LINDA M. DEMPSEY, National Association of Manufacturers

Lead Author: Linda M. Dempsey
Organization: National Association of Manufacturers
Country: USA

Submission

The National Association of Manufacturers (NAM) welcomes the opportunity to provide these written comments to the United Nations High-Level Panel on Access to Medicines (UNHLP) as part of its call for contributions.

The NAM is the largest manufacturing association in the United States, representing businesses of all sizes in every industrial sector and in all 50 states. Manufacturing employs more than 12 million women and men in the U.S. alone, accounting for two-thirds of private sector research and development in the United States and contributing $2.17 trillion to the U.S. economy annually. Global manufacturers of all sizes and across sectors depend on innovation to succeed and to develop cost-effective solutions to public policy challenges, including global health issues.

Promoting the innovation required to address public health and other public welfare challenges requires a policy environment characterized by well-functioning markets and stable regulatory environments where businesses and other stakeholders are incentivized to play productive roles. Open markets and strong intellectual property protection and enforcement facilitate access to today’s healthcare technologies and drive and sustain investment in tomorrow’s advances. For these reasons, the NAM has concerns about the scope of the panel’s inquiry and believes that “the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies” can and do work together to advance health access globally.

Given the many forces that determine whether and to what extent investors and innovators dedicate resources to tackle a particular policy challenge, and the long-term horizon that addressing these challenges often requires, it is critical that challenges are considered broadly and that solutions are based firmly and solely on sound economic and policy analysis, considering all possible options.

The NAM is pleased to provide background on the role that the private sector and innovation play in addressing global public health challenges. This submission focuses on enabling factors that can and should be put in place to fuel private sector participation and innovation that are required to develop and disseminate healthcare technologies. 

Key Comments and Recommendations
The NAM’s comments and recommendations can be summarized as follows: 
1. Both public and private sector investments in global healthcare innovation and technology development and dissemination are needed, and governments should seek to enable these investments through various policy approaches. 
2. The UNHLP must consider the broad range of barriers that can limit access to healthcare and health technologies, including health resources and infrastructure, tax policy, and open investment policies. The UNHLP must use a well-grounded and evidence-based approach to consider potential solutions. This approach should focus on careful reviews of available economic data, policy evidence, and actual, on-the-ground experience. This approach must recognize the essential role of intellectual property rights (“IPR”) and other policy measures in spurring private sector involvement in the development, dissemination, and deployment of health technologies. 
3. IPRs serve as an important incentive and catalyst for the development and dissemination of critical public health products and technologies. The UNHLP should focus on evidence-based analysis in its work on important issues such as IPR, and not rely on unfounded misconceptions about the role of IPRs based on prior public healthrelated IPR and technology discussions.
4. As a supplement to these discussions about innovation and technology enabling factors, the NAM encourages the UNHLP to explore the creation of networks of research institutions and medical centers focused on solving particular public health challenges. Such a model could contribute to positive health outcomes, particularly in the developing world. 
5. The NAM also raises the continued presence of import tariffs and other trade-related barriers in global markets that hamper access to public health solutions, and make health products and technologies more expensive. Each of these factors should be discussed and addressed. 
Healthcare Products, Technologies and Innovation for the Developing World

Thanks to the efforts of the private sector and many other health stakeholders, a broad range of healthcare technologies are available in the world today. These include traditional “smallmolecule” drugs, advanced protein-based biologics, genetics-based molecular diagnostics, complex medical technologies, healthcare services, and even software. Yet despite the array of products and technologies currently on the market, many more public health solutions are needed to tackle both current and emerging public health challenges. The needs of many of the world’s poorest and most vulnerable countries are particularly acute – and are not dependent on access to patented medicines. Of products defined by the World Health Organization (WHO) as “essential medicines,” 95 percent are off-patent, yet one-third of the world’s population does not have reliable access to them. In many of the world’s poorest countries, that figure rises to 50 percent of the population – indicating that IPR is not the main challenge. 1
Private sector innovation and investment has proven to be and will continue to be vital to developing solutions to tackle these and other challenges. For example, the vast majority of important medicines owe their existence to the R&D activities of the biopharmaceutical industry: 91 percent of drugs developed between 1988 and 2005 were developed by the private sector with no direct government role. 2

Such private sector-led innovation will only be more critical in developing new technologies to address both the existing health needs of today’s rapidly growing global population and emerging healthcare challenges in a cost-effective manner. “Connected health” technology solutions, for example, seek both to harness existing commercial applications and hardware and also to develop new breakthroughs to deliver healthcare to underserved locations.3 Such innovations can not only improve the lives of patients, but also dramatically lower a country’s overall healthcare costs by identifying problems at an earlier stage, minimizing unnecessary treatment, and improving health access. 

These and other types of innovative solutions are particularly important for the developing world, where the needs are often greatest and distribution mechanisms are limited by weak infrastructure. In short, innovation and technology development can play a substantial and highly positive role in addressing developing country needs.

Trade, Public Procurement, Education, and Other Positive Enabling Factors
A vast body of economic and policy literature confirms that successful innovation and technology development and dissemination in any country, including the poorest and leastdeveloped countries of the world, requires a range of enabling factors. Innovation- and technology-enabling measures include competitive tax rates, tax incentives for R&D and investment, and mechanisms to enable the exchange of know-how.4 Governments can also foster further innovation through investments in transportation infrastructure such as roads, ports, and pipelines, in reliable access to electricity and other utilities, and in widespread highspeed internet access. Other positive tools include policies that encourage and enable foreign investment (FDI) and openness to robust global market mechanisms that can assist in integrating a country into global supply chains. These enabling factors must be in place to realize targeted healthcare innovation and private sector medical technology investments. 

Continued trade-related barriers are also an important factor limiting the ability to find costeffective solutions to public health challenges. These barriers can include old-fashioned import tariffs, non-tariff barriers such as differential tax treatment, local content measures and policies to encourage or require patents or other forms of IPR to be held locally, regulatory delays in granting patents and marketing approvals, and a range of other regulatory measures that discriminate against foreign imports or otherwise make them more expensive for importers, users, and consumers alike. Finally, public health-related procurement issues, including incentives for hospitals or healthcare professionals or institutions to use domestic products or services and requirements for foreign companies to transfer technology or other assets to particular jurisdictions, can also serve as significant impediments to improving healthcare. 

The Role of IPR
The scope of the UNHLP and the assumptions made in its formation are not reflective of the broad and positive role that IPRs in expanding access to healthcare technologies. IPRs are not a barrier to access – particularly when governments and the private sector partner together to improve health outcomes. Indeed, IPRs help to support the development and dissemination of advanced medical technology, thus facilitating better health access. As the UNHLP undertakes it work, the NAM urges the panel to reject misperceptions, including those that might limit its full consideration of the positive impact of IPRs in solving healthcare challenges. 

The rapid evolution of health technologies has radically changed the healthcare industry in recent years. For example, new biologics – which now make up 50 percent of all new U.S. Food and Drug Administration drug approvals5 and are growing at twice the rate of traditional prescription drugs6 -- have hundreds or even thousands of times more atoms than found in earlier medicines.7 Molecular diagnostics is another promising area that has demonstrated substantial innovation with work to identify individual genetic variations8 that has provided allowed the identification of specific genetic variations leading to breast and ovarian cancer. Research, development, production, and deployment of these new health technologies is far more complicated than in the past, requiring greater capital investment and stronger protection of IPRs. Research on emerging technologies shows that robust IPR protection for these technologies enables companies to develop products necessary to detect and treat diseases,9 and serves as a critical incentive to bring potentially life-saving procedures to the market,10 while having no negative impact on basic research.11

A vast body of economic research confirms that robust IPR protection fosters the development and dissemination of advanced medical technology.12 Many firms will simply not make the requisite investments in such technologies, which take many years to develop at great cost and often require extensive R&D collaboration and cross-industry licensing. Such investments will not happen without a suitable investment climate, rule-of-law protections, and a stable and predictable contractual and IPR environment. Indeed, this is one of the reasons that so many of these advances continue to occur in the United States, Europe, and other parts of the developed world where such key enabling factors are typically in place. Given the substantial growth in these products and the vastly different development and production processes required to create these new products, policies and legal frameworks that cover IPR and health policy at all levels, in developed and developing countries alike, must keep pace and provide enabling environments to foster further innovation. 

In light of these and a range of other developments, and the extensive product scope to which the UNHLP’s work pertains, the NAM urges the panel to take an evidence-based approach, seeking and incorporating input from industry and scientific experts, and not simply assuming any particular role that IPR might play. Indeed, ignoring the positive benefits of IPR and the rapid evolution of health technologies and their dissemination, as some seek to do, is simply not supported by the evidence. 

Beyond these innovation-related issues, recent studies have also shown that developing countries that adopt strategies that impair IPRs tend to pay more for drugs than those that respect IPRs, undermining the access objectives. For example, in a review of HIV/AIDS antiretroviral medicine purchases reported to the World Health Organisation (WHO) and the Global Fund to Fight Aids, Tuberculosis and Malaria, a team of researchers determined that countries that used compulsory licensing to manufacture or import generic antiretroviral medicines paid more than those who negotiated for the best branded or generic deal.13 The typical premium paid by countries with a compulsory license program was 83 percent.14 While this result may initially appear surprising, it is indicative of a dynamic that discourages entry by innovators into markets which need access to medical advances the most. It also shuts the door on collaboration that could develop into solutions to best address local needs.

The NAM also notes the importance of ensuring institutional and legal coherence with respect to IPR-related issues. A key element in ensuring an ongoing positive role of industry and private sector investment is to have a stable and predictable legal and regulatory framework. Today, IPRs are regulated primarily within the World Trade Organization’s (WTO) Agreement on TradeRelated Intellectual Property Rights (TRIPS). TRIPS provides a broad set of IPR protection and enforcement obligations across all industries. The WTO, with input from experts across the trade and health care systems, has also worked on the specific implementation of these obligations to medicines and health care issues, authorizing specific flexibility on the application of some IPR provisions in identified circumstances.15

Broader legal and institutional discussions as to the role of IPRs for developing countries continue to take place at the WTO and World Intellectual Property Organization (WIPO). Duplicating such discussions elsewhere in the UN system would be highly confusing and could lead to legal and institutional uncertainty and confusion for years to come. The most appropriate forum to discuss global IPR-related issues in detail remains the WTO’s TRIPS Council, where subject-matter experts gather, including participants from other UN organizations (such as the WHO and WIPO) and have already begun discussing the role of IPR in relation to a wide range of issues, from climate change16 and public health 17 to issues related to traditional knowledge.18

Medical Technology Centers and Collaboration
In addition to the enabling factors discussed above, a network of global research institutes and medical technology centers could play a key role in accelerating health innovation, technology development and dissemination, particularly to the poorest and least-developed countries. Such networks could be focused, practical and built around targeted objectives, with the structure, functions, and operation determined by the specific health needs and challenges they are set up to address. 

These networks could have broad health and development benefits, providing a forum for local scientists, engineers and policymakers within the developing world to work with top international institutes, global experts, foreign government officials, and the private sector. As such, they can boost developing countries’ efforts to build of a local research base, foster an educated, technology-savvy workforce, and improve health and innovation-related policies and regulations, ultimately assisting developing countries to become more fully integrated in global technology value chains and climb the innovation and technology development ladder. 

Beyond such more local or regional initiatives, global initiatives could be developed as well, particularly in areas where rapid and groundbreaking additional research and development is most urgently needed. One potential model is the Asia-Pacific Partnership on Clean Development and Climate (APP), which from 2006 to 2011 brought together seven countries – Australia, Canada, China, India, Japan, Korea and the United States – to cooperate and accelerate the development and deployment of clean energy technologies in each of their countries. The partnership includes task forces focused on particular challenges faced in the aluminum, buildings and appliances, cement, fossil fuel, coal mining, power generation and transmission, renewable energy, and steel sectors. The APP was a voluntary, non-legally binding framework for international cooperation on fostering enabling environments to meet environmental goals, to facilitate partners’ efforts to attain national pollution reduction, energy security and climate change objectives, and providing a forum to explore policy approaches. The Asia-Pacific Partnership included active private sector participation and was fully consistent with commercial and market principles, and international trade and IP rules.

Conclusion
The NAM and its members appreciate the opportunity to contribute to the UNHLP’s public dialogue. Most fundamentally, the NAM believes an inclusive, evidence-based, solutions focused approach that seeks to foster and not undermine innovation is a necessary component to address global public health challenges. The NAM believes that that the UNHLP’s discussions on IPRs and access to medicines should be evidence-based and focus on positive enabling factors. This includes core factors such as incentives for key new technology development and innovation to address particular challenges facing the poorest and least-developed countries and populations, reducing barriers to trade and procurement of key public health solutions. Other innovative solutions – such as the creation of technology networks – could also be important tools to promote better healthcare and economic development. 

IPR issues also act as a positive enabling factor for innovation and technology development, dissemination, and deployment. Given the importance of IPR to a wider range of stakeholders, and given that IPR issues are already regulated and under further discussion at the WTO and WIPO, the NAM strongly encourages the UNHLP to use the careful, evidence-based approach described above in considering the role and interaction of of IPR with any particular policy and legal framework and to consider the legal and institutional consequences of referencing them in the UNHLP or any other context. 

The NAM looks forward to working with the UNHLP and other key stakeholders to identify critical needs and foster outcomes to address healthcare challenges for patients around the world.
 

Bibliography and References

1 D. Wayne Taylor, Pharmaceutical Access in Least Developed Countries: On-the-ground Barriers and Industry Successes, Hamilton, Ontario: Cameron Institute, accessed February 26, 2016, http://apps.who.int/medicinedocs/en/d/Js17815en/.
2 Bhaven N. Sampat and Frank R. Lichtenberg, “What are the respective roles of the public and private sectors in pharmaceutical innovation?” Health Affairs 30:2 (February 2011), accessed February 26, 2016, http://content.healthaffairs.org/content/30/2/332.full. 
3 Dr. Robin Lee and Dr. Gillian Davies, “Technology: The Cure for Rising Healthcare Costs?”, MIT Technology Review (September 3, 2013), accessed February 25, 2016, https://www.technologyreview.com/s/518946/technologythe-cure-for-rising-healthcare-costs/. 
 4 Innovation: Government’s Many Roles in Fostering Innovation, (New York: PricewaterhouseCoopers, January 2010), accessed February 25, 2016, http://pwc.com/gx/en/technology/pdf/how-governments-foster-innovation- 2010.pdf. 
5 “Bipartisan Group of Members Introduces ‘Promoting Innovation and Access to Life-Saving Medicines Act,’” Rep. Henry Waxman Press Release, March 11, 2009, accessed February 25, 2016, http://votesmart.org/publicstatement/417192/bipartisan-group-of-members-introduces-promoting-innovation-and-access-to-life-savingmedicines-act#.Vs9lRE0UVaQ. 
6 Henry Grabowski, Iain Cockburn and Genia Long, “The Market for Follow-On Biologics: How will It Evolve?”, Health Affairs 25:5 (September 2006): 1291-1301, accessed February 25, 2016, http://content.healthaffairs.org/content/25/5/1291.full.pdf. 
7 Sally Pipes, “A Primer for Follow-on Biologics,” Real Clear Politics (June 6, 2008), accessed February 25, 2016, http://www.realclearpolitics.com/articles/2008/06/a_primer_for_followon_biologic.html. 
8 Identifying particular genetic variations is only more difficult, given that any two individuals typically have roughly 6 million genetic variations. See Christopher M. Holman, The Critical Role of Patents in the Development, Commercialization, and Utilization of Innovative Diagnostic Tests, Fairfax, VA: Center for the Protection of Intellectual Property, July 2014, accessed February 25, 2016, http://cpip.gmu.edu/wpcontent/uploads/2014/04/Holman-Critical-Role-of-Patents-in-Genetic-Diagnostic-Tests.pdf. 
9 John R. Thomas, Mayo v. Prometheus: Implications for Patents, Biotechnology and Personalized Medicine, Washington, DC: Congressional Research Service, November 2012, p. 3. 
10 Notably, in a recent U.S. case, a group of individuals affected by Lynch syndrome filed a brief arguing passionately that greater IPR protection for genetic tests for the syndrome could provide an incentive to bring the potentially life-saving procedure to market. In this case, related patents have been non-exclusively licensed, and there is no widely-available test. See Brief for Lynch Syndrome International as Amicus Curiae in Support of Respondents, Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (No. 12-398), accessed February 25, 2016, http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/briefs-v2/12- 398_resp_amcu_lsi.authcheckdam.pdf. 
11 Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests: Report of the Secretary’s Advisory Committee on Genetics, Health, and Society, Washington, DC: U.S. Department of Health and Human Services, April 2010, accessed February 25, 2016, http://osp.od.nih.gov/sites/default/files/SACGHS_patents_report_2010.pdf. 
12 Chandra Nath Saha and Sanjib Bhattacharya, “Intellectual property rights: An overview and implications in pharmaceutical industry,” Journal of Advanced Pharmaceutial Technology and Research 2(2) (April-June 2011): 88-93; Jean O. Lanjouw and Iain M. Cockburn, “New pills for poor people? Empirical evidence after GATT,” World Development 29(2) (February 2001): 265-289.
13 Amir Attaran, “Opinion: Negotiation is best way to make drugs affordable,” Financial Times (April 6, 2015), accessed February 25, 2016, http://www.ft.com/cms/s/0/fd8453aa-cd85-11e4-9144- 00144feab7de.html#axzz40rA60VNF. 
14 Id. 
15 For instance, in 2003, WTO members made it easier for countries to import medicines produced under compulsory licensing if they are unable to manufacture the medicines themselves (“Paragraph 6 System”). On November 6, 2015, the Council decided that the Least-developed Countries (“LDCs”) will be exempt from WTO obligations to provide patent protection for pharmaceutical products to support access to medicines until at least 2033
 16 “Climate change and the WTO intellectual property (TRIPS) agreement,” World Trade Organization, accessed February 25, 2016, https://www.wto.org/english/tratop_e/trips_e/cchange_e.htm. 
17 “TRIPS and public health,” World Trade Organization, accessed February 25, 2016, https://www.wto.org/english/tratop_e/trips_e/pharmpatent_e.htm. 
18 “Article 27.3b, traditional knowledge, biodiversity,” World Trade Organization, accessed February 25, 2016, https://www.wto.org/english/tratop_e/trips_e/art27_3b_e.htm. 
 

Ministry of Foreign Affairs, The Kingdom of The Netherlands

Submission: The Ministry of Foreign Affairs
Country: The Netherlands

Abstract

The government of the Kingdom of the Netherlands welcomes the opportunity to submit a contribution to the UN High-Level Panel on Access to Medicines (UNHLP). 

Achieving a stronger balance between the rights of inventors, international human rights law, trade rules, and public health objectives is called for in light of the ambition formulated in Sustainable Development Goal 3: Achieve universal health coverage (UHC), including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all.

The Netherlands would recommend the UNHLP to look at the widest range of possible solutions. While we recognise that patents have an important role in innovation, we recommend that the UNHLP encourages the development and implementation of a wider variety of innovation financing models that do not rely on creating additional market exclusivities (through patents or otherwise). Such models should be based on "delinkage" principles, and thus the premise that costs and risks associated with R&D should be rewarded, other than through the price of the product. This would include addressing the analysis and recommendations for a medical R&D Treaty by the WHO Consultative Expert Working Group on Research and Development: Financing and Coordination. The UNHLP should also seek a healthier balance within the patent system, for example by encouraging licensing (voluntary and non-voluntary) of patents and test data related to important medical innovations coupled with royalty payments that reflect different countries’ ability to contribute.

This endeavour should build on earlier important efforts to strengthen this balance. These include the instruments linked to the WTO Agreement on Trade-related Intellectual Property Rights[1], the study by WTO, WHO and WIPO Promoting Access to Medical Technologies and Innovation,- Intersections between public health, intellectual property and trade (2012), the WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (2008), the report of the Priority Medicines for Europe and the World Project:  A Public Health Approach to Innovation (2004), that was updated in 2013 and the report of the WHO Consultative Expert Working Group on Research and Development (CEWG): Financing and Coordination, Research and development to meet health needs in developing countries: Strengthening global financing and coordination (2012).

The UN Sustainable Development Goals (SDGs) are a universal agenda. This universal nature is especially manifest and relevant in goal 3, which sets out the ambition to provide access to medicine and health technologies to everyone.

Access to affordable medicines is no longer a challenge for low and middle income countries alone, but increasingly a pertinent issue in high-income countries as well. It is an urgent challenge: in spite of many successful initiatives making medicines available and affordable, the problem of high prices and insufficient innovation persists, e.g. the inability to combat antimicrobial resistance, the lack of new medicines for diseases in developing countries and constraints to public health budgets in countries all over the world.

Firstly, this contribution highlights a few key topics in the recent Medicines Policy Plan of the Dutch Government and the various Medicines Actions through which the government will address the issue of availability of affordable medicines in the Netherlands. New government policies are introduced to safeguard the fast access to innovative medicines for patients at acceptable prices, aimed at among others:

·       More flexible market authorization mechanisms for innovative medicines (“early access”);

·       Tackling high prices of medicines, e.g. by making sure that healthcare insurance companies and hospitals have a better position in negotiating prices, procurement platforms, regional joint negotiations and exchanging price information, among others;

·       New methods to develop and sell medicines, e.g.set conditions for research subsidies; improve transparency on costs and prices; create space for alternative business models;

·       Healthy balance between rewarding innovation and affordability of medicinal care, e.g. in the EU discuss concerns about additional intellectual property protection, e.g. market exclusivity for orphan drugs or Supplementary Protection Certificates (SPC’s); strict monitoring of undesired market behaviour of pharmaceutical companies.

Secondly, this contribution provides a brief overview of our experience since 2000 with financing a range of initiatives and mechanisms to improve the availability and accessibility of medicines in developing countries. Many prove that innovation models based on “delinkage” principles can bear fruit, e.g. the Product Development Partnerships (PDPs), which has been supported by the Netherlands since 2006. PDPs develop and bring products to market at affordable prices. An example is the Drugs for Neglected Diseases Initiative (DNDi).[1] In this model R&D costs are funded up-front through public and philanthropic financing. Therefore there is no need to re-coup investments afterwards through high sales prices of the medicines. This model attracts private sector involvement because of risk sharing. Another successful example is the Medicines for Malaria Venture (MMV). Over the last 16 years MMV has assembled the largest-ever pipeline of antimalarials, and has brought forward six new medicines. MMV’s overarching priority is to develop child-friendly formulations and new medicines to protect pregnant women. MMV’s portfolio also includes promising compounds in early phases of discovery and preclinical development with the potential to counter resistance, block malaria transmission and cure relapsing malaria. MMV combines its own scientific and malaria expertise with academia and pharmaceutical companies. This makes MMV a highly cost-effective R&D organisation.

The added value of PDPs lies in their ability to support the transition from basic (‘upstream’) research, as performed in academic and research institutes, to the more ‘downstream’ stages of clinical research and development. Most academic scientists lack the resources and the know-how to directly engage in translational research. PDPs, on the other hand, are able to take research findings forward and push products down the R&D pipeline.

By operating on a portfolio model, they are also better positioned than organisations that focus all their efforts on single products or technologies to identify the most promising candidates, and to make fast go/no-go decisions about which products to progress.

We believe important lessons can be derived from these initiatives for all countries and for all diseases where needed:

1.    Delinkage models of R&D financing could contribute significantly towards achieving SDG 3.

2.    Patent driven innovation may be effective for potentially profitable products but leads to high pricing and an R&D priority agenda that reflects profit prospects but may not overlap with health needs. 

3.    Patents do not have to lead to market monopolies as long as licences are available. This is illustrated by licensing policies of certain pharmaceutical companies in particular for HIV through the Medicines Patent Pool (MPP). The MPP has proven its effectiveness for HIV. Patent Pooling could play a role in making other new essential medicines more affordable. Licensing is also important to ensure effective pooled procurement can take place. Pooled procurement may be hampered when patents exists in certain territories and not in others (of course there where companies refuse to license governments can lawfully resort to compulsory licensing). 

4.    Patents can also play a role in identifying the innovator in alternative incentive models for example to identify the “winner” in a prize fund model for innovation.

We recommend that the UNHLP also addresses how to promote greater coherence within and between various international agencies including WTO, WIPO and those more directly concerned with health such as WHO, GFATM, GAVI, UNITAID, UNAIDS.

Attached to this submission you find a short Bibliography and a Summary of the Medicines Policy Plan that was sent as government letter to Parliament by Ms Edith Schippers, Minister for Health, Welfare and Sport, 29 January 2016.[1]

Yours sincerely,

Reina Buijs

Deputy Director General International Cooperation

Ministry of Foreign Affairs

Submission

Summary of Medicines Plan

Introduction

Medications play an important role in the quality of life for many Dutch people and others in de Western world. Diseases which were once terminal are now treatable thanks to medicines. People recover more quickly, can continue to work even though they are ill, or can continue to live on their own. In the last few years, together with insurance companies, pharmacists, doctors, hospitals, patients and pharmaceutical companies, we have been able to offer patients a broad range of pharmaceutical care while at the same time controlling the cost of medications. This has been possible in part through encouraging the use of generic drugs and in part because hospitals purchase their own medicines and therefore negotiate their own prices. In addition, when it is necessary, we negotiate with drug manufacturers before a product is included in the standard insurance package.

These methods no longer suffice in keeping medications affordable. Therefore, it is time for a change of course in drugs policy. The innovative therapies currently introduced to the market are of a different order than many new drugs over the last few decades. New medicines increasingly are complex methods for treating cancer, or new medications for a small number of critically ill people.  These patients’ quality of life can be dramatically improved and they can sometimes even be cured outright. In and of itself, this is excellent news. But the disadvantage is that these medications are extremely expensive, in some cases costing up to 500,000 euros annually per patient. The arrival of these medications threatens the affordability of care, and will detract from care for other patients.

Furthermore, the current approval procedures require that the efficacy and the added value of a new drug must be tested with large numbers of patients. This is a problem in the case of medications developed for illnesses affecting small numbers of patients.

Hence, the current system is no longer tenable and needs to change. This is not only in the interest of patients, doctors and those who pay the insurance premiums, but it is also in the interest of the drug manufacturers themselves. After all, if we can no longer pay for their medicines, they in turn will be forced to stop producing them.

In the first place, we want critically ill patients to have faster access to innovative medicines. Therefore, the approval procedures for promising products need to be more flexible, without jeopardizing safety.

At the same time, we aim to tackle the high price of medicines. These high prices are partly a result of the fact that generic alternatives to the new products often do not yet exist. Another important cause of high prices is the extensive protection manufacturers obtain on their patents. This process was originally intended to stimulate innovation, but is currently used by the industry to maintain a monopoly – and thereby a high price -- on new medications for as long as possible. A contributing factor is that the industry is reluctant to provide transparency into how prices are determined. This makes price negotiations more difficult.

The market for medications is an international market. Therefore, we cooperate with other countries in Europe whenever we can. Through bulk purchasing and exchanging price information we improve our negotiating position. Moreover, we aim to initiate a discussion in Europe about the extensive protective regulations which make it possible for many pharmaceutical companies to maintain a long-term monopoly on medications, enabling them to keep prices unacceptably high.

We are proposing a multi-faceted approach which leads to a robust number of concrete steps. By guaranteeing the affordability and accessibility of innovative medicines, our approach can have a major impact on many people’s quality of life.

1.     Accessibility of innovative medicines

Medications being introduced to the market must be safe and effective. This is, of course, in the interest of the patient. But accessibility and affordability are also in the interest of the patient. Certainly in the case of critical ailments, patients want to have access to new medicines even if they are not yet registered or have yet to prove their efficacy. This is not always possible. Particularly when it comes to exceptional products such as orphan medicines and personalised medicines, current regulations appear to be inadequate for quick approval and quick accessibility for patients.

What are the chances that medications can be made accessible to patients more quickly? At the least we can make sure the requirements for authorization of new medications at the national level and at the EU-level are brought in line. That would reduce the administrative burden, which in turn reduces the time it takes the drug to reach the patient.

Special attention needs to be paid to promising medications for ailments affecting small numbers of patients. Frequently, little information is available about these products, making it difficult to establish their safety and efficacy. These very drugs can represent the difference between life and death for a patient, so the question is: how can we be more flexible in the authorization process. For instance, is it possible to allow conditional authorization, whereby some of the clinical information can be reported later? In order to do this, it is necessary, in consultation with the manufacturer, to identify the minimum requirements these medications must meet. Safety has to remain the first priority. If such a medicine is promising and possibly of critical importance for patients, then we can consider granting immediate, if conditional, approval to the standard insurance package. After a designated period, we would determine whether the medicine is effective and whether or not it can remain in the standard package.

While we prefer registered medications, it should be possible under strict conditions for special compounding pharmacies to prepare medications for local pharmacists. These medicines would be reimbursed if it’s clearly in the patient’s interest. This often involves tailor-made prescriptions, such as drops for children who have difficulty swallowing pills. These pharmaceutical preparations improve access to medications, as well as lowering the price. As soon as medicines are registered, the price goes up exponentially. This is nearly impossible to explain to a patient. Hence, registration is quite important, but not at any price.

Action:

·       Look into how flexible means of market authorization could be used more effectively, so that certain products can reach the patient more quickly and at the same time be affordable.

·       Ensure that conditions for market authorization at the EU level and approval for the standard insurance package at the national level are, as much as possible, in line with one another. That reduces the administrative costs and cuts the time required for a product to reach the patient. 

·       Use the Dutch presidency of the EU to work on a more flexible system to allow special, urgently needed medicines onto the market and make them available to patients.

2.     Tackle the high price of medications

The drug Sovaldi is an important breakthrough in the treatment of patients with chronic hepatitis C. The problem is that a one-time treatment costs between 48,000 and 96,000 euros. In The Netherlands we have an estimated 20,000 patients with this disease. The supplier defends this price in part by pointing to the great value to the patient and to those affected by the patient’s illness. After all, people are able to live longer in good health. But such costs make our healthcare unaffordable. If we continue in this way, it will become nearly impossible to reimburse patients for these medications.

What can we do about the price explosions in the pharmaceutical industry? To start with, we must provide healthcare insurance companies and hospitals a better position in negotiating the price of medications. To accomplish this, it is necessary to have thorough insight into the pharmaceutical market. This involves questions such as; what expensive medications are in development, for whom are they intended, and when do their patents expire? Together with insurance companies and hospitals we aim to make this information more transparent. We are establishing a platform for sharing expertise and information concerning the procurement of drugs. Through this platform, insurance companies and healthcare providers can share their knowledge and experience and explore the possibilities for joint procurement.

These types of collaborations have already proven to be successful. For instance, a procurement collective of academic hospitals and hospital pharmacies are cooperating in an attempt to achieve price reductions. Toward the same goal, insurers are entering into various cooperative efforts with doctors, pharmacists and healthcare organizations. Information is of the essence. Therefore, we are establishing guidelines to clarify what sorts of procurement cooperation are possible under the Dutch Competition Act. In addition, we are creating the Expensive Medications Monitor for an up-to-date overview of what hospitals spend on medications and what agreements hospitals make with healthcare insurers regarding medication procurement. Finally, we are encouraging those hospitals which do not yet have one to create a medications commission in which all parties can determine their policy on expensive medications. We are doing this in order to prevent variations in patient treatment from one hospital to the next due to the price of medicines.

A second method to reduce prices is reforming the system of determining reimbursement levels and approval to the standard insurance package, the Medicines Reimbursement System. By critically evaluating the maximum reimbursement which this system applies to groups of medications, we can, in many instances, reduce the amount of the maximum allowed reimbursement. Plus, in the case of classes of medications which are interchangeable, we can lower the reimbursement as soon as there are competing medications. When more than one medicine is on the market to treat an ailment or a disease, one would expect that competition would lead to lower prices. That is not necessarily the case in our current system. In addition, we can counteract higher prices by imposing limitations on the reimbursement of certain expensive hospital drugs which currently receive automatic approval for the standard insurance package. These limits would be lifted contingent on a new round of price negotiations. For this type of regulation, we will make use of the existing Drug Price Negotiation Unit.

Finally, the market for medication is international and the Dutch market share is too small to exert structural influence on prices or on the behaviour of manufacturers. Therefore, we seek to collaborate with other countries in Europe in various ways, including negotiating jointly and exchanging price information more frequently.

Action:

·       Better equip healthcare insurers and healthcare providers for the procurement of medications.

·       Establish a platform to exchange expertise and information on the procurement of drugs.

·       Establish guidelines stipulating what leeway the Dutch Competition Act allows for cooperation in the procurement of medicines by insurance companies and hospitals.

·       Introduce an Expensive Medications Monitor which provides an up-to-date overview of expensive medications purchased by hospitals and presenting patients’ experiences with these drugs.

·       Help ensure that every hospital has a medications commission in which interested parties discus and determine policy regarding expensive medications.

·       Achieve price reduction by changes in the way medications are accepted into the standard insurance package as well as into the reimbursement system.

·       Recalculate groups of medications in the Medicines Reimbursement System to create lower limits for reimbursement. In addition, set limits on hospital medications which are automatically placed in the standard insurance package.

·       Broader use of the Drug Price Negotiation Unit.

·       Initiate international cooperation to improve timely access to medications for patients, to encourage innovation, to keep medicines affordable and to expand transparency between member states.  

3.     New methods to develop and sell medicines

Only a few dozen patients in The Netherlands suffer from the serious metabolic disease lipoprotein lipase deficiency, or LPLD. The successful drug Glybera was developed for these patients. Research leading to its development was financed by, among others, a government subsidy from the Netherlands Organization for Health Research and Development (known by its Dutch acronym ZonMw). The downside is that the manufacturer of this product charges approximately €1.1 million per treatment. ZonMw receives nothing.

This example begs the question: are we paying twice over? Not only is the medicine extremely expensive, the Dutch taxpayer has already paid for its development through the research subsidy. We would like to prevent this in future. To this end, new methods are needed to develop medicines and bring them onto the market.

How can we do this? Research subsidies are not required to be paid back, and we cannot do much about the price a manufacturer asks for a product. After all, pharmaceutical companies have a patent on new medicines and can drive up the price due to their monopoly. One way or another, we must pay the price. And the bill ends up going to the taxpayer. That’s why we seek to put conditions on the financing of medication development. If the medicine is successful, money must flow back to the research programme, or the taxpayer should share in the profits in some other way. We would like drugs manufacturers to provide transparency into how they set their prices. What percentage of the price is based on research, development and production? What percentage is pure profit? In addition, we aim to join forces with other countries to negotiate with manufacturers about price. Hospitals and insurers can also collaborate in their negotiations with drugs manufacturers.

In this way, we aim to make a change in the medicines market. We will make room for other, new ways to develop medicines and bring them to the market. There are already initiatives demonstrating that medicines can be produced with clarity as to the cost and how the price is set. Such initiatives deserve the chance to prove themselves, which is why we are encouraging them.

Action:

·       Set conditions for research subsidies in order to prevent the Dutch taxpayer from paying twice for medications.

·       Create space for alternatives to the development and sale of medicines, so that affordable medicines enter the market with clarity as to what goes into setting the price.

4.     Appropriate use of medicines

Certainly in the last few decades, medicines have had a very positive influence on people’s health and quality of life. However, the unnecessary use of medications can lead to various unintended effects. In such cases the medication either has no effect, or needless side effects, or can be outright harmful. Plus, it is a waste of money.

Much is already being done towards the proper use of medicines. That needs to continue, since developments in pharmaceutical care move quickly. It is important to know with more precision when patients should start and finish a treatment, and what exact dosage a patient needs. Those administering the treatment as well as pharmacists also want to know how the large number of new medications work in practice. We seek to expand this type of knowledge through supporting ‘diagnostic development’ by means of a programme to stimulate the acquisition of information. In this way we can come up with new methods to use medicines specifically geared toward individual patients. In addition, we are implementing the programme the Responsible Use of Medicines. With that we are conducting research into how we can best and most safely use current medicines.

The pharmacist is of course particularly well suited to inform people about the best use of medications. Good pharmaceutical care is therefore of utmost importance. In order to realize a constantly improving handover of medicines we are amending the current guideline for medication file transfer. We also aim to ensure that pharmacists receive better information from the laboratories, that the symptoms are stated on the prescription, and that patients do better at keeping to their treatment and at using the medications according to the prescription.

Finally, we are giving special attention to ‘biosimilars’: cheaper, equivalent variations of expensive biological medications. As long as doctors are careful in prescribing these ‘biosimilars’ for patients we can save a significant amount without compromising the quality of care. We already do this quite well, but we have much to learn from countries such as Denmark and Norway, where considerable savings have already been made. With the expertise and the experience which we have already acquired here in our own country, we seek to further encourage the use of biosimilars.

Action:

·       Support diagnostic developments so that more information about the right dosage and the start and end point for the treatment is available to the patient and to the person administering treatment.

·       A five-year programme for stimulating ‘personalized medicine’, for which 10 million euros is available.

·       Amend the current guideline for medication file transfer and ensure that chemists receive better information from the laboratories, and that the symptoms are indicated on the prescription, and that patients do a better job keeping to their treatment.

·       Encourage the use of biosimilars.  

5.     Balance in the pharmaceutical market

The way the pharmaceutical market works has led to innovation and new medicines which are extremely valuable for patients. But those patients, and in fact all Dutch people who pay insurance premiums, find themselves at a disadvantage because pharmaceutical companies have a monopoly when it comes to new medicines. Therefore, we need to seek a healthy balance between rewarding innovation and the affordability of medicinal care.

In the first place, we can re-evaluate the protection pharmaceutical companies enjoy through the patent process when new medicines are approved for the market. At the international level we have already initiated the discussion regarding various additional types of protection possible through EU regulation. Other EU-countries also realize that a good balance between the price of new medicines and their availability to patients is often lacking. Therefore, it is worthwhile to highlight this subject during the Dutch EU presidency in 2016.

A particular problem with protecting new pharmaceutical products are orphan drugs for rare ailments or diseases. In addition to the existing protection, companies receive another ten years of ‘market exclusivity’ for developing these medicines. Whoever is the first to bring such a medication to the market has a robust monopoly, even though it may not be the best possible medication for the patient. The number of official orphan drugs is on the rise. Of course, this is not a good development for people totally dependent on this sort of medication. Therefore, we need to look carefully, in the EU context, at the broad definition of orphan drugs and at how long they should remain protected.

