Sudip Chaudhuri, INDIAN INSTITUTE OF MANAGEMENT

Lead Author: Sudip Chaudhuri
Organization: Indian Institute of Management
Country: India

Abstract

In line with the conventional wisdom that developing countries are entitled to limit product patent protection in essential products such as medicines and in the light of the post-TRIPS experience, I am suggesting a change in the compulsory provisions of TRIPS. What I am suggesting is licence of right in developing countries for patented medicines. Any non-patentee in these countries will be eligible to manufacture and sell any patented medicine provided they pay a prescribed royalty. This will eliminate the product monopoly in patented medicines. The resultant competition will drive down prices. And the royalty paid to innovators would continue to provide funds and incentives for R&D.

This suggestion is based on the post-TRIPS experience in India. India is an important case study since India is a major player in the generic pharmaceutical industry as a supplier of medicines to both developed and developing countries.

If the proposal of licence of right is implemented, whatever positive have happened after TRIPS are unlikely to turn negative. But whatever negative have happened are likely to turn positive. Licence of right of patented medicines in developing countries and increased generic competition will reduce the prises of patented medicines. Hence access to medicines will be strengthened. But it is unlikely that the impact on innovation will be negative. With product patent protection continuing in developed countries, R&D for new drug development neither by the MNCs nor by the Indian companies are likely to be adversely affected. Foreign direct investment in developing countries may go down. But as India's experience suggests MNCs are more keen on importing and marketing activities rather than manufacturing and undertaking productive investments. Developing countries in fact are likely to gain due to the larger space of operations of generic companies.

Submission

There is an inherent contradiction between the rights of inventors and the access to fruits of invention. The conventional wisdom has been that developing countries may not recognise product patent protection particularly in vital sectors such as medicines because prices may be higher due to product patent monopoly but the technological and other benefits may not follow unless these countries are more developed economically and technologically. The study by Challu (1991) in fact shows that pharmaceutical product patenting followed economic development rather than being a prerequisite for it. Most developed countries adopted pharmaceutical product patent protection after they had reached a high degree of economic development, for example the United Kingdom (UK) in 1949, Germany in 1968, Japan in 1976, and Switzerland in 1977. Even the United States of America (US) which recognized product patents all through, blocked German drug patents at a critical juncture during the First World War (Challu 1991, Table 9 and p. 75).

But in accordance with TRIPS, product patent protection has been made mandatory in all WTO member countries. And the reason it was done was that developing countries too will benefit. But my argument, which I will factually substantiate below is that developing countries have not benefited. I take India as a case study. And it is an important case study since India is a major player in the generic pharmaceutical industry as a supplier of medicines to both developed and developing countries. In the light of the post-TRIPS experience, it is legitimate to question the propriety of TRIPS. But rather than doing that at this stage, I am suggesting a change in the compulsory licensing provisions of TRIPS to address the problem of misalignment between the rights of inventors and access to medicines. What I am suggesting is licence of right in developing countries for all patented medicines. Any non-patentee in these countries will automatically be eligible to manufacture and sell any patented medicines provided they pay the prescribed royalty, the details of which can be decided later. This will eliminate product monopoly in developing countries. The resultant competition will drive down prices and hence strengthen access. And the royalty paid to innovators would continue to provide funds and incentives for R&D. As we will see below the developing country pharmaceutical market is now much larger than before and hence such royalty earnings will not be insignificant.

This is not a new idea. What is noteworthy so far as this submission is concerned is that it is based on the post-TRIPS experience. And this is a simple proposal - it does not require any financial commitment.

For each of the aspects relevant for the debate relating to innovation and access, I will first provide facts and then discuss what is likely to happen if the proposal of licence of right is implemented. I will argue that whatever positive have happened after TRIPS are unlikely to turn negative. But whatever negative have happened are likely to turn positive. And hence I will hope that the United Nations Secretary-General’s High-Level Panel on Access to Medicines will give this proposal a patient hearing.

