Reflection on Problems Concerning Construction of the Health Impact Fund

INNOVA P2, New Delhi, 12-13,May2011

Gao Zhiqian

Chinese Academy of Science and

Technology for Development

1. Applicable scope of the Health Impact Fund

Scope of illness

Scope of patients

Main functions of HIF

2. The problem of major disease differences in various countries

Even in developing countries, the major diseases in different countries vary greatly, and there is great difference in terms of demand for drugs in various countries.

2. The problem of major disease differences in various countries

Half of the population in the world is troubled by malaria. 300 million people suffer from malaria each year, among whom over 800 thousand people die; while in China, only 14 people died from malaria in 2010. The patients suffering from various hepatitis and related hepatopaths exceed 200 million, so hepatopathy is the most widespread chronic disease with the greatest harm in China.

2. The problem of major disease differences in various countries

Tabel1 infectious disease in China (2010)

Case death

infectious disease 3185932 14289

AIDS 15982 7743

phthisis 991350 3000

hydrophobia 2048 2014

hepatitis 1317982 884

H1N1 7123 147

2. The problem of major disease differences in various countries

The direct medical expenses caused by hepatopathy

reach several hundred billion RMB. At present, 12 million

people suffer from Alzheimer’s disease worldwide, while

about 6 million patients of Alzheimer’s disease,

accounting for 50% of the world’s total. In 2025, the

amount of Alzheimer’s disease patients will reach 15

million.

Therefore, drugs registered with the Health Impact Fund

probably may only benefit some countries.

3. The fund payment ability of developing

countries According to the basic requirements of the World

Health Organization, the proportion of total

health expenditure in GDP shall be no lower

than 5%. According to the “2010 Statistical

Bulletin of Health Development in China” issued

by the Ministry of Health in China, the total

health expenditure in 2010 is estimated to be

RMB 1960.3 billion, accounting for 4.9% of

GDP.

3. The fund payment ability of developing countries

4

4.5

5

5.5

6

0

5000

10000

15000

20000

25000

2007 2008 2009 2010

Pro

po

tion

in G

DP

(%)

Tota

l hea

lth e

xpen

ditu

re(R

MB

100

mill

ion)

Tabel 1: Growth of Total Health Expendituer in China

3. The fund payment ability of developing countries

Government account for 27.5% of the total health budget

in 2009. in rural area, the cost of one person is 562 Yuan

(80 USD)

In 2010 ， Chinese government enhanced the subsidy

for health insurance to 120 Yuan (18 USD) per person in

a year.

The data can provide useful information for HIF

financing.

4. Motivation of pharmaceutical companies to join in HIF

The case of antimalarial drug

In 1999, the Chinese Academy of Military Medical

Sciences successfully developed the first artemisinine

based antimalarial drug in the world, which is jointly

manufactured by two enterprises in China and a foreign

company. Also, the World Health Organization and the

United Nations Children’s Fund cooperate to provide

drugs to related countries in a non-profit-making manner.

4. Motivation of pharmaceutical companies to join in HIF

What we are concerned about is the motive of

this foreign company, and whether this case can

provide reference to the Health Impact Fund.

Relation between price and profits of innovation drugs

profit rate

price

B

ED

C

A

profit rate

reclaim cost profits

price

profits enlarged

high incom

middle income

low income

D E

4.Motivation of pharmaceutical companies to join in HIF

Ways to reduce the drug price

Government allowance

Market mechanism

Beneficence funds

Commonweals activities of pharmaceutical companies

Government’s support to drugs innovation

Other mechanism may be considered in HIF except for

price factor

5.TCMs innovation cooperation between India and China

Illness pressure of low income people

Plenty of TCMs resource

Paying attention to the development of TCM

Modernization of TCMs

Thank you