Second, how manufacturers behave is important. They are not allowed to make agreements to limit competition, just as they are not allowed to abuse their monopoly. This happens nonetheless, taking away any chance patients have for getting access to less expensive medications. It is a tough problem to combat: the patent protection which the producers enjoy at the EU level are often at odds with the Dutch Competition Act. New rulings by the Court of Justice of the European Union are needed to alleviate the situation. From the perspective of the patient, or the payer of the insurance premium, it is not acceptable to have less competition while profit in the pharmaceutical industry continues to grow. At the national level it is difficult to do anything about this, although we are closely following the developments. The European Commission recognizes the problem as well. We are currently awaiting a ruling from the Court of Justice and, if they allow the space for it, we will undertake action.

Action:

·       The protection of intellectual property and shareholder interest must be in proportion to the goal, namely encouraging innovation. In addition, the behaviour of companies and their understanding of the rules is crucial.

·       We will more clearly determine which products fall under the EU regulations for orphan drugs. Furthermore, we seek to intensify the discussion about the balance between market protection of orphan drugs and the supply of the new products.

·       The Netherlands Authority for Consumers and Markets will continue to strictly monitor illicit behaviour by pharmaceutical companies. When necessary and possible this organization will also intervene.

6.     Better Information Services

In the case of many of the aforementioned regulations, it is important that we continue to monitor the effect of new products. Registries provide insight into treatments: when a treatment should start and finish, which patients had the most success and whether the cost of the medicine should be reimbursed.

These registries have been established and maintained at the national as well as the international level in various ways and as a result have become fragmented. To help solve this problem we are creating a ‘plan of action for information services’. This plan should clarify how the goal, the procedures, the roles and the financing of the registries should be set up. For instance, it is important that doctors register when they have prescribed an expensive medication so we get an indication of how that can differ per practice. The Medicines Evaluation Board is establishing a databank for the collection of this information.

We have also commissioned various organizations to create an independent information service, both for the healthcare providers, as well as for patients. There is plenty of information available but patients in general cannot do much with that information and it is usually not easy to find. We seek to improve that in the short term.

Action:

·       A plan of action for information services which clarifies the roles, the goals, the procedures and the responsibilities of the registries.

·       The Medicines Evaluation Board establishes a databank for information about doctors’ prescription practices.

·       We will improve independent information for patients so it is comprehensible and easy to find.

Bibliography and References

[1] The 2001 Doha Declaration on the TRIPS Agreement and Public Health; the 2003 compulsory license for export mechanism under the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (followed by the 2005 Decision to amend the TRIPS Agreement) ; 2013 the Decision Extension of the Transition Period under Article 66.1 for least developed country members until June 2021;the 2015 Decision on the Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with Respect to Pharmaceutical Products,https://www.wto.org/english/tratop_e/trips_e/pharmpatent_e.htm

[2] The DNDi has developed six new treatments since 2003 and expects the completed development of 10-12 additional new treatments by 2023. DNDi is expanding its scope to include HIV, HCV and anti-microbial resistance areas that traditionally were not seen as neglected diseases.

The Commission on Health Research for Development (1990) Health research: Essential link to equity in development. http://www.cohred.org/downloads/open_arc hive/ComReports_0.pdf.

Drugs for Neglected Diseases Working Group, MSF (2001). Fatal imbalance: the crisis in research and development for drugs for neglected diseases. Paris: Médecins sans Frontières. Available: http://www.msfaccess.org/our-work/neglected-diseases/article/958

World Health Organization (2001): Macroeconomics and health: investing in health for economic development: report of the Commission on Macroeconomics and Health. Geneva WHO. Available: at http://www.who.int/macrohealth/infocentre/advocacy/en/investinginhealth02052003.pdf

United Kingdom Commission on Intellectual Property Rights (CIPR) (2002) Integrating intellectual property rights and development policy. http://www.iprcommission.org/graphic/documents/final_report.htm

Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) (2006) Public health, innovation and intellectual property rights. Available: http://www.who.int/intellectualproperty/ report/en/index.html.

World Health Organization (2004). Priority medicines for Europe and the World. Geneva: World Health Organization. Available: http://archives.who.int/prioritymeds/index.html

World Health Assembly (WHA) (2008) Global strategy and plan of action on public health, innovation and intellectual property. Resolution 61.21(Sixty-first). http://www.cfr.org/world/global-strategy-plan-action-public-health-innovation-intellectual-property/p25864; WHA resolution 61.21

WHO Consultative Expert Working Group on Research and Development (CEWG): Financing and Coordination (2012) Research and development to meet health needs in developing countries: Strengthening global financing and coordination. Available: http://www.who.int/phi/CEWG_Report_5_Apr il_2012.pdf. http://www.who.int/phi/cewg_report/en/index.html

World Health Organization (2013): Priority medicines for Europe and the World 2013 update. Geneva, World Health Organization. http://www.who.int/medicines/areas/priority_medicines/en/

Technopolis Group (18 November 2014): Review of the Product Development Partnerships Fund 2011-2014, Final report to the Dutch Ministry of Foreign Affairs

Zakir Thomas

Lead Author: Zakir Thomas
Organization: The author is an independent researcher
Country: India

Abstract

Goal 3 of SDG will be met only if new drugs can be made available for neglected diseases. The absence of market forces, lack of clinical trial infrastructure and unclear regulatory pathways dissuade the for-profit pharmaceutical enterprises from investing in expensive clinical trials. The global attention to this problem since the year 2000 has resulted in a robust pipeline. But this pipeline is not getting translated into promising therapies as the industry is not investing in the development phase.

The current policy environment is IP driven and market oriented. They do not drive innovation in neglected diseases. The solution proposed is a public policy approach which de-risk the development phase and facilitate regulatory clearances. The proposal is based on the evidence of the current approach of the industry on TB drugs. The industry can be incentivised to take up drug development by:
i. Creation of a global fund to de-risk of clinical trials
ii. An Intellectual Property (IP) policy that facilitates access and affordability
iii. Build up clinical trial infrastructure and regulatory capacity in developed countries through a globally coordinated action.

The solution proposes creation of a global fund to support clinical trials in developing countries. The originator company will retain its IP rights in the developed world. They will grant a non-exclusive license to a common IP pool for the rest of the world in lieu of accessing the fund to conduct clinical trials. This licensing model is voluntary and functions like a patent pool, but the incentive is access to the fund. The generic industry business may then access this pool and manufacture drugs after paying a royalty.

The solution also proposes a global monitoring mechanism to ensure new drugs for neglected diseases and an active role for PDPs to ensure development of trial infrastructure.

Submission

The Problem
There is a gap in translating the existing advances in the early stage drug discovery in neglected diseases to drugs accessible to patients who need it most. There are no appropriate policy measures at the development phase to facilitate such translation.

Background of the Problem
Neglected diseases disproportionately affect developing countries, causing significant morbidity and mortality in already disadvantaged populations – more than six million people die each year due to neglected diseases such as tuberculosis (TB), malaria and others, classified as Type II and Type III diseases in WHO Classification.

The neglected diseases problem arises due to the absence of market forces. These diseases are mostly restricted to countries in the tropical regions and that too predominantly among the poor patients. The market is not big enough to be commercially attractive, though the number of patients are large. Therefore, there is insufficient market pull to attract investment by private industry to invest in the risky and expensive development phase. In this background the advances made in the recent years may not translate from bench to bed.

Experts point to the urgent need for new drugs for TB, Malaria and other neglected diseases. If new drugs are not available to the disease burden countries, Goal 3 of SDG will not be met.

The Silver Line – A Robust Early Stage Pipeline
There has been increased attention on the neglected diseases problem since 2000 due to the efforts put in by WHO and others. This led increased industry attention and to the setting up of product development partnerships (PDP) like Global Alliance on Tuberculosis (TB Alliance), Medicines for Malaria Venture (MMV), Drugs for Neglected Diseases Initiative (DnDI) and others. This increased global attention led to increased public and philanthropic funding as evidenced by the G Finder Surveys that are conducted every year .

The increased global engagement on neglected diseases has translated into a robust early stage pipeline of potential drug candidates. The G Finder Survey of Product Pipelines has reported that there are 485 new products in the pipeline for 34 neglected diseases as of October 2015 . The survey reported 117 new products in the pipeline for TB, 124 for Malaria, 84 for HIV and so on. This is hailed as an unrecognised revolution in global health .

Constraints
The constraint that limits the optimism on a robust early stage pipeline is the limited number of actual candidates that moves through the clinical trials.
There are no mechanisms or policies that incentivise the conduct of clinical trials and to get regulatory approvals for the neglected diseases in the developing countries. The industry is the major player at the translational phase of drug discovery. Ironically, there are policy mechanisms in the developed world where the impact of the disease is relatively less, like Orphan Drug Legislation and issue of Priority Review Voucher (PRV) of United States Food and Drug Administration (FDA), which incentivises the industry. No such mechanism exists in the developing world.

The regulators in the developed world seem to be more abreast of the need of new drugs for neglected diseases than their counterparts in developing world. For example, US FDA and EMA has approved conditional marketing of two TB drugs to the needy TB patients while Phase III trials are ongoing. The industry sponsoring these drugs has not approached the developing world regulators for permission to conduct clinical trials. Therefore, while the drugs are available to the developed world markets for the diseases that predominantly affect the developing world, the drugs are not available in those markets. No clear policies are available to get new drugs to the market which need them most.

Evidence
TB is an illustrative example. It is estimated to be having the largest market among the neglected diseases and thus provides the best case scenario in terms of market. The following examples show how the existing policy incoherence limits the access to drugs for the patients in the developing countries.

There are a few new drugs that are undergoing clinical trials. The two most advanced are Janssen Pharmaceutical’s Bedaquiline (tradename Sirturo) and Otsuka Pharmaceutical’s Delamanid (tradename Deltyba). FDA has approved conditional marketing of Bedaquiline based on Phase IIb results, while Phase III trials are ongoing. EMA has approved the conditional marketing of Otsuka’s Delamanid based on Phase IIb results; its Phase III trials are still ongoing. WHO has issued guidelines for their use. These drugs are thus available for patients in US and EU and not elsewhere.

Sutezolid, developed by Pfizer remained dormant in the hands of Pfizer for a long time and in 2013, it granted Sequalla the license to this drug. Sequalla has not yet announced any plans for trials in the developing world, while there are reports of it raising funds for further clinical trials in US.

Another example is Astra Zeneca’s AZD 5847. Astra Zeneca closed down its R&D facility dedicated to neglected diseases which was at Bangalore in India, in 2014. It pursued the Phase IIa clinical trials of AZD 5847 with funds from US National Institute of Allergy and Infectious Diseases (NIAID).

TB Alliance has ventured into the developing world and is testing new TB drug combinations in South Africa, Brazil and India. Being a non-profit and a PDP, TB Alliance is not purely driven by market forces and has therefore taken risks. But they are also dependent on philanthropic and public funds for trials.

This show that on their own the for-profit pharmaceutical companies are not venturing into the developing world. The obvious conclusion is that unless supportive measures at the translational phase are introduced, the pipeline developed for neglected diseases will not translate to drugs for the patients in the developing countries.

The Policy Vacuum
Goal 3 of SDG will not be met unless drugs are pushed into the developing world market. This requires policy tools that support access to new drugs in market failure situations. The policy tool has to address the following issues:
i. Clinical trials are risky and expensive. Lack of market forces dissuade industry from taking the risk at its own time and effort.
ii. Capacity to conduct clinical trials for neglected diseases (which are mostly infectious in nature) are not available in most of the developing world. Capacity will have to be created both in terms of physical infrastructure and manpower competence to conduct complex clinical trials.
This will require globally coordinated action. Some effort has been made by TB Alliance to identify the gaps in clinical trial capability across the globe for TB . Such activity will have to be undertaken for all diseases and corrective measures will have to be undertaken at a global level. The industry will not wade into this space and create such competence.
iii. Regulatory Capacity Building: The regulators in many developing world and most least developing countries are inexperienced to handle complex clinical trial permission requests. Such regulatory capacity will have to be built and in regions with similar genetic composition, regional trials could be contemplated with strong post market surveillance mechanism.
iv. Availability of Drugs: The experience of TB drugs Bedaquiline and Delamanid are indicative that the pharmaceutical industry will not, on its own, take proactive steps to take the drug to the developing world.
The currently available public policy tool for pharmaceutical drug development are
i. Patent based exclusivity which has demonstrated its effectiveness in market, but not in market failure cases
ii. Public and philanthropic fund support for early stage drug discovery
iii. Limited financial support for translational activities as provided by NIH
iv. Market driven incentives like PRV of FDA

These do not address the problem of supporting the development phase in market failure cases.
The provision public funds for early stage research to promote innovation helps both market driven and market failure cases. There is evidence to show that pharmaceutical companies are moving to a business model where early stage discovery is mostly done in universities and research institutions. The industry in-licenses promising candidates and focus on development phase, translating the promising innovations to drugs by taking it through the pre-clinical and clinical trials. There is market pull in the development phase and the industry takes the risk in diseases with market.

There are public policy tools which functions as a push mechanism at the development phase put in place by US and EU in market failure cases such as the Orphan Drug legislation and PRV to which industry has positively responded to. The experience of TB drugs discussed above show that these might enable provision of drugs in the markets where these are operating but not in developing world.

Policies are required to overcome three major hurdles.
i. Conduct of the expensive and risky clinical trials
ii. Underprepared Regulatory Agencies
iii. Ensuring Access and Affordability

Framework of the Solution
The best mechanism to ensure access and affordability is a competitive market. The market driven generic drug industry business model meets this challenge. Therefore, if policies can be framed to bring the generic drug industry on board after the first two hurdles are crossed, market forces can arrive at the right price. The competition in the market could push access as competing firms look for newer markets. This measure could also help generic manufacturing divisions of the research based pharmaceutical companies.

What is required is a public policy tool that combines the de-risking of clinical trials and facilitate regulatory clearances.

Solution Proposed: De-Risk + Push (Regulatory Facilitation) + Market Pull
The solution proposed is a public policy approach which de-risk the development phase and a globally coordinated approach to facilitate regulatory decision making. It has to have the following components
i. Public Fund to de-risk of clinical trials
ii. An Intellectual Property (IP) policy that ensures access and affordability
iii. Build up clinical trial infrastructure and regulatory capacity in developed countries through a globally coordinated action.
iv. Generic industry business model to facilitate market competition based delivery.
This solution presupposes that the current policy approaches and commitments that has enriched the neglected diseases pipeline will continue to provide enough candidates for development.

De-Risk Development through a Fund
De-risking of clinical trials can be implemented by creating a global fund - Fund for Neglected Diseases Drug Development (the Fund) - to conduct clinical trials for neglected diseases in the developing countries.

There are working models of such fund promoting innovation in agricultural sector like Consultative Group on International Agricultural Research (CGIAR). The CGIAR Fund is administered by the World Bank. The Global Fund to Fight TB, AIDS and Malaria is an existing mechanism which support DOTS treatment of neglected diseases. Their mandate may be expanded to manage the Fund.

Such fund should be available for any industry or academic or other institutions to tap into if they propose to conduct clinical trials on a neglected diseases candidate which has been approved after review by the fund’s scientific reviewers.
Conditional Access to the Fund

The fund should be available for conducting the development process in the developed and developing markets. The condition for accessing the fund should be adherence to the IP policy detailed below to ensure access and affordability in developing world markets.

IP Policy
The IP Policy of this solution is derived from the existing patenting approach of the pharmaceutical industry with regard to neglected diseases.

TB is taken as the illustrative example to study the patent protection approach of the industry, as it has the largest market among the neglected disease. The industry approach of two new drugs, Bedaquiline of Janssen Pharma and Delamanid of Otsuka Pharmaceuticals is below:
i. In the case of Bedaquilin, the patent for the compound has been filed in all developed countries and in 32 high burden TB countries, including African countries like Central African Republic, Chad and 16 others . But the firm is currently marketing only in US and EU.
ii. In the case of Delamanid, the information available is limited on whether the patent covers all high burden TB countries . However, patent has been granted in India, China and Russia and the international patent application has entered national phase in Egypt, Indonesia, Pakistan, South Africa, Ukraine and Viet Nam. But, Otsuka has registered Delamanid in only four countries (Germany, Japan, South Korea, and the United Kingdom) .

Both the companies have been criticised by activists for their not registering the compounds in high burden countries and also on the high price of the drug.
The above pattern show that the industry’s main focus is developed market and they are reluctant to enter other markets.

Based on the industry practise, a tiered IP approach is proposed:
Tier I. Developed Markets: No change from the current IP based approach. The industry will have exclusive rights and will enjoy the incentives of Orphan Drug legislations, PRV and other incentives of the market.

Tier II: Countries where Patent has been filed: Industry will be required to make the patent as non-exclusive and non-discriminatory in exchange of the access to the Fund to conduct clinical trials. The data of the clinical trial will be made open for use of regulators anywhere. Generic industry which meets the quality standards may be allowed to manufacture the drug. They will be required give a pre-fixed royalty on sales as decided to the originator industry.
The implementation of this requires industry to submit their patents to a common pool for access by generic industry for sale in developing world. This can be done through the Medicines Patent Pool, already established by the United Nations.

Tier III: Rest of the world where patent has not been filed, the originator industry will not receive any royalty. The countries will have access to the drugs as they benefit from the generic competition arising out of the voluntary license granted in Tier II.

Licensing Model:
The above IP approach is voluntary subject to the access to funds for conduct of clinical trials based on the following licensing model:
i. They retain exclusive rights in the developed world markets.
ii. For the developing world, the drug after approval by regulatory authorities, will be licensed to a pool for use in developing world markets. For manufacturing, the generic drug generic industry may access the pool in a non-exclusive and non-discriminatory manner, subject to them meeting quality restrictions. Thus a voluntary non-exclusive license is provided by the originator to the developing world markets through the pool.
iii. The data from the clinical trials would be kept in the public domain as open data.

Push Mechanisms:
Regulatory Push
The facilitation of appropriate regulatory environment in the developing world for neglected diseases has two components:
i. Create clinical trial infrastructure and develop clinical research competence among physicians and support staff
ii. Regulatory Capacity building for conduct of complex clinical trials.
This will require access to funds and willing partners. The Fund should have a component to develop clinical trial and regulatory capacity. PDPs may be entrusted the responsibility of creating the above capacities by accessing the Fund.

Reorient PDPs
PDPs have done a commendable job in the discovery and development phases. Currently PDPs are focussing on their own internal drug candidates, working more or less like a pharmaceutical company. They could be reoriented to a more outward looking facilitator and set up capacities discussed above. They may be allowed to tap into the Fund to support their activities.
They PDPs should look at the progress of various candidates and should be charged with the responsibility of ensuring that the drugs are available in all countries. In case the industry is not pursuing any candidates in the developing world markets, the PDPs should step in to get the trials and regulatory clearances carried out by accessing the patent pool.

Market Pull
The last mile of ensuring access is through the market based competition by the generic industry. The industry gets license from the Pool in a non-exclusive and non-discriminatory manner creating multiple players for the market. Generic competition will create a market pull that will facilitate access and affordability.

Set up an International Monitoring Authority
For each neglected disease an international mechanism should be established and charged with responsibility to take the pipeline forward. This is necessary if SDG Goal 3 has to be met in just 14 years. This body has to play a coordinating role among various agencies to identify bottlenecks and bridge the gaps.

Conclusion
The market failure creates a big impediment in neglected diseases drug development. The available evidence in TB points to this complexity. New policies and strategies suggested above are required to bridge the loss in translation. Clearing the regulatory hindrances and setting up clinical trial capabilities across the world will help the pharmaceutical industry in general and in facilitating future drug innovations.

Bibliography and References

http://policycures.org/gfinder.html
http://pipeline.policycures.org/
http://pipeline.policycures.org/
Assessment of global capacity to conduct tuberculosis drug development trials: do we have what it takes?
C. van Niekerk, A.Ginsberg; INT J TUBERC LUNG DIS 13(11):1367–1372 http://www.tballiance.org/newscenter/research_papers/IJTLD_Nov2009_Assessemet_of_global_capacity_to_conduct_TB_drug_development_trials.pdf
http://www.unitaid.eu/images/marketdynamics/publications/TMC_207_Patent_Landscape.pdf
http://www.aidsdatahub.org/sites/default/files/publication/UNITAID_Review_of_the_delamanid_patent_landscape_2014.pdf

John Reeder, THE SPECIAL PROGRAMME FOR RESEARCH AND TRAINING IN TROPICAL DISEASE

Lead Author: John Reeder
Additional Authors: Robert Fraser Terry and Ryoko Miyazaki-Krause
Organization: The Special Programme for Research and Training in Tropical Disease (TDR)
Country: Switzerland

Abstract

Research and development (R&D) for health products normally focuses on diseases with a commercial market in high-income countries. R&D is still limited for diseases of poverty. Considering this, the Director-General of the World Health Organization (WHO) through the decision by the 2014 World Health Assembly, requested the Special Programme for Research and Training in Tropical Diseases (TDR) to investigate potential mechanisms and tools to finance R&D to accelerate product development. The TDR report, Health Product R&D Fund: a proposal for financing and operation, to be published on 17 March 2016, describes how a potential pooled fund would operate under the governance of the WHO Member States, and how the tools, some of which will be published later in 2016, could be used for transparent and efficient operation of the proposed framework. The tools described in the Report include:

• The Portfolio-to-Impact model: a new robust financial modelling tool which allows estimating minimum funding scenarios;
• A compendium of Target Product Profiles: a new online resource that would be housed in WHO which collects and maps health product pipelines in a standardized manner;
• Operational mechanisms for efficient and transparent management of the fund as well as the portfolio of health product R&D projects.

The development of a new R&D fund under WHO would create, for the first time, a mechanism to identify and cost out health products for diseases of poverty. The fund would ensure that any products that are developed would be affordable, accessible, acceptable and available to the countries that need them.

TDR is confident that its existing governance mechanisms could establish a transparent and efficient mechanism to manage a proposed fund and portfolio. Disease-endemic and donor countries would form part of this governance structure, opening the door to new funders.

Submission

Research and development (R&D) for health products normally focuses on diseases with a commercial market in high-income countries. R&D is still limited for diseases of poverty. Considering the lack of appropriate and affordable health products, such as diagnostics, vaccines and treatments, for the diseases primarily affecting developing countries, in 2003, the WHO Member States agreed (1) to conduct a special investigation to “collect data and proposals from the different actors involved and produce an analysis of intellectual property rights, innovation, and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries.” This investigation resulted in the Report of the Commission on Intellectual Property, Innovation and Public Health (CIPIH Report (2)) published in 2006. In response to the CIPIH Report, the Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG (3)) was established and developed the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPA-PHI (4)), which was adopted at the WHA in 2008.

To further examine financing and coordination of R&D, as well as proposals for new and innovative sources of funding to stimulate R&D related to diseases affecting developing countries, the Expert Working Group on R&D: Coordination and Financing (EWG (5)) was established in November 2008. The report prepared by the EWG was considered insufficient primarily by developing country member states and the Consultative Expert Working Group on R&D: Financing and Coordination (CEWG (6)) was established in 2010 to “examine current financing and coordination of R&D, as well as proposals for new and innovative sources of financing to stimulate R&D related to Type II and Type III diseases and the specific research needs of developing countries in relation to Type I diseases.”

WHO conducted a review of current organizations and structures that would be best suited to house a potential new R&D Fund, and identified TDR to consult. At the 2014 WHA (7), Member States requested the Director-General to investigate potential mechanisms and tools to finance R&D to accelerate product development for diseases primarily targeting low- and middle-income countries (LMICs).

TDR was asked to conduct this work, the results of which will be published on 17 March 2016, in a new report: Health Product R&D Fund: a proposal for financing and operation. This report outlines the outcomes of the preparatory studies conducted to explore financing mechanisms, including options for the fund’s creation and key operational considerations. The report describes how a potential pooled fund would operate under the governance of the Member States of the WHO, and how the tools, some of which will be published later in 2016, could be used for transparent and efficient operation of the proposed framework.

This proposed global financial mechanism is unique from other R&D financing initiatives that are more regionally focused and centered on capacity building. Interest is already demonstrated by financial contributions provided by Brazil, India and South Africa to support CEWG’s demonstration projects (8).

With regard to the four main criteria of the High Level Panel, this report has considered the following.

Impact on policy incoherence:
Despite the funding of over US$ 3.4 billion reported by the 2015 G-Finder to support research and development (R&D) for diseases of poverty, over 1.4 billion people, including 500 million children, continue to be affected by those diseases annually due to lack of new diagnostics, vaccines and treatments that are affordable, accessible, acceptable and available. The current lack of global policies as well as mechanisms to identify and prioritize health R&D needs hinders development of robust long-term R&D strategies which could also assist in preparing for emerging diseases. The report offers potential mechanisms to increase policy coherence by having a transparent and readily available map on diseases of poverty, and to accelerate product development by facilitating coordination among global public health stakeholders. It also describes how a global forum could be established to gather major funders and relevant stakeholders to share their objectives and to discuss potential coordination and collaboration in product development efforts for diseases of poverty. The involvement of all WHO Member States in the governance mechanism ensures transparency and further encourages coherent policy development both at the global and national level.

Impact on public health:
The proposed mechanisms with a sufficient fund would greatly accelerate development of quality diagnostics, vaccines and treatments under the overarching principles of end products being affordable, accessible, acceptable and available to over 1.4 billion people, including 500 million children, from LMICs which are affected by these diseases annually.

Impact on human rights:
As stated in the constitution of the WHO, the right to health is defined as “the enjoyment of the highest attainable standard of health”. It is the first international demarcation of human rights to health and the report’s proposed mechanism, if implemented, would assist in developing quality diagnostics, vaccines and treatments that are needed to bring all people to achieve “the highest attainable standard of health”. This also supports achievement of SDG 3 principle to “ensure healthy lives and promote well-being for all”. The proposed mechanism is flexible and not limited to communicable diseases, but applicable to noncommunicable diseases that are increasingly affecting developing countries. Access to affordable medicines is a central pillar of achieving universal health coverage and the main objective for this proposal.

Implementation:
The proposal is to establish a new global R&D fund under the WHO structure which is managed by TDR. WHO will set global priorities through its Prioritization Mechanism based on data collected by the new WHO Global Observatory on Health R&D.

At a special meeting in May 2016, WHO Member States will consider the following recommendations proposed in the Report prior to decision-making at the Sixty-ninth World Health Assembly:

1. A fund of sufficient scale (e.g. incremental increase starting at US$ 10–15 million up to US$ 100 million disbursed annually over a 10-year period) should be set up to support health product R&D;
2. The fund’s portfolio of projects (e.g. gradual increase in number of funded projects starting from 5–7 projects per year to an average of 35–40 projects) should be balanced between short-term repurposing and longer term discovery efforts;
3. The fund should have transparent, objective and non-political evidence-based decision-making processes; and
4. The fund should be able to accept “new” funders and maximize leverage by encouraging new partnerships and collaborations.

Subject to approval of the Member States and the availability of new funding, TDR is confident that, if requested, it could establish a transparent and efficient governance mechanism to manage the pooled fund and to assist in accelerating the development of diagnostics, vaccines and treatments for diseases of poverty. The work presented in this report is not disease specific and offers new thinking about how these challenges might be met.

Although we recognize that new financing is being called to meet various health challenges, such as antimicrobial resistance, preparation for potential pandemic outbreaks and the persistent issues related to diseases of poverty, all share a common characteristic of being underserved by the commercially-driven R&D model. Therefore, public finance is needed to leverage funds to accelerate product development and establishment of coherent policies is needed to provide incentives to ensure end products are affordable, accessible, acceptable and available to ensure healthy lives and promote well-being of everyone in the world.

Report summary:
The report is structured in four sections. First, it summarizes the current R&D landscape for Type III and II diseases. (9) Then, it presents options for setting up a R&D financing mechanism. It also provides guidance on how to operate this mechanism, including setting up the SWG. Finally, it reviews the set of tools that would assist the SWG in decision-making and portfolio management. Even though developing countries’ special R&D needs for Type I diseases was not investigated, the Financial Mechanism presented in this report would still be applicable as this broadly falls under the need to repurpose existing health products.

Research and development (R&D) for health products normally focuses on diseases with a commercial market in high-income countries. R&D is still limited for several of the following diseases as defined by the World Health Organization (WHO):

• Type I diseases: occur in both rich and poor countries with large numbers of vulnerable populations in each;
• Type II diseases: occur in both rich and poor countries, but with a substantial proportion of the cases in poor countries;
• Type III diseases: found overwhelmingly or exclusively in developing countries. (10)

There are funding bottlenecks for R&D throughout the development pipeline for Type III and II diseases, in particular with respect to translational research and expensive phase III clinical trials. R&D financing needs differ by disease, with diagnostics most critical for some diseases and new therapeutics or vaccines for others. WHO is currently developing a broad Prioritization Mechanism to set priorities based on data collected by the WHO Global Observatory on Health Research and Development (R&D). It should be noted that the exact structure and mandate of the Prioritization Mechanism had not been defined during the preparation of report. However, the financing and downstream coordination mechanism described in this report will be applicable to putting into operation any priorities set by the Prioritization Mechanism. Financing and coordination mechanisms would help to address some of the most critical funding bottlenecks and shortages. These mechanisms could perform three main roles.

1. An operational priority-setting mechanism could unite diverse stakeholders to effectively focus on the most critical unmet needs in the R&D of health products, as identified by the WHO Prioritization Mechanism.
2. An active coordinating mechanism could include the creation of a new forum to convene donors, making global R&D activities and funding needs more transparent. Larger donors are unlikely to relinquish control of their independent funding decisions, making formal coordination challenging. However, such a forum could ensure identification of critical R&D gaps and agree on how those areas could be funded, by providing a formal mechanism for discussion, establishing collaborations among funders and providing a “base” level of funding for projects that could benefit from other funders becoming involved.
3. A direct fund could help address some of the most critical R&D financing needs for Type III and II diseases. The potential of various fund sizes to launch new health products by 2030 was investigated. The results indicate that, in the long run, an annual disbursement of US$ 100 million or more would have the possibility of funding a portfolio of the most promising and innovative product development projects, which could overcome some of the larger gaps (instead of focusing solely on relatively low-cost activities such as drug reformulation or repurposing). The fund could also address the financing needs outlined below.

(a) It should be constituted with “new” money, as opposed to redistributing money that is already available to public health researchers and developers.
(b) The convening power of WHO could help to access such new funds, but care would have to be taken to ensure efficient and transparent processes.
(c) Building on experience acquired from product development partnerships (PDPs), public-private R&D initiatives, other funds and the private sector, the fund should have a diversified portfolio of projects and enable targeted partnerships along the projects’ development paths. The portfolio should include projects that could provide shorter term projects (development of repurposed drugs or improved point-of-care diagnostics using existing platforms) as well as longer term discovery efforts.

It will be critical to provide a setup and process that enables transparent, objective and non-political decision-making. To ensure this, a Scientific Working Group (SWG) would be convened and managed by TDR, as per its usual operating framework governed by three bodies: the Joint Coordinating Board (JCB), the Standing Committee, and the Scientific and Technical Advisory Committee (STAC). The SWG would be responsible for: the management of the health product projects portfolio, including detailed analyses of the R&D landscape; the identification of project types with high feasibility and impact potential; the development of calls for proposals; the monitoring and evaluation of projects; and the financing recommendations of selected projects.

Together with a world-class knowledge of infectious diseases, SWG members should have experience in:
• leading product development;
• assessing risks;
• making challenging portfolio decisions, from feasibility evaluation of chemistry, manufacturing and controls (CMC) (11) to clinical trials;
• evaluating regulatory compliance and providing regulatory guidance;
• working in health systems in low- and middle- income countries (LMICs);
• financing or developing businesses, including being able to assess projects’ potential to deliver health impacts and their probability of success, and assess teams’ capacities and experience;
• evaluating potential health and economic impact.

This core SWG could be supplemented by expert groups, such as legal and intellectual property (IP) experts, health economists, and disease and product specialists from the individual priority disease areas set by the WHO Prioritization Mechanism. Depending on the status of a funded project, the SWG would consider endorsing the use of specific incentive mechanisms (such as grant-funded push mechanisms), or proposing purchase commitment pull mechanisms to the WHA through the JCB. The ideal SWG operational mechanism would depend on how priorities are set by the WHO Prioritization Mechanism but the SWG could decide in real-time how to prioritize and put into operation the different types of projects. Depending on the availability and/or suitability of target product profiles (TPPs), the SWG would establish or finalize TPPs or candidate product profiles.

The SWG would also identify and clarify milestone goals before projects are funded, and ensure they are met. The SWG’s decision-making on the portfolio could be assisted by using toolkits, such as a compendium of TPPs and a framework for prioritizing projects or guiding investment decisions.

Key recommendations presented above will be considered by the WHO Member States during the special meeting in May 2016.

The High Level Panel may wish to consider how the recommendations outlined in this report could find wider adoption and assistance in filling the R&D pipeline gaps for diseases of poverty or to fulfill other unmet needs.

Bibliography and References

Health Product R&D Fund: a proposal for financing and operation, Special Programme for Research and Training in Tropical Diseases (TDR). To be published on 17 March 2016 and made available at http://www.who.int/tdr/capacity/gap_analysis/en.

Footnotes:
(1) WHA56.27: http://apps.who.int/gb/archive/pdf_files/WHA56/ea56r27.pdf
(2) CIPIH: http://www.who.int/intellectualproperty/en/
(3) IGWG: http://www.who.int/phi/igwg/en/
(4) GSPA-PHI: http://www.who.int/phi/publications/gspa-phi/en/
(5) EWG: http://www.who.int/phi/ewg/en/
(6) CEWG: http://www.who.int/phi/cewg/en/
(7) WHA decision 67(15): http://apps.who.int/gb/ebwha/pdf_files/WHA67-REC1/A67_2014_REC1-en.pdf#page=81
(8) WHO CEWG demonstration projects: http://www.who.int/phi/implementation/phi_cewg_meeting/en/, accessed 26 January 2016.
(9) Due to time constraints, the focus of this report is on Type III and II diseases.
(10) http://www.who.int/phi/3-background_cewg_agenda_item5_disease_types_final.pdf, accessed 26 January 2016.
(11) The importance of evaluating the quality of chemical starting points was underscored by the experts involved in the Global Health Innovative Technology (GHIT) Fund in their recent publication: Katsuno K. et al. Hit and lead criteria in drug discovery for infectious diseases of the developing world. Nat Rev Drug Discov. 2015;14:751–8). Although this report covers the investigations from preclinical to phase III studies, further investigations may be required to investigate cost, time and attrition rates required in early-stage research and discovery phase, including hit discovery, target validation, assay development, lead generation and lead optimization.

Other material related to this topic. The WHO/TDR technical report series on research:

Research priorities for helminth infections: http://www.who.int/entity/tdr/publications/helminth_infections/en/index.html
Research priorities for zoonoses and marginalized infections: http://www.who.int/entity/tdr/publications/zoonoses/en/index.html
Research priorities for Chagas disease, human African trypanosomiasis and leishmaniasis: http://www.who.int/entity/tdr/publications/research_priorities/en/index.html
Research priorities for the environment, agriculture and infectious diseases of poverty: http://www.who.int/entity/tdr/publications/environment/en/index.html
Research priorities for tuberculosis research: http://www.who.int/entity/tdr/publications/tuberculosis_research/en/index.html

Gorik Ooms, PROTECTION INTERNATIONAL

Lead Author: Gorik Ooms
Additional Authors: Lisa Forman, Owain D Williams, and Peter S Hill
Organization: Protection International
Country: Belgium; Canada; Australia

Abstract

There is a tension between the right to health, which obliges states to ensure the provision of essential medicines to all people who need them, and international intellectual property law, which obliges states to protect artificial monopolies for pharmaceutical companies that invented new medicines. If a new medicine is an essential one, states are obliged to subsidize their provision at whatever price the patent-owner charges.

Governments of high income countries can overcome that tension by invoking their right – and perhaps even duty – to issue a compulsory license, in negotiations with patent-owners. Governments of countries where no sufficient manufacturing capacity exists cannot use this kind of pressure.

Relative affordability, in the sense of ‘medicine XYZ is more affordable, less affordable, or equally affordable for Government A, in comparison with Government B’, can be measured. If Country A as a Gross Domestic Product (GDP) per capita that is 10 lower than the GDP per capita of Country B, than the price for Government A should be 10 times lower than the price for Government B, in order to be equally affordable – because GDP per capita reflects capacity to raise public expenditure. Likewise, if per 100 inhabitants, there are 10 who need a given medicine in Country A, while there is only one in Country B, then the price for Government A should be 10 times lower than the price for Government B, in order to be equally affordable, because Government A will have to subsidize 10 times as much of that medicine.

Whenever patent-owning companies set prices for low and middle income countries that are less affordable (adjusted for GDP and prevalence) than for high income countries, the international community should authorize an international compulsory license, allowing generic manufacturers to produce generic medicines for countries affected by less affordable prices.

Submission

The idea mentioned in the abstract was developed in a paper, ‘Could international compulsory licensing reconcile tiered pricing of pharmaceuticals with the right to health?’, published in BMC International Health and Human Rights 2014, 14:37, available here: http://bmcinthealthhumrights.biomedcentral.com/articles/10.1186/s12914-014-0037-4

Bibliography and References

Please see references at the end of the paper, ‘Could international compulsory licensing reconcile tiered pricing of pharmaceuticals with the right to health?’, published in BMC International Health and Human Rights 2014, 14:37, available here: http://bmcinthealthhumrights.biomedcentral.com/articles/10.1186/s12914-014-0037-4

David Rosenberg, GlaxoSmithKline

Lead Author: David Rosenberg
Organization: GlaxoSmithKline
Country: UK

Abstract

The Panel is seeking solutions for remedying the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies. We do not believe that such incoherence has been demonstrated. If it exists, we believe that its impact on health is small compared to that of other factors, such as lack of purchasing power, poor healthcare infrastructure, sanitation and nutrition.

GSK believes that the IP model reflected in TRIPs is indispensable and balanced. It has largely worked well and will continue to work well to promote innovation benefitting patients in most areas of health technology.