Prices and TRIPS flexibilities:

In the 1960s a Senate Committee of the US (Kefauver Committee) found India to be among the highest priced nations in the world. But after the abolition of product patent protection in pharmaceuticals in India in 1972 and with the rise and growth of the generic pharmaceutical industry in India, the prices of patented medicines in India became one of the lowest (Chaudhuri 2005, chapter 2). After the re-introduction of product patent protection in pharmaceuticals in India in 2005, the days of monopoly markets and high prices are back. Table 5 of Chaudhuri 2014 provides information on prices charged by multinational corporations (MNCs) for selected patented medicines in 2013. Some of these prices are: Rs 71175/- for a single 45 mg injection of ixabepilone (anti-cancer) (BMS' brand name Ixempra); Rs 28320/- for a 10.8 mg injection of goserlin (hormones) (AstraZeneca's brand Zoladex); Rs 19516/- for 5 mg infusion of 100ml (pain/analgesics) (Novartis' brand name Aclasta ) etc.

Two important flexibilities which TRIPS permits to tackle the negative consequences of product patent protection are: (i) Exemptions from grant of patents in certain cases and (ii) Compulsory licensing (CL). India has used the former quite successfully by inserting Section 3(d) in her patent law and denying some patents as in the case of Novartis' anti-cancer drug imatinib mesylate (Gleevec). Important as it is, Section 3(d) prevents at best secondary patents. For new drugs which are currently under patents and those which will be patented in future, what is more important is CL. But in India despite hundreds of product patents granted and despite very high prices, only three CL applications have been made of which only one, the CL application of Natco Pharma for the anti-cancer drug, sorafenib has been successful. India's Patent office granted this CL in March 2012. The patentee however aggressively opposed the CL first at the Intellectual Property Appellate Board (IPAB), then at the Bombay High Court and ultimately at the Supreme Court which dismissed Bayer's petition in December 2014 (www.lawyerscollective.org). MNCs have the financial resources to indulge in such legal battles and have high stakes. But for generic companies it is too uncertain and costly a battle and hence it is no wonder why so few CL applications have been made. While MNCs fight aggressively for their patent rights and oppose CL, some of them offer voluntary licences (VL). Surely with the social objective of enhancing access to medicines in mind if the MNCs give VL liberally the resultant competition can keep prices low. But what the HIV/AID crisis and the pricing history of ARVs for example shows is that prices are much lower and are sustained when there is genuine generic competition without any legal or other barriers to entry. Typically VLs are offered for selected products and are associated with restrictions with respect to technology transfer, sources of APIs, geographical coverage and target beneficiaries. VLs also divert attention from the need to check high prices through CL (see, for example, Amin 2007).

Thus if exorbitant prices is the issue and that indeed is the issue then what is required is licence of right. Anyone should be able to enter the market on payment of royalty without any other restrictions and without the need for country specific, company specific or product specific negotiations. This will lead to genuine generic competition resulting in lower prices. HENCE THE IMPACT WILL BE POSITIVE.

Foreign direct investment and technology transfer

It is true that FDI has gone up significantly in the pharmaceutical industry in India in recent years. During 2000-2012, the pharmaceutical sector was in fact the largest recipient of FDI among manufacturing industries with a share of 17.16% (Chalapati Rao et al 2014, pp. 8-9). But this has been used primarily for acquiring existing Indian companies (for example Shantha Biotechs by Sanofi, Piramal Healthcare by Abbott) and for hiking their equity stake in existing companies in India (for example by Pfizer from 40% foreign equity in 2001 to 70.75% by 2010) rather than for productive investments. Whereas plant and machinery investments by Indian companies have expanded rapidly in the post-TRIPS period, that by the MNCs have essentially stagnated (Chaudhuri 2012). Rather than manufacturing the patented products in the country for technological diffusion and further progress, they are importing the products. Formulations imports in India have been increasing very rapidly. Compared to USD 275 million in 2005 it was USD 907 million in 2014. About 84% of these imports came from high income OCED countries - 17.7% from Germany, 15.4% from the US, 10.6% from Switzerland (calculated from the UNCOMTRADE database). Under Section 146 of the Patents Act, 1970, patentees are required to furnish data about whether the patented invention has been worked on a commercial scale in India. Out of the 1115 patented products for which information were available for 16 MNCs, only 140 were commercially worked, i.e., were marketed in India (12.6%). Again out of the 140 patented products worked in India, information about whether these were manufactured in India or not were available for only 92 products. Only 4 of these were manufactured in India including one which involves packaging of bulk imports. The remaining 88 patented products were being imported and marketed in India (Chaudhuri 2014).

