Lead Author: Damiano de Felice
Organization: Access to Medicine Foundation
Country: The Netherlands
This contribution focuses on the Access to Medicine Index as the most authoritative example of an independent ranking and report that incentivizes pharmaceutical companies to maximise their efforts to improve access to medicine.
As a complement (not a substitute) to other policy and financial initiatives, the Access to Medicine Index offers an incremental solution to the misalignment between the rights of inventors, international human rights law, trade rules and public health because it stimulates pharmaceutical companies (1) to engage in innovative R&D activities targeted toward need and known product gap and (2) to enhance access to their products through responsible and effective strategies in business areas such as pricing and IP management.
The Access to Medicine Index triggers corporate action in several ways:
- It builds multi-stakeholder consensus on what the corporate responsibility to respect human rights means for the pharmaceutical industry (thus providing detailed guidance to companies and clear standards for external accountability)
- It prompts collection and disclosure of corporate information (thus enabling better internal management and stronger external tracking)
- It creates a race to do better by ranking companies one against the other
- It diffuses good practices through publication of reports and direct engagement with companies
- It empowers internal change-makers by raising the visibility of access-to-medicine issues and generating “wake-up” calls in case of low performance
- It unleashes pressure from external stakeholders, such as long-term investors, by providing comparative data on corporate performance
In February 2016, a year-long independent evaluation of the Access to Medicine Index found that the tool “has made commendable contributions towards advancing the engagement of the pharmaceutical industry with the issue of access to medicine”. The Index acted as “a catalyst for accelerating ongoing access-to-medicine activities and as an inspiration for development of new activities.”
IMPACT ON POLICY COHERENCE
The problem of access to health technologies is complex and multifaceted. Numerous actors, including governments, NGOs, academia, financial institutions and multilateral organisation, must play a role to tackle it. As developers and manufacturers of life-saving products, pharmaceutical companies clearly have crucial responsibilities too.
The Access to Medicine Index is an independent ranking and report of 20 of the world’s largest research-based pharmaceutical companies based on their efforts to improve access to medicine for people living in low and middle income countries. The Index uses a weighted analytical framework of 83 indicators to consistently capture and compare company data across 107 countries (including middle income countries with large inequalities), 50 diseases (10 communicable diseases, 14 non-communicable disease, 17 neglected tropical diseases and 9 maternal and neonatal health conditions), and 8 product types (medicines, microbicides, therapeutic vaccines, preventive vaccines, diagnostics, vector control products, contraceptive methods & devices, platform technologies). The framework is constructed along seven areas of focus: governance, ethics, research and development, pricing, intellectual property management, health system strengthening and product donations.
Funded by the Bill & Melinda Gates Foundation and the UK and Dutch governments, the Index has been published by the Access to Medicine Foundation every two years since 2008. Each Access to Medicine Index is the result of a two-year process known as the ‘Index cycle.’ During the first year of the cycle, the Access to Medicine Foundation embarks in a targeted process of multi-stakeholder consultation to refine and validate the Index methodology. Year two is spent collecting, analysing and verifying data from pharmaceutical companies. When the results are published in a new ranking and report, the Access to Medicine Foundation makes sure that relevant findings reach key internal and external change-makers.
The Access to Medicine Index reduces the incoherence between the financial expectations of investors and the human rights responsibilities of pharmaceutical companies through several, mutually-reinforcing mechanisms of influence.
It is important to emphasize two points before describing these mechanisms of influence.
First, the mechanisms of influence have been recently tested in an independent evaluation of the Access to Medicine Index conducted by Technopolis Group. The evaluation concluded that “the Index can be viewed as a catalyst for accelerating ongoing ATM activities and as an inspiration for development of new activities. Companies’ willingness to concede that the Index is used internally as a tool for learning and strategy formulation, whilst even welcoming greater use of the Index by external stakeholders, speaks to the importance that many companies attribute to the Index. The Access to Medicine Index should therefore be seen as a valuable contributor to change in a complex environment fraught with competing influences.”