GSK does not believe that IP is generally a barrier to access. We invite the Panel to take note of some emerging evidence that TRIPs standards of IP are associated with improvements in access and that the price premiums for IP-protected products may be lower than is often claimed, especially in poorer countries.

We propose that:

1. The Panel should consider holistically all factors which impact on access to medicines, and the relative weight of their impact.

2. Companies, innovative and generic, should be encouraged to implement pricing models which take into account value and ability to pay in different geographical or even, where possible, different in-country market segments. Countries should facilitate and enable such models and not implement measures that undermine them, such as reference pricing and parallel trade.

3. The Panel should focus on both patented and generic medicines. Millions of people do not have access to the medicines that comprise the Essential Medicines List, the vast majority of which are generic. Focus on ensuring access to these medicines will likely have as much, or more, impact on health, be more cost- effective and thus be more practical than focussing on patented medicines.

4. Countries should, according to their means, devote sufficient resources to health, 1 including reasonable funding for purchasing priority medicines.

5. Where funding is insufficient, external procurement funding should be provided.

6. Where voluntary licensing is likely to be effective, countries should facilitate it and not act to undermine it through reference pricing and parallel trade.

7. Medicines should be made more affordable by reducing taxes, tariffs and mark ups in supply chains for all or certain classes of medicines. 

Submission

GSK’s mission is to enable people to Do More, Feel Better and Live Longer. We have an important role and responsibility in improving the health of people around the world.

GSK is evolving its business model based on the twin imperatives of achieving sustainable innovation and access. We will invest in R&D to discover and develop medicines and vaccines to meet unmet needs. We will then seek a return on that investment, and measure our commercial success, by providing access to those products for as many people as possible.

Pricing of medicines must balance the needs of multiple stakeholders. We aim to strike a fair and appropriate balance between the need to reward innovation with the broader cost expectations of payers, patients, and other stakeholders.

Prices should enable optimal use of resources for healthcare systems, recognising the potential for medicines to slow the progression of illness and prevent costlier medical care; improve access to value-adding medicines for patients; and reward added-value to encourage further research and scientific breakthrough.

Access to medicines is a multi-faceted problem
The problem of access to medicines is multi-faceted and involves many stakeholders including international organisations, UN members, civil society and the innovative and generic pharmaceutical industries. It will only be resolved by all stakeholders collaborating; each must do what it does best. Building upon successful initiatives is more likely to make more progress more quickly than unpicking existing frameworks and models and trying to create and agree new ones.

The access problem is rooted in poverty. Poverty impacts the causes of disease, healthcare infrastructure (including hospitals, numbers and accessibility of healthcare professionals), rational use of medicines, distribution systems and public and private expenditure on medicines, all of which are important factors in access to medicines.

There is clear evidence that patents are not a significant barrier to access. To focus on patents is misleading and potentially harmful if it results in a wilful weakening of the patent system. It will not resolve or alleviate access problems, but will damage the system that has a proven track record in bringing medicines to patients.

The Panel should recognise this and seek practical solutions to real problems. If it succeeds in doing this, it will make a valuable contribution.

This submission outlines GSK’s proposals to increase access to medicines, while at the same time preserving incentives that have been proven to work for innovation.

In a separate submission, we address the issue of how to facilitate innovation for those situations cases where the current incentives for innovation are insufficient, notably where there is no viable commercial market for the medicines.

IP is a powerful incentive for pharmaceutical innovation
The IP system has proved to be a successful model for incentives for biopharmaceutical innovation. While we acknowledge the contributions of others to this innovation (for example the academic sector and public funders), the pharmaceutical industry has been instrumental in the development of all, or nearly all, the medicines we have today which benefit hundreds of millions of patients.

Where a viable commercial market exists, the IP-based R&D system has led to virtually all of the breakthroughs in medicines and vaccines over the last 50 years from antibiotics, to vaccines, to HIV and Hep C treatments, to powerful cancer and cardiovascular medicines. These innovative products are the generic medicines of tomorrow.

Developing an innovative pharmaceutical product or vaccine is a costly and risky activity. It requires:
1. the discovery of active substances suitable for treating or preventing the medical condition

2. developing them into formulations suitable for administration to patients

3. satisfying the regulatory authorities in all countries where the product is to be sold that it is safe and effective.

The cost of developing a new medicine is significant. Approximately 5-10,000 compounds are synthesised for every one that comes to market. Those that show some type of potential medical activity undergo pre-clinical and, if this is successful, large-scale clinical testing before applications to approve the product are made. Substantial numbers, often thousands, of patients undergo clinical trials. Following approval, post-marketing surveillance of the product is required.

Approximately 70% of the cost of bringing a product to market arises after discovery of the compound, and most of this is usually borne by the innovative pharmaceutical industry.

Only one in three medicines which are brought to market is profitable.

Companies would not incur the huge risk and cost of innovative R&D if, shortly after launch of their products, a cheaper copy could be launched by a competitor who had the competitive advantage of not incurring development costs and risk.

A period of freedom from competition from copies is therefore needed to provide the incentive to innovate for the benefit of patients. Patents are a vital way of providing this incentive and reward. The period of exclusivity conferred by a patent relates to the specific patented product, not to therapeutic classes, for example. This means that innovative products that do not infringe the original patent can be, and usually are, launched to provide competition to other innovative treatments. So patented compounds from one company often compete with patented compounds from another, and unpatented (generic) products often compete with patented products. It is rare that there is no competition in a therapeutic area from innovator and generic products.

In this way, the patent system facilitates competition in innovation and creates the new products which sustain the generic industry; it therefore creates benefits for patients and payors. We support this model and the incentives provided by the TRIPs agreement. We also acknowledge its flexibilities, such as the right to use compulsory licensing, though we do not always agree with claims by others as to what those flexibilities are.

We seek to take a flexible approach to IP issues. For example, while we support the TRIPs model, we do not believe that WTO enforcement actions are always the best means of resolving disputes about TRIPs compliance, nor do we advocate for inclusion of TRIPs-plus provisions in all FTAs.

We take a flexible approach to patent filing and enforcement. For example, we do not apply for any patents in the majority of LMICs. And we very rarely enforce patents in LMICs or LDCs, even where we see infringements.

GSK pursues multiple models in its approach to R&D. Most are underpinned by intellectual property protection. In some cases we rely on the exclusivity that patents provide; in others, particularly collaborations where the costs and risks of R&D are shared (for example, product development partnerships (PDPs)), we allow third parties to use our patents and other IP.

IP is not generally a barrier to access
There is manifest evidence that IP is not generally a barrier to access.

• The vast majority of the medicines on the WHO Essential Medicines List are not patentprotected, yet many hundreds of millions of people in the developing world do not receive them. First-line treatments for killer diseases like malaria and TB are available as generic products at very low cost, and yet many people do not have access to them.
• Access to medicines was a major (but largely unappreciated) problem long before the TRIPs agreement and long before most poorer countries introduced patent protection for pharmaceuticals even though some countries, notably India, had large and high quality generics industries.
• One 2012 study found that 22% of the products on the WHO’s Model List of Essential Medicines (17th version) are indicated for NCDs, and none of these medicines have patentability issues that could prevent their generic production.2
• Some of the world’s most healthcare challenged countries, namely the LDCs, have a waiver on their TRIPS commitments and need not grant or enforce patents.
• There are few patents on medicines in India, which has a large and high quality generic industry, yet India has a huge access problem

This undeniably low access to medicines that have no patent protection suggests that IP cannot be the cause. The problem is caused by other barriers, related to poverty and weak health systems and lack of political will to deal with them. These include insufficient funding of health systems, shortages of health workers, mark-ups in the distribution chain and inefficient regulatory and procurement systems.

For the reasons described above, we believe that it is misleading and counter-productive to focus disproportionately on patents in the access debate. However, there may be situations where IP could potentially be perceived as a contributory factor in access problems. The most commonly cited criticism of IP as a barrier to access is that patents allegedly prevent generic competition and enable higher pricing than is affordable. GSK acknowledges that price is a factor in affordability and that affordability is a component of access. GSK also acknowledges that patents can be a factor affecting price. However, clearly, this can only have an impact when patents exist. As demonstrated above there are significant access problems where there are no or few patents. More attention should be paid to, for example, supply chain issues, including taxes, tariffs and mark-ups, and their impact on affordability. 

Further, price premiums associated with patented medicines may be more modest in developing countries than is commonly assumed. We invite the Panel to take note of a presentation by M Kyle, citing her own unpublished 2015 study, which states that “patents are associated with significant price premia in rich countries, but not in poorer markets.”3

We do not suggest that patents can never have a significant effect on prices or access. However, it is clear from the evidence of the scale of access problems where there are no patents that common allegations that affordability problems are caused by patents may be overstated. This is why we believe that if the Panel focuses on patents, it will not achieve meaningful results.

There is no doubt that access has improved since the TRIPs Agreement. That does not mean per se that TRIPs has improved access any more than it is true to say that because patents can give pricing power (which can of course be limited by price controls), TRIPs is a significant barrier to access.

However, the Panel might wish to consider some recent evidence that the existence of patents may be an enabler and facilitator of access in that earlier and broader access exists where there are patents in developing countries.

For example, Berndt and Cockburn concluded: “For drugs, the cost of low prices is delayed access to the benefits of innovation. Our analysis of when new drugs become commercially available in India shows that launch lags are substantial. These long delays reflect domestic policy choices that focus on driving down prices of already available drugs through generic competition at the expense of providing incentives to incur the up-front costs of launching new drugs.... Launch lags could be reduced by implementing policies that encourage innovator companies to bring new products to the Indian market.” 4 Similarly Kyle and Qian concluded that “patents have important consequences for access to new drugs: in the absence of a patent, launch is unlikely. That is, even when no patent barrier exists, generic entry may not occur. Conditional on launch, patented drugs have higher prices but higher sales as well. The price premium associated with patents is smaller in poorer countries. Price discrimination across countries has increased for drugs patented post-TRIPS and prices are negatively related to the burden of disease, suggesting that countervailing policies to offset expected price increases may have had the intended effects.”

Ensuring IP does not become a barrier

In most therapy areas treatment options include both patented and off-patent medicines, providing both prescriber and patient choice. For off-patent medicines a well-regulated generics market can help address affordability and access issues.

The Panel should consider measures to ensure that the structure of markets (including generics markets) and distribution channels are efficient. In many cases, prices to the public payer or patient are significantly inflated by tariffs, taxes and mark ups in the distribution chain.

The R&D based industry is adopting flexible models of differential or tiered pricing so that the best prices are offered to the poorest countries. The Panel should consider how best to encourage such practices, seeking to achieve an appropriate balance between sustaining the revenues needed for future innovation and maximising access.

GSK has offered tiered pricing on vaccines for over 30 years and preferential pricing for ARVs to tackle HIV/AIDS for 15 years. We are extending this across our prescription medicines portfolio. Our flexible tiered pricing approach for vaccines – and now increasingly for more prescription medicines too – is based on countries’ ability to pay. And we have frozen our prices for GAVI graduating countries for 10 years so that they pay the same discounted price for GSK vaccines for a decade from end of GAVI support. 6

To maximise patient benefits and sustain our business in Least Developed Countries (LDCs), we cap the prices of our patented products to no more than 25% of the price in the developed world.

Where few generic options exist in a particular therapy area, GSK has adopted a voluntary licensing approach. Other companies have done the same or given patent waivers which achieve similar results.

These approaches enable generics manufacturers to produce and sell generic versions of patented products. However, they are not always suitable and will only have an impact when certain conditions apply. These include:

• A therapy area where there are limited numbers of suitable alternative products available e.g. HIV in its early days
• External funding in place to purchase licensed products and make it attractive for generic companies e.g. Global Fund diseases, but not many others
• Sufficient in-country political will to make the therapy area a public health priority
• A sufficiently efficient and effective health system to absorb more products
• Products that are easy to manufacture and are not complex like vaccines
• The right generic partners are available and willing to supply

One of the few therapy areas that meet all these criteria is HIV/AIDS and many companies have issued non-exclusive voluntary licences, either bi-laterally or through the Medicines Patent Pool. For example ViiV Healthcare, the HIV joint venture created by GSK, Pfizer and Shionogi, grants royalty free voluntary licenses on all of their current medicines (including those in their pipeline, once licensed) for public sector and donor agency programmes in all Low Income Countries, all Least Developed Countries and all of Sub-Saharan Africa. ViiV Healthcare has given 16 voluntary licences for their ARVs to generic manufacturers. These companies are based in a broad range of different locations. ViiV does not charge royalties in respect of these countries. Some Middle Income Countries are also covered by ViiV’s licences on which royalties may apply. In total 138 countries are covered.

Both preferential pricing and, when the conditions are right, voluntary licensing are proven successes. However both can be undermined by “exporting” the low prices intended for poorer markets to wealthier ones. This can occur through international reference pricing and measures which promote parallel trade (parallel trade has a further adverse effect as it takes the lower priced products away from the poorest patients in the poorest countries for whom the low prices were intended). Governments should not implement policies which undermine these methods of promoting access.

The Panel should not just focus on patented medicines
We have already argued that in order for the Panel to make a meaningful contribution to improving access in developing countries and innovation it needs to take a holistic approach to analysing the real problems. This should address not only issues relating to healthcare infrastructure but also other health-related technologies such as vaccines and diagnostics as well as issues in other area of technology such as nutrition and sanitation.

To the extent that attention is paid to medicines, it should not just focus on patented medicines. As we have demonstrated, patents are rarely a significant barrier. Hundreds of millions of people do not have access to the generic medicines which comprise the vast majority of the Essential Medicines List.7 These medicines are simply not affordable despite their low prices.

As well as considering issues relating to patented medicines, we urge the Panel to consider also how to address the issue of lack of access to generic medicines. As a practical matter, measures addressing access to generic medicines may make a more significant contribution to public health than measures addressing patented medicines. 

Bibliography

1 For example the AU Abuja Declaration commitment of 15% of annual budget on health

2 Mackey T & Liang B (2012), “Patent and Exclusivity Status of Essential Medicines for Non-Communicable Disease”, PLoS ONE, 7(11): e51022

3 “Patents and the Availability of Medicines in Developing Countries”; Presentation at WIPO SCP 23; 2 December 2016, available at http://www.wipo.int/edocs/mdocs/scp/en/scp_23/scp_23_seminar_on_p_h_kyle.pdf. See also Mark Duggan, Craig Garthwaite, and Aparajita Goyal, “The Market Impacts of Pharmaceutical Product Patents in Developing Countries: Evidence from India,” American Economic Review 2016, 106(1): 99–135 and the references below. 

4 Ernst R. Berndt and Iain M. Cockburn, “The Hidden Cost Of Low Prices: Limited Access To New Drugs In India,” 2014 (http://content.healthaffairs.org/content/33/9/1567.full.pdf+html) 

5 Kyle & Qian, “Intellectual Property Rights

6 http://www.gsk.com/en-gb/media/press-releases/2015/gsk-extends-its-price-freeze-commitment-to-ten-years-for-countries-graduatingfrom-gavi-support/

7 The World Medicines Situation 2011: Medicines Prices, Availability and Affordability; Cameron et al (http://apps.who.int/medicinedocs/documents/s18065en/s18065en.pdf )

Jon Pender, GlaxoSmithKline

Lead Author: Jon Pender
Organization: GlaxoSmithKline
Country: UK

Abstract

While some tensions may remain between international human rights law, trade rules and public health objectives, the last 15 years have seen a number of initiatives pursued by the pharmaceutical industry and other stakeholders which have brought significant improvements in access to medicines. Intellectual property plays a vital role in facilitating innovation and this is covered in a separate submission from GSK. This paper describes some of the new business models that GSK and others have adopted, focusing on research and development (R&D) models for diseases of poverty, when IP is not always a sufficient incentive. 

We believe these approaches are bearing fruit and that the Panel should consider how they could be scaled up and built upon. This approach of building upon successful initiatives is more likely to make more progress more quickly than unpicking existing frameworks and models and trying to create and agree new ones. 

We propose that the Panel: 
1. Acknowledges that the private sector, working in collaboration with other sectors, has an indispensable role to play in developing products for diseases which disproportionally affect the developing world
2. Endorses Product Development Partnership (PDP) approaches in which the costs and risks of R&D are shared, reviews the progress made by PDPs, such as the Medicines for Malaria Venture (MMV), the Malaria Vaccine Initiative (MVI), the TB Alliance and the Drugs for Neglected Diseases initiative (DNDi) and identifies best practices
3. Calls for a wider funding base for these PDPs
4. Focuses on ensuring that the products developed by these PDPs reach the people who need them as quickly as possible
5. Considers whether there is scope to expand the PDP approach to meet other unmet needs
6. Encourages greater use of open innovation approaches for diseases of the developing world including mechanisms such as Open Labs and WIPO Re:Search
7. Supports a menu of incentives which in combination will stimulate more R&D by more companies for diseases of the developing world
8. Recognises and encourages efforts by companies to expand access to existing products
9. Supports the new business models and approaches, such as tiered pricing and partnerships to strengthen health systems, being increasingly adopted by companies
 

Submission

New Models for Innovation and Access for Diseases of the Developing World - Building on what is already working

GSK’s mission is to enable people to Do More, Feel Better and Live Longer. We have an important role and responsibility in improving the health of people around the world. 
Innovative medicines, vaccines and consumer healthcare products contribute enormous benefit and reassurance for individual citizens, and increased economic efficiency and competitiveness for society. The most important thing GSK can do is to continue to discover, develop and supply products that address unmet need and improve quality of life – and to work with others to make these medicines accessible as widely and rapidly as possible to people who benefit from them, wherever they live. 

GSK is playing an important role in addressing the health and sustainability challenges of the developing world. Our efforts include evolving new business models and forging innovative partnerships in wide-ranging areas such as R&D, disease elimination programmes, community partnerships, voluntary licensing and increasing the affordability of our products.1 Our approach has been recognised via our top ranking in every edition of the Access to Medicines Index.2
GSK is evolving its business model based on the twin imperatives of innovation and access. We will invest in R&D to discover and develop medicines and vaccines to meet unmet needs. We will then seek a return on that investment, and measure our commercial success, by providing access to those products for as many people as possible. 

Pricing of medicines must balance the needs of multiple stakeholders. We aim to strike a fair and appropriate balance between the need to reward innovation with the broader cost expectations of payers and other stakeholders. 

Prices should enable optimal use of resources for healthcare systems, recognising the potential for medicines to slow the progression of illness and prevent costlier medical care; improve access to value-adding medicines for patients; and reward added-value to encourage further research and scientific breakthrough. 

GSK is focusing on delivering medicines and healthcare products to the 6.5 billion people across all countries of the world who are becoming increasingly significant consumers of healthcare products.

We seek to price our medicines and vaccines responsibly and sustainably to reflect both the value they deliver - to patients and their families, healthcare systems and wider society – and the customer’s ability to pay, wherever in the world they are. Our tiered pricing approach on vaccines and our commitment to price patented medicines in the world’s Least Developed Countries at 25% or less of European prices are strong examples of this approach. 

When IP may not be a sufficient incentive

The R&D based pharma industry wants to be able to develop medicines to meet unmet medical needs wherever they occur. However, the return on investment on R&D for diseases of the developing world is often too low to justify an adequate allocation of resources.

Product Development Partnerships
To address this dilemma, we are increasingly working in Product Development Partnerships (PDPs), which share the scientific and financial risks and can help to initiate and accelerate R&D. Typically, the model involves companies providing the technology that they have invested in for decades, as well as their development and distribution expertise, to the partnership. Public sector partners help fund the development costs while also helping to ensure that the medicines and vaccines developed get to the people who need them by financing implementation programmes. This has the dual benefit of encouraging R&D and accelerating the products’ uptake in the developing world.

A number of these PDPs such as the Medicines for Malaria Venture (MMV), the Malaria Vaccine Initiative (MVI), the Drugs for Neglected Diseases Initiative (DNDi), and the TB Alliance have transformed the pipeline of R&D projects for diseases of the developing world. Research programmes are overseen by joint steering committees with representatives from all the partners. Under the terms of the agreements, where sales opportunities exist priority must always be given to treatments for neglected tropical diseases in the LDCs, and many contain provisions on affordable pricing, for example “no loss, no profit” models.

The PDP approach is working. A report from Policy Cures published in February 2016 showed that 485 products were in the pipeline for products to fight diseases of the developing world3 the vast majority being developed in partnerships. GSK has worked with many of the major PDPs since their inception. A case study on GSK’s partnership with the MVI to develop the world’s first malaria vaccine is provided in Annex A. These PDPs are reducing the costs of development; making products more affordable by delinking the price charged from the costs of R&D; and getting new products to patients faster.

The data from the independent G-FINDER4 report, which analyses investments in R&D for diseases which disproportionately affect the developing world, has shown that these approaches have fostered increased investments by the industry. In the latest G-FINDER report aggregate industry investment in R&D for diseases of the developing world was US$534m, making the industry second only to US NIH in the list of funders of research in this area.

This collaborative approach adopted by the industry was further illustrated by its response to the Ebola outbreak in West Africa. GSK, MSD and J&J all responded quickly to the crisis, working at an unprecedented rate to accelerate the development of their candidate vaccines. By working closely with partners including the World Health Organization (WHO), making significant investments, and doing normally sequential activities in parallel to speed up vaccine development, the companies were doing in around 10 months what could usually take more like 10 years.

Knowledge Pools and WIPO Re:Search
In 2009, GSK created the Pool for Open Innovation against Neglected Tropical Diseases (POINT). By emphasizing a more accessible approach to intellectual property and know-how, POINT facilitated access to intellectual property and/or technologies for organizations that wanted to conduct research on treatments for these neglected diseases. In addition to including our IP in the pool, stakeholders told us that they would like to be able to access our knowledge, know-how and experience in R&D. The pool evolved therefore into more of a Knowledge Pool.

This led to the creation of WIPO Re:Search in 2011 by the World Intellectual Property Organization (WIPO) in collaboration with BIO Ventures for Global Health (BVGH), and with the active participation of leading pharmaceutical companies and other private and public sector research organizations. Its 101 members represent a wide range of private and public sector research organizations from six continents.

GSK is a member of WIPO Re:Search where member organizations share IP, compounds, expertise, facilities and know-how with qualified researchers working on new solutions for NTDs, malaria and tuberculosis. WIPO Re:Search is bringing innovative medical technologies to the fight against these diseases by brokering new research partnerships and sharing knowledge.

WIPO Re:Search consists of an online, freely accessible database of IP, technology and other knowledge assets, and a Partnership Hub administrated by BVGH, a leading non-profit global health organization. BVGH connects potential users and licensees of WIPO Re:Search, creating research collaborations and ensuring WIPO Re:Search assets are being used productively.

WIPO Re:Search Members include some of the world’s largest pharmaceutical companies, prestigious academic institutions and product development partnerships. The Consortium is a voluntary endeavour of members that endorse the WIPO Re:Search Guiding Principles, which include a commitment to:

• provide royalty-free licenses for research, development and manufacture anywhere in the world
• make products available royalty-free to all Least Developed Countries
• consider in good faith access for all developing countries, taking into account the economic development of the countries and the need to facilitate access to disadvantaged populations.

Open Innovation
More and more companies are pursuing open innovation approaches for diseases of the developing world. For example, GSK’s approach to open innovation includes:

• Being more open with our IP – As noted above, GSK created the world’s first patent pool for neglected tropical diseases, which led to WIPO Re:Search. In 2013 through ViiV Healthcare, its HIV joint venture with Pfizer and Shionogi, GSK joined the Medicines Patent Pool (MPP) and in 2014, just two months after regulatory approvals, ViiV Healthcare announced licences with the MPP for dolutegravir for both adults and children in countries with the highest HIV burden. For children, generic manufacturers now have a royalty-free voluntary licence to develop paediatric formulations of dolutegravir in 121 countries, where 99% of children with HIV live. The licence also includes paediatric formulations currently in clinical development
• Being more open with its resources – GSK has established an 'open lab' at its dedicated diseases of the developing world R&D facility in Tres Cantos, giving independent scientists access to its expertise, facilities, knowledge and infrastructure to work on their own projects. In 2014, 26 visiting scientists made use of the Open Lab which has built up a portfolio of over 50 research 26 Feb 16 projects since it was established in 2010. Recognising the growing disease burden form noncommunicable diseases (NCDs) in Africa, GSK has expanded this concept and has committed a £25 million investment to establish the world’s first Africa NCD Open Lab. In this project, GSK scientists will collaborate with researchers across Africa to address the specific variations of NCDs in Africa. GSK and the UK and South African Medical Research Councils have together pledged £5 million to help South African researchers study NCDs as part of the Open Lab initiative. In November 2014, GSK committed a further £4 million to support successful proposals for NCD research from Cameroon, Cote D’Ivoire, Ghana, Kenya, Malawi, Nigeria, The Gambia and Uganda.
• Being more open with its data and compounds - GSK spent 12 months screening two million molecules in its compound library for activity against the deadliest malaria parasite, P. falciparum, yielding more than 13,500 hits. The results were published in the journal Nature and all the data was posted on a number of freely available scientific websites. GSK has also run similar screens, and made the results public, against TB, African sleeping sickness and Chagas disease.

Potential Incentives
It is important to create the right environment to encourage more companies and institutions to be active in R&D for diseases which disproportionally affect developing countries. There is no single magic bullet to incentivise more R&D for DDW. A number of complementary new mechanisms need to be considered to stimulate more research in this area, including:

• Transferable extensions of Market Exclusivity/Patent Rights for novel proofs of concept and new, licensed products
• Increasing funding for currently available developing world product purchases
• Increased public sector funding for clinical trials and the scale-up of production facilities
• Tax credits and orphan drug laws for DDW research
• Streamlined regulatory processes for new vaccines and medicines

Other GSK Programmes to Expand Access
In addition to our efforts in R&D, GSK is pursuing other approaches to ensure access to medicines and to minimise the impact of any policy incoherencies.

Innovative business models and partnerships
GSK continues to seek creative new business models and external partnerships to help improve access to medicines. Some of our longstanding and more recent initiatives include:

• The creation of a new operating unit dedicated to the LDCs in 2010, to provide a strategic focus on expanding access to medicines for patients living in these countries, including price caps on patented products at 25% or less of European prices. We aim to improve access to healthcare for 20 million underserved people by 2020.
• A tiered pricing policy for our vaccines dating back over 30 years - typically 70 - 80% of all the vaccines we sell go to developing countries. In 2015 we announced that we would freeze our prices for Gavi graduating countries for 10 years so that they pay the same discounted price for GSK vaccines for a decade from end of GAVI support. 5
• Our 2014 announcement extending the tiered pricing model to our prescription medicines. We develop pricing strategies based on country-specific circumstances, such as patient affordability, the local healthcare system, and other social and economic factors. In Bangladesh, for example, sales of Cexime have grown by 60% over four years since we reduced the price to help more people access this oral antibiotic.
• The launch of ViiV Healthcare in 2009: a joint venuture with Pfizer and Shionogi dedicated to the discovery and delivery of new and better treatments for HIV/AIDS patients worldwide, and increased access through licencing.
• Africa Strategy6 launched in 2014 in which our goal is to make our products accessible and available to 80% of the African population by 2020. This isn’t philanthropy. It’s a new way of doing business. In addition to the NCD Open Lab described above, we are investing up to £100m in local manufacturing and are supporting 25 academic chairs in African Universities in areas such as pharmaceutical and clinical sciences, public health, manufacturing and logistics to help create a workforce with the necessary skills.
• A partnership with the Brazilian Government’s Oswaldo Cruz Foundation (Fiocruz) since 1985, to manufacture vaccines for public health priorities in Brazil including polio, Haemophilus influenzae type b (Hib), measles, mumps, rubella, rotavirus.
• A groundbreaking five-year partnership with Save the Children with the aim of combining our resources and expertise to help save the lives of one million children. Our initiatives include developing child friendly medicines; training healthcare workers; and working together to increase access to medicines more broadly. So far we have reached over 3.6 million people including 1.3 million children with life-saving immunisation and treatments since 2013.
• A 5 year £22m partnership with Comic Relief in which we are teaming up in support of global efforts to strengthen health systems’ capabilities to fight malaria.

Conclusion
Where IP is not a sufficient incentive to stimulate R&D for diseases of poverty, the industry has an impressive track record of pursuing innovative partnerships and collaborative approaches to share the costs and risks of R&D where no commercial return can be expected. These approaches are working and have transformed the landscape of R&D into diseases of the developing world. We believe the Panel should consider how they could be scaled up and built upon. This approach of building upon successful initiatives is more likely to make progress more quickly than unpicking existing frameworks and models and trying to create and agree new ones. There is more that can be done, especially in creating the right environment to build and scale up these approaches. At GSK, we will actively seek new partnerships, new ways of doing things, and new approaches to address the needs of our customers and patients. Ultimately, we will ensure sustainable business performance that generates value for our shareholders while doing what is right for patients and customers.

Bibliography and References

1 http://www.gsk.com/responsibility.html 

2 http://www.accesstomedicineindex.org/ 26 Feb 16

3 http://pipeline.policycures.org/ 4 https://gfinder.policycures.org/ 26 Feb 16

4 https://gfinder.policycures.org

5 http://www.gsk.com/en-gb/media/press-releases/2015/gsk-extends-its-price-freeze-commitment-to-ten-years-for-countries-graduatingfrom-gavi-support/

6 http://www.gsk.com/en-gb/media/press-releases/2014/gsk-announces-new-strategic-investments-in-africa-to-increase-access-tomedicines-build-capacity-and-deliver-sustainable-growth/

Grania Brigden and Katy Athersuch, Médecins Sans Frontières- Access Campaign

Lead Authors: Grania Brigden and Katy Athersuch
Organization: Médecins Sans Frontières- Access Campaign
Country: Switzerland

*We present this submission on behalf of Médecins Sans Frontières- Access Campaign, the WHO Global TB Programme, Global TB Coalition of Advocates (GCTA) and Global TB Community Advisory Board (TB-CAB), the Stop TB Partnership (STBP), the TB Alliance and the International Union Against Tuberculosis and Lung Disease (The Union).

Abstract

We present to you the 3P Project which aims to rapidly deliver affordable, effective new regimens for the treatment of TB through an open collaborative approach to conducting drug development and through novel approaches to financing and coordinating R&D. This project provides a model for public health needs-driven R&D, which on a disease-specific scale demonstrates how the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health can be remedied in the context of health technologies.

TB is a disease which occurs mainly in the developing world and the lack of R&D into treatments for the disease reflects the lack of financial incentives for developers. The 3P Project overcomes this by providing funding for R&D activities upfront (push); funding to incentivise R&D through the promise of financial rewards on the achievement of certain objectives (pull); and linking these financial incentives to commitments to IP and data pooling in order to foster open collaborative research, accelerate the development of combination regimens and enable affordable access through the fair licensing of the final products for competitive production (pool). As such, the Project “de-links” the incentive to innovate from high product prices, guaranteeing affordability and availability of the newly developed regimens.

The structuring of incentives rewards the efforts of inventors, while ensuring that the data and IP generated are pooled and made broadly available, thus promoting the human right to enjoy the benefits of scientific progress (1) and the right to health (2). In accelerating the delivery of urgently needed treatment regimens to treat all forms of TB, it will help to end the epidemic, thus helping to achieve an important target agreed in the Sustainable Development Goals (SDGs). 

Submission

I.               INTRODUCTION 

Last year, the global community agreed to ambitious targets in the Sustainable Development Goals (SDGs) to promote healthy lives. In particular, SDG 3 aims to end the tuberculosis (TB) epidemic by 2030. It also promises to support the research and development (R&D) of medicines for diseases that primarily affect developing countries, and to provide access to affordable medicines (3). For TB, these two targets are inextricably linked, as the current medicines at our disposal are not up to the challenge of ending the TB epidemic. There is a need to support greater investments in R&D in TB drug development, and to ensure that the R&D is conducted in a manner that ensures broad and equitable access.

TB mainly affects people living in low- and middle- income countries with 95% of cases occurring there (4). 9 million people became infected with drug-sensitive TB and 1.5 million people died from the disease in 2014 alone (5). With the advent of new diagnostics like GeneXpert, the confirmed numbers of multidrug-resistant (MDR) TB cases are rising and programmes are unable to cope. Of the 480,000 cases of MDR-TB estimated to have occurred in 2014, only about a quarter of these – 123,000 – were detected and reported. In 2014, an estimated 190,000 people died of MDR-TB (6).

MDR-TB treatment is particularly difficult, because it is long—two years of treatment including eight months of daily injections and a total of more than 14,600 pills to swallow—and because many of the medicines used have toxic side effects such as deafness, psychosis and severe nausea. Globally, an estimated 3.3% of new TB cases and 20% of previously treated cases are MDR-TB. Only 50% of treated MDR-TB patients were successfully treated, and costs can be very high. An estimated 9.7% of people with MDR-TB have extremely drug-resistant TB (XDR-TB), for XDR-TB (reported by 105 countries by 2015) (7) cases treatment is even longer, more expensive and the success rate is even lower at only 13%.

The ultimate goal in TB treatment is the development of new treatment combinations to effectively, safely, quickly, affordably and simply treat all forms of TB. In the immediate term there is an urgent need to improve the treatment for MDR-TB. In order for these new treatment combinations to be developed the status quo must be transformed to deliver:

a healthy TB drug pipeline with a number of compounds in all phases of development. The pipeline for new TB drugs is weak; there are only 8 new chemical entities in clinical development (8).
an increase in investment; the current spending of $674 million on all TB R&D (vaccines, diagnostics and treatment) (9) is only 33.7% of the $2 billion annual funding target outlined in the 2011–2015 WHO Global Plan (10). Of particular concern is the continued decrease in private sector investments which stood at just 15% of overall funding in 2014 (11).
an open collaborative R&D approach that reduces risks and costs associated with testing multiple drugs for combination treatments by incentivizing research organizations to share scientific data, clinical trial results as early as possible and to conduct medically appropriate research on combinations of compounds.
a de-linking of R&D cost from prices to ensure affordability and access of resulting medical tools

The ‘3P Project’ aims to rapidly deliver affordable, effective new regimens for TB through an open collaborative approach to conducting drug development and through novel approaches to financing and coordinating R&D.  The 3P Project implements three mechanisms to facilitate the necessary and appropriate R&D for TB regimens:

·  pull funding to incentivise R&D activities through the promise of financial rewards on the achievement of certain R&D objectives (i.e. through milestone prizes)

·  pooling of intellectual property (IP) and data to ensure open collaborative research and affordability through the fair licensing for competitive production of the final products

·  push funding to finance R&D activities upfront (i.e. through grants)

II.             BACKGROUND: WHY IS TB DRUG R&D FAILING TB PATIENTS?

FOCUS ON DEVELOPMENT OF SINGLE DRUGS, NOT NEW REGIMENS. In 2012, the first new TB drug in 50 years received accelerated approval for use in treating MDR-TB, and a second new drug was approved in late 2013 (12). TB must be treated with a combination of drugs, but a lack of collaboration and transparency means that clinical trials to test these two new drugs in combination in order to ensure they can be safely combined and then to build a new, better regimen will not be completed for several years. Many organisations working in the area of regimen development, including TB Alliance, the UK’s Medical Research Council (MRC), the Open Source Drug Discovery project (OSDD) and RESIST TB, have encountered obstacles in accessing new drug compounds for testing as part of improved treatment regimens.  There is currently no IP licensing mechanism linked to financial incentives – either grants or prizes - to incentivize the collaborative, open research needed to stimulate regimen-based R&D activities. 

INADEQUATE FINANCIAL INCENTIVES FOR COMPANIES. The market for TB regimens is far less lucrative than for other diseases and is marked by chronic underinvestment; this translates into slow or stalled scientific progress, as promising drug candidates languish for lack of a business case. Private-sector investment in TB R&D has fallen by a third since 2011 (13), and since 2012 Pfizer, AstraZeneca, Novartis and Vertex have all withdrawn from TB drug development, closing R&D facilities.  The lack of market incentives makes it difficult for research organizations to enter the TB R&D field and to take TB drug candidates through to late-stage clinical research, leaving significant gaps in the pipeline: there are only 8 new TB drug candidates in clinical development and there are no ongoing late stage clinical trials recruiting patients to test all new drug regimens, with the exception of one- the Nix TB trial in XDR-TB. (14) Many of the compounds currently in Phase II and Phase III are older “repurposed’ compounds that don’t represent investments by commercial developers. With the exception of bedaquiline and pretomanid, new drugs are currently being developed as single products and are not involved in combination trials or new regimen trials until after receiving regulatory approval.

LACK OF FINANCIAL SUPPORT TO PROGRESS PRECLINICAL COMPOUNDS. In early-stage and preclinical research, the majority of TB compounds are being developed by public institutions, small companies or product development partnerships (PDPs), and it is unclear if they have the necessary capital and resources to bring an adequate number of new products forward to Phase I trials. For example preclinical development of the new drug candidate PBTZ169 was funded by the European Commission, but further progression of this potential new chemical entity has stalled as there are no dedicated funding streams available for the next stage of development (15).

ACCESS AND AFFORDABILITY NOT GUARANTEED: When new TB products come to market, they may not be affordable or accessible in countries where the disease burden is highest. For example, the new TB drug bedaquiline will cost US$900 in low-income countries and US$3,000 in middle-income countries for a 6-month regimen and Delamanid will be priced at US$1,700 in low-income countries, to which the cost of several other drugs will need to be added (16).

III.           A JOINT POOLING & FUNDING MECHANISM TO PROMOTE INNOVATION AND ACCESS

The ‘3P Project’ creates a new open collaborative framework for regimen development based on the sharing of data, the pooling of intellectual property and the creation of incentives for multiple actors to enter the R&D process in order to accelerate drug regimen development timelines.

Opening up the pipeline to promote collaboration for drug combinations and regimen development and offering incentives to facilitate progression will help ensure that preclinical compounds are brought forward to clinical trials. Drug-drug interaction and potential beneficial drug combinations can be discovered sooner if products are tested together at an early stage, which will accelerate the development of new regimens. The increased investment and structuring of funding through both push and pull mechanisms will dramatically increase the number of compounds in the clinical development pipeline, enhancing the work of PDPs such as the TB Alliance in designing and testing regimens for all forms of TB.