If our proposal of licence of right is implemented, then obviously the environment will turn worse for the MNCs and FDI may do down. But IT WILL NOT BE WORSE FOR THE COUNTRY since FDI has hardly contributed to productive investments and technological progress. IN FACT THE OUTCOME WILL BE POSITIVE since as a result of the licence of right, more manufacturing will take place in the country by generic companies and high priced imports will go down.

Research and Development by MNCs

In the early 1990s before TRIPS came into effect, the top MNCs in India - Glaxosmithkline, Pfizer, Sanofi, Abbott, Novartis Wyeth, Merck and AstraZeneca - spent on R&D only about 1% of sales. Since then rather than going up, R&D expenditure as a percentage of sales has actually declined to about 0.3% in 2014-15. In absolute terms too R&D expenditure has started falling recently. Compared to Rs 570.2 million in 2009-10, these MNCs spent Rs 246.7 million in 2011-12 and Rs 369.7 million in 2014-15) (Table 2 of Chaudhuri 2014 updated). Two MNCs - Novartis and AstraZeneca - did not spend any amount on R&D in India during 2013-14 and 2014-15 (respective Annual Reports).

So far as India is concerned, the MNCs disprove the hypothesis that strong intellectual property rights are important for their investments in R&D. MNCs locate their R&D laboratories primarily in developed countries. But before TRIPS, three MNCs - Ciba Geigy (now part of Novartis), Hoechst (now part of Sanofi India) and Boots set up facilities for new drug development in India. In fact Giba-Geigy obtained 42 patents from India in the US and Hoechst 35 patents before TRIPS. Later both Ciba Geigy and Boots discontinued their new drug research in India. The Hoechst outfit was sold off to an Indian company Piramal. After TRIPS, except AstraZeneca none of the MNCs has been involved in any R&D for new drugs. AstraZeneca set up a research facility in 2003 in Bangalore to develop novel compounds for TB but decided to close it down in 2014 (Chaudhuri 2014). The foreign companies who are now more active in patenting activities in the US from India are the generic companies such as Teva and Mylan rather than the MNCs such Novartis or Sanofi or AstraZeneca. ((http://www.uspto.gov/web/offices/ac/ido/oeip/taf/stcasga/inx_stcorg.htm).

Hence if our proposal of licence of right is implemented the situation in India IS UNLIKELY TO BE ANY WORSE IN TERMS OF R&D IN INDIA AND PATENTING FROM INDIA. Globally of course the MNCs spend much more. But so far as innovation in India is concerned what is important is what they do in India. If they are doing R&D outside India and as we saw above importing in India the new patented drugs resulting from such R&D, India does not gain technologically but suffers from the high prices. But if the proposal of licence of right is implemented and if the generic companies start manufacturing and selling patented drugs, then what about the revenue loss of the MNCs from sales of patented drugs in India and other developing countries and hence what about the possible negative impact on their new drug R&D programmes? About 85% of the patented drugs market is located in developed countries (calculated from Espicom 2015, pp 11-12; the high income OCED countries as per World Bank's definition are considered as developed countries). And they will get royalties from the sales of the patented products in developing countries. Hence THE INCENTIVES FOR R&D ARE UNLIKELY TO BE AFFECTED.