Second, the strength of the Access to Medicine Index lies in the fact that, whatever international standards, policy environments or financial incentives, there will always be room for companies to behave more or less responsibly, for business leaders to take access to medicine more or less seriously. The Access to Medicine Index triggers basic processes of transparency, accountability, competition and learning which are particularly helpful to prevent companies from taking advantage of the loopholes and limitations of any other potentially useful interventions (for instance, policy changes to mitigate patent protection and/or push and pull mechanisms to incentivize innovation). In this light, the Index should not be seen as a substitute, but, yes, as a powerful complement of other initiatives.
1) An independent ranking and report builds consensus on “authoritative focal points” and actionable standards
Senior managers, patients, investors, officers of international organizations, activists, etc. often hold diverging views on the responsibilities of pharmaceutical companies in facilitating access to medicine. This is problematic because the pharmaceutical industry lacks concrete guidance on how to best respond to societal pressure. Moreover, external stakeholders cannot hold the industry to account using mutually-agreed-upon standards.
The process of developing the methodology and indicators for the Access to Medicine Index builds consensus on what society expects from pharmaceutical companies. For each successive Index, representatives from relevant stakeholder groups (including investors, NGOs, international organizations, business associations, patient organizations, etc.) are brought to the table in order to improve and validate the methodology. Participation by business representatives also encourages ownership of the problem.
2) An independent ranking and report prompts transparency and enables accountability towards international targets
The accountability processes of most global health and international development targets, such as the Sustainable Development Goals, still mainly focus on government actions and metrics. While there is increasing recognition of the role of the private sectors to achieve these targets, there is almost no mechanisms (for companies and external stakeholders alike) to track corporate progress.
The Access to Medicine Index offers the potential of a multi-stakeholder accountability mechanism for the contribution of pharmaceutical companies to global health and sustainable development targets. For instance, the MDGs Gap Task Force reported the results of the 2012 Access to Medicine Index because it recognized that “[i]t is important to monitor and evaluate what pharmaceutical companies themselves, as the producers and suppliers of medicines, are doing to increase access to their products”.
3) An independent ranking and report triggers positive competition
Companies are “competitive animals”. Yet, they lack financial incentives to compete on in the field of access to medicine.
In addition, behavioural change is most likely when negative consequences (the stick) and positive enticements (the carrot) mutually reinforce each other. However, pharmaceutical companies are confronted with an environment where they are very often said what they have done wrong but almost never praised when they do something right.
The ranking component of the Access to Medicine Index (with its social and media coverage) introduces a positive competitive environment that fuels a corporate race to do better. Moreover, recognition is an important motivator for companies and their employees to drive ongoing efforts further and motivate the development of new activities.
4) An independent ranking and report diffuses best practices
Pharmaceutical companies have few occasions to share their access to medicine initiatives with each other and/or exchange how they integrate access to medicine into their business strategies. This leads companies to continuously “reinvent the wheel” and duplicate initiatives.
The Access to Medicine Index offers a comprehensive overview of what pharmaceutical companies are doing to facilitate access to medicine and allows the diffusion of good practices. By providing companies a better understanding of their own performance and that of their peers, the Index facilitates cross-company learning.
5) An independent ranking and report unleashes pressure from investors
Investors increasingly recognize that access to medicine issues can be material for pharmaceutical companies. To start with, wider access to health technologies is a key component of a novel business model based on reaching new customers in high volume-low price emerging markets. Second, the way in which companies respond to societal pressure is a good proxy for long-term, sustainable management practices. Yet, investors have very little information on the access to medicine performance of pharmaceutical companies.
The Access to Medicine Index enables evidence-based engagement by investors. More than 50 institutional investors have already pledged their support for the Access to Medicine Index by signing our Investor Statement. Together, these institutional investors have more than USD 5 trillion assets under management.