In order to ensure affordability of the final medicines, the 3P Project separates (or “de-links”) the cost of R&D from the price of the resulting treatments. Once a regimen receives regulatory approval, the individual drugs or fixed-dose combinations could be licensed to multiple manufacturers with proven capacity to produce quality-assured drugs through the patent pool, allowing competition to lower prices to a sustainable level in developing countries.  Regimen prices would be determined independent of the cost of R&D. In this way, international donors, developing country governments and patients will not be asked to cover the cost of medical R&D through the price they pay for the treatment.  

The 3P Project proposal offers benefits over the current TB R&D framework by:

Reducing duplication of research efforts, thereby saving time and money
Reducing the risks associated with developing potential combinations early in the R&D process
Accelerating the development of all-new drug regimens
Reducing the risk of resistance to new compounds by ensuring their use as part of regimens
Coordinating disparate sources of funding and linking financial rewards to an obligation to share scientific and clinical data and IPR
Separating (“de-linking”) R&D costs from the final price of TB combination regimens

For a schematic representation of the proposed mechanism including prizes, grants and patent pooling, please follow this link: http://www.msfaccess.org/sites/default/files/MSF_assets/TB/Photos/TB_3P-diagram_0.jpg 

IV.           IMPACT ON POLICY COHERENCE 

By improving the way TB drug development is conducted, the 3P Project aims to bring greater coherence in the rules governing the rights of inventors, international human rights, trade rules and public health objectives. While the current intellectual property rules embedded in global trade laws may provide an effective incentive mechanism for R&D into diseases affecting high-income countries, it is well-recognised that this is not the case for diseases affecting predominantly poorer countries such as TB (17). The Project aims to overcome this market failure through an innovative funding model that de-links the cost of R&D from the price of the final product (18). In doing so, it rewards the efforts of inventors (through both “push” and “pull” financing), while ensuring that the data and IP generated in the development efforts are pooled and made broadly available, thus promoting the human right to enjoy the benefits of scientific progress (19) and the right to health (20). And by ensuring that the incentive mechanisms are targeted towards specific development efforts, the Project aims to speed the development of effective TB regimens that will help to end the epidemic, thus helping to achieve an important target that was globally agreed in the SDGs. Importantly, although the Project addresses just one pressing public health need in TB, its successful implementation will have far-reaching effects towards achieving greater policy coherence globally. 

V.             IMPACT ON PUBLIC HEALTH

According to the WHO, TB is now the leading cause of death from infectious disease globally (21). Ending the TB epidemic has been recognised as a priority public health target in the SDGs, but achieving that target will be difficult, if not impossible, with the existing arsenal of TB medicines. The 3P Project aims to address this pressing need by adopting a public health-oriented model for TB drug development. Rather than relying on commercially-driven decisions regarding allocation of R&D efforts, the Project will align the incentives for R&D with public health needs. The data and IP that is generated through the Project will be managed with public health considerations in mind, and with the cost of R&D “de-linked” from the price of the final products, affordability and availability of the new regimens developed through the Project will be guaranteed. 

VI.           ADVANCING HUMAN RIGHTS

The right to health is enshrined in a number of international instruments, including the Universal Declaration of Human Rights and International Covenant on Economic Social and Cultural Rights (ICESCR) (22). The WHO Constitution declares that “the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being (23).” General Comment 14 of the UN Committee on Economic, Social and Cultural Rights identifies access to essential medicines is a core part of the right to health, and applies the principles of availability, accessibility, acceptability and quality to this right (24). The 3P Project will advance the right to health for people living with TB by making available safer, less toxic, simpler, more effective TB regimens of shorter duration. The Project, by de-linking the cost of development from the price of the medicine, will ensure that the new treatments are made accessible and affordable. By driving R&D efforts with public health considerations in mind, the Project will ensure that the medicines that are developed will be acceptable to TB patients and their specific needs. And by including stringent quality standards in the terms of the non-exclusive IP licences that will be made available to qualified licensees, the Project will ensure that all medicines will be of good quality.

The Universal Declaration of Human Rights and the ICESCR also enshrine the human right to enjoy the benefits of scientific progress and its applications (25). Although not a human rights instrument, the Agreement on Trade-Related Aspects of Intellectual Property adopts a similar norm in declaring that the protection of IP should contribute to the “dissemination of technology and in a manner conducive to social and economic welfare (26).” The Special Rapporteur in the field of cultural rights has expounded on the right to enjoy the benefits of scientific progress in the context of access to medicines, and has recommended that “states and other stakeholders further develop incentive mechanisms that delink research and development from the price of products (27),” and observed that “collective management of patent rights is an approach that might be extended to promote access to medicines (28).”

VII.         IMPLEMENTATION

The Project already relies on the participation and support of many of the leading technical and political organisations in the field of TB, including TB Alliance (TBA), Médecins Sans Frontières (MSF), the Stop TB Partnership (STBP), The South African Medical Research Council (SAMRC), The Union, the Critical Path Institute (C-PATH), an individual nominated by civil society groups (CS) and, with its recent entry into tuberculosis, the Medicines Patent Pool.  Several governments have also expressed their support for the initiative, and the World Health Organization has contributed to its further development.  In 2014, an early draft of the project was selected by the WHO European Region as a possible Health R&D demonstration project (29). Since then, the project has evolved further with significant additional buy-in from TB stakeholders and strong interest from several high-burden TB countries.  Strong political and financial support will be important in order to operationalize the push and pull funding elements of the initiative. 

The institutional structure is envisaged as a collaboration between a number of existing organisations in TB, rather than the establishment of a new organisation, and would rely on expertise of existing technical bodies.  An interim Steering Committee is in place to guide and support the implementation of this proposal. Implementing partners and steering committee members include the International Union Against Tuberculosis and Lung Disease (Union), MSF, Stop TB Partnership (STBP), a member of civil society, the TB Alliance, the South African Medical Research Council, the Medicines Patent Pool (MPP) and the Critical Path Institute (C-Path). Within the virtual secretariat, the Union will be the main project coordinator. Additionally there will be four other main lines of work; the scientific advisory committee, IP licensing for innovation and access (led by MPP), advocacy communication and resource mobilization (led by STBP) and data pooling (led by C-Path).

Bibliography and References

(1)  Universal Declaration of Human Rights (Article 27) http://www.ohchr.org/EN/UDHR/Documents/UDHR_Translations/eng.pdf; International Covenant on Economic, Social and Cultural Rights (Article 15, 1b) http://www.ohchr.org/Documents/ProfessionalInterest/cescr.pdf; see also Special Rapporteur reports: A/HRC/20/26; A/70/279

(2)  ICESCR (Article 12); UN Committee on Economic, Social and Cultural Rights (General Comment 14)

(3)  United Nations (2015), Transforming our world: the 2030 Agenda for Sustainable Development. A/RES/70/1

(4)  WHO (2015), Tuberculosis. Fact sheet N°104, http://www.who.int/mediacentre/factsheets/fs104/en/ 

(5)  WHO (2015), Global Tuberculosis Report 2015 (page 5) http://www.who.int/tb/publications/global_report/gtbr2015_executive_summary.pdf

(6)  WHO (2015), Global Tuberculosis Report 2015 (page 2)   

(7)  WHO (2015), Global Tuberculosis Report 2015 (page 2)

(8)  Working Group on New TB Drugs (2016), http://www.newtbdrugs.org/pipeline.php (The 8 compounds are: TBA-354 (Nitroimidazole); Q203 (Imidazopyridine); Sutezolid; SQ109; Pretomanid; Bedaquiline; Delamanid; AZD5847) and Treatment Action Group (TAG) Pipeline Report (2014) http://www.treatmentactiongroup.org/sites/g/files/g450272/f/201407/2014%20Pipeline%20Report%20Full.pdf 

(9)  Treatment Action Group (TAG), (2015), 2015 Report on Tuberculosis Research Funding Trends, 2015- 2014: A Decade of Data,  http://www.treatmentactiongroup.org/sites/g/files/g450272/f/201511/TB_FUNDING_2015_WEB.pdf (page 1)

(10)       WHO and Stop TB Partnership (STBP), The Global Plan to Stop TB 2011 – 2015: Transforming the Fight Towards Elimination of Tuberculosis,  http://www.stoptb.org/assets/documents/global/plan/tb_globalplantostoptb2011-2015.pdf

(11)       Treatment Action Group (TAG), (2015), 2015 Report on Tuberculosis Research Funding Trends, 2015- 2014: A Decade of Data,  (Page 12)

(12)       Treatment Action Group (TAG), (2015), 2015 Report on Tuberculosis Research Funding Trends, 2015- 2014: A Decade of Data, (Page 5).

(13)       WHO (2015), Global Tuberculosis Report 2015, and TAG (2015), 2015 Report on Tuberculosis Research Funding Trends, 2005-2014: A Decade of Data

(14)       TB Alliance, http://www.tballiance.org/downloads/NixTB/NixTB_factsheet.pdf 

(15)       News Medical, (2014), ‘EPFL sets up foundation to release antibiotic for tuberculosis’, http://www.news-medical.net/news/20140312/EPFL-sets-up-foundation-to-release-antibiotic-for-tuberculosis.aspx

(16)       MSF, (2015), Out of Time: Access to Treatment for DR-TB, http://msfaccess.org/sites/default/files/TB_Out_of_Time_DRTB_Drug_Briefer-ENG_Dec-2015.pdf

(17)       WHO Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH), http://www.who.int/intellectualproperty/report/en/ 

(18)       Report of the WHO Consultative Expert Working Group on R&D Financing and Coordination (CEWG), (2012) http://www.who.int/phi/CEWG_Report_5_April_2012.pdf

(19)       Universal Declaration of Human Rights (Article 27) http://www.ohchr.org/EN/UDHR/Documents/UDHR_Translations/eng.pdf; International Covenant on Economic, Social and Cultural Rights (Article 15, 1b) http://www.ohchr.org/Documents/ProfessionalInterest/cescr.pdf; see also Special Rapporteur reports: A/HRC/20/26; A/70/279

(20)       ICESCR (Article 12); UN Committee on Economic, Social and Cultural Rights (General Comment 14)

(21)        WHO (2015), Global Tuberculosis Report 2015 (page 1)

(22)       Universal Declaration of Human Rights (Article 25); ICESCR (Article 12)    

(23)       WHO Constitution, (preamble, page 1) http://www.who.int/governance/eb/who_constitution_en.pdf

(24)       UN Committee on Economic, Social and Cultural Rights (General Comment 14)

(25)       Universal Declaration of Human Rights (Article 27); ICESCR (Article 15, 1b).

(26)       World Trade Organisation, Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Article 7) https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

(27)       UN, (A/HRC/20/26)

http://daccess-dds-ny.un.org/doc/UNDOC/GEN/G12/134/91/PDF/G1213491.pdf?OpenElement

(28)       UN, (A/70/279) http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N15/243/83/PDF/N1524383.pdf?OpenElement

(29) WHO (2014), Regional Office for Europe, Summary Report on the nomination of Experts and the shortlisting of Health R&D Demonstration Projects http://www.who.int/phi/implementation/EURO_procedure_for_selection_of_demo_projects.pdf

Low Cheap Foh, Positive Malaysia Treatment Access & Advocacy Group (TAAG+)

Lead Author: Low Cheap Foh
Additional Author: Elisha Kor
Organization: Positive Malaysia Treatment Access & Advocacy Group (TAAG+)
Country: Malaysia

Abstract

The Trans-Pacific Partnership Agreement (TPP) is a recently signed free trade agreement which has stronger intellectual property protection for medicines which is incoherent with the right to health obligations of the countries which have signed the TPP.  The TPP is expected to be ratified over the next two years and due to its expected adverse effect on human rights including the right to health, MTAAG+ is recommending TPP countries do not ratify the text.  Furthermore, other countries should not join the TPP, especially developing and least developed countries, while it has these provisions which harm: the right to health and the ability to achieve the sustainable development goals.

Submission

The Positive Malaysian Treatment Access and Advocacy Group (MTAAG+) was formed in 2005 after a group of local PLHIV was empowered  during a ITPC Regional Access To Treatment workshop held in Pattaya in September, 2004. They realized the need  to form a platform of strong positive representatives in Malaysia to speak out and be heard in international events and decision-making venues. It has a board of 3 directors, one male and 2 female. Each director has more than 15 years of experience and various skills including community-based training and advocacy targeting government bodies.

 The Trans-Pacific Partnership Agreement (TPP) involving 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam was concluded in October 2015, the text was released in November 2015 (legally scrubbed version released in January 2016[i]) and signed in February 2016.[ii] It will come into force after ratification.[iii]

The intellectual property (IP) rules in the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) have already made medicines including for AIDS, Hepatitis C and cancer unaffordable. The TPP requires even stronger and longer IP protection known as ‘TRIPS-plus’.

For example the TPP requires longer patent terms, marketing exclusivity and harsh patent enforcement provisions that undermine TRIPS flexibilities to protect public health. It also has investment provisions that will allow investors from other TPP countries to sue governments for pro-health policies. 

The TRIPS Plus provisions in the TPP undermine the Sustainable Development Goals and the new WHO HIV treatment guidelines that call for immediate initiation of treatment.   

‘The Sustainable Development Goals that all UN members including TPPA countries signed in September include ambitious health goals and call on countries to make use of the Doha Declaration to ensure access to treatment for communicable and non-communicable diseases.’[iv] (Sustainable Development Goals, September 2015: Goal 3.b: “Support the research and development of vaccines and medicines for the communicable and noncommunicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade Related Aspects of Intellectual Property Rights [TRIPS] regarding flexibilities to protect public health, and, in particular, provide access to medicines for all.” ).[v]

‘More recently the WHO released new HIV treatment guidelines recommending that everyone who tests positive for HIV should be put on treatment immediately instead of waiting for a lowered CD4 count. Under the latest guidelines millions more need HIV treatment including people living with HIV in TPP countries.’[vi] (WHO Guidelines on when to start antiretroviral therapy 2015: “…antiretroviral therapy (ART) should be initiated in everyone living with HIV at any CD4 cell count…recommendations is based on evidence from clinical trials and observational studies released since 2013 showing that earlier use of ART results in better clinical outcomes for people living with HIV compared with delayed treatment.”)[vii]     

 ‘Study on the Impact of the TPP on access to HIV treatment in Vietnam: In 2014, an impact assessment of the provisions being negotiated in the TPP on intellectual property on access to HIV treatment in Vietnam was published. Highlights from the study titled, “Assessing the impact of alternative patent systems on the cost of health care: Vietnam, the TPP and HIV treatment in Vietnam”, include:

·         Official estimates suggest that in 2014 Vietnam had around 256,000 people living with HIV. By the end of 2013 antiretroviral (ARV) therapy was provided to 82,687 people – 68% of those meeting the clinical criteria for such medicines.

·         Using the current Vietnamese patent regime as our base case, we analyse the potential impact of alternative patent regimes on access to ARVs in Vietnam. The two other scenarios investigated are a patent regime making full use of TRIPS flexibilities, and a regime based on the US proposals in the 2014 leaked draft of the TPP intellectual property chapter.

·         Our results indicate 82% of the HIV population eligible for treatment would receive ARVs under a full TRIPS flexibility scenario, while only 30% of Vietnam's eligible HIV patients would have access to ARVs under the US 2014 TPP proposals – more than halving the proportion treated compared to the current 68%. Similar price impacts can be expected for other countries participating in the TPP, though these are less economically vulnerable than Vietnam.’[viii]

“In Vietnam, we are already concerned by announcements from international aid agencies including the US’ PEPFAR programme of their withdrawal of funds and treatment programmes from our country,” said Do Dang Dong of VNP+. “Estimates suggest that under our current budget, if Vietnam was forced to agree to all of the US’ demands on patents and intellectual property in the TPP, only 30% of people living with HIV who need treatment would receive it. With the new HIV treatment guidelines from the WHO, the TPP’s impact for people living with HIV will be even more severe. This is an unthinkable scenario for us.”[ix] 

The price of patented medicines in Malaysia are already high enough to be of concern. For example a 2005 study using WHO methodology found that for a family of three receiving the lowest level of Malaysian civil servant salary, it would take two-months’ salary to pay for one month of patented medicines.[x] Similarly, an article by Azmi and Alavi found that patented medicines can be 1,044% more expensive than their generic equivalents in Malaysia.[xi]

The TPP countries are party to human rights treaties which include the right to health. For example Malaysia is party to the Convention on the Rights of the Child[xii] which includes the right to health[xiii]. Yet the TPP text that was released has TRIPS-plus provisions in the TPP that can harm access to affordable medicines and thus the right to health as outlined below. 

United Nations Special Rapporteurs including for the right to health have already expressed concern about the TPP’s potential adverse impacts on human rights.[xiv] 

Some of the TRIPS-plus provisions in the TPP that can harm access to affordable medicines and thus the right to health:

·         MARKET EXCLUSIVITY that prevents governments from giving marketing approval to generic versions of medicines even if they are off-patent, their patents have expired or are revoked. The TPP text requires 5 years of exclusivity for small molecule medicines[xv] and  5 or 8 years of exclusivity for biological medicines[xvi].

·         PATENT TERM EXTENSIONS that extend patent life beyond 20 years for delays by the patent office or medicine regulatory authority.[xvii]

·      STRONGER ENFORCEMENT PROVISIONS that restrict access to generic medicines.[xviii]

·      INVESTMENT RULES that allow foreign companies to sue governments in private international arbitration over domestic health policies like health safeguards in patent laws.[xix]

RECOMMENDATION:

MTAAG+ reaffirms the call it made with other NGOs in the Bangkok Declaration on Free Trade Agreements and Access to Medicines[xx] and calls on:

·       Those countries which have signed the TPP to reject ratification of the TPP.

·       Additional countries not to join the TPP while it has these rules which can harm the right to health.

For moreanalysis of the leaked TPP proposals that may adversely impact access to medicines and public health see UNITAID’s report on the TPP.[i]

Bibliography and References

[i] : http://www.unitaid.eu/en/rss-unitaid/1339-the-trans-pacific-partnership-agreement-implications-for-access-to-medicines-and-public-health

[2]https://www.mfat.govt.nz/en/about-us/who-we-are/treaty-making-process/trans-pacific-partnership-tpp/text-of-the-trans-pacific-partnership. References to the TPP text are to this version. 

[3] http://dfat.gov.au/trade/agreements/tpp/official-documents/Pages/official-documents.aspx

[4] Article 30.5

[5] http://www.apnplus.org/main/

[5] https://sustainabledevelopment.un.org/?menu=1300

[6] http://www.apnplus.org/main/

[7] http://www.who.int/hiv/pub/guidelines/earlyrelease-arv/en/

[8] http://www.apnplus.org/main/. Full study at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2536254.

[9] http://www.apnplus.org/main/

[10] Members of the hypothetical family suffered depression, peptic ulcers, a viral infection and asthma. ‘A Survey of Medicine Prices, Availability, Affordability and Price Components in Malaysia using the WHO/HAI methodology: Research Report’, Babar, Ibrahim, Singh, Bukhari, University College Sedaya Interntional and Universiti Sains Malaysia in collaboration with the World Health Organization and Health Action International, Malaysia, October 2005.

[11] ‘TRIPS, Patents, Technology Transfer, Foreign Direct Investment and the Pharmaceutical Industry in Malaysia’, Ida Madieha Azmi and Rokiah Alavi, Journal of World Intellectual Property, Vol 4 No. 6, November 2001.

[12] https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=IV-11&chapter=4&lang=en

[13] http://www.un.org/documents/ga/res/44/a44r025.htm

[14] http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=16031&LangID=E@

[14] Article 18.50

[15] Article 18.51

[16] Article 18.46 and 18.48

[17] Section I of the IP chapter

[18] Chapter 9

[19] http://www.bilaterals.org/?the-bangkok-declaration-on-free&lang=fr

[20] : http://www.unitaid.eu/en/rss-unitaid/1339-the-trans-pacific-partnership-agreement-implications-for-access-to-medicines-and-public-health

John Forman

From: John Forman
Sent: 27 February, 2016 3:29 PM
To: 'unsgaccessmeds@undp.org' <unsgaccessmeds@undp.org>
Subject: Contribution submission - UNSG high-level panel on access to medicines

This is a personal submission from John Forman, Rare Disease Advocate, from New Zealand. I have 41 years’ experience as a parent of twins with a rare disease that involves significant and progressive physical and intellectual disability, and 25 years of advocacy roles in health and disability services in New Zealand, plus substantial roles in international rare disease advocacy networks spanning more than a decade.

Submission summary

1.       This submission focusses on a narrow but important, yet often marginalised section of all populations in need of affordable access to medicines – those who have a rare disease. They exist in numbers that are very substantial in all countries, about 6% of all populations (Eurordis 2005, page 3), whether in advanced or developing nations, yet their needs for healthcare generally, and specialised “orphan” medicines in particular, are often in a serious state of neglect relative to the average patient in their own country or community.

2.       It is proposed that the particular needs of the rare disease population are an essential aspect of what the right to health and universal healthcare should include. Regardless of their needs and rights as individuals and groups of patients within their own communities, the disadvantage of rarity makes them a significantly neglected population, just like those whose health status is negatively affected by indigenous or other minority status, or those with significant socio-economic disadvantage, or remote locations, across all nations. This situation demands that special attention should be given to the needs of rare disease populations in healthcare in general, as well as in access to medicines specifically.

3.       Furthermore, the needs of rare disease patients for access to orphan medicines, offers a sometimes extreme yet very informative example of the dynamics and outcomes of the tensions between intellectual property rights and the right to health which this consultation seeks to explore.

4.       I suggest that the tension between intellectual property right and the right to health, as presented in the request for submissions as largely a dichotomous problem, is too simplistic an analysis of the dilemma under discussion, whether in respect of medicine access or healthcare generally. While this tension is real, analysis of actual experiences in a number of countries (NZ is a classic example) shows that there is a significant third factor involved in the mix. That factor is the willingness, or otherwise, of governments to accept their obligations that flow from their citizens’ right to health, and the resulting significant conflict of interest they often have in also being (in most situations) the funder of healthcare and medicine costs.

5.       Experience shows that many countries, as payers of healthcare costs, are quick to use their sovereign powers to negate the rights of their citizens to orphan medicines for rare diseases, usually citing high costs and poor comparison against other possible healthcare investments. It is clear that the legal framework set up in many countries puts the right to health as subservient to the political decisions of government, (e.g. NZ Bill of Rights Act 1990) rather than elevating the human rights framework to a level that guides and instructs the actions of governments. By contrast, if the right to health is expressed in a written constitution, there may be a greater likelihood that medicines and services will be provided. This third factor of governments’ dual role of policy maker and funder, and the resulting conflict of interest, accentuates the dilemmas of access to medicines for those with rare diseases.

6.       Given the existence of negotiation and pragmatic agreements in a number of countries to fund orphan medicines for rare diseases, it is apparent that positive outcomes are achievable, that compromises are made both by supplier and payer, and that the right to health is clearly given more practical effect by some governments than others. It is also apparent that medicine developers do make a number of concessions against their intellectual property rights when governments engage seriously with them to give effect to their citizens’ right to health.

7.       The policy solution I propose is an agency based in the high level reaches of the UN, WHO, or within the international human rights framework, with this agency charged with an intervention agenda to actively engage with governments and industry over medicine access in each country, with special attention given to access to orphan medicines for rare diseases. In dealing with individual governments, the agency would address their practical application of the right to health for their citizens, to encourage them to engage constructively with industry with the intention of gaining access to needed medicines, and to deal honourably with the substantial conflict of interest they have. In dealing with industry, they should seek negotiations on mechanisms that would facilitate access at affordable prices, including the use of tools such as differential pricing schemes, managed access schemes, and similar tools, to improve access while managing costs. The agency should also act as a broker to include patient advocacy and not-for-profit foundations as partners in its work with governments and industry, to achieve acceptable and sustainable solutions.

8.       There are parallels here with moves to promote universal healthcare, especially under the Millennium Development Goals and the emerging Sustainable Development Goals, where international agencies successfully encouraged and motivated many countries to make quantum leaps with the extension of core healthcare services to previously underserved or neglected populations. There are parallels also in relation to security and trade, with high level agencies charged with leading and facilitating better outcomes for all.

9.       The proposal outlined in this submission is suggested as the most likely and practical tool for impacting on the current policy incoherence in access to medicines, improving public health and giving practical effect to the human right to health, within any individual country. Of course the agency could be the same one(s) charged with promoting universal healthcare and other Sustainable Development Goals, but the critical point would be the acceptance of the intervention agenda outlined here, to ensure progress is real and not subject to lip service. This proposal is not suggested as a panacea for all medicine access issues in the world. It is focused solely on medicines for rare diseases.

10.   Note, importantly, that the presence of an industry with intellectual property rights and often high charges, can lead to political and partisan stances on the part of many interested parties, including governments, officials, and academics. What is vital for success in this endeavor would be the principle of constructive engagement that leaves partisan views aside, and executive function to act as a broker and mediator with successful negotiations the prime outcome sought.

Additional discussion points

11.   My submission is based on ICORD’s Yukiwariso Declaration which tracks the connection between the Universal Declaration of Human Rights, various international Covenants and Conventions that most governments have signed up to and which reinforce their commitment to the human right to health, and the influence of moral philosophy which is a strong force in most legal systems and public policy, and guidance in this case about how the right to health should be applied in practice. That Declaration states what governments ought to do, and gives strong encouragement to them to deliver. This call for submissions on what should be done at a policy level, offers the natural extension of the Yukiwariso’s discussion into practical implementation steps at a global level.

12.   There have been incentives since the 1980s, firstly in the US and then the EU from 2000, for the development of orphan drugs. These have been successful in bringing many new medicines to market. While price is a sticking point for some payers, it is notable that in the US the government is quite removed from the role of payer for most of the population. Despite the prices, the US seems to provide better access to orphan medical products for patients with rare diseases, than the socialized systems in the EU and elsewhere, despite historically low insurance cover for the US population. This seems to reinforce the point about the conflict of interest where government is also the payer.

13.   There is considerable risk of distraction and diversion in any suggestion of using Health Technology Assessment models, transparent pricing systems, or other approaches to measuring value, as a basis for price negotiation. HTA on its own is primarily useful for comparing cost and benefits of alternative treatments or interventions for the same condition. If it is used to compare value of available interventions or treatments between different populations, or different diseases, it is highly likely to bias the outcomes against those affected by rare diseases. The calculations will mostly not find treatments for rare diseases cost-effective compared to other health interventions, especially medicines for common diseases. This highlights the value of HTA in certain situations but its very limited value in others, and shows the HTA and similar debates in the case of orphan medicines for rare diseases, to be a diversion from the core problem, rather than a potential solution.

14.   There is also a significant risk to good decision-making in health if HTA is used as the prime consideration. Note especially the decision framework used until recently by Pharmac in New Zealand which gave excess emphasis to costs of health outcomes and budget management, but excluded any specific consideration of human rights or moral factors such as fairness and equity. Without counterbalancing moral and ethical considerations, HTA alone as the prime factor in decisions is likely to frequently do harm and conflict with the right to health. See my 2014 discussion on ethics, equity and community values in medicine decision making in New Zealand. Note that the resulting policies adopted by Pharmac did adopt a broader range of factors for consideration and established an orphan drugs fund, indicating some effect of the advocacy made, but the overall legislative mandate of the organisation remains restrictive and is a continuing problem for access to medicines.

15.   The work of the WHO in promoting use of HTA to assist with the attainment of universal healthcare has value in addressing the right to health only if there is specific inclusion of rights and moral factors in the decision making process. It is disappointing that the subsequent WHO report is silent on that point and that the work of that group is so dramatically light on representation form patient advocacy groups.

16.   Compulsory licensing has been one mechanism widely discussed and sometimes implemented for the production of generic substitutes of essential medicines in some countries. Whatever the pros and cons of this as a tool to improve access, it should be noted that compulsory licensing is very unlikely to have much impact or feasibility in relation to orphan medicines, primarily because of the complexity of the biological systems required for manufacture of many orphan drugs.

17.   Concern has been frequently expressed about the likely impact of orphan medicine products on overall health system sustainability. This may well be a red herring, as past concerns about catastrophic impact on healthcare systems of blood products and dialysis have been unfounded in the developed nations. In respect of costs of orphan medicines for rare diseases, the literature is divided over the likely future impacts and sustainability with Hutchings et al and Schey et al finding little concern about unmanageable impacts, while Kanters et al provide a contrary view. My own estimates suggest that the cost to New Zealand’s health system to fund all of the orphan medicines available in the marketplace, but not funded here in 2014, would have been less than 3% of the entire community medicines budget. Further analysis shows that just a part of the medicine budget savings in New Zealand in the 2013-14 and 2014-15 financial years could have funded all the unfunded orphan medicines without any increase to the medicine budget, though the savings were in fact used for other purposes. At least as far as the OECD countries are concerned, there seems to be very weak evidence and mostly partisan views, that suggest the cost of orphan medicine products is not sustainable now or into the foreseeable future.

18.   An important point to note in this discussion is the extent to which governments are constructing legal frameworks that place their elected representatives above the human rights framework. This cements their conflict of interest into the system to their own advantage. (See example in para 5 – the NZ Bill of Rights Act). Note that this approach has been praised in some quarters as a sound approach to human rights legislation (see Gledhill in the NZ Herald 1 October 2010), but there are very concerning aspects of this in regard to such a fundamental right as the right to health, when the government is so seriously conflicted in its dual roles. This should not be acceptable and the panel is encouraged to address this point with recommendations that the reverse situation should apply.

19.   The dangers to the right to health that arises from Governments’ conflicts of interest, is well demonstrated in the long running human rights case in New Zealand regarding support for family carers of disabled adult children. In the case recently  reported in the NZ Herald the Crown is refusing to concede on the multiple victories that families have won in the Human Rights Tribunal and in the Courts. Note in particular the commentary by Law Professor Andrew Geddes which demonstrates the definite weakness of the human rights framework in such situations and the willingness of a government to manipulate things to its own advantage.

20.   The essence of this proposal for an agency with an intervention agenda, is that it reflects some similar existing structures and agencies, and also reflects what has been done in the past for access to medicines in other situations, e.g. drugs for HIV, vaccine production and distribution. Though those particular projects involved charitable foundations which are unlikely to be much interested in orphan drugs access, they had significant political push for solutions behind them, and they worked in bringing multiple parties together to develop solutions. While perhaps not perfect solutions in those areas, those groups made significant progress in developing much better access for their medicines and diseases of interest, at an affordable price for governments. This proposal builds on a system that exists and has demonstrated some ability to work successfully.

My experience

21.   I have 41 years’ experience as a parent of twins with a rare disease that involves significant and progressive physical and intellectual disability, and 25 years of advocacy roles in health and disability services in New Zealand, plus substantial connections with international rare disease advocacy networks spanning more than a decade. Currently I am the president of ICORD (www.icord.se) the International Conference on Rare Diseases and Orphan Drugs. 17 years ago I established Lysosomal Diseases New Zealand (www.ldnz.org.nz) to provide information and support for affected families, and I am the Chair of that group. Just over 15 years ago I set up NZORD (www.nzord.org.nz) the NZ Organisation for Rare Disorders, which I led until my retirement last year. I have continuing roles in supporting a number of local and international rare disease advocacy groups, including being part of the establishment group for Rare Voices Australia (www.rarevoices.org.au) and still involved as RVA’s acting Chair while board renewal is carried out.

22.   My relevant academic experience includes a post-graduate course on Public Health Law & Public Health Ethics in 2008 from Otago University, lead author on ICORD’s Yukiwariso Declaration on the need for worldwide policies and action plans for rare diseases, and various other articles, presentations, chapters and posters relating to rights and ethics in healthcare for rare diseases. The main ones can be found athttps://www.researchgate.net/profile/John_Forman2/contributions

23.   My policy experience in medicines access and rare diseases generally, revolves in particular around the challenges with the narrow legislative framework set up in New Zealand over the past 25 years to drive cost savings in medicines, and the negative impact this had regarding access to new medicines for most diseases groups, but for rare diseases in particular. I have led extensive analysis, reviews, submissions and appeals to our Ministry of Health, to Pharmac our drugs purchasing agency, and to political leaders, over my 15 years with NZORD. The results of this advocacy work is a new orphan drugs fund in New Zealand which is just starting to address the need for access to medicines for rare diseases, and a revised set of decision criteria adopted by our medicine funding agency, that broadens the range of factors to be taken into account.  I have become very familiar with the legal, policy, ethical and social dimensions of medicine policy in NZ, and read extensively on similar issues in other countries. A variety of these experiences are recorded in the news section of the NZORD website http://www.nzord.org.nz/news/press_releases_and_submissions

24.   I am making this as a personal submission as it is not realistic to claim to speak on behalf of the wide range of groups I am involved with on this matter. Even trying to seek endorsement from such a wide and diverse group of stakeholders would be challenging at the best of times, but impossible in the very tight timeframe for this submission. However, the points I make in this submission are based on the extensive engagement I have had with many hundreds of stakeholders in patient advocacy, academia, industry, government agencies and political leaders, over these past 17 years. I believe the submission is well-informed about the core issues based on this wide experience and my deep immersion in rare disease policy issues for such a significant time.

John Forman
125 Cuba St, Petone 5012
New Zealand
Home +64 4 566 7707
Mobile +64 27 240 3377

Marcus Low, TREATMENT ACTION CAMPAIGN

Lead Author: Marcus Low
Additional Author: Kristanna Peris
Organization: Treatment Action Campaign (Submission endorsed by SECTION27 and Knowledge Ecology International, KEI)
Country: South Africa

Abstract

This contribution calls for changes to the international intellectual property framework for medical products so as to ensure increased investment on research and development (R&D) by holders of patents on medical products. It proposes compliance with a research mandate as a condition for maintaining intellectual property rights on medical products.

The current international intellectual property framework provides rights holders with market exclusivity that enables rights holders to charge high prices for medical products. High prices for medical products are typically justified by arguing that such high prices are required to recoup investments in past R&D and to ensure investment in R&D for future medical products. Available evidence however suggests that rights holders typically spend modest, and in some cases very low, percentages of revenue on R&D, given the fraction of the value of the final product that is based upon knowledge, as opposed to manufacturing costs.

The mechanisms proposed in this contribution are aimed at creating a regulatory and legal environment for rights holders on medical products that would redistribute investment toward medical R&D and away from marketing, advertising, and excessive profiteering. In addition, it proposes mechanisms by which such increased spending on R&D could be channelled to areas of greatest unmet medical need.

This contribution must be considered in combination with the contribution from KEI, TAC, and others focussing on transparency of R&D spending. While that contribution essentially argues for a transparency mandate, this contribution goes a step further and argues that a research mandate must be built on top of the foundations laid by a transparency mandate.

Submission

Introduction-Statement of the Problem

The current international intellectual property framework provides rights holders with 20 years of market exclusivity on all medical products that meet national patentability criteria. During these 20 years of patent protection there is often no effective limit to the prices that a rights holder can charge for the medical product in question. Potential price-limiting mechanisms like price regulation and/or compulsory licensing are either not implemented aggressively or not used at all.

High prices for medical products are typically justified by arguing that such high prices are required to recoup investments in past R&D and to ensure investment in R&D for future medical products. However, there is no legal obligation on rights holders to invest in medical R&D. There is also no mechanism to ensure that investment in medical R&D is directed at areas of greatest medical need. The current system gives rights holders the freedom to charge excessive prices for medical products and to spend the money raised through high prices as they wish (e.g. on advertising, litigation, dividends, or profits).

Available evidence suggests that industry invests a very low percentage of revenue on R&D – and typically spends significantly more on marketing. In 2014, the top ten pharmaceutical companies by market share spent an average of 15.5% of revenue on R&D according to GlobalData. By contrast, these ten companies spent an average of 23.04% on sales and marketing and earned a 19.6% profit on average. The World Health Organization (WHO) estimates that global pharmaceutical companies spend an average of 15% of total revenue on research and development. Conversely, an average of 30% of total revenue is spent on sales and marketing. A York University study in 2008 found that US pharmaceutical companies spent 13.4% of revenue on R&D and more than 24% of total revenue on marketing. According to PhRMA, the percentage of revenue dedicated to R&D amongst US pharmaceutical companies rose to an average of 17.8% of total sales on R&D in 2013: however, less than 1% of the total amount of money spent on R&D that year was dedicated to R&D for neglected diseases. According to the International Federation of Pharmaceutical Manufacturers and Associations, in 2014, USD137bn or 14.6% of the global pharmaceutical industry was dedicated to research and development. Of this, only USD525 million was allocated to research on neglected diseases. The WHO also notes that most of the 15% of the global pharmaceutical market spent on R&D is used for researching new drugs that will be utilized by the mass market, not for research on neglected diseases: only 10% of R&D expenditures are spent on diseases that account for 90% of the global disease burden, the so-called 10/90 Gap.

Widely varying estimates have been made regarding the absolute cost of drug development. A 2014 widely quoted, but yet to be published or made public, study conducted by DiMasi from Tufts University, estimated that the total cost of developing a new drug is USD2.6bn. This contrasts with DNDI research which estimates that developing a new drug can cost up to USD166.27 million – a fraction of the DiMasi estimate. In 2001, a study published by Adams and Brantner estimated the absolute cost of drug development at USD1.5bn. In 2010, a study conducted by Paul et al. estimated the total cost of drug development at USD1.8bn.

While much focus is placed on the absolute cost of drug development, spending on R&D as a percentage of revenue is a much more useful measure when considering potential policy interventions. This is because it provides a more accurate indication of how companies invest the income generated through the sale of medicines. It is clear from the above evidence that under current laws rights holders reinvest a relatively small fraction of sales into R&D on new products.

By introducing mandates for reinvestment in R&D, governments will have a mechanism to ensure there is robust funding for R&D, including in areas of priority, even as they pursue other policies that are designed to lower drug prices.

1. Impact on remedying policy incoherence

The policy incoherence of concern in this submission can be summarised as follows: While the justification for granting patent protection on medical products is to ensure investment in medical R&D that would serve the public interest, the evidence suggests that the granting of patent rights provides no guarantee of such investment in medical R&D. In addition, the investment in R&D that does take place tends not to be in areas of greatest medical need.

A well designed IPR-linked research mandate will address this policy incoherence by mandating rights holders to invest more in R&D. It will do so by making the maintenance of patent rights contingent upon compliance with an R&D mandate.