R&D by Indian companies

In sharp contrast, R&D by Indian companies has increased rapidly in recent years specially by the larger companies. Like the MNCs in India, the Indian companies too traditionally did not invest much in R&D. But since the mid-1900s, particularly since the early 2000s, there has been a remarkable improvement in a segment of the industry. In 2013-14, Hetero Drugs, which is a mid-sized Indian pharmaceutical company alone spent Rs 362.4 million which is more than what the 8 MNCs together spent in the same year (Rs 359.3 million). There are 32 other Indian companies each of which spent more than the 8 MNCs put together in that year. The larger Indian companies spend much more. Lupin, for example spent Rs 9929.2 million (11.1%), Dr Reddys Rs 10706 million (10.9%), Cipla Rs 5175.1 million (5.4%), Cadila Healthcare Rs 4451 million (12.1%) etc in 2013-14 (calculated from the CMIE Prowess database).

Indian pharmaceutical industry is highly export oriented. A large number of companies earn more than 50% of their revenue from exports including the larger ones, for example Dr Reddys Laboratories (75.5%), Sun Pharmaceuticals 75.8%), Lupin (63.7%), Aurobindo Pharma (73.3%), Cipla (51.8%) etc in 2014-15 (CMIE Prowess database). Not only overall exports. Exports to developed countries have been increasingly very fast. Compared to 35.8% in 1995, the high income OECD countries accounted for 48% of total pharmaceutical exports from India in 2014. The US alone accounted for 30.8% of the exports in 2014 (calculated from the UNCOMTRADE database). The larger Indian companies in particular have been targeting the regulated markets in the US and in Europe. In 2013-14, 60% of the sales of Sun Pharmaceuticals came from the US compared to 23% from India. The US market contributed to 47.8% of sales for Dr Reddys in 2014-15 and 12% in Europe compared to only 13.4% in India. For Wockhardt in 2014-15, whereas India contributed to 27.6% of their sales, the US and Europe contributed 35.1% and 30.4% respectively. Other companies where the US market is more important than India, include Cadila Healthcare and Lupin (respective Annual Reports).

Developed countries have tough quality and regulatory requirements for marketing of drugs. The main objective of R&D conducted by Indian companies has been to develop processes and products to satisfy these requirements including for patent expired drugs in the regulated markets in developed countries. But a new development which has taken place in the pharmaceutical industry in India is that the Indian private sector has started investing in R&D for new chemical entities. This began around the time TRIPS came into effect in the mid-1990s. R&D investments were initiated by Dr Reddy’s Laboratories followed by Ranbaxy Laboratories. Since then several other companies such as Sun, Cadila Healthcare, Lupin, Torrent, Wockhardt, Glenmark, Biocon, Seven Lifesciences have also joined in.

None of these companies is engaged in the entire process of drug development for the simple reason that these companies lack the skills and the funds necessary to develop a drug and put it to the market on their own. Hence the model that these companies have adopted is to focus on the early stages of the R&D process and then out licensing it to larger companies in developed countries or to co-develop with them. The journey so far has not really been very smooth. The initial enthusiasm has waned. The prospect of huge licensing revenue through milestone and other payments is yet to materialize. Glenmark is the only Indian company which can claim some success in generating R&D revenue with milestone income of more than USD 200 million (Axis Capital 2014, p. 88). Several agreements between the Indian companies and MNCs have been called off and further development stopped (Chaudhuri 2010, pp 48 to 53; BMI Research 2015, p. 65; Wilson and Rao 2012, p. 51).

One of the major problems of the structure of the pharmaceutical industry dominated by the MNCs is that R&D is primarily directed towards developing new drugs for the large developed country markets. During the TRIPS negotiations, it was argued that developing countries too would benefit from stronger patent protection because it will prompt local companies to do more R&D for the development of new drugs which are more suited to their needs but are neglected by the MNCs.

