1. 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

2. 1. Applicable scope of the Health Impact Fund Scope of illness Scope of patients Main functions of HIF

3. 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.

4. 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.

5. 2. The problem of major disease differences in various countries Tabel1 infectious disease in China (2010) Casedeath infectious disease 318593214289 AIDS 159827743 phthisis 9913503000 hydrophobia 20482014 hepatitis 1317982884 H1N1 7123147

6. 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.

7. 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.

8. 3. The fund payment ability of developing countries

9. 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.

10. 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.

11. 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.

12. Relation between price and profits of innovation drugs profit rate price B E D C A profit rate reclaim cost profits price profits enlarged high incom middle income low income D E

13. 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

14. 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

15. Thank you