2. Impact on public health

A well designed IPR-linked research mandate will benefit public health by increasing investment on medical R&D. This will contribute to the accelerated development of much needed new medicines, diagnostics, and other medical tools.

In addition, such a mechanism could be tailored to channel investment to areas of greatest medical need rather than areas of greatest commercial potential. It could, for example, help fund the estimated USD1.3bn annual short-fall in tuberculosis research (as estimated by the World Health Organization). While TB is currently the infectious disease that causes the most annual deaths in human beings, only USD0.7bn is spent on TB research per year.

An IPR-linked research mandate could function in parallel with, and in support of, current and future legal and regulatory mechanisms aimed at ensuring access to medicines. It would however be essential for such a mechanism to be structured in such a way as to ensure that it does not have the unintended consequence of contributing to price increases.

3. Impact on human rights

The right to health is a fundamental human right that is recognised in various legal systems and in a number of international agreements – including the International Covenant on Economic, Social and Cultural Rights and the Universal Declaration of Human Rights. The right to health includes the right to access affordable vaccines and medicines that will prevent, treat and/or cure ‘neglected diseases’ and the right to access paediatric formulations, heat-stable, or appropriately co-formulated drugs that may not return a profit to pharmaceutical companies. This right is not being fully realized. This is partly because the social contract by which companies are expected to invest in useful medical R&D in exchange for patent protection is not being enforced. An IPR-linked research mandate is a potential mechanism to ensure this social contract is enforced in a way that contributes to the realisation of the right to health.

Globally, pharmaceutical companies are dedicating only a fraction of their profits to R&D for neglected diseases which leads to very little innovation in the field: between 1975 and 1999, only 13 (one percent) of the 1393 new drugs approved were specifically designed for neglected diseases. When new treatments for diseases that disproportionately affect developing countries are developed, they are often priced out of reach of the populations it is intended to benefit.

Pharmaceutical companies justify high prices by citing the high cost of R&D. However, as previously mentioned, pharmaceutical companies spend a disproportionately low percentage of revenue on R&D. A research mandate will both ensure greater investment in medical R&D in general and in neglected disease R&D specifically. An IPR-linked research mandate will thus help pharmaceutical companies realize their contribution to the right to health for all human beings by changing the regulatory or legal environment to push increased investment toward R&D.

4. Implementation

4.1. Precedents regarding research mandates and conditions relating to intellectual property rights

Research mandates presently exist as part of a number of medicines regulatory frameworks. For example, the United States Food and Drug Administration (FDA) often makes the granting of regulatory approval for a medicine contingent upon a binding commitment to conduct additional clinical trials on the use of that medicine.

Some countries have instituted R&D mandates in other fields of technology (See the example from the Brazilian oil industry in section 4.4.5. below.).

There also already exist strong precedents for linking the maintenance of IPR to certain conditions or requirements. Patent holders are, for example, required to pay annual fees in order to maintain their patent rights.

These precedents, read together with the obligations that States have to take steps toward the progressive realisation of the right to health, establish that the introduction of IPR-linked research mandates falls within the bounds of reasonable regulatory or legislative intervention.

4.2. Key principles behind potential mechanisms that link IPR to research mandates

An IPR-linked research mandate mechanism will ideally be structured in such a way as to meet the following criteria.

• The mechanism must be structured in such a way as to ensure that the prices paid for medicines by governments, insurers or consumers will not be greater with the mechanism than what it would be without it.
• The mechanism must result in significantly increased investment in R&D as a percentage of revenue by holders of pharmaceutical patents. In other words, the mechanism must explicitly be designed in such a way as to incentivise the redistribution of funds from other areas (such as marketing, advertising, and profits) toward R&D.
• The mechanism must incentivise R&D investment in areas where the unmet medical need is greatest.
• The mechanism must function in parallel with, and must in no way impede on, other mechanisms or laws aimed at increasing access to medicines.

4.3. A potential mechanism for an IPR-linked research mandate

The below is a broad outline of what we consider to be a potential mechanism for an IPR-linked research mandate. We recognise that legislation or regulations aimed at implementing such a mechanism would have to be significantly more detailed and nuanced than what we present below. We also recognise that further research needs to be conducted on the potential impact of such a mechanism and the optimal form and structure of such a mechanism.

• For a company in possession of any pharmaceutical patents to maintain the rights to those patents it must, on an annual basis, file information confirming the following:
• That over the last 12 months the company spent a minimum of 30% of revenue on R&D and
• Spending on R&D over the last 12 months was at least double the combined spending on marketing and advertising over the same period and
• Spending on R&D over the last 12 months was at least double the company’s profits.
• For the purpose of this mechanism investment on R&D must include direct contributions made to approved medical R&D grant-making institutions at the national level or as part of a UN agency or a partnership with with a UN agency, such as the United States National Institutes for Health, the South African Medical Research Council (SAMRC), or TDR, the Special Programme for Research and Training in Tropical Diseases. A minimum of 20% of the patent holder’s R&D investment must be contributed to such institutions. Such institutions should be obliged to invest these funds in R&D relating to areas of greatest medical need.
• In cases where fewer than four companies hold a license or licenses to market a specific patented medical product, these provisions will apply to all license holders in exactly the same way as it applies to the original patent holder.

4.4. Examples of research mandates

Various forms of research mandates have been proposed and/or implemented to varying degrees. Below we briefly describe some examples.

4.4.1. Cisplatin

In 1983, an R&D mandate proposal was made in connection with cisplatin, a cancer drug invented at Michigan State University. When generic producers wanted to sell cisplatin, Bristol-Myers (before Squibb merger) claimed competition and lower prices would reduce R&D. One generic producer’s response to this claim was a proposal for an R&D mandate on generic producers. The generic producer said that the government could require any amount of R&D investment, and specify also who the recipient of the funds would be.

A watered down version of the R&D mandate was eventually implemented, not in connection with the entry by generic producers, but in connection with a negotiation which gave Bristol-Myers a 5-year extension on its monopoly, in return for a 30 percent decrease in prices, and a $35+ million obligation to fund third party cancer R&D (supervised by the NIH). Later BMS would return to this idea in 1997, and propose a 5-year extension of its Taxol monopoly in return for a 6 percent R&D mandate on Taxol sales (with half going to the NIH and half invested by BMS).

4.4.2. Brazilian proposal to World Health Organisation

In a proposal made as part of a WHO consultation, the Brazilian government in 2009 proposed a tax on pharmaceutical profits that would go toward an R&D fund. The fund would be used only for R&D on medicines and vaccines that address public health needs of developing countries. The available resources could be drawn upon by the pharmaceutical industry, including the ones that paid the tax in the first place, in a partnership with national public or private laboratories from developing countries, in a public-private partnership fashion. Products resulting from those R&D activities would be made available to developing countries in accessible terms.

4.4.3. HR 4270, 104th Congress.

A US proposal by Representative Sanders in the 104th Congress (HR 4270) was made to require more transparency of R&D, and to impose minimum R&D requirements on companies that sell drugs in the United States. The contribution levels would depend on patent protection, orphan drug status, and the magnitude of sales. The 1996 Sanders' proposal demonstrated how one could make the overall level of private R&D investment a matter of public policy, and also that policy makers could do various things to protect consumer interests, and not worry about overall R&D levels, since there would be another mechanism (other than high prices) to increase private R&D investments.

4.4.4. Antibiotics

Knowledge Ecology International submitted a proposal to be considered at the WHO World Health Assembly in May 2014 proposing a new form of sustainable funding for R&D on antibiotics. The proposal included a mechanism that taxed the use of antibiotic drugs and used the revenue from this tax to partially or completely fund R&D incentives or direct R&D on antibiotics. The mechanism also aims to regulate the usage of the tax funds so that it is not used towards low value uses of antibiotics that cause negative externalities.

4.4.5. R&D Mandates in the Brazilian Oil Fields

The Brazilian government began taking legal measures in 1998 to tie the right of oil exploration concessions to R&D funds. Under the Petroleum Law and Federal Decree 2,705, when production of oil or natural gas reaches a certain target, the concessionaire is required to make investments in R&D. The Concession Contract also requires the concessionaires to invest in R&D projects. The obligation, established by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in Resolution No. 33/2005, requires that an amount equal to 1 percent of the field’s gross product income must be invested in R&D projects. At least half of the 1 percent must be invested in previously accredited institutions by the ANP while the other half may be invested in development activities in the concessionaire’s own facilities. “The main purpose of this R&D investment requirement is to protect and channel the investments to institutions with high expertise, operational capability and technological standards.” Since 1998, the cumulative R&D investments from this program exceed USD3.3bn. In the future, the program is expected to raise up to USD2bn per year for R&D projects.

4.4.6. Research mandates in Columbia

In 2011, Colombia created new laws requiring that ten percent of the royalties of exploitation of oil, coal, gold, platinum, and other mineral resources by both the government and private sectors must be invested in various R&D projects. The funds are distributed to R&D projects based on where the need is greatest and increase the country’s R&D funding by almost 40%. Because of the success of these laws, Columbia is now a co-sponsor of a proposal before the World Health Organization to fund a prize fund designed to stimulate the development of new, low-cost diagnostic tests for cancer.

Bibliography and References

2015 Profile: Biopharmaceutical Research Industry (Profile). (2015). Washington, DC: Pharmaceutical Researchers and Manufacturers of America.

Adams, C. P., & Brantner, V. V. (2006). Estimating the Cost of New Drug Development: Is It Really $802 Million? HealthAffairs, 25(2), 420-428. Retrieved from http://www.healthaffairs.org

Anderson, R. (2014, November 6). Pharmaceutical industry gets high on fat profits - BBC News. Retrieved February 19, 2016, from http://www.bbc.com/news/business-28212223

Brazil, Ministry of Health. (n.d.). Innovative Mechanism for R&D for Developing Countries. Retrieved February 16, 2016, from http://www.who.int/phi/Brazil.pdf

DiMasi, J. A., Grabowski, H. G., & Hansen, R. W. (2016). Innovation in the Pharmaceutical Industry: New Estimates of R&D Costs. Journal of Health Economics. Retrieved February 18, 2016, from http://www.sciencedirect.com

Eichler, A. (2012, September 8). Pharmaceutical Companies Spent 19 Times More on Self-Promotion Than Basic Research: Report. Retrieved February 18, 2016, from http://www.huffingtonpost.com/2012/08/09/pharmaceutical-companies-marketing_n_1760380.html

Frick, M. (2015). 2015 Report on Tuberculosis Research Funding Trends, 2005-2014: A Decade of Data (Rep.). New York, NY: Treatment Action Group.

Light, D. W., & Lexchin, J. R. (2012). Pharmaceutical research and development: What do we get for all that money? BMJ. Retrieved February 18, 2016, from http://www.bmj.com/thebmj

Love, J. (n.d.). Antibiotics Innovation Funding Mechanism (Proposal). Knowledge Ecology International.

Love, J. P. (2014, September 19). Alternatives to the Patent System that are Used to Support R&D Efforts, Including Both Push and Pull Mechanisms, With a Special Focus on Innovation-Inducement Prizes and Open Source Development Models (Study). Retrieved February 22, 2016, from World Intellectual Property Organization website: http://www.wipo.int/edocs/mdocs/mdocs/en/cdip_14/cdip_14_inf_12.pdf

Morgan, S., Grootendorst, P., Lexchin, J., Cunningham, C., & Greyson, D. (2011). The Cost of Drug Development: A Systematic Review. Health Policy, 100(1), 4-17. Retrieved February 18, 2016, from http://www.sciencedirect.com

Pharmaceutical Industry. (n.d.). Retrieved February 19, 2016, from http://www.who.int/trade/glossary/story073/en/

Private and Public Partners Unite to Combat 10 Neglected Tropical Diseases by 2020. (n.d.). Retrieved February 19, 2016, from http://www.gatesfoundation.org/media-center/press-releases/2012/01/private-and-public-partners-unite-to-combat-10-neglected-tropical-diseases-by-2020

Research & Development for Diseases of the Poor: A 10 Year Analysis of Impact of the DNDi Model. (2013, December 5). Retrieved February 18, 2016, from http://www.dndi.org/2013/media-centre/press-releases/dndi-rd-model/

Stevens, P. (2004). Diseases of poverty and the 10/90 Gap (Rep.). London: International Policy Network.

The Pharmaceutical Industry and Global Health: Facts and Figures 2014 (Publication). (2014, November). Retrieved http://www.ifpma.org/fileadmin/content/Publication/2014/IFPMA_-_Facts_And_Figures_2014.pdf

Top 20 pharmaceutical companies based on R&D spending as revenue share in 2014 and 2020*. (2016). Retrieved February 22, 2016, from http://www.statista.com/statistics/309471/randd-spending-share-of-top-pharmaceutical-companies/

York University. (2008, January 7). Big Pharma Spends More On Advertising Than Research And Development, Study Finds. ScienceDaily. Retrieved February 19, 2016 from https://www.sciencedaily.com

Gargi Chakrabarti, NATIONAL LAW UNIVERSITY, JODHPUR

Lead Author: Gargi Chakrabarti
Organization: National Law University, Jodhpur, India
Country: India

Abstract

Pharmaceutical innovation thus includes a huge spectrum of research activities (including failed research projects) and it necessarily directs itself towards a common direction of increased therapeutic efficacy and safety. Few scientists in this industry used to develop “block-buster” drug from no prior research; but mostly pharmaceutical research leads to innovation of new molecule to an already existing class. This second category of innovation is termed as incremental innovation, which is proved to be very useful; when pharmaceutical innovation, treatment of disease and patient compliance is concerned. TRIPS Agreement is silent about patentability of incremental innovations, and the practice in different countries vary widely from liberalized grant of patent for incremental innovation to no patent for certain kinds of innovations where there is no therapeutic efficacy. The issue here is the patentability of inventions which are actually incremental innovation and its impact on global access to medicine. This paper will discuss the details of definition of incremental innovation and ever-greening; will describe international guideline regarding incremental innovation; and how those legal provisions are implemented in the practical reality. It will analyze the impact of incremental innovation provisions on access to medicine and establish that with the analysis of case studies. It will also evaluate Indian stand regarding incremental innovation, especially after joining WTO, and will also specifically discuss the impact of Section 3(d) of Indian Patent (Amendment) Act 2005 on patent protection and access to medicine.

Submission

1. Introduction
Pharmaceutical Industry is one of the most profitable industries in today’s globalized economy. Innovation is the pillar of the research-based pharmaceutical industry (IFPMA, 2012). ‘Innovation’ here means the application of knowledge of research and development to produce a therapeutically effective pharmaceutical product. Pharmaceutical innovation thus includes a huge spectrum of research activities (including failed research projects) and it necessarily directs itself towards a common direction of increased therapeutic efficacy and safety (Charles, 2012). Few scientists in this industry used to develop “block-buster” drug from no prior research; but mostly pharmaceutical research leads to innovation of new molecule to an already existing class (Wertheimer, 2004). Similarity of new molecule with other molecules of same class is not only in chemical structure but also in mechanism of action; but the new molecule usually differs in terms of therapeutic profile, mechanism of its metabolism, adverse effects, dosage schedule, delivery system etc (GSK, 2008). This kind of innovation is termed as ‘incremental innovation’. In 1999 one study showed that top ten prescribed drugs in USA were products of incremental innovation, eg. Prilosec, Lipitor, Prozac, Revecid, Zocor, Zoloft, Claritin, Paxil, Norvasc and Augmentin (Zarate, 1996).
2. Patenting of New Forms of Known Substances and New Uses: International Guideline
Article 27.1 of TRIPS Agreement specifies that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.” So, TRIPS Article 27.1 has not specifically mentioned anything about patentability of ‘new forms of known substances’ or ‘new uses of known substances’. It leaves on the discretion of individual Member Country to interpret the patentability requirements and to apply the best mode of execution as per the public health need of the country and their public policy. For promotion of social interest and prioritization of public health need, domestic legal regime may take strict interpretation of patentability requirements; which will allow the patenting of only genuine innovations and will prevent the market monopoly of the private companies by mere modification of the existing medicines. Ministries of Health of Chile, Argentina, Uruguay and Paraguay along with the Brazilian Ministry of Health showed concern regarding the patentability of trivial modification of known substances as they said, “the fulfillment and application of patentability criteria in our region raises concerns due to the proliferation of patent applications on matters that do not properly constitute an invention or are marginal developments. That those difficulties have been highlighted in several studies pointing to the negative effects to access to medicines and public health in the granting of patents of medicines based on these types of claims” (Lima, 2013). Countries of developing world is concerned in this issue as their patients are suffering from life threatening diseases and have problems of affordability and accessibility of medicine. World Health Organization (WHO) organized a Study for ‘Evaluation of the Guideline for the Examination of Pharmaceutical Patent’ (hereinafter ‘the study’) which was jointly sponsored by WHO and International Center for Trade and Sustainable Development in 2006; the study was done by Dr. Carlos Correa and he has given some valuable recommendations in his report (Correa, 2007).

3. Incremental Innovation v. evergreening
When access to medicine is the key issue from public health point of view, the affordability and accessibility of medicine for patients will be jeopardized because of these kinds of patents and serious negative health impact will result. Indian Patent Act included s. 3(d) which is aimed to prevent the patents for inventions based on incremental innovation and evergreening. It is important to understand here the difference between proper drug innovation and mere replication. Technically ‘incremental innovation’ and ‘evergreening’ are not synonymous. Incremental innovation is the way of production of newer generation of drugs from older generation, and it includes research and development to increase either therapeutic efficacy and/or safety profile. But ‘evergreening’ is the company strategy to maximize the patent term or to prevent generic entry. Incremental innovation can be one of the ways adopted by the companies. But there are many other ways which can be adopted by pharmaceutical companies for evergreening, like (i) switch from prescription to over-the-counter medicine, (ii) exclusive partnership with generic manufacturing companies before patent expiry, (iii) defensive pricing techniques, (iv) filing of fraudulent patent application to invoke unnecessary legal consequences to do undue delay in generic entry, (v) brand migration and so on.
In Australia legal safeguard is provided against evergreening under s 26C and 26D of Patent Act, 1990; effective mechanism is made under these sections by which government will be paid damages if the evergreening practice is proved (Bhat, 2012). Same approach can be found by USA in Korea-US FTA in which Article 18.9.4 is specially framed to give provision for anti-evergreening agency (Bhat, 2012). India has taken a very bold and firm step, leaving all other countries behind, to stop evergreening and to prevent grant of patent for incremental innovation by introduction of s. 3(d) in its legislation, which needs special mention and discussion hereafter.

4. Analysis of Indian Sec 3(d) – legal and technical perspective
Indian stand regarding patent protection of second indication of the known substance or new form of known substances is having its statutory basis in s. 3(d). Because of its unique nature s. 3(d) required to be analyzed in details with reference of the case of Novartis v Union of India [(2013) 6 SCC 1].
4.1 Structure of Section 3(d)
Section 3 in Indian Patent Amendment Act, 2005 provides an exhaustive list of topics which are non-patentable subject matter, as it says, “The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.” The explanation is as follows: “For the purpose of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substances shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.” Aim of s. 3 (d) is supposedly not to grant patent for incremental innovation without significant therapeutic efficacy. So, technically s. 3(d) denotes a difference between “evergreening” and “incremental innovation.” So s. 3(d) is encouraging the companies to produce newer generation of medicine to meet greater public health need, at the same time preventing successfully the patent protection of “evergreen” varieties. Novartis v Union of India is a landmark case which discussed the different important aspects of s. 3(d).

4.2 Novartis case
Novartis invented the drug ‘Imatinib’ useful for Chronic Myeloid Leukemia (CML), originally patent for ‘Imatinib’ free base form was granted in US in 1993 (Zimmerman patent, US patent number 5,521,184). In India Novartis applied patent for ‘Imatinib Mesylate’ (beta crystalline form, trade name ‘Glivec’), which is a salt of the free base ‘Imatinib’, in 1998. Because of the waiting period of their “mailbox” application until 2005, Novartis had applied for ‘exclusive marketing right’ (EMR) in India and granted in November 2003. On the basis of their EMR, Novartis sued Ranbaxy and Cipla (Indian generic drug makers) in Bombay and Madras High Court. There was immense difference in the opinion of Madras and Bombay High Court in this case. Madras High Court was of opinion that EMR should be continued as Novartis was running the “Glivec International Patients Assistance Program” (GIPAP) and tried to give the drug to the non-affordable patients (Novartis v Adarsh Pharma, 2004 (29) PTC 108 Mad.). However, for Bombay High Court the EMR and the ruling of Madras High Court was not correct as the Bench agreed with the defendants’ contention of higher price and importation (no local manufacture) of Novartis’ drug. Thus Bombay High Court denied injunction.
In 2005 Novartis’ application was rejected by Assistant Controller General of Patents, though patent for the same polymorph was granted in about 35 countries (Novartis v Union of India, WP No. 24759 of 2006). It was accepted that beta crystalline form is having better flow to organs, more thermodynamic stability and lower hygroscopic in nature, but the rejection was based on anticipation and loss of novelty of the crystalline form of the salt ‘Imatinib Mesylate’ with the disclosure of the free base ‘Imatinib’. The other grounds of rejection of the application, like i) lack of significant efficacy under s. 3(d), ii) obviousness and iii) wrongful priority was also suggested by several generic drug companies and the NGO called Cancer Patients Aid Association (CPAA). Novartis AG was not agreed with the rejection and they filed two writ petition in the Madras High Court. The petition for reversal of Assistant Controller’s order was transferred to Intellectual Property Appellate Board (IPAB) for decision; IPAB had upheld the decision of Assistant Controller by rejecting the appeal.
4.3 Analysis of s. 3(d): Reference of Glivec
As discussed earlier, s. 3(d) seeks for the ‘significant enhancement of efficacy’ of the new form of known substances to be patentable in India. The Court analyzed this requirement and elaborated its opinion in this case. Detailed discussions with relevant illustrations are given below:
• Meaning of “efficacy” – According to Madras High Court, the term ‘significant enhancement of efficacy’ is for medicine is the ‘therapeutic efficacy’, whose dictionary meaning is ‘the ability of a drug to produce the desired therapeutic effect’. So, according to their interpretation, the new form of a known substance will only be patentable when patent applicant can prove that discovery of the new form of a known substance has much better therapeutic effect for the given disease. It is also suggested that, to qualify for having ‘increased therapeutic efficacy’ the new form of the drug must have increased ‘bioavailability’. ‘Efficacy’ synonymous to ‘therapeutic efficacy’ and ‘bioavailability’ will be correct for pharmaceutical patent applications, for inventions related to other chemicals (like pesticides or agro-chemicals) the term ‘efficacy’ had to be interpreted as per its plain meaning.
• Determining “significant enhancement of efficacy” – Madras High Court mentioned specifically in their judgment that it is not possible to provide any guideline or a rule to determine whether any claimed increase in efficacy can be amounted to “significant enhancement of efficacy” for requirement of s. 3(d) (Novartis v Union of India, WP No. 24759 of 2006). Similar view is reflected by the drafters of the Patent Manual when it is said that, the quantification of ‘efficacy’ should not be done in terms of any numerical value, because “it is not possible to have a standard numerical value for efficacy for all products including pharmaceutical products.” So, ‘significance’ in enhancement of efficacy has to be judged as case by case basis.
• Proof of efficacy – It seems easy to get the ‘proof’ regarding efficacy of a drug as because it has to go through clinical trials, Madras High Court assumed the same. But clinical trials are conducted as per the requirement of Drug Regulatory Authority, which is much later in time frame and may not be proper to serve the purpose of patentability as per s. 3(d) (Richard, 2005). Interestingly the USPTO guideline on patentability of pharmaceutical substances seeks only the proof of correlation between activity and the claimed use, which needs to be proved by statistical relevance of the activity of the compound, or documentary evidence or a combination thereof (Nelson v Bowler, 626 F.2d 853). It is the discretion of the legal authorities to determine the amount of proof which would be sufficient for showing ‘significantly enhanced efficacy’ but it will be advisable to follow a reasonable middle way.
• ‘Known substance’ – S. 3(d) is not clarified that what constitute the proposed ‘known substance’. In the Novartis case, it was a controversy whether the reference ‘known substance’ is ‘Imatinib’ free base or the later salt ‘Imatinib Mesylate’ or the ‘alpha crystalline form of the salt Imatinib Mesylate’. It is also not reasonable to read s. 3(d) in such a way that it suggests the meaning of known substance will be same as that of ‘new’ or ‘novel’ as per the patentability criteria.
• ‘New Use’ – ‘New use’ of a known substance is excluded from patentable subject matter under s. 3(d); but this creates some ambiguity in case of pharmaceutical products.
• ‘Derivative’ – S. 3(d) prevents new forms of known substances to be patentable subject matter, such as polymorphs, salts, ethers, esters and all “other derivatives” amount to the same ‘substance’. This word ‘derivative’ creates another ambiguous area regarding s. 3(d). The term ‘derivative’ is not defined anywhere in the Act, nor the explanation clarifies it properly. In another recent pharmaceutical patent litigation of Roche v Cipla (CS(OS) 89/2008) the court had to consider this issue. Roche, the patent holder of ‘Tarceva’ (Elotinib), sued Cipla for their generic version ‘Erlocip’. Cipla contended that Roche’s patent is not valid as per s. 3(d) as ‘Erlotinib’ is not sufficiently more efficacious than the structurally similar previously known substance ‘Geftinib’. From the understanding of organic chemistry, both ‘Geftinib’ and ‘Erlotinib’ are 4-quinazolinamine derivative, but the type of substitution has significant difference. So, technically it is difficult to tag them as derivative of one another in strict sense. But it has to be taken seriously and the proper explanation for the same would be required in near future.

4.4 Analysis of s. 3(d): Patent Eligibility Standard v Patentability Standard
It may be said that s. 3(d) is designed in a way to refine the patentability criteria to address the problem of patenting of pharmaceutical ‘evergreening’. From refinement point of view, the ‘enhanced efficacy’ can be taken as refinement of ‘non-obviousness’; as new forms of known substances are inherently obvious if there is no enhancement of efficacy. But as per the wording, s. 3(d) said, “the following are not inventions within the meaning of this Act……” which means any invention not in compliance with s. 3(d) will be denoted as excluded from patentability, i.e. s. 3(d) essentially structured to provide a patent eligibility test. From conceptual point of view, ‘patent eligibility’ test and ‘patentability’ criteria are distinct from each other. ‘Patent eligibility’ can be explained as a character of a subject matter (i.e. invention) by which it can be suitably represented as an application for patent protection. If the invention will not qualify the test of ‘patent eligibility,’ it would not be considered for judgment of ‘patentability.’ ‘Patentability’ can be explained as a set of criteria by which patent applications of ‘patent eligible’ inventions are examined for grant of a valid patent. Novelty, inventive step, industrial application and sufficient disclosure are the criteria of patentability according to TRIPS Agreement. As s. 3(d) has explicitly saying that a new form without significant increase in efficacy would not be a patentable invention, it seems that it sets out the ‘patent eligibility’ standard; but in effect the examination of an invention for compatibility with s. 3(d) will amount to raise the issues same as that of inventive step examination. Hence, in practical sense, most of the time s. 3(d) has to be used as a ‘patentability’ criteria rather than a ‘patent eligibility’ test.

5. Conclusion: Implication of s. 3(d)
Aim behind incorporation of s. 3(d) in Patent Act was to prevent the patent protection of ‘mere discovery of new forms’ and at the same time to encourage true innovators by patent incentive. It is indeed a very bold step in itself by Indian legislative authority, and as of now it is one of its kinds in the world. India is standing alone after making such a giant leap and going through all legal and technical assessment (as was done in Glivec case). Section 3(d) works as a kind of “filter” to differentiate between non-patentable discovery and true invention. Though some arguments have emerged against the rationale behind taking ‘therapeutic efficacy’ (which is a factor usually considered by drug regulatory authorities) as a standard for ‘patentability’ examination, still keeping the unethical practice of “ever-greening” by multi-national pharmaceutical companies by all means. The rigorous examination of every application with the help of s. 3(d) is justified from public interest and public need point of view. It needs to be understood that s. 3(d) aims to stop the use patenting of incremental pharmaceutical innovation as a tool for evergreening, but there is no intention to prevent patent protection of the true innovations, which are real asset for the industry and pathfinder for diagnosis or treatment of many diseases. The statutory language of s. 3(d) seems to be very strict, but the interpretation is done on case by case basis and each case needs to be judged from different perspective, as the case may be to get the balance of interest between pharmaceutical companies (providers) and public in general (users) to reach the global goal of access to medicine for all.

References and Bibliography

1. Bhat, P., Drug Patent Evergreening: An Overview, MMS Holdings Inc, Jul 26, 2012.
2. Charles River Associates, Policies that encourage innovation in middle-income countries, 2012, MA: Charles River Associates.
3. Chamber of Deputies, CSSD, Brazil’s Patent Reform: Innovation towards National Competitiveness, Centre for Strategic Studies and Debates, Coordination: Newton Lima, 2013.
4. Correa C., Guidelines for the examination of pharmaceutical patents: Developing a public health perspective, Working Paper for WHO – ICTSD – UNCAD, January 2007.
5. Dorland Healthcare Information, Market Category A: Pharmaceuticals and Related All Ethical Pharmaceuticals, 16th Ed., Vol 1, pp. 95-96, Phildelphia, Dorland, 2000.
6. GSK Report, Global Public Policy Issues: GlaxoSmithKline’s Position, A publication of GlaxoSmithKline Government Affairs, Europe & Corporate, January 2008.
7. GSK, Global Public Policy Issues – GlaxoSmithKline’s Position, Evergreening, A publication of GlaxoSmithKline Government Affairs, Public Policy and Patient Advocacy, 2012.
8. IFPMA, The new frontiers of biopharmaceutical innovation, Geneva, 2012, International Federation of Pharmaceutical Manufacturers and associations.
9. India Patent Office, Draft Manual of Patent Practice and Procedure, 2005.
10. Lima N. et al, Brazil’s Patent Reform: Innovation Towards National Competitiveness, Estudos Estrategicos, Brasilia, 2013.
11. Richard B Silverman, The Organic Chemistry of Drug Design and Drug Action, 2nd ed, Elsevier Academic Press, 2004.
12. Roberts M. & Lee A., Lundbeck extension of time upheld in LEXAPRO extension of pharmaceutical patent term saga, 12 Feb 2013.
13. Schweizer M., That (es)citalopram patent yet again, 15 Dec 2009.
14. Shadlen K. C., The rise and fall of ‘prior consent’ in Brazil, The WIPO Journal: Analysis of Intellectual Property Issues, Volume 13, Issue 1, 2011.
15. T. P. Ross, Intellectual Property: Patents and Transfer Agreements Preceding Clinical Trials and Commercialization, (2005) 25(8) Retina, The Journal of Retinal and Vitreous Diseases.
16. UK Patent Office, Examination Guidelines for Patent Applications relating to Medical Inventions, (March, 2004), Claims to pharmaceutical compositions, Compositions adapted to a particular use.
17. Wertheimer A. I. & Santella T. M., Pharmacoevaluaion: The advantages of incremental innovation, IPN Working Papers on Intellectual Property, Innovation and Health.
18. Zarate C. A. et al, Does Intolerance or lack of Response with Fluoxetine Predict the same will happen with Sertraline, Journal of Clinical Psychiatry, 1996, 57, 67-71.

SARBANI CHAKRABORTY, MERCK

Submission From: MERCK
Prepared by: Sarbani Chakraborty and Sebastian Gagnon-Messier
Country: Germany

Abstract

This contribution from Merck to the UN High Level Panel on Access to Medicines highlights the importance of intellectual property (IP) protection for stimulating innovation for global public health benefit. The topic of IP and access to medicines is not new – in fact, its discussion at the global health policy level has led to multiple innovative partnerships that have contributed significantly to progressing the health MDGs. There are many barriers to access to medicines requiring a holistic and partnership based approach to bring innovations to patients globally. Merck is committed to promoting access to medicines in the context of the 2030 Sustainable Development Goals. Finding innovative health solutions for communicable and non-communicable diseases and bringing them to scale through partnerships is a priority for Merck. We view intellectual property (IP) protection as a catalyst for continued innovation and improving medicines access at the global level. We believe that to bring these innovations to the global population on a sustainable basis, multi-stakeholders partnerships with governments, private sector and civil society are critical. We commend the United Nations’ recognition of the importance of partnerships as stated in SDG Goal 17 (a successful and sustainable development agenda requires partnerships). By leveraging our core competencies and experience across the health value chain, and fostering multi-sectoral partnerships, we deliver scalable and transformative access programs.

Submission

Section 1: Merck perspective on access to medicines and intellectual property

Merck is grateful for the opportunity to submit comments to the UN High-Level Panel on Access to Medicines. We share the Panel’s commitment to and interest in exploring the delicate and essential balance between the rights of inventors, international human rights law, trade rules and public health.

This balance is an essential element that is the foundation of our Intellectual Property (IP) system. Indeed, this balance provided the underlying rationale for members of the World Trade Organization (WTO) when they adopted the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). The text of TRIPs makes this clear: “The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”

The important balance between rights and obligations is reflected by the strict conditions specified for patent applicants and rights holders. First, a patent application requires sufficient information so as to enable any “person skilled in the technological area to which the invention pertains … to make and use the [invention].” This stands in stark contrast to other forms of IP, such as trade secrets, which can allow companies to avoid disclosing such information.

Critically, this disclosure serves an important societal purpose, which is in and of itself a valuable public good. Because the information has been made available, a patent draws on the existing body of scientific knowledge. At the same time, it adds to it so that others may use and benefit from it in their own research. Furthermore, granting innovators protection for their intellectual property makes it more likely that they will collaborate with others, including through the transfer of technology. This collaboration plays a critical role in the fostering of scientific research.

In addition, a patent is limited in two critical ways. Geographically, it is only granted for the country in which it has been filed. Lastly, it is limited in time: patent rights are originally only ever granted for 20 years. It is worth highlighting that the 20-year limit begins when an application is filed, not when a product is marketed.

Filings are therefore required in the earliest days of discovery, given that a patent is only granted for discoveries that are new. Once granted the long journey through clinical development begins. This includes smaller Phase I trials with a small number of volunteers, to Phase III trials which can include thousands of patients. The development program for Merck’s Multiple Sclerosis treatment (Rebif) included over 10,000 patients. Even at the end of a successful development program, the preparation of a submission for marketing authorization is itself a time-consuming and expensive requirement. As a result, from the earliest days in the lab to drug approval and launch, companies face an average of 8 to 12 years of efforts, with no guarantee of being able to launch a drug. This leaves the effective term of patent protection at no more or less than half of the often-quoted 20-year term. Critically, the time needed to secure approval for a new drug has significantly increased in the last decades. This has been driven by multiple factors: authorities may require additional data due to safety concerns, or to “to gather additional information about a product's safety, efficacy, or optimal use.”

Yet even a marketing authorization is not sufficient to ensure that a treatment reaches those who need it. The first company to launch a product, and only the first, must undertake extensive education and information efforts so that doctors are aware of the availability and best use of a new treatment. The inventor company, having completed the full range of clinical trials, is also able to provide comprehensive and accurate information to healthcare professionals and patients. The innovator company is also in the unique position to be the first legally required to fulfill pharmacovigilance requirements. Given the need to closely monitor the safety profile of a new medicine once it is used outside of controlled clinical trials, this too is a vital role filled by innovators.

The steps described above are a necessity in the journey to bring new medicines to market. They are also required even when the possibility of relying on IP rights is limited or non-existent in a given country. Several studies have underscored the role and unique ability of innovative companies to ensure that new medicines are launched and made available. In a 2014 paper reviewing the launch of new drugs in 60 countries from 2000 to 2013, Kyle and Qian found that “patents have important consequences for access to new drugs: in the absence of a patent, launch is unlikely.

Even post-launch and off-patent, generic medicines may not be available at all, or only available at prices beyond the reach of many. Restricting or diluting patent rights cannot be simply assumed to increase access to new drugs. The case of India, home to the largest and most competitive domestic generic drugs industry, underlines this challenge. Writing on access to essential (off-patent) medicines, Maiti et al. write: “The availability of medicines in India is still a big issue. It has been estimated by different sources that 50–80% of the Indian population are not able to access all the medicines they need. Despite having lower prices of medicines in India as compared to the international prices, the availability and affordability is poor.

Patents are not an obstacle to access for any Least-Developed Country (LDC). LDCs have been granted successive waivers to exclude pharmaceutical patents from their WTO commitments. The last one, granted in the fall of 2015, exempts LDCs from enforcing pharmaceutical patents until 2033. As detailed in the Merck Charter on Access to Health in Developing Countries, Merck does not file or enforce patents in 96 countries, a group that includes, in addition to the 34 WTO LDC members, 43 low-middle income countries and 13 Middle-Income countries.

In considering policy solutions to improve access, we call on the Panel to consider solutions that do not undermine innovation and the balance needed in any system. As noted above, IP—in and of itself—has not been an obstacle to access in LDCs. Moreover, the scope of unmet medical needs makes it imperative that R&D into new treatments continues. Yet innovation can only happen if pull mechanisms are in place to incentivize continued research towards new medicines. The IP system has enabled the continued ability of the R&D-based pharmaceutical industry to deliver new and improved treatments for patients worldwide. In 2015 alone, the European Medicines Agency issued marketing authorizations for 39 new active substances, 18 of those for orphan medicines. In addition, it approved 54 new therapeutic indications for already approved medicines. The fruits of these efforts were made possible by the existence of our functioning, well-regulated and balanced IP system.

2. What is Merck doing to address access concerns?

Merck engages in multiple partnerships to drive innovation, and bring these innovations to patients. Below are examples of these partnerships through which Merck is committed to make significant contributions:

A. R&D Innovations to address Communicable Diseases

Schistosomiasis is the world’s foremost neglected tropical disease. This devastating disease causes suffering and debilitation to more than 249 million people and poses a threat to over 700 million people primarily in the world’s most impoverished communities. It is second only to malaria in terms of economic impact. Since 2007, Merck has partnered with the World Health Organization (WHO) to fight schistosomiasis in Africa. Merck has donated more than 340 million Praziquantel tablets, to treat 74 million patients – mainly primary school-age children. In 2014, Merck founded the Global Schistosomiasis Alliance in cooperation with the Bill & Melinda Gates Foundation,the Children’s Investment Fund Foundation, and the Liverpool School of Tropical Medicine.