But going by the progress as reported in their websites and Annual Reports, the Indian companies are not focussing on neglected diseases. The only exception is the new anti-malarial drug, arterolane maleate developed by Ranbaxy (now part of Sun Pharma). Lupin has discontinued the development of the much publicised anti-TB compound. What they are focussing on are "global diseases" such as cancer, heart diseases, diabetes, asthma, obesity, spasticity, pain and inflammation, CNS disorders etc. Apart from the anti-malarial drug developed by Ranbaxy, the only other successful NCE developed by an Indian company (Cadila Healthcare) is an anti-diabetic drug.

Indian pharmaceutical companies are very active in getting their inventions patented in the US, the largest pharmaceutical market. It started with Ranbaxy obtaining two patents in 1990. By 1995 the Indian companies obtained 8 patents and by 2000, 65 patents. But as the Indian companies increasingly focussed on R&D, the number accelerated since then. Between 2001 and 2010 they obtained 495 patents and between 2011 and 2014, 527 patents (http://www.uspto.gov/web/offices/ac/ido/oeip/taf/stcasga/inx_stcorg.htm).

If the licence of right for patented drugs is implemented in developing countries, R&D BY INDIAN COMPANIES ARE UNLIKELY TO BE ADVERSELY AFFECTED, the primary motivation for R&D being generic exports. The licence of right provision will be applicable also for new drugs that may be developed by Indian companies. This may limit their earnings in developing countries. But they are EXPECTED TO CONTINUE NEW DRUG R&D IN INDIA because they are targeting the large global diseases markets in developed countries and licence of right in developing countries will not stop the product patenting activities in developed countries. In fact due to expansion of their activities due to licence of right, THEIR REVENUE MAY GO UP AND HENCE THEIR R&D ACTIVITIES.

Bibliography and Refernces

Amin, Tahir, (2007), "Voluntary licensing practices in the pharmaceutical sector: An acceptable solution to improving access to affordable medicines?", a study prepared on behalf of Oxfam GB.

Axis Capital (2014), "Indian Pharma: Ready for the Next Leap", Pharma Sector Report.

BMI Research (2015), India Pharmaceuticals and Healthcare Report, Q3 2015.

Chalapati Rao, K S et al (2014): "FDI into India’s Manufacturing Sector via M&As: Trends and Composition", New Delhi: Institute for Studies in Industrial Development, Working Paper No 161.

Challu, Pablo (1991), “The Consequences of Pharmaceutical Product Patenting”, in World Competition: Law and Economics Review, Vol 15, Number 2, December.

Chaudhuri, Sudip (2005), The WTO and India’s Pharmaceuticals Industry: Patent Protection TRIPS and Developing Countries, New Delhi: Oxford University Press.

Chaudhuri, Sudip (2010), "The Industry Response", Chapter 1 in Chaudhuri, Park and Gopakumar 2010.

Chaudhuri, Sudip, Chan Park and K M Gopakumar (2010): Five Years into the Product Patent Regime: India’s Response, New York: United Nations Development Programme.

Chaudhuri, Sudip (2012), “Multinationals and Monopolies: Pharmaceutical industry in India after TRIPS”, Economic and Political Weekly, March 24.

Chaudhuri, Sudip (2014), "Intellectual Property Rights and Innovation: MNCs in Pharmaceutical Industry in India after TRIPS", New Delhi: Institute for Studies in Industrial Development, Working Paper No 170.

Espicom (2015), World Pharmaceuticals Factbook 2015, BMI Research.

Wilson Paul and Aarthi Rao (2012), India’s Role in Global Health R&D, Washington DC: Results for Development Institute.

CHALERMSAK KITTITRAKUL, FTA Watch

Lead Author: Chalermsak Kittitrakul
Organization: FTA Watch
Country: Thailand

Abstract

FTA Watch is a coalition of 25 organizations in Thailand, who are non-government organizations, civil society organizations, people living with HIV network, academics, patient and small-scale farmer groups, consumer group, and health activists, that has monitored and provided policy recommendation to the Thai governments on the impacts of free trade agreement negotiations since 2003.

