

45 Hol­lis and Pog­ge (2008: 31).
46 Buchanan et al. (2008: 325–326).
47 Faun­ce and Nasu (2008: 150), Son­der­holm (2010: 173). 48 Buchanan et al. (2008: 326).
49 Sel­gel­id (2008: 138).
50 Sel­gel­id (2008: 139–151), see Son­der­holm (2010: 171–173). 51 Sel­gel­id (2008: 138, 143).

IV. An assess­ment of the HIF’s abi­li­ty to sol­ve the access to medi­ci­ne pro­blem in the light of pover­ty traps

So far, the pre­sen­ted cri­ti­ques main­ly address the imp­le- men­ta­ti­on of the HIF. Howe­ver, I will now focus in more detail on ano­t­her prac­ti­cal pro­blem – the “last mile pro- blem” – that con­cerns access to phar­maceu­ti­cals. Many peop­le are still exclu­ded from drug use, alt­hough phar- maceu­ti­cals could be chea­ply avail­ab­le. A recent UNAIDS report sta­tes that to this day only about 41 per cent of sub-Saha­ran Afri­can HIV/AIDS pati­ents recei­ve anti­re­tro­vi­ral drugs.52 Howe­ver, Son­der­holm argues that anti­re­tro­vi­ral HIV drugs are not com­mon­ly paten­ted in Afri­can countries.53 Thus, the cur­rent TRIPS sys­tem can­not be made ful­ly respon­si­ble for the exclu­si­on of pati­ents from essen­ti­al drugs in the glo­bal AIDS cri­sis. Accord­ing to Son­der­holm, the lack of phy­si­ci­ans, cli­nics, and infra­st­ruc­tu­re to admi­nis­ter the anti­re­tro­vi­ral the­ra- py and to screen peop­le are the main cau­ses for the AIDS epi­de­mic and not the pri­ce poli­ci­es of pharmaceuticals.54 This lack of infra­st­ruc­tu­re for the final dis­tri­bu­ti­on of drugs is known as the last mile pro­blem. To redu­ce the glo­bal bur­den of dise­a­se effec­tively, drugs must be deli- ver­ed to pati­ents over ‘the last mile’.

Hol­lis and Pog­ge argue that short­co­mings in the health sec­tor would adver­se­ly affect the spread of HIF- regis­tered drugs. Hence, the aut­hors belie­ve that phar- maceu­ti­cal com­pa­nies that regis­ter drugs under the HIF would have strong incen­ti­ves to sus­tainab­ly pur­sue stra- tegies to impro­ve the health impact of new drugs on the GDB in order to incre­a­se the reward payments.55 Firms would tack­le the last mile pro­blem by impro­ving fac­tors that pre­vent the effec­ti­ve acqui­si­ti­on of drugs.56 Such im- pro­ve­ments would be efforts to deter­mi­ne how infor­ma- tion could be best com­mu­ni­ca­ted to the public, how health care edu­ca­ti­on could be impro­ved, and to iden­ti­fy stra­te­gies to encou­ra­ge health care pro­vi­ders in the pub- lic and pri­va­te sec­tor to deve­lop stra­te­gies for drug dis- pen­sers, health care workers and drug sellers.57 Fur­ther- more, Pog­ge argues that HIF regis­trants, perhaps in col- labo­ra­ti­on with inter­na­tio­nal agen­ci­es or NGOs, would be in a more potent posi­ti­on than poor coun­tries to over-

  1. 52  UNAIDS (2013: 4). Howe­ver, the pro­vi­si­on of tre­at­ment in the area has been sub­stan­ti­al­ly incre­a­sed during the last deca­de. As sta­ted in a for­mer WHO report (2005: 13), only 11 per­cent of the sub-Saha­ran Afri­can HIV pati­ents recei­ved anti­re­tro­vi­ral the­ra­py in 2005.
  2. 53  Son­der­holm (2010: 170), see Attaran and Gil­le­spie-White (2001).
  3. 54  Son­der­holm (2010: 170–171) argues against Pog­ge (2005: 184)who uses the glo­bal AIDS cri­sis in Afri­ca as vital examp­le for the needs of poor pati­ents that is play­ed out against the recoup of R&D cos­ts of phar­maceu­ti­cal companies.

come short­co­mings on the last mile.58 The­re­fo­re, Hol­lis and Pog­ge con­si­der the HIF as a rea­listic chan­ce to im- pro­ve the last mile problem.