A key goal of the Alliance is to increase awareness and understanding of what it will take to eliminate schistosomias. The Alliance is, for example, promoting Mass Drug Administration (MDA). Evidence shows that when large scale MDA programmes are implemented in combination with adequate hygiene and sanitation, access to safe water, vector control, and education programmes to inform communities about the disease and how to prevent it, it is possible to eliminate Schistosomiasis. Merck is also signatory to the January 2012 London Declaration on Neglected Tropical Diseases (NTDs). The London Declaration is a public-private effort to eradicate, eliminate and intensify control of 10 of the 17 NTDs (includes schistosomiasis) in order to contribute to the WHO 2020 NTD targets.

Beacuse of tablet size and taste it is hard to adminsiter praziquantel for schistosomias to children under 6. Therefore, an innovation was needed – a new child-appropriate formula. As part of the Pediatric Praziquantel Consortium, Astellas Pharma, Merck and Farmanguinhos, Brazil have been working together to build a solid basis for a new and innovative pediatric formulation.

WIPO Re: Search

WIPO Re:Search is a Consortium sponsored by the World Intellectual Property Organization (WIPO) in collaboration with BIO Ventures for Global Health (BVGH). The Consortium aims to accelerate the discovery and development of medicines, vaccines, and diagnostics to create new solutions for people affected by neglected tropical diseases (NTDs), malaria, and tuberculosis by making intellectual property and knowledge available to the global health research community. These diseases affect more than one billion people across the globe. Merck joined WIPO Re:Search in 2015. In 2015, Merck finalized its first collaboration with the University of Buea in Cameroon, which aims to repurpose compounds from our library to develop a treatment for onchocerciasis, also known as river blindness. Through this collaboration, we are helping to build research capacity, knowledge and expertise in developing countries.

External Translational Innovation Platform (eTIP) for Global Health

Continued research and development innovation is key to improving the lives of millions of children living in low and middle-income countries. "One Merck for Children" is a cross-divisional research and development program under the umbrella of Merck's Global Health Innovation Platform. This external Translational Innovation Platform (eTIP) is working on schistosomiasis, related helminthic diseases, malaria and other major communicable diseases. The aim is to discover and develop sustainable ways to fight these diseases and help underserved populations gain access to better health care. The work is being conducted together with international and local research institutions, and with partners such as the World Health Organization (WHO), the Bill & Melinda Gates Foundation, Medicines for Malaria Ventures as well as governments.

Merck has established a discovery program with external organizations and entered into a partnership with the non-profit Medicines for Malaria Venture (MMV) in 2013. The Merck-MMV collaboration aims at further developing proprietary Merck lead compounds as long-acting anti-malarials, which represent a major gap in the worldwide anti-malarial portfolio. This private-NGO partnership allows resource sharing and uses relevant networks to speed up development. In 2015, Merck announced a research agreement with the University of Cape Town (UCT) South Africa to co-develop a new R&D platform aimed at identifying new lead programs for potential treatments against malaria, with the potential to expand it to other tropical diseases.

B. R&D Innovations and Technology Transfers for Non-communicable diseases:

The non-communicable disease burden is growing every day in low and middle-income countries and the WHO estimates that three-quarters of NCD deaths are occurring in these countries. Moreover, among cancers, colorectal cancer has the fourth highest disease burden globally.

Product Development Partnerships: Merck supports the use of Product Development Partnerships (PDPs) and technology transfers as mechanisms to increase access and improve the health of patients in low- and middle-income countries. On September 9, 2015, Merck signed a Technology Transfer and Supply Agreement (TTSA) for multiple-sclerosis medicines with Bio-Manguinhos/Fiocruz/MoH (Pharmaceutical laboratory that belongs to the Brazilian Ministry of Health) and Bionovis (Domestic private pharmaceutical laboratory). The TTSA establishes a period of seven (seven) years for the Technology Transfer. Immediately after the signature, Merck started the TT procedures and it is expected that during 2016 Bio-Manguinhos will get the Marketing Authorization from ANVISA for betainterferon-1a.

Merck has additional six PDPs granted by the MoH for biological products that are currently under development and these negotiations involves Bionovis and other two public laboratories.
.
Access to Innovative Cancer Treatments: Genetic testing to provide targeted treatment is an innovation in cancer care. Merck has developed a program of genetic testing (RAS) to increase detection of colorectal cancer among the population. Merck covers the cost of testing to expand patients’ access to innovative medicines. The Merck screening program allows healthcare professionals to better diagnose the disease in the population-at-risk, and helps them make the right treatment decision for patients. For example. Merck is partnering with the Mexican public insurance scheme (Seguro Popular) to implement a “patient reference program” in order to ease the logistics around access to colorectal cancer treatments.

Innovations to bring quality medicines to patients

Merck Global Pharma Health Fund: Counterfeit medicines cause serious harm to patients, including unnecessary deaths and in the case of antibiotics, can promote antibiotic resistance. Counterfeit medicines are particularly endemic in low and middle- income countries where millions of poor families pay out-of-pocket for medicines. The Global Pharma Health Fund (GPHF) is a charitable organization initiated and funded exclusively by donations from Merck. In 2007, the GPHF took over the work of the former German Pharma Health Fund (1985). The GPHF-Minilab is a mobile mini-laboratory for rapid drug quality verification and counterfeit medicines detection protecting the health of millions of people anywhere in developing countries. It is designed for use in developing countries that lack facilities for effective medicine testing. To date, more than 700 Minilabs have been supplied to health facilities in 85 countries mostly in Africa and Asia. Since 2012, over 50 Minilabs have been donated to thirteen Ministries of Health or National Regulatory Authorities. Data generated by the program have prompted global drug alerts generated by WHO.

The success of the GPHF lies in the ability to form partnerships with governments, non-governmental organizations and faith based organizations. GPHF recently formalized a partnership with the Ghana-based Center for Pharmaceutical Advancement and Training (CePAT) to build local and regional capacity in pharmaceutical quality assurance throughout sub-Saharan Africa.

Capacity Advancement Program for Non-Communicable Diseases (Diabetes) in Africa and Asia

Even when medicines are available, due to lack of awareness and cultural beliefs, people worldwide do not obtain appropriate treatment in a timely manner. Globally, half of the people with diabetes are undiagnosed, and 85% of those undiagnosed are living in low- and middle- income countries. The highest prevalence of people with undiagnosed diabetes is found in Sub-Saharan Africa (78% of people with diabetes are unaware of their status). The Merck Capacity Advancement Program (CAP) addresses this gap by collaborating with Universities and civil society to train HCPs in diabetes diagnosis and increasing public awareness of the disease.

Adddressing the Special Needs of Women and Non-Communicable Diseases: Healthy Women, Healthy Economies

Non-communicable diseases (NCDs) NCDs are the leading cause of death of women worldwide. Moreover, women face many barriers to reproductive health throughout their life cycle. Poor health is one factor that significantly disadvantages women from entering and remaining in the workforce. To address women’s health and economic empowerment, along with key Asia Pacific Economic Cooperation (APEC) countries, Merck launched the Healthy Women, Healthy Economies Initiative in 2015. It includes the development of the Healthy Women, Healthy Economies Policy Toolkit to support APEC government officials, policymakers, civil society and the private sector seeking to improve female economic participation through better health.

Under the rubric of Healthy Women, Healthy Economies, Merck has launched partnerships with governments and NGOs to address thyroid disorders – a major disease among women. More than 200 million people globally suffer from thyroid disorder. Thyroid disorders are seven times more likely to occur among women as compared to men. More than 50 percent of thyroid disorders are underdiagnosed or misdiagnosed, and diagnosis rates in low and middle income countries are particularly small. To advance public awarness of thyroids and enable primary health care providers to diagnose thyroid disease, Merck is partnering with Governments and disease societies in China, India, Indonesia and Philiipines to scale up thyroid diagnosis and treatment. To date 13 million patients have been reached in the Philippines and more than a 1000 hospitals in 100 Chineese cities have implemented thyroid education and awareness programs.

3. Specific proposals

Each of the above mentioned programs or models includes innovative health solutions that are being scaled up in partnership with Governments, other private sector and civil society organizations. These programs have demonstrated success and offer promise if scaled up or replicated in other relevant settings. Innovations in multistakeholder partnerships are key to scaling up global health and we encourage adaptation of such multistakeholder approaches to other countries and contexts to address a full range of global health problems.

Bibliography and References

World Trade Organization. 1994. Agreement On Trade-Related Aspects Of Intellectual Property Rights. Article 7. https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

United States Patents and Trademark Office. 2014. General Information Concerning Patents, United States Patents and Trademark Office, October 2014. http://www.uspto.gov/patents-getting-started/general-information-concerning-patents#heading-12

Euroepan Commission. 2013. EU Science conference: President Benoît Battistelli highlights EPO's role in supporting innovation. “Patent information is an important tool for researchers to identify partners for scientific collaboration or for the further development of an invention into a product.” https://www.epo.org/news-issues/news/2013/20130306a.html

Ulrik Schulze and Michael Ringel. 2013. “What matters most in commercial success: first-in-class or best-in-class?” Nature Reviews Drug Discovery 12, 419–420 (2013). http://www.nature.com/nrd/journal/v12/n6/full/nrd4035.html?WT.ec_id=NRD-201306

Kaitin K.2010. “Deconstructing the Drug Development Process: The New Face of Innovation.“ Clinical pharmacology and therapeutics. 2010;87(3):356-361. doi:10.1038/clpt.2009.293.

U.S. Food and Drug Administration. 2014. “The FDA's Drug Review Process: Ensuring Drugs Are Safe and Effective.”http://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm143534.htm.

Margaret Kyle and Yi Qian.2014. “Intellectual Property Rights and Access to Innovation: Evidence from TRIPS,” National Bureau of Economic Research, Dec. 2014, http://www.nber.org/papers/w20799

Rituparna Maiti, Vikas Bhatia, Biswa Mohan Padhy, and Debasish Hota. 2015.“Essential Medicines: An Indian Perspective.” Indian Journal of Community Medicine. 2015 Oct-Dec; 40(4): 223–232.

Mercg KGaA. 2015. Corporation Responsibility Progress Report: Access to Health: Our Approach. Merck KGaA, Darmstadt, Germany. http://reports.merckgroup.com/2012/cr-report/products/accesstohealth/ourapproach.html?cat=m

Global Health Progress.2015. Global Pharma Health Fund. http://www.globalhealthprogress.org/programs/global-pharma-health-fund

NCD Alliance. 2015. Diabetets (jointly with the International Diabetets Federation). http://www.ncdalliance.org/node/46

Asia-Pactific Economic Cooperation. 2015. Healthy Women, Healthy Economies: Policy Toolkit. APEC. Singapore.

World Health Organization. 2015. Noncommunicable Disease Progress Monitor. The World Health Organization, Geneva, Switzerland.

Ping Jia, Xiaomeo Zhai, and Renzong Qiu, C-HELP

Lead Author: Ping Jia
Additional Authors: Xiaomeo Zhai, and Renzong Qiu
Organization: Center for Human Rights Law, Sichuan University
Country: China

*China Public Health Ethics, Law and Public Policy Research Group (C-HELP) is a Think-Tank and Do-Tank Non-For -Profit Research Initiative co-founded by School of the Humanities & Social Science, Peking Union Medical College, Center for Applied Ethics, Chinese Academy of Social Science (CASS), Center for Human Rights Law, Sichuan University and Health Governance Initiative, a civic Think-tank and NGO focus on Public Health and Law. Regarding access to medicine in China being an important research area and long time collaborating together, the team of C-HELP organized its first seminar on access to medicine in CASS in 2007 with its key members involved into access to medicine issue in China. 

Abstract

Although China is already most influential country in some respects such as GDP and value of foreign trade, the dark-side of the extensive development in the past decades also phenomenon. The fast-growing disease burden, both due to chronic diseases and infectious ones left Chinese people a vulnerable situation. But still weak and in its preliminary development stage, China’s local pharmaceutical industry not only lack of scale advantage, the poor innovation capacity also play a key barrier for access to essential medicines in the country. The insufficient drug administration and needs to be improved regulatory system also can’t provide enough local incentives, while the intellectual property law and regulations does not fully utilize the TRIPS flexibility. Further, the tightening international IP protection system, particularly FTAs and TPP, make China facing with even fewer policy options to solve the domestic health challenges. The authors suggest that the Chinese government should take advantage of TRIPS flexibility, reform domestic drug administrative and regulatory system, fostering a user friendly and needs driven domestic IP-Patent legal system, and take measures to alleviate impact to health system from the TPP. Promote global collaboration on public research and to create new models to balance between profit-driven market needs and health needs from the general public.

Submission

Access to Affordable Essential Medicine in China
—How China deal with a rising up disease burden and
a tightening global IP protection system

Jia Ping Zhai Xiaomei Qiu Renzong

The world witnessed a “China Miracle” in the past three decades: being a country of extreme poverty in late 70’s, China became the second largest economy since 2011 and the biggest trading nation in 2013. But as many writers pointed out, the dark side of the development heavily weakened the glory of the economic achievements. Health challenge, among others, pose a particular increasing threat to the future of the society.

The health challenge in China, although long time out of radar and never attract enough attention during the triumphant days when people immersed with frenzy of development, seems heading to a severe bad scenario in the recent years. While the ferociously rising cases of cancer nowadays indicates a gloomy reality, other chronic diseases such as diabetes and angiocardiopathy, along with infectious diseases include HIV/AIDS and HCV, pose a growing burden and threat for the still fragile national social security system. The most recent research, Cancer Statistics in China, published in CA: A Cancer Journal for Clinicians in December 2015, estimates there were 4.3 million new cancer cases and more than 2.8 million cancer deaths in China this year [the number was 3 million (and 14.1 million globally) and 2.2 million(8.2 million globally) respectively three years ago in 2012), which means more than 7500 people died of cancer per day in China. The New York time most recent report disclosed that according to data from Hebei provincial tumor hospital, the cancer mortality increased 306% from 1973 to 2012, much worse than other provinces. Hebei is the biggest steel production province with the worst air quality in China. Besides reasons of aging and growing of population, the pollution of air, soil and water which expose average people to environmental carcinogens obviously contribute to the cases of cancer increasing substantially: the data shows that lung cancer is the most common one for men and the second for women. The five leading causes of cancer death among both men and women in China are cancers of the lung and bronchus, stomach, liver, esophagus, and colorectum, accounting for about three-quarters of all cancer deaths. But this is not a astonishing fresh news, a report by Pfizer points that China alone already contributes to more than half of the world’s newly diagnosed liver and esophageal cancer cases, and 42% of newly diagnosed stomach cancer cases in 2002.

Although Chinese government seems take it serious to the rising up disease burden, seldom could people feel any substantial changes been made in dealing with the access to medicine issue in China. In 2014, a Chinese patient Lu Yong with chronic myelogenous leukemia, who helped other Chinese patients to organize online purchase of generic version of Gliver from India which originally patented by Novartis since early 2001 but processed since 1993, was arrested and alleged crime of “selling fake medicine” by a local Procuratorate in Hunan province. Lu Yong was set free in early 2015 due to social pressure but only in nominal cause that he only “buy” but not “re-sell” the drug. The price of imported Gliver is near USD 4000 each carton (for one month use), twice expensive than the price in South Korea and more than 130 times expensive than India’s generic version, which only sell for around USD 30 per carton.

The Gliver story disclosed a tough situation for average Chinese that matters: how Chinese Government provide its citizens enough qualified health and medical products with reasonable and affordable price? Or, if we go further, is a GDP oriented development model also an innovative one on the basis of which can be built a healthy society? For Chinese Government, this is truly a dilemma.

Although Chinese government try hard to build China a “Socialism Innovative Country”, With their low budget for research and development, China’s pharmaceutical makers are relatively small and often lack of capital compare with multinationals.They are not large enough to compete effectively and numerous small
enterprises present serious problems. During the past years, some Chinese pharmaceutical companies began to establish R&D infrastructures largely due to internal growth needs or even go to NASDAQ for more funding, but their primary focus is directed toward improving existing technologies or developing generic version of new drugs. According to People's Daily, a state-owned party control media, there are less than 5 drugs that China own “Completely independent intellectual property rights” before 2013. China did make some progress in the recent years but still 95% of chemical drugs in domestic market are generic versions. Actually from global perspective, except artemisinin, China never contribute a new drug to the world in the past 60 years.

The lack of R & D capacity and scale competition advantage only tells one side of the story. The long standing mismanagement and bad governance, including non-transparent process of administrative review and approval for new drugs creates another barrier. The period for application of clinic trials is 60-90 days in general but many enterprise can only get approval for about 12-24 months. The complexity of the clinic trials process application also prevent international new drugs to enter into China, some report complaints that it even provide incentives to “steal” the technology from overseas and get rich in domestic market. For under the situation, local enterprise and government tend to reduce the patent protection period while produce generic versions if they can. While multinationals tend to do build a more rigid protection mechanism for the new drugs, the Chinese FDA’s drug approval and review process thus provide more incentives for less qualified generic rather than innovative drugs manufacture.

But what make it more interesting is that China actually established a quite good IP protection mechanism at least on paper. Scholars pointed out that the Chinese IP system experienced leapfrog development in the past 20 years, with its standards approaching the global criteria. The Patent Law of the People’s Republic of China was adopted on 12 March 1984 and put into effect on 1 April 1985. It was then revised in 1992, 2000 and 2008 respectively. As the biggest developing country in the world, the Chinese government understand that over protection of IP may lead to negative impact to their infant domestic pharmaceutical industry and public health. The 2008 Patent law thus integrated SIPO (State Intellectual Property Office) Order No. 31 and 37, the TRIPS Protocol agreement on compulsory license and added an anti-monopoly clause. Article 49 of the law stipulates that when there is a national emergency, or for the purposes of public interests, SIPO can issue compulsory licenses on inventions or utility models. Article 49 covers both situations of “national emergency or other circumstances of extreme urgency” as well as “public non-commercial use” (Government Use) under the TRIPS Agreement. One break-through in recent years has been the Measures for Compulsory License of China issued in May 2012. The Measures finally detailed the process and requirements for a department under the State Council to ask for a compulsory license under Article 49 of the Patent Law.

But the government has not shown any willingness to issue a compulsory license (CL), partially due to lack of knowledge and poor understanding of the international system on trade and health issues at the decision-making level in China. But there must exits deeper reasons, as it was implied in the case of Lu Yong and Gliver.

According to Deloitte report, the pharmaceutical sales in China market will reach USD 100 billion in 2015. Domestic and international players operate in an extreme “crowded and competitive environment”. There are more than 1000 international enterprises enter into Chinese market, the world’s top 20 multinational Pharmaceutical companies have “have extensive operations in the country”. Regarding China as cost haven and profit pool, international Pharmas all take expansion a common strategy in Chinese market. In 2011, the top ten multinationals occupied more than 50% market share and the average growth reached 30%.

The huge market, aging society, limited innovative capacity, clumsy administrative governance and regulation, with vicious competition among Chinese local industries, make China owns promising potentiality as a cash cow in the coming decades for multinational Pharmas. That is also why international Pharmas always push hard for IP protection in China.

The non-transparent drug regulatory and review system, together with the unsuccessful health reform, lead to rents-seeking activities. Among which known as “drug agency pattern（DAP, “Yao Dai” in Chinese）”. The DAP in general refers to drug agency from Pharmas make deals with doctors with price make-up return commission. The drugs thus were sold to the hospitals with higher price and re-sell to patients. The DAs and doctors will share the profit (while most were flow into Pharmas’ pocket) as bonus while hospitals rely on this drug price addition to compensate their financial shortage due to lack of government budget support after the marketization of medical reform since 1980s. This at least partially explained why Gliver’s price is more than twice as expensive as it was in South Korea. Why there were strong motivation to block hundreds of dying patients to purchase cheap India generic version Gliver and even try sentence Lu Yong in jail. As a Shanxi province health officer pointed out, the reason why Gliver is ridiculously expensive in mainland China is because of “Chinese character institutional costs: first is high tax rate for drugs which pull up the price of the drug, second is the price was raised in each single layer, from marketing to distribution process. And all costs will be shifted to the patients in the end of the day”.

That also explains why the government never initiate the compulsory license process. The “pressure” from international Pharmas is to a large extent an excuse. To strengthening of domestic IP protection system and respect IPR become a “protective umbrella” to defend any request for use TRIPS flexibility clauses. Even at costs of rising up disease burden and patients’ life. For example, there are long time debate in AIDS area in China in terms of CL, the main-stream opinion inside the Chinese government till now is still “to use CL as a threat to request for lower the price on the multinational Pharma side”. But as Dr. Zhang Fujie pointed out in his presentation on the 2nd China HIV/AIDS Academy Congress, China never introduce new ARV drugs approved after the year of 2001. Leaving Chinese doctors only have very limited options on ARV treatment combination. What makes it even worse is that the shortcomings of TRIPS flexibility thus was perfectly reserved and copied directly into Chinese laws and regulations. Any single try of CL by local enterprise or NGOs will automatically facing pressure from multinational Pharmas and dilemma of lacking institutional support domestically. This model thus promotes a vicious circle being established: China is suffering rising up disease burden and financial resources loss while provides negative incentives to local innovation.

Besides the domestic turmoil of the pharmaceutical industry and stunning increasing disease burden, the tightening of global IP protection system will give another heavy blow to the efforts of establishing a “Socialist Innovative Society”, and possibly make it a pipe dream if Chinese government can’t take proper measures in response to those challenges.

On 4 February 2016 in Auckland, New Zealand, after 7 years of negotiations, twelve Pacific Rim countries include US, Japan and Australia signed the Trans-Pacific Partnership (TPP). As a historic new type of Free Trade Agreement (FTA), TPP represents more than 40% global GDP with a quite a few countries express their interest to join in. Many critics believe that TPP largely aims to balance the rising China who still in the process of overcoming difficulties of integrating into global world and try to get use of international norms. TPP’s Intellectual Property Chapter (hereafter IP Chapter) try to promote and establish a U.S style “TRIPS Plus” mechanism and thus build a “technology control regime” in Asia Pacific. The IP Chapter expand the scope of patentability to “any invention, whether a product or process”, although a Party may exclude some subject matters such as animals or essential biological process for production of plants from patentability. IP Chapter pushes a streamlined international patent application system among TPP Parties, provide patent term adjustment for patent office “unreasonable” delays or curtailment, particularly for pharmaceutical product subject to a patent. It also stipulate “data exclusivity” in details and requires each party provide at least 5 years market protection from the date of marketing approval of the new pharmaceutical product in the territory of the Party. For new pharmaceutical products that is or contains a biologic, the IP Chapter will provide an “effective market protection” (similar with Data exclusivity protection) for a period of at least 8 years, both aims to weaken the generic industry in developing countries. Article 18.52 stipulates that due to market circumstance may “evolve over time”, the parties shall consult after 10 years of entry into force of the TPP Agreement or otherwise decided by a Commission. This means after 8 years’ protection, TPP Parties can extent the effective protection period through the so called consultation process if “necessary”. The IP Chapter also designs a series of very strict board measures, ask parties to suspend the release or detain any suspected “counterfeit or confusingly similar trade mark….that are imported into the territory of the Party”. Which greatly enhanced the power to block generic pharmaceutical products from being exporting from manufactory countries to other developing countries (especially the least developed ones) through implementation of trademark regulations. Finally, the TPP IP Chapter also stipulates rigorous criminal procedures and penalties to ensure the execution of the rules.

Advocated by TPP IP Chapter and other FTAs, the TRIPS plus will definitely a barrier for China in using TRIPS flexibility to solve its domestic health challenges. The data exclusivity and effective protection period will play as containment strategy against country such as India and China’s generic and bio-similar industry, while the board measures can weaken the distribution channel and increase its costs if China and India want export their cheaper pharmaceutical products globally. In the worst scenario, China’s less innovative pharmaceutical industry with poor public policy and strategy response capacity, will probably even rely on API manufacture and “me too” generic production without establishing a strong local innovative industry and vivid generic one in the coming predictable future.

So what China should do to break the curse? Is there a way out of “Inferno”? There might be no magic antidote once for all. But concrete steps should be stridden out if we do want some positive changes.

To Utilize TRIPS Flexibility to solve the health challenges in emergency In summary, China already has a Patent Law with examination criteria and compulsory license clause to take advantage of TRIPS flexibility. Therefore there are no legal barriers to implementing the TRIPS agreement or issuing a CL. But the challenge in practice is how to implement Article 12 of 2012 Measures and Article 49 of the Patent law. Local manufacturers are mostly geared to export production and still lack incentives for the development of local generic pharmaceuticals in China. China can develop its Competitive Law system and provide a more supportive social environment for those who want initiate a CL application.

To Move out Institutional Barriers to Innovation China should distinguish “innovation” with “invention”. For the past decade, China regard number of patents (key part of invention) as a key indicator of building a successful innovative society. This lead to “patent trash” and even widespread corruption due to misunderstanding of patentability and power abuse. China should reform its science and technology governance structure, reduce the influence of politics on science and provide more incentives to encourage real innovation and scientific research, which means more good governance on the government side and more free competition in “ideas market”. The market oriented mechanism is important but making money should not be the single objective and the fundamental researches should not be manipulated by capital power. And of course, China should also reform its dysfunctional drug regulatory system.

A Right-Based Approach The tremendous fast growing disease burden, without proper response, will lead to a humanitarian disaster in the coming decades in China. The Chinese government should take responsibility, as promised, to provide support for its people including affordable qualified medicine and other pharmaceutical products, so as to maintain a dignity life. China should also build a more high efficient and capable local pharmaceutical industry, commensurate with its economic power and talent of its people. Only then can China fulfill its MDG obligation and guarantee Chinese people’s right to health. Thus human rights protection should always a fundamental guideline for China’s health policy making and related activities and options. As Chinese President Xi jinping committed most recently during a visit to local drug enterprise, China should take concrete steps to “Ensure the citizens’ right to life and health”.

Ethical principles as Bottom Line in Global Trade System Provide incentives to invention and S&T development, the IP system greatly enhanced the health of human beings by enjoying longer life expectation with better dignity. But the expanding of capital power globally not necessarily increase human welfare, it can also block the average from enjoy the right to life. Further, driven by the greedy desire as instinct, the capital can also “conspire with” local powers, to increase exploitation to the community and aggravate the local institutional defects, as Lu Yong case already told us. That is why TPP agreement, although will greatly promote economic integration in Pacific Rim and bring prosperity to the people in the region, can also be a tool to subordinate developing member countries and south nations politically and economically via technology control rather than technology transference, particularly under the background of global aging and disease spreading as part of the consequence of global industrialization. Ethical principles as bottom line thus a necessary option for development and global trade system to which China should always pay attention.

Joint Effort to Combat with Diseases Globally Besides pushing a global IP regime, Western countries should collaborate with south emerging countries more frequently in terms of health and pharmaceutical technology transference and knowledge exchange. China could collaborate with U.S in a more innovative way, seeking opportunities and solutions to compensate social costs for R&D, promote public innovation and a possible substitute way for IP system in the pharmaceutical and biologics area. Thus to reduce the vicious competition and conflict of interests between big powers, increase the welfare of human beings globally and save millions of lives who deserved a decent and better life.

Bibliography and References

http://www.theguardian.com/business/2014/jan/10/china-surpasses-us-world-largest-trading-nation
China Xinhua News Agency reported in 2015 that that the number of persons with HCV infection in China could reach 40million. See:http://news.xinhuanet.com/health/2015-02/08/c_1114296352.htm
See: http://onlinelibrary.wiley.com/journal/10.3322/(ISSN)1542-4863
See: https://www.iarc.fr/en/media-centre/pr/2013/pdfs/pr223_E.pdf and http://www.wcrf.org/int/cancer-facts-figures/worldwide-data
纽约时报中文网，“河北肺癌死亡率激增，工业污染疑是主因”.2015年2月19日.(New York Times Chinese Website report).
The Burden of Cancer in Asia, Pfizer Facts,P3.
See China Southern Weekly report, http://www.infzm.com/content/107938
According to China FDA website information, there are currently around 5000 local pharmaceutical companies in China (4875 in 2013).
http://news.hexun.com/2011-09-16/133415647.html
http://yao.dxy.cn/article/80281?trace=drugs
吴汉东,《中国知识产权法制建设的评价与反思》，中国法学.2009(1):52.
Measures on the Compulsory License for Exploitation of a Patent, SIPO Order No. 31（2003） and Measures to Implement Public Health-Related Compulsory Licensing, SIPO Order No. 37 （2005）.
See Article 48 of China Patent Law: “Under any of the following circumstances, the patent administration department under the State Council (i.e. SIPO) may, upon application made by any unit or individual that possesses the conditions for exploitation, grant a compulsory license for exploitation of an invention patent or utility model patent:
(1) When it has been three years since the date the patent right is granted and four years since the date the patent application is submitted, the patentee, without legitimate reasons, fails to have the patent exploited or fully exploited; or
(2) The patentee's exercise of the patent right is in accordance with law, confirmed as monopoly and its negative impact on competition needs to be eliminated or reduced.”
See Article 49 of China Patent Law, “Where a national emergency or any extraordinary state of affairs occurs, or public interests so require, the Patent Administration Department under the State Council (SIPO) may grant a compulsory license for exploitation of an invention patent or utility model patent.”
Deloitte, The next phase: Opportunities in China's pharmaceuticals market.P4.
KPMG, China’s Pharmaceutical Industry—Poised for Giant leap. P27.
Ibid.
Yangcheng Evening Paper(羊城晚报)Feb.14,2015. See: http://money.163.com/15/0214/16/AIE659UD00253B0H.html.
http://file01.static.xieshou.org/aids/image/2015/12/01/18/01e8b2b82bee42630adb1c296c8e246461.pdf
Those countries(Region) include Columbia, South Korea, Philippines, Thailand, Indonesia and Taiwan.
Article 18.37.1 of the IP Chapter.
Article 18.37.3(b) of the IP Chapter.
Article 18.44-Article 18.45 of the IP Chapter.
Article 18.46 and Article 18.48 of the IP Chapter.
Article 18.50 of the IP Chapter.
Article 18.52 of the IP Chapter.
Article 18.76 of the IP Chapter.
Article 18.77 of the IP Chapter.
For one of the most troubling features of the TRIPS C.L. regime is Article 31(f) which requires that compulsory licenses be authorized “predominantly for the supply of the domestic market of the Member authorizing such use.” Although a C.L. for import is perfectly lawful, there may well be Article 31(f) restrictions on exporters that limit that right. China can develop its Competitive Law system to avoid the 31(f) restriction: the patent subject matter can be public used if it convict “market monopoly” by court or government anti-trust entities.
According to Chinese media report, Wang lijun, former Police Chief of Chongqing, and Wu changshun who was former Police Chief of Tianjin city, both own 254 and 35 patent respectively. All of which are trash ones.
Xinhua News Agency, http://news.xinhuanet.com/politics/2016-02/03/c_1117985476.htm.

Jonathan Klein, NCD CHILD

Lead Author: Jonathan Klein
Additional Authors: Kate Armstrong and Mychelle Farmer
Organization: NCD Child
Country: USA; Australia 

Abstract

This submission addresses the importance of inclusion of children and adolescents as needing specific consideration in access to medicines and medical devices.

Submission

NCD Child, its leaders, and member organizations request the United Nations High Level Panel of Access to Medicines give careful consideration to the specific needs of children and adolescents, who require age appropriate medications and medical devices. Children of all ages are affected by chronic diseases, including heart disease, chronic respiratory diseases, diabetes, and cancer. Seventy percent of adult deaths result from antecedent behaviors or illness that begin in childhood and adolescence. The global medical community needs to focus on the unique needs to promote medical research, innovative development of pediatric medical devices and medicines, and diagnostics designed for infants and children. This approach will improve health outcomes for children and adolescents, it is consistent with the UN Convention on the Rights of the Child, and it will improve global efforts to achieve Sustainable Development Goal Three, to ensure healthy lives and promote well-being for all at all ages.

Non-communicable diseases (NCDs) have a significant impact on children and youth. Approximately 1.2 million deaths from NCDs occur each year in people under the age of 20, over 13% of all NCD mortality. Children die from treatable NCDs, including rheumatic heart disease, type-1 diabetes, asthma, and leukemia. Ensuring child health care systems have adequate detection, treatment, and management services for children living with NCDs is essential. Inadequate diagnostic capacity, unaffordable interventions, and an inadequate child health care workforce lead to unnecessary suffering, early mortality and preventable disability.

We note that many of the behaviors that lead to adult NCDs start during childhood and adolescence. NCD rate are increasing faster in low- and middle-income countries, with worse outcomes than in wealthier countries. NCDs also reduce economic progress, increasing poverty and the potential for political instability. Children and adolescents living with NCDS or caring for family members with NCDs have lower educational attainment and poorer access to employment opportunities. To eradicate extreme poverty, and maximize the potential of all children, health services must include resources to reduce the long-term economic burden of the NCD epidemic. Children and youth living with and at risk for NCDs require health care, education, and social and community services that are specific to their and their families’ needs. Affordable diagnosis and treatment, including access to medicines, pain management and palliative care, must be provided as a matter of human rights, and should be established as a priority for health and sustainable human development.

Investing in prevention through strengthening the availability and quality of routine health care for children and youth should also be a priority. Governments, professional organizations, community-based institutions, donor agencies, and public private partnerships must collaborate to support sustainable enduring health care systems, integrate funding streams, and avoid duplication and waste.

Plans for access to medicines and medical devices must be inclusive of children and adolescents, and allow for country-level policy, planning and accountability. Whether for specific diseases or risk factor targets, for access to medicines, or for universal coverage – specific indicators and measures addressing children and youth are needed in order to drive accountability. Thus goals for children and adolescents will be included in the High-Level Panel on Access to Medicines. Additionally, national governments are encouraged to understand and act upon the need for access to care for children and youth living with cancer, heart disease, diabetes, respiratory diseases, and other NCDs by developing systems, personnel and resources for universal health care that provides equitable access to families and individuals living with NCDs. Countries should also be encouraged to include these issues in planning and surveillance of their own populations’ health and health care needs.

NCD Child endorses the calls for specific actions in the APPES – CLAN Equity (ACE) Working Group online contribution, and the UICC paper on Children and Cancer. While specific to the Asian Pacific region, and to childhood cancer, the strategies that these submissions call for are excellent examples of the approaches needed in every region, and for every condition leading to and requiring special health care resources. Children's rights to health and well-being require that we do nothing less.

Bibliography and References

http://www.ncdchild.org/resources.html

http://www.ncdchild.org/pdf/NCD%20Child%20call%20for%20Action_ELECTRONIC.pdf
Call to Action on NCDs, Child Survival, and Child Health. 2015

http://www.ncdchild.org/policybrief-2014conference.html
The 2014 NCD Child Conference Report: Doing What Needs to Be Done. April, 2014.

Christopher F. Palombo, DOH

Lead Author: Christopher F. Palombo
Organization: DoH
Country: USA

Abstract

There is an unprecedented opportunity to transform global access to medicine without significant change to the interests of manufacturers, while serving the needs of the 2 billion people worldwide who lack access. Across the world, there is a large volume of unexpired, usable and regulatory-compliant medicine surplus within every country’s healthcare distribution system, all of which is incinerated due to a lack of coordination and partnership. Should the right attributes be present within a country, that surplus can be redirected internally from waste to need.

An increase in chronic illness in the developing world has compounded the volume of the challenge of lack of access to medicine. Yet, Medication Surplus Recovery is a policy problem that has been given very little attention. The opportunity is massive – in the United States, where there are 30 million low-income uninsured people, over $100 billion in generic medication is sold, with billions more manufactured and incinerated due to oversupply. In the U.S., a collaboration between drug manufacturers and hospitals has demonstrated a transformation in medication access – resulting in a public health impact of shortened hospital length of stay, decreased Emergency Department utilization and hospital readmissions, as well as significant hospital cost savings. Since 2010, the DoH has collected $80,776,290 worth of donated medication. This medication is then distributed to healthcare facilities across the nation.

The United Nations has the opportunity to make Medication Surplus Recovery a policy priority, and to facilitate collaboration between manufacturers, distributors, and the providers serving those who lack essential medicine. Scaling Medication Surplus Recovery initiatives could play an important role in expanding access to essential medicines – a critical component for countries seeking to improve population health. The work can be organized in a matter of months, and incur considerable cost savings due to replication of tested concepts.

Submission

Medication Surplus Recovery is an underutilized opportunity. Medication Surplus needs to become a policy priority of the United Nations for the following reasons:
• There is a moral responsibility for leaders in the commercial and political space to identify opportunity and host collaborative solutions to solve large-scale social problems.
• The model of Medication Surplus Recovery is tested and tried. The DoH model has been successful for over a decade.
• Data is available demonstrating the opportunity of waste, the need of the poor, the value to the donor, the costs associated with dispensing, and the impact of the medication when applied to population health goals.
• Replication is prepared. The DoH has processes, systems, documents, and expert staff prepared to provide open source access to suitable partners. The replication toolkit is available, capturing an enterprise which required an investment of over $10 million in expense over 12 years to create, undergoing four quality improvement review processes, and including the ideas and test results from dozens of knowledgeable contributors.
• Relationships are in place with several of the most important multi-national drug manufacturing organizations. The DoH has found donor organizations to be ethical, engaged, and willing to take the opportunity to collaborate for important societal goals. While these relationships are not “scalable” in the way replication documents may be, the right relationships are in place to host meaningful exploration of a good idea.

Previous regulatory efforts addressing medication surplus and international distribution were often a narrow-scope treatment of a specific challenge, or a single issue rather than systemic policy approach. One example is policy addressing the dangerous unregulated flow of expired, near-expired and/or clinically inappropriate medications between well-meaning wealthy regions and into countries that faced need. The policy guidance, the WHO in Guidelines for Medicine Donations, 3rd Edition 2010, put in place an international best practice which supported sustainable distribution of medication. Guideline 6 requires 12 months of product life for donated medication shipped between counties, and for large donations, an assurance that the need match the donation. This resulted in a reduction of short-dated medication shipped internationally, but has not yet resulted in the international growth of in-country Medication Surplus Recovery systems. One of the most important policy benefits of the Medication Surplus Recovery opportunity put before the UN is its efficiency - for in-nation donation of the surplus medication specified above, there are no current systemic regulations, except those governing its shipping over national borders, and that which addresses the environmental impact of its destruction. The slate is clear form a policy perspective to expand this model.