We have grave concerns over bilateral and regional trade agreement negotiations, which include free trade agreements (FTAs) between Thailand and the USA & the EU, FTA between India and the EU, Trans-Pacific Partnership Agreement (TPPA), and Regional Comprehensive Economic Partnership (RCEP) between ASEAN and six countries (ASEAN+6) including Japan, South Korea, India, Australia, New Zealand, and China.

All of these agreements have incorporated or likely introduce intellectual property (IP) rules more stringent than the WTO’s TRIPs Agreement, which is the global IP standard, and also Doha Declaration on TRIPs Agreement and Public Health. These trade agreements, in addition, also introduced non-IP rules, like data exclusivity, investor state dispute settlement (ISDS), and the TPPA’s Transparency Chapter Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices.

Despite the fact that, new mechanisms were invented in the last few years with an intention to overcome a lack of lifesaving medicines at affordable prices like voluntary licenses and the Medicine Patent Pool, they have been distorted to encouraged a new type of monopolization and do not promote access to essential medicines for people who really need the medicines, especially patients in middle-income countries.

Such trade negotiations and the voluntary licensing mechanisms are undermining access to lifesaving medicines as well as R&D capacity of generic pharmaceutical industry in the developing countries, which would play a critical role in the competition leading to reduction in drugs’ prices and the promotion of access.

Submission

Impact of Bilateral and Regional Trade Agreements on Access to Essential Medicines

Thailand has at least 37 Bilateral Investment Treaties (BITs) that are in force and a party to 11 Free Trade Agreements (FTA). In June 2004 and March 2013, Thailand started FTA negotiations with the USA and the EU respectively. But due to the coup staged in 2006 and 2014, the US and the EU governments suspended the negotiations.

However, the past and current governments have shown their interest to continue and join other regional trade agreement negotiations including Trans-Pacific Partnership Agreement (TPPA) and Regional Compressive Economic Partnership (RCEP).

Intellectual property (IP) rules introduced in the trade agreement negotiations are more stringent than the WTO’s intellectual property standards, known as TRIPs (Trade Related Aspect of Intellectual Property Rights) Agreement, and violate Doha Declaration on TRIPs Agreement and Public Health. The trade agreements with stricter IP rules are a threat to access to lifesaving medicines at affordable prices, not just only for Thailand but for all the developing countries.

It has been a consistence intention of State officials to negotiate and accept agreements with IP conditions stricter than the WTO’s IP standard, which is known as “TRIPs plus” provisions. TRIPs plus provisions allow the pharmaceutical industry able to extend patent protection more than 20 years, undermine competition of generic medicines that play an important role in lowering prices of medicines, and also limit the use of public health safeguards under the TRIPS Agreement and Doha Declaration that have intention to ensure access to affordable medicines for all and emphasize importance of public health before trade. As a result, if the TRIPS plus provisions are accepted, lifesaving medicines will be extremely expensive.

In addition to TRIPs plus provisions in trade agreements, Investor State Dispute Settlement (ISDS) is also another major concern that has direct negative impacts on rights to health. Many FTAs and at least 33 BITs of Thailand included arbitration clause for investor-state dispute settlement (ISDS) that can be invoked only by investors against host States for alleged violation of investor’s benefits, even the States have laws and policies promoting health and public interest. The inclusion of ISDS would limit policy space and ability of State to protect and fulfil rights to health of its own peoples, as the investors can file lawsuit against State to the arbitration outside the country and require its government to revoke policies and/or pay enormous compensation .

According to the leaked text of the TPPA, CSOs in Thailand has also serious concerns over the Transparency Chapter Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices, as its implication will allow the multinational pharmaceutical industry to get actively involved and influence the government’s policy making process, including public policies and laws on price comparison, price negotiation, as well as price control in order to ensure that the country will be able to manage their limited resources to provide quality healthcare services and essential medicines to save lives of their own peoples in the most effective manner.