Howe­ver, as Son­der­holm puts it, the­re is litt­le hope that the HIF would sus­tainab­ly sol­ve the last mile prob- lem. He argues that des­pi­te strong incen­ti­ves to impro­ve the access to medi­ci­nes under the HIF, the­re would be a collec­ti­ve choice problem.

„So, ima­gi­ne that com­pa­ny A has a pro­duct in coun­try x and that com­pa­ny B also has a pro­duct in this coun­try and that its pro­duct has a signi­fi­cant­ly hig­her poten­ti­al for health impro­ve­ment that the pro­duct of com­pa­ny A. Ima­gi­ne also that com­pa­ny A has ano­t­her pro­duct in ano­t­her coun­try that has a huge poten­ti­al for health im- pro­ve­ment and that com­pa­ny B has no other pro­duct than the one it has in x. […] In this sce­n­a­rio, com­pa­ny A has very litt­le finan­cial incen­ti­ve for con­tri­bu­ting to coun­try x.”59

In this out­lined hypo­the­ti­cal case, a collec­ti­ve choice pro­blem of lacking incen­ti­ves to impro­ve the health inf- rast­ruc­tu­re occurs. Fur­ther­mo­re, assuming that the­re is usual­ly more than one com­pa­ny that pro­du­ces medi­ci- nes with a poten­ti­al health impact, firms would spe­cu­la- te to free-ride on the efforts made by other com­pa­nies. This would even­tual­ly lead to a sub­op­ti­mal pro­vi­si­on of health infrastructure.60

Buil­ding upon Sonderholm’s cri­tique, I will intro­du­ce the con­cept of pover­ty traps and app­ly it to the last mile pro­blem in order to pro­vi­de a dif­fe­rent, more fun­da­men- tal cri­tique of the HIF’s abi­li­ty to effec­tively sol­ve the ac- cess to medi­ci­nes pro­blem. Simi­lar­ly to Son­der­holm, I do not belie­ve that Hol­lis’ and Pogge’s argu­ment – that firms would have the capa­ci­ty to sub­stan­ti­al­ly con­tri­bu­te to the last mile problem61 – is very com­pel­ling. Howe­ver, I belie­ve that the­re are rea­sons other than the collec­ti­ve choice pro­blem Son­der­holm iden­ti­fies. To show this, I will ana­ly­ze the last mile pro­blem in the con­text of glo­bal pover­ty traps.

The Mill­en­ni­um Deve­lo­p­ment Goals (MDGs) estab- lis­hed in 2000 envi­sa­ged the aff­lu­ent coun­tries mobi­li- zing resour­ces to redu­ce pover­ty by incre­a­sing develo-

55 Hol­lis and Pog­ge (2008: 75).
56 Hol­lis and Pog­ge (2008, Ch. 7).
57 Hol­lis and Pog­ge (2008: 75–77).
58 Pog­ge (2009: 549–550), Hol­lis and Pog­ge (2010).
59 Son­der­holm (2010: 171).
60 As wide­ly dis­cus­sed in the eco­no­mic theo­ry of public goods, the

free-rider pro­blem occurs when tho­se who bene­fit from goods do not pay for them, which results in a sub­op­ti­mal pro­vi­si­on of goods or ser­vices. See Cor­nes and Sand­ler (1996).

61 Hol­lis and Pog­ge (2008: Ch. 7).

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ping assi­s­tance from 0.25% of the gross domestic pro­duct in 2003 to 0.54% in 2015 which amounts to 120 bil­li­on U.S. Dol­lars annually.62 The goal was alrea­dy excee­ded by 2007 when more than 120 bil­li­on U.S. Dol­lars were spent, from which 22 bil­li­on U.S. Dol­lars were going to health programs.63

Howe­ver, the United Nati­ons, that set the MDGs, ex- pec­ted a much grea­ter impact on pover­ty which was not over­co­me by the rai­sing and spen­ding of enor­mous funds. Many very poor coun­tries are still unab­le to reach the out­lined goals. For instance, accord­ing to esti­ma­tes in 2010 and 2012, 896 mil­li­on peop­le were living on less than two Dol­lars a day. Child and mater­nal mor­ta­li­ty are still abo­ve the tar­get rate.64 David Stuck­ler et al. show that the une­qual pro­gress in achie­ving the health MDGs in low-inco­me coun­tries is signi­fi­cant­ly rela­ted to the bur­den of type I and type II dise­a­ses like HIV/AIDS and other com­mu­ni­ca­ble diseases.65