THE IMPACT – Globally, mediations are being destroyed which could be used to improve public health. It is standard practice to produce medication with two to three years of available “life” before expiration. It is also standard practice in the developed world to continue to sell these medications up to the point at which medications are no longer viable for purchase by major wholesale distributors, that typically being 14 to 6 months before expiration. At that point, the medication no longer has adequate time for typical distribution by major wholesale distributors, who will pass on purchasing the product and instead will opt to purchase longer-dated product from competing manufacturers. The result is that public health remains unimpacted by a usable and regulatory acceptable supply of medicine.

The drug manufacturing process, like any manufacturing process, has some level of inefficiency. Production levels for drug manufacturing may be forecast a considerable time before medication meets actual wholesale market demand. Further, drug manufacturing is a highly competitive industry where licensing, government relations, distribution, and capital intensive specialized manufacturing plants mean that forecasts may not always align with market demand. One way to hedge against lost revenue due to inadequate supply is to produce and/or import at a level which is at the highest possibility for potential sales. This tactic may be more efficient than attempting to strike an exact supply/demand balance. Further, the cost of active pharmaceutical ingredients (API), chemicals used in the production of medication, represent just one minority part of the total cost of medication production. With a larger cost for medication nested in the value chain (logistics, marketing and sales, contracting and service), the low marginal cost per pill provides incentive to hedge by achieving the highest likely range of production and importation, even considering the destruction expense of unsold inventory. Thus, the cash cost of potential medication surplus is considerably less than the opportunity cost of underproduction.

Compared to other industries, surplus production may occur more readily in the generic manufacturing industry due to the competitive marketplace. Manufacturers frequently lose customers, which makes for opportunities to utilize surplus. Similarly, global supply chain disruptions also open opportunities to use surplus. Thus, medication surplus is available in every nation as surplus native manufactured inventory, and/or as surplus imported inventory. Both sources result in surplus, and therefore a viable supply of either incinerated waste or newly leveragable value. In the context of the United States, Nearly 80% of all prescriptions written have a generic alternative - many of the chemicals used to treat chronic illnesses – are those which are overproduced and over-imported result in wasted opportunity. The volume of overproduction and over-importation amount to billions of dollars annually.

THE SOLUTION - To draw the value from this surplus supply, DoH operates as a consortium of leading drug manufacturers, hospital systems, charity pharmacies and clinics, funders, supporters, and evaluation partners. Previously, some of these partners worked as quasi-adversaries, with supply levels and pricing negotiated between manufacturer, distributor and healthcare provider. Now, by working together in support of solutions identified and agreed upon by all stakeholders, surplus medication at risk of waste is redirected to solve the need for medication access. The partnership is free to solve the manufacturer’s concern over surplus, the hospital’s concern over need, and solve both institutions’ concern for vulnerable patients.

This model and its guiding collaborative complements the free-market drug manufacturing system as well as the World Health Organization’s best practice guidelines, neither undercutting the commercial interests of industry, nor utilizing surplus across national lines; hence there is no risk of expired medication transfer nor economic collapse of national free market distribution systems. For the manufacturers, modest government incentive is offered in return for their donation to the poor, based on fair market value credit subtracted from tax responsibility. For the dispensing partner, government subsidy is offered to nonprofit corporations which dispense the medication to serve those without access. Next, this model makes medication available to those who were previously priced out of the self-pay medication market and were unable to afford essential medicine, thereby serving those in need with stable, high-quality medication, without undercutting customer markets. Since each patient provided medication is qualified according to manufacturer-endorsed criteria, DoH can work with its partners to assure that the right medicine is going to the right patients in the right way.

In 2015, $1.3 billion in medication (WAC valuation) was offered by drug manufacturers to the DoH, with a substantial number of the U.S. drug manufacturing industry offering donation. The total offered was many times more than the DoH could distribute - the sum in 2015 of $13.9 million, resulting in 123,588 patient encounters. By 2020, the total distributed will more than quadruple, while the expense to run the operation carries an overall cost of $2,508,044, a scale that will be comfortably able to distribute $50,000,000 annually. By 2020, the DoH will return substantial annual value to its stakeholders return on investment of $18.79 in donated medication distributed to the poor for every $1 in operating expenses. After 2020, that return on investment will be even higher.

IMPACT ON PUBLIC HEALTH: In the United States, DoH is growing in order to meet the need, demonstrating that Medication Surplus Recovery is a viable alternative to incineration of surplus, and therefore to address the challenges of chronic illness. In the U.S., public coverage programs for the elderly (Medicare) and the poor (Medicaid) provide millions with access to medication. Yet, the 30 million uninsured do not qualify for public coverage, and cannot afford insurance. Over 40 percent of the 30 million uninsured in the United States are chronically ill, and half report forgoing healthcare, include prescription medication to treat their illness. This resulting lack of timely healthcare results in increased use of the Emergency Room, increased hospitalizations, and lowered overall health status. The typical patient for the DoH tends to be chronically ill and working poor, with one or two jobs held by someone within the household, yet living below 200% of the U.S. Federal Poverty Level, and who seek healthcare from clinics and hospitals due in part to a lack of access to affordable medication.

The US is not the only nation that has surplus, and chronic illness. Chronic illness is a global problem, with rates of chronic illness rising in developing countries. Heart disease, diabetes, adult asthma, and depression/anxiety all are common and require stable access to pharmaceutical treatment, and all have been found, as described below, to be impacted by stable access to DoH medication.

Not all surplus medication is equal. While there are over 10,000 compounds sold each year in the U.S. as prescription and “over the counter” medication, only about 300-500 chemicals and strengths are identified by the DoH as “essential” – providing the broadest possible benefit to the most people, targeting the most common chronic illness such as asthma, diabetes, hypertension, hyperlipidemia, depression, and anxiety. The DoH works with its dispensing site partners to identify and modify the target drug list, making certain that it is compatible with the identified needs of the region’s low-income, uninsured residents. The DoH formulary is driven by requests of doctors and pharmacists participating in the network.

Having access to the right 300-500 medications is a good start, but for patients with chronic illness, it is also important to ensure that access is never disrupted. Many illnesses require medication levels to remain constant in the bloodstream. Transition to a new drug can be disruptive for a patient, and the resulting impact can negatively affect a person’s livelihood, relationships, and long-term health. A drug distribution effort must provide its partner pharmacies and clinics with compounds, medication strength, and unit packaging which is stable and appropriate for the dispensing partners. The DoH has worked to implement a number of business practices to achieve stability in supply of chemical compound, strength, unit packaging, and other variables. First, the DoH targets donor redundancy for each compound and strength, with an ideal of several manufacturers for each. Redundancy in donors ensures that each target medication has several potential sources, should any one manufacturer have an inadequate supply, or should need outpace minimum acceptable product dating. Further, the DoH has established agreements with manufacturers which allow the organization to request and receive supplies of product when surplus supplies are inadequate to cover demand. This allows the DoH to reach into the future and address critical gaps in surplus product availability before items become backordered. Next, the DoH maintains a 20,000 square foot, state-of-the-art, secure inventory warehouse, which allows DoH inventory managers to stock supplies of medication in advance of a need, and keep inventory on hand to satisfy demand. Finally, the DoH makes good use of technology to assess the ideal quantities of medication to have on hand. The data algorithm combines ordering history, site behavior, additional site usage, and data on the availability of medication, stocking adequately to satisfy need without overstocking, which would result in cost to the program. These components work together to ensure that a consistent supply of medication to patients can be mined from an inconsistent supply of surplus product. Great effort is invested into sourcing the right medications, and providing those medications in stable supply. This leads to the highest impact possible on chronic illness.

IMPLEMENTATION: Medication overproduction and over-importation goes beyond any single nation, and is a global aspect of industry. According to the U.S. Food and Drug Administration, the global market for generic medications will be over half a trillion U.S. dollars by 2018. According to USA Today, 80% of that production consists of Active Pharmaceutical Ingredients (API) which are manufactured overseas, and 40% of the finished medication product is manufactured internationally, mostly in the nations of China, India, and Brazil. The surplus is present for drugs, in all therapeutic classes, treating all disease states. If the medication is available globally to treat a condition, then either by overproduction or over-importation, the surplus exists.

The U.S. is not alone in the need for essential medication combined with a waste of medication resources, and the DoH’s learnings are replicable in other counties. For this model to be effectively replicated in an international context, the DoH believes that four conditions must be present within a country: 1) Surplus - a supply of medication must be available either through native manufacturing or source country import and distribution (though both provide opportunity and the absence of native manufacturing does not negate the need for surplus recovery). 2) Security - a supply chain must be in existence, with trustworthy and efficient in-country shipping, reputable partners to dispense the medication to those in need, and supply lines that have manageable levels of oversight to mitigate drug diversion. 3) Suffering - there must be demand, coming from a significant population of vulnerable people who cannot access essential medicines, either through coverage or self-pay, but need access. 4) Subsidy – a tax or a market-driven incentive system that rewards donor altruism and is accessible, fair, stable and dependable. This can be creatively applied to suit the needs of the pharmaceutical company donor - structured as a tax credit, or any other form of cash or noncash remuneration for a company’s service to the vulnerable. When these four attributes are at work, manufactures are more likely to consider participating, and a model such as the DoH is more likely to be successfully replicated in the context of a new nation. These conditions are currently present in dozens of industrialized and developing countries.

EVIDENCE: The impact of the DoH model has been found to be outstanding to reduce cost and improve health outcomes. DoH was evaluated in 2015 by the Advisory Board Company, an international consulting and research company that serves 99 of the 100 largest US hospital systems and 30 of the largest international drug manufacturers. The Advisory Board Company reviewed 2.5 years of data form three pharmacies and three hospitals in the U.S. state of Tennessee. Enrollment into one of the DoH-supplied pharmacies was the critical “intervention,” and the data was compared, using a “pre-” and “post-” enrollment (into DoH donated medication program), a longitudinal analysis of patient’s timeline as they flowed through care, and a review of high utilizers of hospital care. Researchers then compared findings to the NYU Algorithm (Potentially Preventable ED Visits), AHRQ Algorithm (Ambulatory Care Sensitive Admissions), and the 3M Algorithm (Potentially Preventable Readmissions, and Potentially Preventable Complications. As a result, the DoH was found to provide: 1) reduced length of hospital stays for those previously without access to medication but now served by the DoH, 2) reduced need for emergent care facilities, and 3) reduced hospital readmissions for those who have accessed their medication. Further, specific improvement was found in chronic illnesses such as diabetes with ketoacidosis, cardiac disease, and respiratory disease. Overall, the DoH program reduced both the cost and the utilization for the low-income uninsured patients, resulting in a savings per 1,000 lives for hospitals of $2.08M.

The DoH model demonstrates that people, regardless of income, can have a substantial increase in access to the medicine that they need. This expanded access is based on sustainable systems - multinational drug manufacturing companies which host the surplus, and hospitals and their associated clinics and pharmacies, which host and fund the dispensing activity. The result is that this solution is scalable to other nations, and utilizes the same mechanisms and value chain solutions used by for-profit drug provision. Further, the DoH is designed to be financially self-sustaining, with the manufacturers providing the medication from their surplus and planned giving inventories, and with dispensing sites funding both the dispensing of medication, and the costs associated with Medication Surplus Recovery. Participation from the manufacturers and the hospitals are therefore critical to this effort, and the resulting collaborative model and its operating systems are funded through their work.

Bibliography and References

• DoH Summary Video - https://vimeo.com/153332531

• Trefis Team. Why are Generic Drug Prices Shooting Up? Forbes, February, 2015

• World Health Organization, Guidelines for Medicine Donations, 3rd Edition, 2010

• DoH assessment based on industry surplus review, 2014.

• Total US Sales and Total Generic Sales - Institute for Medical Informatics, 2010 Report “The Use of Medicines in the United States” 2010

• US Food and Drug Administration. Generic Drug Products: Moving Forward in a Global Environment.

• Kaiser Commission of Medicaid and the Uninsured. Prescription Drug Trends. May 2010 Fact Sheet.

• USA Today, As Drug Making Goes Global, Lack of Oversight Found. October, 2012

• The Uninsured: A Primer. Kaiser Commission on Medicaid and the Uninsured. January, 2015

• Uninsured Americans with Chronic Health Conditions. Key Findings from the National Health Interview Survey. Robert Wood Johnson Foundation. May, 2005

KATE ARMSTRONG, CLAN (Caring & Living As Neighbours) and APPES (the Asia Pacific Paediatric Endocrinology Society)

Lead Authors: Kate Armstrong and Professor Paul Hoffman and Jacinta Sherlock,
Organization: CLAN (Caring & Living As Neighbours) and APPES (the Asia Pacific Paediatric Endocrinology Society).
Country: Australia; New Zealand

*The authors would like to acknowledge members of the APPES-CLAN Equity (ACE) Working Group who assisted not only with the development of this paper but also the actions underpinning the case studies. The deep commitment of these health practitioners to achieving equitable access to medicines and healthcare for the many thousands of children they care for in the Asia Pacific region informed this contribution. We would ask that the expertise, insights and achievements of the grassroots practitioners that is shared in this paper be considered by the High Level Panel members in their deliberations.

Abstract

This contribution to the United Nations Secretary General’s High-Level Panel (UNSG HLP) on Access to Medicines is respectfully submitted by CLAN (Caring & Living As Neighbours) and APPES (the Asia Pacific Paediatric Endocrinology Society).

CLAN and APPES will speak to the inequitable access to medicines, equipment, diagnostics and health technologies experienced by children and adolescents living with non-communicable diseases (NCDs) in low- and middle-income countries (LMICs) specifically in the Asia Pacific region, and the enormous and preventable morbidity and mortality that results. We offer specific examples relating to children affected by common childhood endocrine NCDs such as Congenital Hypothyroidism (CH), Type 1 Diabetes Mellitus (T1DM), Congenital Adrenal Hyperplasia (CAH) and Osteogenesis Imperfecta (OI) to inform this contribution.

CLAN and APPES invites the UNSG HLP to consider what has been accomplished to date for children living with endocrine conditions and other NCDs through the multisectoral collaborative implementation of CLAN’s strategic framework for action using “the five pillars” (http://www.clanchildhealth.org). This human rights-based, community development approach offers practical solutions for the sustainable and scalable change for children and adolescents living with NCDs in LMICs.

Background to the authors

CLAN is an Australian-based non-government organization (NGO) committed to equity for children and adolescents living with chronic health conditions in resource poor countries. CLAN is formally associated with United Nations Department of Public Information (UNDPI/NGO) and delivered successfully on commitments to the UNSG’s Every Woman Every Child (EWEC) movement. CLAN is founding secretariat and governing council member of global coalition NCD Child (www.ncdchild.org). NCD Child endorses this contribution.

APPES is the peak body for paediatric endocrinology societies in the Asia Pacific region, representing around 500 specialist paediatricians working across almost twenty countries (including Australia, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, New Zealand, Oman, Pakistan, the Philippines, Singapore, Thailand and Vietnam).

Submission

A. Executive Summary

CLAN and APPES respectfully calls upon the UNSG HLP to consider our experiences redressing inequities for children living with endocrine conditions in LMICs of the Asia Pacific region through systematic and collaborative action around childhood NCD community priorities by a range of multisectoral partners.

Our specific recommendations to the UNSG HLP include a request for urgent and high-level support for:

1. Coordinated action towards equitable access to medicines, technologies, diagnostics and healthcare for #EVERYchild living with endocrine conditions and other NCDs. Maslow’s Hierarchy of Needs conceptualises the fundamental importance of affordable access to essential medicines and healthcare if rights to fulfilling lives are to be respected. Urgent humanitarian donations must be secured for those living in LMICs whilst medium and longer term solutions (including local registration of drugs; Universal Health Care and innovative financing mechanisms) are explored;

2. A human rights-based, person-centred and community development approach to improving equity for children living with NCDs in LMICs;

3. Universal newborn screening for Congenital Hypothyroidism in all LMICs;

4. Development of paediatric NCD patient registers and data disaggregation to identify and monitor the actual burden NCDs place on children and families in LMICs; and

5. Encouragement of technology and private sector partners to engage with grassroots childhood NCD communities and practitioners to fast-track change.



B. The rights of EVERY child to access medicines and healthcare

The United Nations Convention on the Rights of the Child (UNCRC)1 recognises the rights of all children to live an individual life in society, raised in the spirit of happiness, love, understanding, peace, dignity, tolerance, freedom, equality and solidarity.

Specifically, UNCRC addresses the rights of children who are living with special health needs such as NCDs and other chronic health conditions (see Table 1). UNCRC affords all children the right to “enjoyment of the highest attainable standard of health and to facilities for the treatment of illness and rehabilitation of health” and holds the international community responsible for ensuring countries “strive to ensure that no child is deprived of his or her right of access to such health care services”.


Table 1 – The rights of EVERY child to essential medicines and equipment (as outlined by UNCRC)

• Governments shall undertake all appropriate legislative, administrative and other measures for the implementation of the rights recognised in the present Convention ... to the maximum extent of their available resources and where needed, within the framework of international co-operation (Article 4)
• The inherent right to life (Article 6)
• Governments shall ... ensure the development of institutions, facilities and services for your care (Article 18)
• Governments recognise that a child living with a mental or physical disability should enjoy a full and decent life, in conditions which ensure dignity, promote self-reliance and facilitate active participation in the community ... and ensure access to health care services and rehabilitation services… in a manner conducive to achieving the fullest possible social integration and individual development… (and) the right of a child living with a disability (and those responsible for the child) to special care, subject to available resources (Article 23)
• The right to the enjoyment of the highest attainable standard of health and facilities including the provision of necessary medical assistance and health care (Article 24)
• The right to benefit from social security, including social insurance (Article 26)
• The right to a standard of living adequate for physical, mental, spiritual, moral and social development... including through material assistance and support programs (Article 27)


C. Child health inequities in the Asia Pacific region

With the rights of every child so clearly articulated by the UNCRC, the gross inequities experienced by children and adolescents living with endocrine conditions2 and other NCDs3,4 in resource poor settings represents a significant misalignment of policy, public health goals and actions.

Specific examples of this inequity relevant to four major NCDs affecting children and adolescents in the Asia Pacific region are:

i. Congenital Hypothyroidism (CH) – access to diagnostics

CH is the most common inherited endocrine condition of childhood and affects 5.02:10,000 children5. Undiagnosed and untreated, CH results in severe developmental delay (historically called “cretinism”). This outcome is rarely seen anymore in high-income and middle-income countries due to implementation of universal newborn screening (NBS – also called heel-prick testing) and the affordable availability of thyroxine tablets for treatment.

By comparison, in many LMICs of the Asia Pacific region preventable morbidity associated with CH is high. Although thyroxine tablets are relatively affordable and available in all countries, failure to screen EVERY newborn baby in EVERY country for CH6 results in irreversible developmental delay that affects thousands of babies by the time a diagnosis is made. The consequent burden of preventable disability on affected children, families and the economic fabric of their countries is extreme7.

ii. Type 1 Diabetes Mellitus (T1DM) - access to medicines, diagnostics, technologies and health care

It is estimated 100million people globally require insulin (an estimated 490,100 for T1DM)8,9, with around half facing challenges with access. In high-income countries children with T1DM can expect to be diagnosed and managed so that their diabetes does not significantly reduce their lifespan. Secure access to medicines (insulin and glucagon) and new technologies (such as insulin pumps) are reducing the burden on young people and families alike.

For children living in LMICs of the Asia Pacific the experience of T1DM is very different10. Misdiagnoses are frequently fatal (ketoacidosis is commonly mistaken for pneumonia); insulin and glucose monitoring strips are unaffordable and in many cases unavailable; glucagon is unavailable in most LMICs (increasing the risk of fatal hypoglycaemic episodes); and, inequitable access to new technologies is commonplace (eg 30-60% use of insulin pumps by children in Australia versus 0% use in Pakistan). These factors all contribute to the inequitable burden of preventable morbidity and mortality in the region11.

Whilst successful humanitarian aid programs (such as the International Diabetes Federation’s Life For A Child program12) are doing much to reduce mortality, there is a need for strong political will to drive secure, sustainable long-term solutions in-country that will protect and promote the rights of children. Insulin was discovered in 1921 and both insulin and glucagon are included within the World Health Organisation’s Essential Medicines List for Children (WHO EMLc)13, yet misalignment of the rights of inventors and children, trade regulations and public health objectives intensifies inequities.

iii. Congenital Adrenal Hyperplasia (CAH) – access to medicines, diagnostics and healthcare

CAH is the most common adrenal condition of childhood. The incidence of CAH is known to vary significantly (incidence figures of 1:18,000 in the USA and 1:6,000 in the Philippines7 have been established through documented NBS programs). With appropriate maintenance treatment (affordable hydrocortisone and fludrocortisone tablets) and sick day care (hydrocortisone for emergency injection) the life expectancy for children born with CAH in HICs is not reduced.

By comparison, mortality associated with CAH in LMICs in the Asia Pacific is known to be significant and largely attributable to unaffordable access to essential medicines, diagnostics and quality health care. Like insulin, hydrocortisone (tablets and vials for injection) and fludrocortisone are included on the WHO EMLc13, yet this proves little help to health professionals striving to secure local registration and availability. Compounding the issue, high mortality rates reduce prevalence numbers and the demand for drugs remains low. As orphan drugs with competing cheap generics in the market, there is minimal financial incentive for pharmaceutical companies to push ahead with registration of the drugs in-country (often at significant cost to have a portfolio approved). The black market is consequently the only source of CAH medications in many countries, with negative impact on quality and security of supply.

iv. Osteogenesis Imperfecta (OI) – access to medicines, technology and healthcare

OI is a genetic disorder of collagen production that results in fragile bones that fracture easily and often. Fortunately, treatment with intravenous bisphosphonates is affordable and effective, and since it was introduced in 199414 has revolutionized care for children living with OI by reducing fracture rates and optimizing mobility and health outcomes.

Unfortunately, in many LMICs, bisphosphonates for injection are neither available nor registered for legal use in children. As a result, OI in these countries is still associated with very high rates of preventable disability, morbidity and mortality. Access to morphine (for pain relief) and effective management of fractures are additional problems for OI communities in many LMICs. Most usually the telescopic high quality steel rods used to stabilise long bone fractures in HICs and MICs are not affordably available in LMICs, and this further contributes to the high rates of disability, pain and suffering that are reported by APPES members15.


D. A human rights-based, community development model to fast-track equity for children living with NCDs in LMICs

CLAN and APPES respectfully share their experiences utilizing CLAN’s strategic framework for action to drive multisectoral collaborative action to redress inequities for children and adolescents living with endocrine conditions in the Asia Pacific region. Based on successes so far, we offer it as a model for driving sustainable and scalable change for children living with NCDs in LMICs more broadly.

Since 2004 CLAN and members of APPES have worked in partnership to implement a human rights-based, person-centred, community development approach to redressing the inequities experienced by children and adolescents living with endocrine conditions in the Asia Pacific region.

Empowering individuals to become communities

CLAN identifies all children and adolescents in a country who are living with the same chronic health condition as members of a united local, national and global “community”. For example, a child presenting with Diabetes at the National Institute of Child Health in Karachi, Pakistan is automatically a member of the Pakistani Diabetes community and also the international Diabetes community.

Having shifted from an individual to a community based focus, CLAN and APPES members then commit to working collaboratively with a range of multisectoral partners and stakeholders to drive human rights-based, Strategic Framework for Action (known as the “Five Pillars”) focused on community priorities:
1) Affordable access to medicines and equipment;
2) Education (of children, families, health professionals, and local, national and international communities), research and advocacy;
3) Optimal medical management (with a holistic approach and commitment to primary, secondary and tertiary prevention);
4) Encouragement of family support groups; and
5) Reducing financial burdens and promoting financial independence.

These Five Pillars were first developed in 2005 following detailed consultation with the CAH community of Vietnam16, and have since been used to inform collaborative action across multiple chronic conditions (including Diabetes, Autism Spectrum Disorders, Nephrotic Syndrome, Rheumatic Heart Disease, Asthma, Osteogenesis Imperfecta and Duchenne Muscular Dystrophy) and countries (Pakistan, the Philippines, Indonesia, Nigeria, Kenya and Algeria).


Practical examples of CLAN’s model redressing inequity in the Asia Pacific

Regional achievements are presented as brief case studies:

i. Impact on remedying policy incoherence

a) Rapid change for the CAH and Diabetes communities in Vietnam

CLAN was invited by APPES members to work with the CAH (since 2004) and Diabetes (since 2007) communities in Vietnam. Access to medicines (Pillar 1) was identified by families as their greatest priority15. Urgent humanitarian donations of hydrocortisone (Alphapharm Australia), fludrocortisone (Bristol-Myers Squibb) and insulin (Insulin For Life) were arranged to secure the lives of all affected children whilst medium term solutions to registration barriers were explored.

A partnership with the International Insulin Foundation was established, resulting in collaborative implementation of the RAPIA (Rapid Assessment Protocol for Insulin Access) survey across three paediatric hospitals in Vietnam (Pillar 2 – research). The Diabetes RAPIA17 was then adapted for use by the CAH community and the resultant CAH RAPIA report18 identified clear recommendations to benefit the communities which were then implemented (including successful inclusion of hydrocortisone and fludrocortisone tablets in the WHO EMLc in 2008)19, resulting in the registration of hydrocortisone and fludrocortisone tablets in Vietnam and their inclusion in the national insurance scheme. APPES members assisted with translation of educational resources (Pillar 2); gave educational talks for families at support group meetings (Pillars 2 and 4) to help families learn how to use the drugs optimally; and supported training for health professionals to strengthen medical management (Pillar 3).

b) FOSTEO impacts legislation in Indonesia

CLAN was invited by APPES members to support efforts for the OI community in Indonesia in 2012. At that time quality of life for children with OI was very poor; there were only 25 children known to be alive. Most children with OI died painful, fracture-related deaths within the first few years of life because it was illegal for doctors to prescribe intravenous bisphosphonates to children, despite extensive evidence internationally that such treatment strengthened bones and offered increased mobility and survival for those receiving it (Pillar 1, 2, 3).

An official launch of the national OI community (called FOSTEO) was held in Jakarta (Pillar 4) with celebrity endorsement resulting in significant media coverage of the challenges the community faced (Pillar 2 – advocacy)20. Within 6 months national legislation was changed and bisphosphonates could be legally prescribed (Pillar 1). A patient register was developed, and in the following 6 months more than 100 children were registered due to the increased awareness of the condition across the archipelago (Pillar 2). Strong community participation (using Watts App and other means) supports ongoing action and fundraising for the community21, with all children receiving treatment and many now mobilizing and achieving health outcomes comparable to children in Australia.

ii. Impact on public health

a) “Rarity” does not reflect the true burden of disease

When CLAN was first invited to help children living with CAH in Vietnam (2004), doctors estimated there were around 150 children alive nationally with CAH. Collaborative efforts focused on improving quality of life, and prevalence increased as rapidly as mortality plummeted. A burgeoning CAH community prompted questions around incidence, and the Vietnamese government implemented a pilot NBS program for CAH, further reducing mortality, raising awareness and improving health outcomes (Pillar 2,3). In 2016 there are over 1000 children on CAH registers coordinated by APPES members at the major children’s hospitals in Vietnam (Pillar 2)22

APPES members have worked to establish CAH communities in Indonesia (KAHAKI), the Philippines (CAHSAPI) and Pakistan (CLIP), driving improvements in child survival and quality of life.

b) Health literacy

Translation of educational resources on CAH, Diabetes, OI and CH into local languages by APPES members has been a key success factor (Pillar 2,3). These resources are utilised by health professionals and families; increase community awareness; promote empowerment of community champions; and reduce the burden on strained outpatient and inpatient systems. Incorporation of these resources into a mobile phone app that can be used by health professionals and families is currently being trialed by CLAN and APPES in Pakistan, with support from Pfizer Australia.


iii. Impact on human rights

a) Empowering young people living with NCDs

CLAN has developed child-friendly resources for NCD communities, outlining specific articles in UNCRC as they relate to the needs identified by families in CLAN’s five pillars (Pillar 2). To date, flyers on Diabetes (English, French, Spanish)23 and Childhood Cancer (English)24 have been finalized, with flyers on Rheumatic Heart Disease, Asthma, CAH, OI / disability and NCDs (prevention and management more generally) under development.

b) NCD Child

Rights-based advocacy efforts by CLAN to integrate children and adolescents within the global NCD discourse (Pillar 2) resulted in CLAN chairing the NCD Alliance Child Focused Working Group in January 2011 and later founding NCD Child (www.ncdchild.org) immediately following the UN High Level Meeting (UNHLM) on NCDs in September 2011.

Inclusion of children and a focus on a life-course approach to NCDs in the UNHLM Declaration was an important outcome in terms of remedying policy incoherence and uniting facilitating future action by civil society and government alike. A partnership with UNICEF around the development of a chapter on NCDs for their Facts For Life publication will support awareness amongst communities about the rights of children who are living with and at risk of NCDs.

iv. Implementation

a) Embracing the sustainability and scalability of community development

Because of the chronic nature of NCDs, many of the families and young people CLAN works with have been partnering with us for over a decade (Pillar 4). The strength of community history, ownership and commitment means CLAN and APPES are able to implement activities in a very cost effective fashion.

The success of collaborative efforts between CLAN and APPES to address endocrine conditions in Vietnam prompted health professionals to successfully replicate CLAN’s Five Pillars model to other NCDs (including Nephrotic Syndrome, Autism and Duchenne Muscular Dystrophy). CLAN’s Strategic Framework for Action has allowed the scaling of action beyond the Asia Pacific region, with new CAH Communities recently established in Nigeria and Algeria using CLAN’s model. Led by GPED (the Global Pediatric Endocrinology and Diabetes organisation of which APPES is a member) the Algerian CAH community launch has already facilitated early success in clarifying barriers around local access to medicines25. CLAN’s Five Pillars have also been used in Kenya (Rheumatic Heart Disease - RHD)26, with the Kenyan national NCD policy including RHD for the first time just one year after the establishment of the Nairobi RHD Club.

b) Innovating to improve access to medicines

CLAN’s 5th Pillar is focused on financial independence, and challenges thinking as to how to consider innovative solutions to medically-induced bankruptcy and poverty. A successful trial of a micro-finance and enterprise development projects over three years in Indonesia for the CAH community demonstrated the capacity for multisectoral action to improve access to medicines and health outcomes simply by increasing income generation of poor families27.


E. Conclusion

Utilization of CLAN’s Strategic Framework for Action by APPES members has facilitated a number of significant improvements in access to essential medicines, diagnostics, technologies and healthcare for some of the most vulnerable children and adolescents in the Asia Pacific region over the last decade.

CLAN and APPES welcome the opportunity to address the HLP in person to share further information about our experiences redressing inequities associated with childhood NCDs in LMICs. We believe change is possible when we all work together.

Bibliography and References

1. The United Nations Convention on the Rights of the Child – available at http://www.unicef.org/crc (accessed January 2016).
2. Zacharin M. Practical paediatric endocrinology in a limited resource setting. First edition. Academic Press, 2013.
3. A focus on children and NCDs. Policy brief, NCD Child, 2011. Accessed NCD Alliance website Feb 2016 (http://ncdalliance.org/sites/default/files/resource_files/20110627_A_Focus_on_Children_&_NCDs_FINAL_2.pdf).
4. Proimos J, Klein J. Noncommunicable Diseases in Children and Adolescents. Pediatrics, September 2012, Vol 130, Iss
5. Chen et al. Epidemiology and Clinical Characteristics of Congenital Hypothyroidism in an Asian Population: A Nationwide Population-Based Study. J Epidemiol. 2013; 23(2): 85–94.
6. Padilla, et al. Consolidating newborn screening efforts in the Asia Pacific region: Networking and shared education. Journal of Community Genetics, 2012;3(1), 35–45. Countries not currently offering universal NBS in the Asia Pacific region include: Bangladesh; China; India; Indonesia; Laos; Mongolia; Pakistan; Philippines; Sri Lanka (commenced December 2015); Vietnam (conducted in some provinces) (personal communication with APPES colleagues).
7. Gu et al. A cost-benefit evaluation of neonatal screening for phenylketonuria and congenital hypothyroidism. Chinese journal of preventive medicine. 2000 may; 34(3):147-9
8. Beran et al. Constraints and challenges in access to insulin: a global perspective. The Lancet, Diabetes & Endocrinology, accessible online 5 Feb 2016 http://www.thelancet.com/journals/landia/article/PIIS2213-8587%2815%2900521-5/abstract
9. International Diabetes Federation. Diabetes Atlas, 5th ed. IDF. Brussels, 2011. https://www.idf.org/sites/default/files/attachments/DV_56-SI2.pdf
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11. Beran et al. Delivering Diabetes Care in the Philippines and Vietnam. Asia Pac J Public Health 2013 Jan; 25 (1): 92-
12. International Diabetes Federation (2015). Life for a Child. Accessible online Feb 2016 (http://www.idf.org/lifeforachild)
13. World Health Organisation (2015). WHO Model List of Essential Medicines for Children. Accessible online Feb 2016 (http://www.who.int/medicines/publications/essentialmedicines/EMLc_2015_FINAL_amended_AUG2015.pdf?ua=1)
14. Glorieux F. Experience with bisphosphonates in osteogenesis imperfecta Pediatrics. 2007 Mar;119 (2): S163-5. Accessible online Feb 2016 (http://www.ncbi.nlm.nih.gov/pubmed/17332237)
15. APPES-CLAN Equity Working Group Snapshot Survey of the Asia Pacific region (2015-16); internal evaluation as yet unpublished; personal communication.
16. Armstrong et al. Living with congenital adrenal hyperplasia in Vietnam: a survey of parents. J Paediatr Endocrinol Metab. 2006 Oct; 19(10):1207-23.
17. Beran et all. Report on the rapid assessment protocol for insulin access in Vietnam (2008). Accessed online Feb 2016 (https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi664eZu_3KAhXJFJQKHbyjAgQQFggdMAA&url=https%3A%2F%2Fwww.idf.org%2Fwebdata%2Fdocs%2FIIF-RAPIA-2008-Final-Report-Vietnam.pdf&usg=AFQjCNHG-yE5kx3nEPezx460zzw4gF4AhQ&bvm=bv.114195076,d.dGo).
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Burcu Kilic, PUBLIC CITIZEN

Lead Author: Burcu Kilic
Organization: Public Citizen
Country: USA

Abstract

Achieving policy coherence between trade and health

Since 1994, the United States has signed 20 free trade agreements (FTAs) with both developed and developing countries. These agreements introduce substantive patent, data/market exclusivity, and enforcement rules, and each agreement updates the previous one and sets the bar higher for IP protection.

The World Health Organization’s resolution 59.26 on international trade and health underlines the lack of policy coherence between trade and health. Identifying the need for policy coherence is easier than producing such coherence. The problem of creating coherence in complex policy settings requires looking at specific problems.
Exclusivity rules delay generic medicine registration for a specified period of time by limiting the ability of generics manufacturers and regulatory authorities to make use of an originator company’s data submitted in the marketing approval process.

The implications of such measures could have far-reaching effects for access to affordable medicines. Marketing and data exclusivity rules are separate from patents. Even where there is no patent for a medicine, exclusivity rules will provide a monopoly for a set period.
The inbuilt flexibilities for compulsory licenses are not reflected under the exclusivity provisions of the FTAs. The increasing prevalence of public health interventions creates need to incentivize governments’ to take advantage of their policy space, using different tools to complement creatively the exclusivity provisions.

Thus, this submission aims to

- establish policy coherence between FTA commitments and national health objectives by focusing on the national policy-making process
- articulate the need for an explicit public health exception to address data/market exclusivity obstacles for access to medicines
- propose targets, policy measures and mechanisms that are designed to work towards improving global health architecture — and, in particular, achieving better health outcomes in FTA countries

Submission

Achieving policy coherence between trade and health

Background
The Doha Declaration on the World Trade Organization’s (WTO) Agreement on Trade Related Intellectual Property Rights (TRIPS) and Public Health is a binding legal document, which clarifies and confirms flexibilities for protecting public health under TRIPS. According to Paragraph 4 of the Doha Declaration, Members can and should interpret and implement TRIPS in a manner supportive of their own rights to protect public health and, in particular, to promote access to medicines for all. The ‘spirit of Doha’ represents a broad and binding consensus of the international community that governments are not only entitled but have a duty to use public policy health safeguards to promote access to affordable medicines.

Since 1994, the United States has signed 20 FTAs with both developed and developing countries including Jordan, Morocco, Peru, Chile, Australia, and Singapore . The European Union concluded 34 trade agreements with 53 countries worldwide and is in the process of negotiating agreements with many more . These agreements introduce substantive patent, data/market exclusivity, and enforcement rules, and each agreement updates the previous one and sets the bar higher for IP protection, with a modest exception in the U.S. pursuant to the so-called May 10 Agreement .

The recently signed the Trans-Pacific Partnership Agreement (TPP) includes measures that are detrimental to access to affordable medicines.

Exclusivity Provisions
Article 39.3 of TRIPS covers the “protection of undisclosed information” and only requires protection of undisclosed test data on new chemical entities, the collection of which involved considerable effort, against disclosure unless steps are taken to ensure that the data is protected against “unfair commercial use.”

The North American Free Trade Agreement (NAFTA) includes a similar passage, but also specifically prevents regulators from relying on an originator’s data for a reasonable period. The U.S. sought a provision in TRIPS based on this NAFTA paragraph. This proposed provision was excised from the TRIPS Dunkel Draft in 1991 and was never restored to the TRIPS Final Act of 1994.

The TRIPS drafters’ refusal to adopt the NAFTA provision is one of several factors demonstrating their intention to provide for some level of data protection, but not data exclusivity, in TRIPS.

Nevertheless, all the recent free trade agreements include provisions on data & market exclusivity. Marketing and data exclusivity rules are separate from patents. Even where there is no patent for a medicine, exclusivity rules could provide a monopoly for a set period.