6) An independent ranking and report empowers internal change-makers
Ensuring a coordinated effort towards access to medicine is not an easy task for a large pharmaceutical company. Multinational companies are composed of different units and departments. It is also likely to witness conservative resistance to change practices and adopt innovative approaches.
The Access to Medicine Index supports internal-change makers at all levels of a company. Bottom-up pressure is exerted by employees whose specific mandate is to ensure good performance in access to medicine. Top-down pressure involves senior managers who use Index findings to promote new strategies.
7) An independent ranking and report multiplies the impact of other global health and sustainable development initiatives
Given the complexity of the access-to-medicine challenge, donors rightly support numerous research, policy and financial initiatives. The risk is that these initiatives are not aligned with each other and lead to duplication of efforts.
The Access to Medicine Index is not a substitute but a complement to other initiatives in the global health and sustainable development landscape. For instance, the Index incentivizes private sector participation in public-private partnerships (from product development partnerships to innovative patent pools). Moreover, it stimulates public and private co-developers to integrate pro-access provisions as soon and effectively as possible.
IMPACT ON PUBLIC HEALTH
Any positive change in the behaviour of pharmaceutical companies can affect the life (or death) of thousands of people. The Access to Medicine Index is designed to incentivise pharmaceutical companies to both (1) innovate to address the health needs of all and (2) improve access to health technologies.
With respect to the first point (innovation), the Access to Medicine Index rewards companies that engage in R&D activities which are targeted toward need and toward known product gaps. R&D projects that are demonstrably addressing high-need, non-commercial product gaps will be given extra credit in the scoring process.
Moreover, the Access to Medicine Index incentivizes companies to develop health technologies in partnership with other actors. This is particularly important to leverage the resources and capabilities of a network of public, philanthropic and private-sector partners. The 2014 Access to Medicine Index also found that public partners correlate with greater transparency and access provisions.
With respect to the second point (access), the Access to Medicine Foundation incentivizes companies to adopt a holistic approach that includes, inter alia, the alignment of access-to-medicine objectives with their business plans, the responsible management of their intellectual property, pricing strategies based on needs, capacity-building activities and structured, locally-driven donations programme.
The 2015 Methodology Report offers a useful summary of the specific actions that companies should take in order to meet stakeholders’ expectations. As a way of illustration, the approach to pricing and IP management is described below.
In terms of pricing, there is much debate among stakeholders as to how companies can ensure pharmaceutical products are affordable. As a result, how the Index evaluates company pricing strategies has also evolved over time. In 2012, the Index measured the extent to which companies engaged in differential (tiered) pricing. In 2014 the Index progressed to examining whether companies took ‘ability to pay’ into account when designing pricing strategies.
The 2014 approach yielded new insights. For example, while companies may take socio-economic factors into account when setting pricing practices, they frequently group countries together according to aggregative measures, such as World Bank-defined income level. Stakeholders have strongly voiced the view that the national income level of a country or group of countries is insufficient for establishing whether a company has fully considered the ability of the population to pay. It was felt that companies should take account of differences between countries’ disease burdens, their levels of inequality, their healthcare financing systems, and the ability of different groups to pay, as well as other constraints and variables. The development of a suitable model for evaluating whether pricing strategies are needs-based was required.
The 2016 Index will newly analyse how companies consider socio-economic factors (in addition to income level) in forming their pricing strategies, in order to evaluate the extent to which companies are customising strategies according to the needs and constraints of the population groups they are targeting. This framework will allow for comparability between companies in different disease areas and will set a first, objective baseline for measuring how companies are approaching needs-based pricing.
In terms of IP management, the Index stimulates companies to support a competitive market for pharmaceuticals. This includes managing responsibly the impact of patent monopolies on medicines prices (e.g., by taking steps that support both the market entry of generic medicine manufacturers and the activities of drug procurement agencies) and refraining from anti-competitive activities.