Gorik Ooms et al. exp­lain that pover­ty traps are the major cau­ses for the fact that the MDGs have not been met as expec­ted. Pover­ty traps, accord­ing to Ooms et al., are vicious cycles of insuf­fi­ci­ent capi­tal in which poor coun­tries are unab­le to build up infra­st­ruc­tu­re and busi- ness, and to sus­tain edu­ca­ti­on. This lack of sus­tainab­le infra­st­ruc­tu­re ent­ails a lack of ser­vices that would be nee­ded for health, edu­ca­ti­on, or other basic infra­st­ruc- ture which, in turn, would be requi­red to main­tain the health of workers that would pro­du­ce capi­tal and so on.66 Pover­ty traps imply a long-term growth fail­u­re of very poor coun­tries and an incre­a­sing diver­gence in the glo­bal eco­no­my. Also, insti­tu­tio­nal fail­u­res pre­vent coun­tries from esca­ping this vis­cous cycle.67 Fur­ther­mo- re, glo­bal cen­tres of eco­no­mic growth and pro­spe­ri­ty like the Wes­tern world, Chi­na, Rus­sia, Bra­zil, and South Af- rica, attract capi­tal and human resour­ces to “bend the rules to their advan­ta­ge”, but the return of capi­tal does not go back to poor countries.68 In addi­ti­on to that, capi- tal accu­mu­la­ti­on in poor coun­tries can easi­ly be over- whel­med by glo­bal pri­ce fluc­tua­tions, for instance, of com­mo­di­ties low-inco­me coun­tries lar­ge­ly depend on. Also, low-inco­me coun­tries fre­quent­ly lack an insuran­ce sys­tem that would be nee­ded to deve­lop com­pa­ra­ti­ve eco­no­mic advantages.69

  1. 62  Ravis­hankar et al. (2009: 2113), see United Nati­ons (2015), see Sachs and McAr­thur (2005).
  2. 63  Ooms et al. (2010: 1), see Ravis­hankar et al. (2009).
  3. 64  World Bank (2015), Stuck­ler et al. (2010: 2).
  4. 65  Stuck­ler et al. (2010: 1).
  5. 66  Ooms et al. (2010: 1–2).
  6. 67  Aza­ria­dis and John (2005).

As Ooms et al. sug­gest, poor coun­tries can­not impro- ve their over­all health situa­ti­on due to the pover­ty traps they are caught in. In the fol­lowing, I will show that this cor­re­sponds to the – what Son­der­holm, Hol­lis and Pog- ge call – last mile pro­blem. The fail­u­re to achie­ve the MDGs reve­als the genui­ne impor­t­ance of pover­ty traps and the sub­stan­ti­al dif­fi­cul­ties on the last mile, sin­ce coun­tries remain in pover­ty des­pi­te the pro­vi­si­on of enor­mous fun­ding. Sus­tainab­le net­works of ser­vices, staff and traf­fic sys­tems that would be nee­ded to effi­ci- ent­ly sol­ve the last mile pro­blem seem to be deeply ent- angled with more far-reaching glo­bal eco­no­mic struc­tu- res. The­re are long­stan­ding short­co­mings like the lack of electri­ci­ty, know­ledge and infor­ma­ti­on about dise­a­ses, as well as cor­rup­ti­on which inter­na­tio­nal agen­ci­es, NGOs and sta­tes have been addres­sing over several decades.

Given the ent­an­gle­ment of the last mile pro­blem with glo­bal eco­no­mic struc­tures and local short­co­mings, I argue that the HIF is not unab­le to sol­ve the last mile pro­blem just becau­se of the collec­ti­ve choice pro­blem Son­der­holm intro­du­ces. Even if the pre­sen­ted collec­ti­ve choice pro­blem could be sol­ved, a sus­tainab­le inter­ven­ti- on nee­ded to drag a coun­try out of a pover­ty trap would be too far-reaching in view of the local and glo­bal di- men­si­on of the trap. Des­pi­te the aff­lu­ence of the phar- maceu­ti­cal indus­try, it would be unli­kely to expect pri­va- te firms to have the necessa­ry resour­ces to attain suc­cess. This seems espe­cial­ly com­pel­ling when con­si­de­ring Hol- lis and Pogge’s assump­ti­on that the resour­ces nee­ded to sol­ve the last mile pro­blem could almost exclu­si­ve­ly be rai­sed by the phar­maceu­ti­cal indus­try. Then, the aut­hors would have to claim that firms would maxi­mi­ze pro­fits with the HIF while and pre­cise­ly becau­se they are fre­eing coun­tries from pover­ty traps. This claim appears to sub- stan­ti­al­ly under­ra­te the struc­tu­ral con­sti­tu­ti­on of the last mile problem.