The US-model exclusivity provisions require governments not to permit third parties to market the same or similar product using the same test or other data concerning the safety and efficacy of the product .

Public Health Safeguards

All the recent U.S. FTAs including the TPP contain a provision providing safeguards for governments to take measures to protect public health in accordance with the TRIPS Agreement and Doha Declaration . The provision borrows the language from May 10 Agreement and the previous FTAs (Peru US FTA, Korea-US FTA). Those involved in drafting the provision say it was designed precisely to overcome data exclusivity and facilitate the use of generics when governments so choose. It was meant to be analogous to compulsory licensing for patents: a tool to introduce generic competition when an exclusive right poses an obstacle for health.

But are these safeguards specific enough to protect health? The increasing prevalence of public health interventions creates a need to analyze the scope of governments’ ability to supersede exclusivity provisions. The US-FTA style Doha safeguards provide little specific guidance. The inbuilt flexibility for compulsory licenses is not reflected under the exclusivity provisions.

Professor Carlos Correa highlights this problem in his analysis of the TPP intellectual property chapter:

“..this language has little or no practical effect. It would not limit in any manner the obligations imposed by the agreement. The referred to Declaration only confirms the flexibilities allowed by the TRIPS Agreement in relation to public health matters (such as compulsory licenses and parallel imports), but it is unlikely to provide a sufficient legal basis to derogate from the obligations established by the TPP.”

The Doha Declaration confirms the flexibilities of the TRIPS agreement. Its protections may be interpreted by some as not relevant to the provisions going beyond TRIPS in FTAs. Multinational pharmaceutical companies could seek to take advantage of this.

In the absence of an explicit public health exception overriding data/market exclusivity in appropriate circumstances, a compulsory license on a patent could be rendered moot. Although the compulsory license would prevent patent obligations from standing in the way of needed domestic production or export of a patented drug, production of the drug would still be blocked by data/market exclusivity since generic firms must still obtain marketing approval.

Article 31 of TRIPS , which provides for compulsory licensing, is explicitly about patents. FTAs, like the TPP, do not explicitly require that compulsory licenses be effective or override any market/data exclusivity so that generics/biosimilars can enter the market. Article 31 just ensures that a compulsory license can be issued on the patent.
A European Commission communication from 20 February 2006 claimed that compulsory licenses on patents did not allow the overriding of data/market exclusivity as the exclusivity law did not allow it:

“However the Community pharmaceutical acquis does not currently contain any provision allowing the waiver of the rules on data exclusivity and marketing protection periods described above in the case of a national or an EU-wide emergency.

Before the expiry of the data exclusivity and marketing protection periods provided for by the European pharmaceutical legislation, applicants for a generic marketing authorization have to either (1) provide the relevant authority with the required documentation on pre-clinical tests and clinical trials or confirm that the marketing authorization holder has consented to the use of the required documentation by the applicant. “

There is an urgent need for expanded language to provide a clear operational path for health exceptions to data and marketing exclusivity under FTAs.

Biologics
The ambiguous terms of existing US-FTA style Doha safeguards present a more serious problem for biologics. Biologic medicines are complex molecules such as proteins that are isolated from plants/animals/micro-organisms or made using biotechnology. They can include cancer medicines and therapies such as insulin. An AIDS vaccine would be a biologic. They are a growing share of medicines and can cost up to 569,000 per patient per year at monopoly prices, often for a lifetime .
Biologics may not be patentable in all cases as they are naturally occurring products such as insulin or components of human blood etc. The TPP Agreement requires countries to stop generic versions of biologic medicines (‘biosimilars’) from being available to patients, even when there is no patent or beyond the term of patent. If there is no patent on biologics drug (and hence no compulsory license), it is unclear whether Doha safeguards can be used to override biologics exclusivity .

In the TPP negotiations, only Chile has preserved the health and other exceptions in its law , which Chile can use to override biologics exclusivity. However, other TPP parties can only rely on a generic TPP provision with respect to the utilization of data for regulatory approval, which includes a boilerplate exception to “protect the public” . The general and vague language of this provision may not give countries the confidence to override exclusivity provisions with compulsory licensing-like mechanisms, in cases where there is a compulsory license on pharmaceutical patents. Above all, the provision does not address how these safeguards can be used to override exclusivity on an unpatented drugs.

There is thus a quest for an explicit public health exception to override data/market exclusivity obstacles for access to medicines. Such an exception will provide latitude for policy makers to issue licenses or create safeguards s to the effective marketing monopolies conferred by exclusivity provisions .

Implementation

United Nations Secretary-General’s High-Level Panel on Access to Medicines can take a leadership role on trade and health policy to establish institutional mechanism transplanting right to health into a new area and ultimately extending its reach in some respects into the international trade arena.

• Right to health: The Panel should make the case for the power of human rights law to develop possible policy responses to minimize negative impact of FTA provisions. This would include revisiting long-established human right principles and revising long-held positions on trade. The Panel should promote a trade-health coherence agenda putting in place appropriate, public health and public interest policies to support progress towards achievement of the right to the highest attainable standard of health.

• Technical Assistance: TPP countries have not yet implemented the TPP. Countries might further need specific technical assistance for achieving more coherent policies at the intersection between trade and health. Institutional mechanisms of collaboration among TPP countries be led by the High Level Panel can achieve desired policy outcomes.

• Model law: Model Law provisions can assist the design of complementary policies aimed at smoothing negative effects of exclusivity provisions to maximize public health outcomes.
A model law provision on overriding health exception among others can include legal exemptions (or research exemptions) from infringement for certain acts relating to the development and submission of testing data to a regulatory agency (so-called Bolar provisions, in reference to a US law enacted to overturn a prior court ruling holding that the US did not provide for a research exemption - Roche Products, Inc. v. Bolar Pharmaceutical Co., Inc., 733 F.2d 858 (1984), compulsory licensing and government use of safety and efficacy data whether there is a public health emergency or not.

• Policy Dialogue: Trade policy-making and implementation is embedded in a larger complex political process. A dialogue between trade and health and human rights officials at the national, regional and global level becomes key ensuring policy coherence. Coordinated action on overriding health exception would contribute to better health outcomes.

• Networking: Achieving policy coherence in the relationship between trade and health requires linkage of national policy making process to intergovernmental regimes (WHO, WTO, WIPO), regional trade-related bodies, such as ASEAN (Association of Southeast Asian Nations), APEC (Asia-Pacifi c Economic Cooperation) and Alianza del Pacifico and other transgovernmental networks. The Panel can create a working group or committee on trade and health for the implementation of FTAs. By integrating human rights approaches into national policy making process, the Committee can invoke the synergy and complementarity between the health and trade policies.

Impact on Public Health

A balanced public health approach would provide latitude for policy makers to issue licenses or create exceptions to the effective marketing monopolies conferred by exclusivity provisions.

The Doha Declaration recognizes countries’ rights to “promote access to medicines for all” and represented a significant victory for developing countries and global health. Ever since, health advocates and developing countries have worked to live up to Doha’s promise.

This submission aims to recalibrate TRIPs-plus provisions of FTAs and rekindle the Doha spirit. The increasing inclusion of TRIPS-plus provisions in FTAs illustrates that the status quo must change. Still, a great deal of latitude depends upon the political willingness of countries to set their IP policy in accordance with their own national needs and priorities. The integrity of the spirit at Doha must be preserved to minimize the social cost of any FTA provision adopted.

Health crises in the 21st century arise from the outbreaks of new, acute or re-emerging communicable diseases, which pose a threat of international spread. A global overriding public health exception appears to be a critical measure that would better prevent and respond to future health crises. The impact of this measure could be even greater as it would strengthen the global health architecture both in FTA and non-FTA countries. With the necessary legal infrastructure to protect public health, countries will be able to build an effective emergency preparedness and immediate response capacity.

The High Level Panel should undertake and sustain stronger global leadership for health within the trade arena. The Panel has an important role to play in engaging effectively with trade and health policies and be a catalyst for policy coherence.

Bibliography and References

1. The WHA Resolution 59.26 on International trade and health 2006 available at http://apps.who.int/gb/ebwha/pdf_files/WHA59-REC1/e/WHA59_2006_REC1-en.pdf
2. Free Trade Agreements, Office of the U.S. Trade Representative, available at http://www.ustr.gov/trade-agreements/free-trade-agreements.
3. Free Trade Agreements, European Commission, available at http://ec.europa.eu/trade/policy/countries-and-regions/agreements/#_customs-unions. http://apps.who.int/gb/ebwha/pdf_files/WHA59-REC1/e/WHA59_2006_REC1-en.pdf
4. On May 10, 2007, Democratic leaders in the U.S. House of Representatives brokered a deal with the George W. Bush Administration designed in part to reduce the negative consequences of U.S. trade agreements for global access to medicines. The May 10 Agreement placed limits on the new monopoly powers that would be granted to pharmaceutical companies in trade agreements, including those with Peru and Panama. This would facilitate the continued generic competition on which many people depend for access to affordable medicine.
5. North American Free Trade Agreement Art.1711.5, Dec. 8, 1993, 32 I.L.M. 289 (1993).
6. Carlos M. Correa, Trade Related Aspects of Intellectual Property Rights: A Commentary On the TRIPS Agreement 23 at 385-87 (2007).
7. Brook K. Baker, Ending Drug Registration Apartheid: Taming Data Exclusivity and Patent/Registration Linkage, 34 Am. J. Law & Med. 303,315-16 (2008).
8. Relevant Articles of Bilateral FTAs
• US-Jordan FTA Article 4(22)
• US-Singapore FTA Article 16.8(1-3)
• US-Chile FTA Article 17.10(1)
• US-Australia FTA Article 17.10(1), Article 17.10(3)
• US-Morocco FTA Article 15.10(1)
• US-Korea FTA Article 18.9.2
• US-Peru TPA Article 16.10.2
• US-Panama TPA Article 15.10.2

9. TPP Article 18.50: “1. (a) If a Party requires, as a condition for granting marketing approval for a new pharmaceutical product, the submission of undisclosed test or other data concerning the safety and efficacy of the product,51 that Party shall not permit third persons, without the consent of the person that previously submitted such information, to market the same or a similar52 product on the basis of:
a. that information; or
b. the marketing approval granted to the person that submitted such information, for at least five years53 from the date of marketing approval of the new pharmaceutical product in the territory of the Party.”
10. TPP Article 18.50.3 “Notwithstanding paragraphs 1 and 2 and Article 18.52 (Biologics), a Party may take measures to protect public health in accordance with: (a) the Declaration on the TRIPS [Agreement] and Public Health (WT/MIN(01)/DEC/2) (the “Declaration”); (b) any waiver of any provision of the TRIPS Agreement granted by WTO Members in accordance with the WTO Agreement to implement the Declaration and in force between the Parties; or (c) any amendment of the TRIPS Agreement to implement the Declaration on TRIPS and Public Health that enters into force with respect to the Parties.”
11. The United States – Colombia Trade Promotion Agreement Implementation Act, P. 30, http://waysandmeans.house.gov/UploadedFiles/COLOMBIA_Statement_of_Administrative_Action.pdf.
“For pharmaceutical products, Article 16.10.2(e)(i) of the Agreement provides an exception to the data exclusivity obligations for measures to protect public health in accordance with the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2) (the “Doha Declaration”). Thus, where a Party issues a compulsory license in accordance with Article 31 of the TRIPS Agreement and the Doha Declaration, the data exclusivity obligations in Chapter Sixteen of the Agreement will not prevent the adoption or implementation of such a public health measure. In addition, in a case in which there is no patent on the pharmaceutical product, and, therefore, no need to issue a compulsory license, the data exclusivity obligations in Chapter Sixteen will not prevent the adoption or implementation of such a measure.”
12. Carlos M. Correa, Intellectual Property in the Trans-Pacific Partnership: Increasing the Barriers for the Access to Affordable Medicines, South Centre Research Paper 62 (Sep 2015), available at http://www.southcentre.int/wp-content/uploads/2015/08/RP62_IP-in-TPP-Increasing-the-Barriers-Access-to-Affordable-Medicines_EN.pdf.
13. Article 31 of the TRIPS Agreement (other use without authorization of the right holder): Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes.
14. Terberger M, Tamiflu applications and data exclusivity in an emergency compulsory license situation, Letter to the European Generic Medicines Association, Brussels: Enterprise and Industry Directorate-General, European Commission (2006), available at https://www.google.ch/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiz1OCUqozLAhUsJpoKHflCAyYQFgglMAE&url=https%3A%2F%2Fwww.wcl.american.edu%2Fpijip%2Fgo%2Feu02202006&usg=AFQjCNHb_3sp23argriMcYCo1qbL-iaZ9w.
15. Tracy Staton, Why does Alexion’s Soliris cost $500K-plus? U.K. gatekeepers want to know, FiercePharma (Mar 2014), available at http://www.fiercepharma.com/story/why-does-alexions-soliris-cost-500k-plus-uk-gatekeepers-want-know/2014-03-04; See Preliminary analysis of biologics exclusivity, Third World Network Info Service on Intellectual Property Issues (Aug 2015), available at http://www.twn.my/title2/intellectual_property/info.service/2015/ip150802.htm.
16. UNITAID, The Trans-Pacific Partnership Agreement: Implications For Access To Medicines And Public Health (2014), available at http://www.unitaid.eu/images/marketdynamics/publications/TPPA-Report_Final.pdf.
17. Chile Law No. 19.039: For example, in addition to health, for non-commercial public use, national emergency, other circumstances of extreme urgency declared by the competent authority and national security, termination of the exclusivity is allowed. Compulsory licenses, anticompetitive practices by the originator company, failure to commercialize it in Chile for more than 12 months after getting marketing approval in Chile etc result in the protection under this paragraph not applying,, available at http://www.wipo.int/wipolex/en/text.jsp?file_id=270135
18. Roma Patel, A Public Health Imperative: The Need for Meaningful Change in the Trans-Pacific Partnership's Intellectual Property Chapter (2015), available at https://conservancy.umn.edu/bitstream/handle/11299/172106/Patel.pdf?sequence=1&isAllowed=y.
19. Pedro Roffe, Geoff Tansey and David Vivas Eugui, Negotiating Health: Intellectual Property and Access to Medicines, (Earthscan London, 2012).
20. Jerome H. Reichman, Undisclosed Clinical Trial Data Under the TRIPS Agreement and Its Progeny: A Broader Perspective, UNCTAD-ICTSD Dialogue on Moving the pro-development IP agenda forward: Preserving Public Goods in health, education and learning, Bellagio, 29 November – 3 December 2004, at p.3.

Erin Morton and Matthew Robinson, GLOBAL HEALTH TECHNOLOGIES COALITION

Lead Authors: Erin Morton and Matthew Robinson
Organization: Global Health Technologies Coalition
Country: USA

Abstract

Improving access to medicines in low- and middle-income countries is a complex problem, touching on a variety of issues. For a product to be “accessible,” it must be available, affordable, acceptable to its users, and adopted into the local health system. The Global Health Technologies Coalition (GHTC)—on the basis of extensive experience in product development and access promotion—believes that a coordinated set of activities targeting these characteristics can improve access. GHTC further believes that there are four key considerations in designing access promotion plans. First, the design of the new technology must incorporate input from those that will actually use the product. Second, simply achieving access milestones such as regulatory approval does not guarantee actual local access. Third, over-reliance on national income status to determine pricing structures can undermine access for the poorest populations given income inequality. Finally, private sector developers must see a niche in the market where they bring added value in order to have any incentive to invest in developing products to address global health diseases and conditions. Keeping these factors firmly in mind at all stages of product development will help ensure that barriers to access are minimized.

Submission

As members of the Global Health Technologies Coalition (GHTC)—a group of more than 25 nonprofit organizations working to increase awareness of the vital role health technologies play in saving lives in low- and middle-income countries (LMICs)—we would like to thank the High-Level Panel on Access to Medicines for their commitment to promoting innovation in and access to high quality health technologies and offer the following considerations in support of the ongoing challenge to ensure that essential health tools reach the people who need them.

According to research conducted by the GHTC in a 2013 briefing paper on access to new health technologies, “Improving the affordability, availability, and acceptability of health technologies,” the World Health Organization (WHO) defines access as “a coordinated set of activities needed to ensure that the products developed will ultimately have an equitable public health impact. Achieving that impact requires products that are available, affordable, and acceptable to end users, and adopted into LMIC health systems.” Affordability means that users and buyers are able to pay the price of the product. Availability includes activities to ensure a reliable, regular, quality supply of the technology, and may take place at the local, national, regional, and global level. Finally, acceptability ensures that there is demand and willingness from beneficiaries, end users, health systems, and buyers to adopt the product.

Historically, the introduction of new health technologies in LMICs relied on a trickle-down approach, which assumes products developed for high-income settings will eventually be accessible to poorer populations. This structure came about partially due to the high cost of research and development, combined with a need for developers to show a return on investment in R&D, sometimes through the use of intellectual property rights to ensure sales in higher-income markets. However, the approach of waiting for new tools to eventually trickle down to vulnerable populations delays wide-scale adoption of much-needed health interventions, as opposed to developing products incorporating LMIC considerations from the start such that they do not face the same challenges to introduction.

Beginning in the 1990s, product development partnerships (PDPs), many of which are members of GHTC, and initiatives with market-shaping activities were created to support such a scale-up approach and accelerate the development, affordability, and accessibility of new health technologies targeting poverty-related diseases and conditions. Though their primary role is to develop, not deliver, health technologies, PDPs have worked to ensure access as quickly as possible to the technologies that they and their partners develop, while maintaining quality standards. To date, PDPs’ efforts have focused on accelerating product development, establishing affordable pricing and sustainable supplies, and advocating for resources and policies to enable timely product adoption at the country level.

Ultimately, many PDPs work with—and sometimes rely on—other stakeholders (e.g., nonprofit organizations, national governments, local health systems, and manufacturers) to help deliver the technologies they create to ensure that the products get into the hands of people who need them most, thus increasing access to vital health tools for populations in need. Since the creation of these mechanisms, the pipeline of products addressing the health needs of LMICs has grown substantially—including 485 technologies currently in development, 58 percent of which were developed by PDPs and other public-private partnerships.

As the Panel works to consider policy options to enhance and strengthen the promotion of innovation and access to quality medicines, vaccines, diagnostics, and other health tools, GHTC highlights the following considerations—developed on the basis of the extensive global health R&D experience of GHTC members.

• The design of a new health technology must incorporate input from the local communities and countries that will use the product. Product development funders must understand and address the needs and wants of those who will ultimately be implementing and benefiting from the product. The end users must be engaged in the identification of need, design, and development of the solution, and access plans, in order to ensure that the resulting technology has impact for those most in need.
• Achieving regulatory approval does not guarantee local access. PDPs and partners may achieve global access milestones (e.g., receiving WHO prequalification) but this does not guarantee that the technology will be accessible at the national or subnational level. A global access plan is necessary to facilitate implementation at the country level, but it is also critical to work with government officials, local providers, and communities to translate need into demand, plan for introduction, and accelerate the uptake of new technologies.
• Relying on national average income status can undermine access for the poorest populations. In many middle-income countries, the burden of disease is among poorer populations who have not benefitted from strengthening economies. Conflicting criteria used to define LMICs has complicated price negotiations as countries transition from receiving donor funds to becoming donors. For some middle-income countries, the national gross domestic product does not reflect what local populations can afford to spend on public health programming. In fact, recent research by the Center for Global Development shows that over 70% of the world’s poor now live in middle-income countries. Therefore, the poorest populations, often the most at-risk, are unable to access new technologies.
• Demonstrating a niche in the market for manufacturers is essential to incentivize their investment. Manufacturing partners must understand the added value that they bring to a market to enable them to invest time, effort, and expense to developing products for global health diseases and conditions. They need to be able to see long-term benefits to their business while at the same time achieving the access goals outlined by the PDPs.

GHTC appreciates the opportunity to offer these comments to the High-Level Panel on Access to Medicines. For more details on the GHTC’s research into the role of PDPs and access, please refer to the third paper in a five volume series published on our website, “Briefing Paper, Volume 3: Improving the affordability, availability, and acceptability of health technologies.”

Bibliography and References

GHTC, “Improving the affordability, availability, and acceptability of health technologies.” Available from: http://www.ghtcoalition.org/files/ER_GHTC_NPPD_briefing-paperVol_3_DEC2013-12-9.pdf

Policy Cures. “The unrecognized revolution in global health.” Available from: http://policycures.org/downloads/ND%20Pipeline%20Report%202015%20web.pdf

Center for Global Development, “Global Health and the New Bottom Billion: What Do Shifts in Global Poverty and the Global Disease Burden Mean for GAVI and the Global Fund?” Available from: http://www.cgdev.org/publication/global-health-and-new-bottom-billion-what-do-shifts-global-poverty-and-global-disease

Bruce Bloom, CURES WITHIN REACH

Lead Author: Bruce Bloom
Organization: Cures Within Reach
Country: USA

Abstract

500 million people worldwide suffer from one of 7000 unsolved diseases. The current pharma system “solves” 10-30 diseases each year and creates costly solutions. That isn’t enough! We need to produce more treatments for patients. We know how!

Thousands of cheap, widely available generic drugs can be “repurposed” to create treatments for unsolved diseases. Repurposing means taking a drug approved for human use in one disease and clinically testing it to determine if it provides a benefit for patients with a different, unsolved disease. Generic drug repurposing is a powerful solution for common diseases like TB, and for rare diseases. Our small NGO has already repurposed generic drugs, saving lives and hundreds of millions of healthcare dollars annually. We have a new idea that can help us scale these successes.

A Social Impact Bond (SIB) “pay for success” model could financially support generic drug repurposing, using healthcare savings generated when a repurposed therapy improves patient outcomes to repay “investors” who fund the repurposing research.

Pharma supports research that creates a drug selling for a price high enough to recoup the research investment and make a profit. Most generic drug repurposing won’t make a profit, so pharma won’t undertake generic drug repurposing. Foundations, NGOs and government support generic drug repurposing research, but funds are scarce and insufficient to cover the $8-$40M to support research and regulatory approval often required to support more physicians to prescribe the repurposed drug to patients.

A SIB “pay for success” model can fill this gap. We are currently developing a Generic Drug Repurposing SIB in England, and the UN could help us speed development and expand it globally. A Generic Drug Repurposing SIB is a simple, safe, cheap and rapid solution to a complex problem, and it will work in every country and for many diseases.

Submission

Our solution is called the Generic Drug Repurposing Social Impact Bond (SIB). It creates an unique and powerful economic engine that drives the development of “new” repurposed treatments and cures for some of the 7000 unsolved diseases in the world that impact over 500M people around the world. We do this by clinically testing whether a generic drug already approved for human use in one disease can create a treatment or a cure for a different, unsolved disease.

We know it is possible for a drug approved for one disease to help a different disease - up to 20% of the drugs physicians prescribe for their patients are prescribed for a disease for which they were not originally developed and for which they are not currently approved. This is called “off-label use” and it works very well in many cases.

We could create treatments for many unsolved diseases by just repurposing generic drugs and nutriceuticals already widely available for human use and very affordable, with a high success rate and low investment costs to supplement the great work done under the current pharmaceutical model of creating a new drugs.

There is no capital market economic incentive for testing the repurposing potential of the 3000+ widely available and inexpensive generic drugs that have been approved for human use, or the 2500+ additional safe non-drug supplements (nutriceuticals) that have drug-like biologic impact in the body. A Social Impact Bond sets up a non-capital market economic engine, allowing investors to take the risk that they will get paid back when the drug repurposing research creates two simultaneous successes-improving patient outcomes and reducing healthcare expenses. Only when both happen does the payer have an obligation to pay, but when both happen the patient impact can be life changing and the healthcare savings can be substantial.

1) Impact on remedying policy incoherence

Modern day governments in most countries provide healthcare for citizens with disease, or mandate its provision by others. The costs of providing healthcare are burdening governments as they strive to help the billion people around the world with a chronic or acute disease. Government goals are to improve health and decrease costs, but the government policies and resources often create decreased healthcare outcomes and increase healthcare costs, creating huge policy incoherence.

Governments and other payers look to the pharmaceutical and medical device industries to provide solutions for most diseases. De novo development has created many life-saving therapeutics, and needs to be continued. However, de novo development usually takes as long as two decades or more to get from concept to patient impact. This is way too long for patients, many of whom die before a solution is discovered. These industries create, on average, 10-30 new drugs and devices to solve some of the 7000 unsolved diseases, leaving many diseases available to be tackled by generic drug repurposing.

These de novo solutions are almost always very expensive. Research cost estimates range from $1.4B-4.6B per approved de novo drug, which covers the actual drug development cost, as well as the costs of all of the failed drug development during the same time frame. Governments want more solutions at a lower cost, but seem to have regulations and incentives that favor expensive and slow de novo drug development. And governments don’t have good supplements to this standard drug development system.

The reason that more generic drug repurposing solutions haven’t been delivered to patients is that there is often no natural economic incentive for the repurposing of inexpensive and widely available generic drugs. Generic means that the drug is off patent, so there is no intellectual property protection to allow one company to be “corner the market” and charge a price high enough to recoup its investment, so no company will make the investment. The pharmaceutical model of investing in a new, patent protected drug that can be sold for 7-10 times the original investment works well for drugs with intellectual property protection, but it does not work for the repurposing of generic drugs. A different economic system is needed to drug repurposing, so patients can get the benefit of both de novo drug development therapies and generic drug repurposing therapies.

The Generic Drug Repurposing SIB creates a new economic engine for the repurposing of generic drugs by tapping into a different source of funding, healthcare savings, through the use of a “pay for success” strategy. When a repurposed generic drug is proven, through a clinical trial, to work in an unsolved disease, it improves healthcare outcomes for patients with a disease. When the drug works, the patients often no longer need the palliative medicine and hospitalization they needed when they didn’t have a treatment that worked.

This improvement in patient outcomes can significantly reduce the healthcare expenditures for governments and other payers, who no longer have to pay for other expensive treatments for these patients, including hospitalization, surgery, drugs and devices. It also reduces many expensive indirect costs, such as loss time at work for patients or for caregivers, social services, disability payments, workplace adaptions, and government supported caregiving and housing.

A portion of those savings can be used to repay the impact investors who fund the generic drug repurposing research. Any additional pay for success funds would be used to fund additional generic drug repurposing clinical trials in other unsolved diseases, creating a virtuous economic engine that can bring inexpensive and safe repurposed treatments to patients in need, especially patients with rare diseases, neglected diseases, acute diseases and diseases of the poor, all categories that are a challenge for the pharmaceutical model, and all diseases that cause patients a lot of suffering and payers a lot of cost.

The news gets even better. When a repurposing solution works for patients in one country, it is likely to work for and be available to patients in every country where the generic drug is available. So clinical trials only need to take place in one country for patients in all countries to benefit. That reduces the costs of the clinical trials. And when a repurposed drug solves one disease, it can often quickly be repurposed again in a different but similar unsolved disease, creating even greater leverage.

The Generic Drug Repurposing Social Impact Bond works best when more payers participate. The more each payer participates, the smaller percentage of the healthcare cost savings each payer needs to contribute from their healthcare savings in order to repay the impact investors and create a pool of funds for the next group of repurposing clinical trials. A global Generic Drug Repurposing Social Impact Bond would be a powerful solution to the unmet needs of 500M people around the world suffering from an unsolved disease.

The United Nations has the reach and influence to create such a vehicle for healing and economic benefit. The UN has already done great work on innovative funding options for health, including the IFFIm vaccine bond program and UNITAID, both of which have delivered therapies to specific patient populations that would not have received these therapies were it not for these UN programs. It is unlikely that the UNITAID airline tax fund for improving HIV outcomes would have been possible without the global influence and coordination of the UN. And it is also unlikely that the IFFIm vaccine bond program could have received the multiple countries financial backing that makes it such a powerful investment, without the UN coordination and support.

That same UN power to create collaboration and support is necessary for the full impact of a global Generic Drug Repurposing SIB.

2) Impact on public health

Historically at Cures Within Reach, and based on statistical analysis of the success of Phase II and III de novo drug discovery, we estimate that 10-30% of the generic drug repurposing clinical trials can create a "new" treatment that meets both the patient impact and cost savings requirements. And the clinical trials are relatively inexpensive and quick to get started in most cases, so the patient impact can happen and the evaluation of success can be assessed in a short period of time.

The team at Cures Within Reach has been focused on generic drug and nutriceutical repurposing since 2010, and through 50 proof of concept clinical trials we have created 13 repurposed treatments that are either being used clinically off-label or moving to commercialization. Here are two examples of Cures Within Reach repurposed therapies being used clinically in once deadly children's diseases and are both saving lives, and creating an estimated $40,000-$80,000 per patient per year in healthcare cost savings.

Cures Within Reach funded a generic drug repurposing research to produce the first and only effective treatment for the childhood blood disease Autoimmune Lymphoproliferative Syndrome (ALPS) at Children’s Hospital of Philadelphia. ALPS is considered an “orphan” disease, since it affects less than 200,000 Americans. Children with ALPS lead difficult lives. ALPS causes anemia and increased infections, so ALPS patients spend 5-10 days in the hospital every month getting transfusions and IV antibiotics. Though they have normal IQ, physical capabilities and communication skills, they are often years behind in school because of their chronic hospitalization.

Few of these children used to live beyond their twenties, but they are living longer and very normal lives now that they have a repurposed generic drug solution. Sirolimus, a safe drug already on the market, has created a low cost, low side effect treatment for these children. Children on sirolimus have been hospitalization-free since early 2006 and are often off all of their other high side effect medicines. This grant of less than US$300,000 transformed the lives of thousands of children in the US and around the world. It took less than 36 months, using an already existing drug, so no wasted time and money in further drug testing and approval issues.

The average ALPS patient’s medical bills used to exceed $100,000 per year. On the sirolimus drug repurposing regimen, no patient has been hospitalized for ALPS and the cost of medical care has been reduced by over $80,000 per patient per year! If all patients in the US with this disease were on Sirolimus, the total cost savings could exceed $60M per year.

Based on the success of repurposing sirolimus from ALPS, Cures Within Reach has funded additional sirolimus research to test this drug in 7 other rare and deadly pediatric auto-immune, including Evans disease, pediatric lupus, and idiopathic thrombocytopenia purpura. In the first three years of this pilot clinical, 50 children with one of these diseases have been treated with sirolimus. 42 subjects have gone into complete remission, 4 into partial remission, and 4 have not had success with this treatment. All 50 of these patients had failed all prior therapy, so an 85% success rate is a huge advance for these children.

In a similar Cures Within Reach success story, Drs. Berish Rubin and Sylvia Anderson study Familial Dysautonomia (FD) a disorder that affects the development and survival of the nervous system. In the summer of 2001, Dr. Rubin’s laboratory identified the genetic cause of FD is a defect in a gene that makes a protein called IKAP that is necessary for development and function of the nervous system. In 2005, Dr. Rubin’s lab discovered two compounds capable of increasing the amount of functional IKAP protein produced in these patients – one is a form of vitamin E and the other a chemical component of green tea, epigallocatechin gallate (EGCG). Afew years later the team found that vitamin A can further increase the production of functional IKAP. FD patients can take these vitamin A compounds along with the Vitamin E and EGCG. Then they made an every bigger discover in 2010 that two components of soy, genistein and daidzein, when combined with the other compounds, allow children with FD to produce 100 percent of the required IKAP protein! What this means, is that when these children take these compounds, which they can purchase affordably at the pharmacy, they can lead almost normal lives. Their nervous system will function as well as it would if they didn’t have the disease!

These discoveries, privately funded for less than $200,000 per year, have dramatically changed the lives of FD patients worldwide, and the families who cherish them. Much like the ALPS story above, these inexpensive and widely available FD treatments have significantly improved lives and reduced healthcare costs. Most children with untreated FD die before the age of 5, and during their years of life are hospitalized often and for long periods of time. Untreated FD healthcare costs average over US$100,000/year. Once on the regimen, their hospitalization use approaches normal, and their annual healthcare costs decrease to less than US$10,000 per year. The accumulated savings for these patients is in the tens of millions of dollars each year.

There are hundreds of similar stories waiting to benefit patients if the economic incentives can be created to support generic drug repurposing. These projects start with significant scientific justification, and often with clinical anecdotal support. They can be done quickly, safely and inexpensively, and because the drugs or nutriceuticals are already available, once the use is proven to help the disease and the data are published, physicians can begin to use the treatment to benefit patients and reduce healthcare costs.

3) Impact on human rights

There are a huge number of diseases that impact the poor and other in developing countries. These patients are often the last to benefit from de novo drug discovery because of the costs of the new treatments compared to the annual earnings of the patients. If these drugs do get to these patient groups it is often decades after they have reached developing countries.

Treatments created through a Generic Drug Repurposing SIB will be low cost and immediately available, even in developing countries, where generic drugs are often widely available. If they are not currently available, it is much easy to find a manufacturer and distributor for an inexpensive generic drug. And if the patients cannot afford the repurposed drug, the low cost makes government and/or NGO provision of the drug relatively inexpensive.

4) Implementation

In conjunction with our UK partners Findacure and Numbers4Good, we have started the process in England to create the first Generic Drug Repurposing SIB for rare diseases. To support the SIB process, we have created an algorithm to help select the right kinds of repurposing projects, and we are developing a system to determine how the healthcare costs savings would be estimated. The National Health Service has partnered with us, assigning Dr. Harpreet Sood, Senior Fellow, to the Chairman and Chief Executive's Office of NHS, to work with us on this initiative. We have engaged Costello Medical Consulting to do the economic analysis of the impact of several new projects in diseases such as congenital hyperinsulinism, myelofibrosis, polycythemia vera, Wolfram’s Syndrome and others. We expect to complete these evaluations this year, and have the first Generic Drug Repurposing Social Impact Bond up and running in early 2017.

To support this global drug repurposing initiative, with funding from the Robert Wood Johnson Foundation, we created a web platform for the collection and review of repurposing research, called CureAccelerator™, and have funded 12 repurposing projects so far through CureAccelerator. CureAccelerator will be used to collect, review and help find funding for the Generic Drug Repurposing SIB Proposals from around the world.

In addition, we have completed two feasibility studies of drug repurposing Social Impact Bonds, one by the MaRS Centre for Impact Investing in Canada (funded by the Mindset Social Innovation Foundation) and one by Oliver Wyman consulting in the UK (done pro bono for our sister NGO Findacure.) We have government and impact investor interest in Canada and several EU countries, as well. Cures Within Reach has funded repurposing research in 7 countries so far, and has received requests for funding in many more. There are thousands of repurposing ideas in the minds of researchers and clinicians ready to be put to the test if we can create an economic engine to drive it forward.

The Open Source Pharma Foundation, an India-based NGO focused on creating new ways of developing drugs, is a supporter of this brief. Cures Within Reach is honored to be a supporter and collaborator of the Open Source Pharma Foundation brief, which describes the Open Source Pharma (OSP) concept inspired by the Linux model of IT operation. Adapted to tackling important public health challenges, OSP hopes to catalyze radical change to the way medical R&D can deliver better and more affordable innovation quicker and cheaper to patients. In brief, crowdsourced, computer-driven drug discovery; IT-enabled clinical trials with open data; and generics manufacture. Cures Within Reach is supporting OSP by leveraging our drug repurposing expertise and network.

We continue to engage with impact investors, government and non-government healthcare payers, repurposing research researchers and clinicians, the FDA, EMA and other regulators, to determine how best to create the SIB structure and the “pay for success” measures, how to determine which diseases are most likely to benefit from a repurposed treatment and yield healthcare savings, and how to insure that the repurposed therapy information can be effectively disseminated and used by physicians and patients. In the medium-term, we need to pilot several Generic Drug Repurposing SIB portfolios to test the algorithms, the success ratios, the patient impact and the actual cost savings. In the long-term, we need to manage the system so that it continues to grow, creating more and more opportunities for repurposing to create new treatments that save lives and save money.

We already had the ultimate goal of eventually reaching out to the UN and/or WHO and/or the World Bank to help us bring a global Generic Drug Repurposing Social Impact Bond solution to the world. We are well on our way, and the UN support at this stage could markedly accelerate the impact this could make improving and saving lives by solving disease issues, and helping the world reduce its ever growing healthcare costs. Together, we have the resources, the success stories, the opportunity, the infrastructure, the funding and the connections to make this work ASAP for patients that don't have time to wait.

Bibliography and References

Here is more information about Cures Within Reach, CureAccelerator and drug repurposing:

Overview video- https://www.youtube.com/watch?v=D0RXKVQSYxo
Link to speaking engagements- http://cureswithinreach.org/event-calendar/speaking-engagements
Media information: http://cureswithinreach.org/newsroom/media-coverage
Ashoka Fellow profile- https://www.ashoka.org/fellow/bruce-bloom
Blogpost about our work- https://www.ashoka.org/Chain_of-impact
https://www.youtube.com/watch?v=uGlT7kYEgjM
https://www.youtube.com/watch?v=SQID0slK_nc
Company Website- http://cureswithinreach.org
CureAccelerator™ Website- http://cureaccelerator.org

References:

Food and Drug Administration: Frequently Asked Questions on Patents and Exclusivity; available at www.fda.gov/Drugs/DevelopmentApprovalProcess/ucm079031.htm#How%20long%20is%20exclusivity%20granted%20for?
2 Patent Docs: FDA Approval of Biologic Drugs under 505(b)(2) Expected to Increase; available at www.patentdocs.org/2011/10/fda-approval-of-biologics-under-505b2-expected-to-increase.html
3 D Radley, Off-label Prescribing Among Office-Based Physicians Archives of Internal Medicine 166 (9): 1021–1026 (2006)
4 FD NOW: Research Treatment Breakthroughs, available at www.fdnow.org/research/treatment-breakthroughs
5 N Ryan, et.al., Gabapentin for refractory chronic cough: a randomized, double-blind, placebo-controlled trial. The Lancet, V 380:9853, 1583–1589 (2012)
6 Roundtable on Translating Genomic-Based Research for Health; Board on Health Sciences Policy; Institute of Medicine. Drug Repurposing and Repositioning: Workshop Summary. Washington (DC): National Academies Press (2014)
7 D Teachey, R Greiner, A Seif, et.al. Treatment with sirolimus results in complete responses in patients with autoimmune lymphoproliferative syndrome. Br J Haematol. 145(1):101-6, (2009)