For instance, companies are encouraged to publish patent statuses, publicly agree not to patent, not to enforce patents, and to abandon existing patents in the broadest range of countries, and publicly agree to waive rights to data exclusivity. Moreover, companies are penalized when they do not acknowledge publicly the full range of flexibilities in the Doha Declaration on TRIPS and Public Health aimed at protecting public health, when they engage in lobbying activities intended to restrict these flexibilities, and when they hinder access to affordable medicines through other mechanisms related to trade policy. Finally, companies are rewarded when they seek to engage in licensing where opportunities exist, and when they agree pro-access licensing terms for a wide range of countries, including middle-income countries.
Specifically on to middle-income countries, a clear message was received from stakeholders that companies must be able to demonstrate how they target the needs (through licensing strategies but also through pricing) of the very poor segments of these increasingly wealthy territories. In 2016, the Access to Medicine Index will look more closely at whether companies are prepared to license their products for manufacture and distribution in middle-income countries, and how they achieve this, for example, by agreeing tiered royalties for different country groupings.
ADVANCING HUMAN RIGHTS
According to the United Nations Guiding Principles on Business and Human Rights, business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. Guiding Principle 14 clarifies that the responsibility of business enterprises to respect human rights applies to all enterprises regardless of their size, sector, operational context, ownership and structure, that is, it applies to all pharmaceutical companies.
An independent ranking and report like the Access to Medicine Index offers crucial information on whether pharmaceutical companies meet this responsibility or not. Indeed, the United Nations Working Group on Business and Human Rights – the expert body in charge of ensuring full implementation of the Guiding Principles – recently acknowledged that the Access to Medicine Index represents one of the most authoritative examples of corporate accountability in the field of measuring business and human rights issues.
The Access to Medicine Index is also in line with the Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines developed by Paul Hunt in 2008 during his mandate as UN Special Rapporteur on the right to health. A comparison between the approach and coverage of the Human Rights Guidelines and the technical areas covered by the Access to Medicine Index corroborates this alignment. The Human Rights Guidelines and the Access to Medicine Index similarly cover issues regarding policy statements, transparency, public policy influence, patents and licencing, pricing and donations.
Specific indicators from the Access to Medicine Index also validate its alignment with basic human rights principles, such as participation and due diligence. For instance, indicator A.III.2. measures whether pharmaceutical companies engages with relevant stakeholders, including universities, industry peers, patient groups, local governments, employees, and local and international non-governmental organisations, with the aim of improving access to medicine. Indicator D.III.2. assesses whether pharmaceutical companies take into consideration needs-based affordability and other relevant socioeconomic factors when making inter-country pricing decisions.
The very idea of benchmarking corporate performance against human rights responsibilities was suggested by Mary Robinson (former UN Commissioner for Human Rights) and Paul Hunt. In 2006, they both suggested to evaluate policies and practices of pharmaceutical companies against a consensus report developed through expert consultation, and make the evaluation public. Anand Grover, Special Rapporteur on the Right to Health from 2008 to 2014, also repeatedly called for stronger accountability mechanisms for pharmaceutical companies under international human rights law.
Based in the Netherlands, the Access to Medicine Foundation is a not-for-profit organisation dedicated to addressing the problem of access to medicine worldwide. The work of the Foundation advances sustainable health outcomes because it offers substantial value-for-money.
The annual budget of the Access to Medicine Foundation is about $1.5 million. The annual revenues of the average company included in the Access to Medicine Index is about $30 billion (ratio of 1:20,000!). The annual revenues of all the companies included in the Access to Medicine Index is about $630 billion (ratio of 1:420,000!).
Political and financial support to the Access to Medicine Foundation would ensure robust measurement of company performance and the possibility to expand the scope of the Index, for instance, to new diseases and companies.
With respect to the disease scope, the Access to Medicine Index does not cover cancer. Given that several cancer drugs are high-priced, that access to them is limited, and that the burden of cancer in low-income and middle-income countries is increasing, some stakeholders argued for the inclusion of at least a subset of cancer conditions within the disease scope of the Index. Additional resources would allow to develop a sound measurement system to assess the activities of pharmaceutical companies with respect to access to cancer medicines.