Thailand had a great success in promotion of rights to health by having the National Health Security Act B.E. 2545, which was a result of nationwide signature campaign in proposing the draft law to the Parliament. However, the trade agreements with TRIPs plus provisions and ISDS are threatening the Universal Coverage Scheme of Thailand, which is a fruitful outcome of the National Health Security Act and has been globally recognized as a best practice that it can provide quality healthcare services to over 80% of its citizens at no cost.

But the Universal Coverage Scheme will be at risk and not sustainable if the prices of essential medicines are exorbitant due to implications of TRIPs plus provisions . If Thailand accepts international trade agreements with TRIPS plus provisions, the spending on medicines will increase over 80,000 million Baht per year if the FTAs have condition of data exclusivity for 5 years .

Thailand was also recognized internationally about the use of the flexibility measures under TRIPs Agreement and Doha Declaration to address a lack of affordable medicines to treat AIDS, cardiovascular diseases, and cancers. People living with HIV and NGOs had actively advocated with the Ministry of Public Health since 1999 and it was successful in 2006 and 2007 that the government agreed to enforce the public health safeguards, known as compulsory licensing, in compliance with its Patent Act and the WTO’s TRIPs Agreement. Prices of ARVs, due to compulsory licensing, reduced 82 – 94% and over 90% in medicines for CVDs and cancers. It enhanced the government able to save costs approximately 6,000 million Baht in 2008 - 2011 and expand the health benefit package to cover kidney-failure disease .

Thousands of people living with HIV have accessed treatment with anti-retroviral drugs at no cost due to the Universal Coverage Scheme and the compulsory licensing policy; it is estimated that each 300 million Baht increased accessibility to anti-retroviral medicines for 10,000 patients. The impact of Thailand’s compulsory licensing also resulted in the worldwide price reduction of a number of original anti-retroviral drugs. Other developing countries like India and Indonesia followed Thailand’s footstep in issuing compulsory licensing on AIDS and cancer drugs.

However, the public health safeguards, as the flexibility measures in TRIPS Agreement, will no longer be enforced if a trade agreement with TRIPs plus provisions, particularly data exclusivity, border measures, and third party liability, is agreed.

Public health of the developing world is also under threat due to similar FTA that India is negotiating with the EU and in the RCEP. India is the “Pharmacy of the Developing World”, 70% of generic anti-retroviral drugs supplied to developing countries comes from India. If India signs TRIPs-plus FTA with the EU, it means that India has to amend its patent law and incorporate TRIPs plus provisions in their law, and India, the world’s major generic medicine supplier, will be shut down.

Impact of Voluntary Licenses and the Medicine Patent Pool to Access to Essential Medicines

Recently the treatment of hepatitis C (HCV) with the direct-acting anti-viral medicines (DAA), namely sofosbuvir, daclatasvir, ledipasvir, and the other HCV DAAs in the pipeline, has become a global controversial issue due to their exorbitant prices that the transnational drug companies introduced to the market (e.g. sofosbuvir USD 84,000 per 12-week treatment, sofosbuvir+ledpasvir USD 94,000 per 12-week treatment).

Gilead Sciences, Inc. has filed patent applications for sofosbuvir in many countries. However, it has been questioned about its patentability and was challenged in many countries. Patent oppositions have been filed against Gilead’s patents on sofosbuvir in India, Argentina, Russia, Thailand and the EU. And, patent applications for sofosbuvir in Egypt, China, and Ukraine were already rejected by those countries’ patent offices.

While the patents are not granted in India yet, Gilead reached agreements , known as voluntary licenses, with 11 big generic pharmaceutical manufacturers in India last year allowing those companies able to produce and sell generic versions of sofosbuvir at low prices to 91 countries. But these deals exclude a number of middle-income countries with very high burdens of hepatitis C, including Thailand. This leaves around 49 million people in such countries, representing more than 40% of the global hepatitis C burden, without access to this drug.