To actual­ly tack­le the access to medi­ci­nes pro­blem ef- fec­tively, I sug­gest that the pro­blem has to be view­ed in a wider con­text of access to health-rela­ted infor­ma­ti­on, know­ledge, and education.70 The­se fac­tors are of impor- tance to the dis­tri­bu­ti­on of drugs, just as afford­a­ble pri- ces. Accord­ing to Tha­na Cam­pos, only a fun­da­men­tal in- sti­tu­tio­nal health reform could sol­ve the cur­rent global

68 Ooms et al. (2010 : 2).
69 Ooms et al. (2010: 3), see Lock et al. (2009).
70 See Cam­pos (2008), see Bal­kin (2006) who defi­nes access to

know­ledge as access to edu­ca­ti­on, infor­ma­ti­on, know­ledge-em- bed­ded goods (pro­ducts that requi­re infor­ma­ti­on for pro­du­cing e.g. drugs) and tools for the repro­duc­tion of such goods.

health dilemma.71 For instance, the Mill­en­ni­um Deve- lop­ment Goals advo­ca­te a more sys­te­ma­tic approach by iden­ti­fy­ing, for instance, phar­maceu­ti­cal com­pa­nies and the who­le pri­va­te sec­tor as respon­si­ble actors to pro­vi­de access to medi­ci­nes and new tech­no­lo­gies, such as infor- mati­on and com­mu­ni­ca­ti­on technologies.72

V. Con­clu­si­on

The HIF is com­pre­hen­si­ve in its scope and offers in its theo­re­ti­cal foun­da­ti­on a plau­si­ble mecha­nism to sol­ve the health pro­blems of the glo­bal poor. It is a serious att- empt to tack­le the glo­bal imba­lan­ce in R&D and to set long-term incen­ti­ves for the deve­lo­p­ment of cheap drugs with a glo­bal health impact. Thus, the HIF is a valu­able reform pro­po­sal to address the pro­blem of paten­ta­ble drugs and the pro­blem of extre­me depri­va­ti­on through mono­po­ly pri­ces. Also, the HIF is in line with a strong and jus­ti­fia­ble ethi­cal frame­work based on a human rights approach.

The cri­ti­ques of the prac­ti­cal imple­men­ta­ti­on I dis- cus­sed sug­gest that more rese­arch on issu­es of prac­ti­ca­li- ty needs to be done befo­re a final ver­dict on the HIF can be pas­sed. Howe­ver, having depic­ted the com­plex struc- tures of pover­ty traps, the ana­ly­sis of the last mile prob- lem sug­gests that howe­ver posi­ti­ve this ver­dict turns out to be, the HIF’ abi­li­ty to sole­ly impro­ve the last mile pro- blem is limi­ted. In this regard, Hol­lis and Pog­ge may ove- resti­ma­te the poten­ti­al strength of the HIF. Thus, I advo- cate an approach in which the HIF would be intro­du­ced as a mecha­nism along­side other struc­tu­ral reforms on a glo­bal and local level to over­co­me pover­ty traps and the access to medi­ci­nes problem.

71 Cam­pos (2008: 8), see Taran­to­la et al. (2008).

72

United Nati­ons (2015: 62–68), Goal 8.

Hol­zer · Inter­na­tio­nal Patent Regimes 1 6 7

Die Autorin absol­viert zur Zeit das Mas­ter­pro­gramm (MPhil) in„History and Phi­lo­so­phy of Sci­ence“. an der Uni­ver­si­ty of Cam­bridge mit den Schwer­punk­ten Bio- ethik und Wissenschaftstheorie.

168 ORDNUNG DER WISSENSCHAFT 3 (2016), 161–168