With respect to the company scope, the Access to Medicine Foundation could develop an index and report focusing on generic drug manufacturers in developing countries. While generic drugs are generally perceived as being more accessible for poorer people, these medicines are not available everywhere to everyone. In some developing countries, the availability of low-cost generic medicines in the public sector is just a staggering 30%. As per its standard practice, the Access to Medicine Foundation would develop the final methodology of a potential Access to Generic Medicine Index through a detailed process of multi-stakeholder consultation. The most interesting areas for improving performance of developing country manufacturers are likely to be the following: product manufacturing and adaptation, affordability, availability and quality.
The Access to Medicine Foundation hopes to be invited to present and engage members of the High-Level Panel at one of the two Global Dialogues in March 2016 in order to discuss how to consolidate the achievements of the Access to Medicine Index, increase the impact of its activities and discuss the potential expansion of its scope of coverage.
Bibliography and References
[Because of the format of the online submission, references are listed under pertinent topics. For the sake of conciseness, the list includes two relevant references for each topic – with the exception of the Access to Medicine Index itself.]
On the Access to Medicine Index:
- Access to Medicine Foundation. Full Report: The 2014 Access to Medicine Index. November 2014. http://www.accesstomedicineindex.org/sites/2015.atmindex.org/files/2014_accesstomedicineindex_fullreport_clickablepdf.pdf
- Access to Medicine Foundation. Methodology for the 2016 Access to Medicine Index. November 2015. http://www.accesstomedicineindex.org/sites/2015.atmindex.org/files/2015methodology_2016accesstomedicineindex_accesstomedicinefoundation.pdf
- Access to Medicine Foundation. Methodology for the 2017 Access to Vaccines Index. November 2015. http://www.accesstomedicineindex.org/sites/2015.atmindex.org/files/2015methodology_2017accesstovaccinesindex_accesstomedicinefoundation_0.pdf
- Access to Medicine Foundation. Access to Medicine Index Investor Statement. February 2016. http://www.accesstomedicineindex.org/sites/2015.atmindex.org/files/150526atm_investorsstatement_opm12.pdf
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On the impact assessment of the Access to Medicine Index:
- The executive summary of the evaluation study of the Access to Medicine Index will be published on the website of the Access to Medicine Foundation at the beginning of March. http://www.accesstomedicineindex.org/news
- In 2014, the Access to Medicine Foundation convened an independent Reference Group (chaired by Paul Engel, Senior Fellow and former Director at ECDPM) to support the assessment of how, and to what extent, the Access to Medicine Index has contributed to changes in the behaviour and performance of research-based pharmaceutical companies with respect to access to medicine. The responsibilities of the Reference Group included the selection of a third-party assessment agency and the validation of its methodology. In February 2015, the Reference Group selected Technopolis Group to conduct the study. Technopolis Group is a pre-eminent provider of policy advice and support to organisations with a mission to address environmental and societal challenges. Technopolis had already carried out several studies and evaluations of global health-related programmes, projects and organisations, such as the Product Development Partnership Fund of the Dutch Ministry of Foreign Affairs, the European and Developing Countries Clinical Trials Partnership and the ‘Operational Research in Health Project’ in developing countries (jointly funded by the UK Department for International Development, Médicines Sans Frontières and the World Health Organization). The evaluation was primarily based on interviews with representatives from indexed companies, non-indexed companies and external stakeholders. Technopolis conducted in-depth case studies for five indexed companies. Purposive selection on several key characteristics was done to ensure sufficient heterogeneity in the sample. The two most important of these were a company’s relative position in the Index (and the evaluation therein over time), and its geographic representation. Additional company characteristics that were considered were the number of diseases and markets covered that are in scope for the Index, or the presence of company characteristics such as particularly strong performance in one of the Technical Areas of the Index. To provide a theoretical underpinning for the evaluation, Technopolis developed a Theory of Change for the Access to Medicine Index. The Theory of Change included several pathways of influence, covering pressures from both within and outside the companies. The evaluation first assessed whether the Index fulfils basic conditions of relevance, feasibility, acceptability and credibility, which are necessary to activate its potential pathways of influence (such as competition through the ranking, learning through diffusion of good practices, and financial pressure from investors). The study then evaluated the absolute and relative effectiveness of each of these pathways.
On pharmaceutical companies and the Sustainable Development Goals:
- United Nations Global Compact. Post-2015 Agenda and Related Sustainable Development Goals: The Role of Business in Improving Health. UN Global Compact Briefing Series: Issue Paper 4. February 2014. http://www.unprme.org/resource-docs/Post2015HealthIssueBrief.pdf
- GSK & Pfizer. The Central Role of Health in the Post-2015 Sustainable Development Agenda. Business & Health Action Group for Post-2015. 2014. http://www.everywomaneverychild.org/images/Health_in_the_SDGs_v10_6April15_2.pdf
On the Access to Medicine Index and the Sustainable Development Goals:
- MDG Gap Task Force. The Global Partnership for Development: The Challenge We Face. United Nations Department of Economic and Social Affairs. 2013.
- D de Felice & D J Edwards. SDG SERIES: The Access to Medicine Index and Accountability of Pharmaceutical Companies. Health and Human Rights Journal (blog). 23 September 2015. http://www.hhrjournal.org/2015/09/sdg-series-the-access-to-medicine-index-and-accountability-of-pharmaceutical-companies/
On the human rights responsibilities of pharmaceutical companies:
- S Moon. Respecting the right to access to medicines: Implications of the UN Guiding Principles on Business and Human Rights for the pharmaceutical industry. Health and Human Rights. 2013; 15: 32-43. http://www.hhrjournal.org/wp-content/uploads/sites/13/2013/06/Moon-FINAL.pdf
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On the Access to Medicine Index and the human rights responsibilities of pharmaceutical companies:
- J Lee & P Hunt. Human Rights Responsibilities of Pharmaceutical Companies in Relation to Access to Medicines. The Journal of Law, Medicine & Ethics. 2012; 40:220-233. DOI: http://dx.doi.org/10.1111/j.1748-720X.2012.00660.x
- United Nations Working Group on Business and Human Rights. Report of the Working Group to the General Assembly on the issue of human rights and transnational corporations and other business enterprises ("Measuring the implementation of the Guiding Principles on Business and Human Rights"). 2015. A/70/216. http://www.un.org/en/ga/search/view_doc.asp?symbol=A/70/216
On pharmaceutical companies and public-private product development partnerships:
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On pharmaceutical companies and equitable pricing strategies:
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On pharmaceutical companies and responsible IP management:
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On the importance of building consensus on “authoritative focal points” and actionable standards:
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On the power of indicators to trigger human rights compliance:
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On the power of rankings to create “virtuous competition”:
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On the importance of learning processes and diffusion of good practices:
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On the importance of monitoring progress:
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On the importance of transparency and accountability:
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- A Grover, B Citro, M Mankad & F Lander. Pharmaceutical Companies and Global Lack of Access to Medicines: Strengthening Accountability under the Right to Health. The Journal of Law, Medicine & Ethics. 2012; 40:234-250. DOI: http://dx.doi.org/10.1111/j.1748-720X.2012.00661.x
On the power of investors in pharmaceutical companies:
- M Clark, T Race & R Parkes. Tropical diseases: Social responsibility, neglected market. Deutsche Bank Markets Research. September 2014. http://www.accesstomedicineindex.org/sites/2015.atmindex.org/files/deutsche_bank_market_research_-_european_pharmacueticals.pdf
- A Ward. Investors join push for more transparency on drug trials. Financial Times. 23 July 2015. http://ow.ly/YQzro