Gilead’s registration of sofosbuvir was approved by the Food and Drugs Administration of Thailand in 2015, but it hasn’t been marketed in Thailand yet. Sofosbuvir and the other DAAs are recommended in the national treatment guideline. But, due to its exorbitant prices, the Thai government hasn’t included the medicines in the universal coverage scheme’s benefit package yet, while the country has approximately 1.2 – 1.7 million people who are living with hepatitis C virus and need the treatment.

It is expected that Gilead’s sofosbuvir will be launched in Thailand at the price of USD 3,600 per 12-week treatment, which is considered expensive when comparing to generic versions in India sold at USD 335 per 12-week treatment. Unfortunately Thailand is excluded from the Gilead’s voluntary license deals with the 11 Indian companies. Thailand is illegible to import the finished products and active pharmaceutical ingredient (API) for local production from India. Worsen than that, Gilead has filed many patent applications for sofosbuvir in Thailand. Therefore, people who have hepatitis C infection have no choice but to use pegylated interferon that can cause intolerable side effects. If the patients are untreated, it can cause liver cirrhosis and cancers. It is estimated that 150 million people globally are infected with hepatitis C, and 700,000 die from the liver cirrhosis and cancers due to hepatitis C each year.

In July 2011, Gilead Sciences, Inc. announced a great success in their contribution to the promotion of access to medicines by signing an agreement on licensing AIDS drugs to the Medicine Patent Pool (MPP). However, in reality this announcement was a bad news for millions of people living with HIV in the low and middle income countries excluded from the benefits of the Patent Pool. Such a divisive agreement contradicted the original intent of the Patent Pool, as a newly created mechanism to overcome IP barriers and promote access to essential medicines for all.

Although the Gilead agreement allowed medicines produced under its license to be shipped to excluded countries if they decided to use a public health safeguard, known as compulsory licensing, there were very few examples of developing countries being able to use this public health safeguard successfully. It required strong political will and massive public pressure to ensure that governments use compulsory licensing in the face of pressure and retaliation from the multinational pharmaceutical industry and its governments. Thailand and Brazil are examples of countries that faced massive backlash after issuing compulsory licenses on HIV medicines.

Whether or not such provisions were in the Patent Pool license, it makes no difference – eventually huge numbers of people remain without access to affordable essential medicines. Instead of pushing low and middle income countries to take the difficult option, Gilead should not limit the countries that can benefit from their licenses; unless they had a hidden agenda to weaken local production capacity and impede competitiveness of generic medicines.

As in Thailand, where there is no patent on tenofovir, many countries are also trying to impose strict patent standards and patents on tenofovir have been rejected in some countries or don’t exist in many countries. But Gilead has placed conditions before the generic companies can supply to those countries where patent is rejected or does not exist – so the license made it more difficult for excluded countries to get generic supply even if patent is rejected in their country.

In addition, Gilead claimed that the agreement with the Medicines Patent Pool has been made public to reflect the transparency of the process. However, the company did not provide reasons or the criteria used for selecting which countries could benefit from their licenses. For example, Thailand is included in the tenofovir license, even though tenofovir is not patented in Thailand, but Thailand is excluded from licenses for cobicistat and elvitegravir that may have patents in Thailand. What were the reasons for the Medicines Patent Pool to accept exclusion of Thailand for the new drugs? Is the primary objective of the Medicines Patent Pool (MPP) still to be a new mechanism to address the particular public health needs of developing countries?

Recently the MPP announced that it extended its target medicines to the HCV DAAs, the medicines for hepatitis C treatment. While the MPP cannot set non-negotiable standards in the licenses with the pharmaceutical corporations, especially geographical scope limit, the licenses under the MPP remain problematic and become barriers of access, rather than promotion of access.

Giant multinational drug companies are increasingly taking over the Indian generic-drug industry - since 2008 multinational pharmaceutical corporations have already taken over six drug companies in India. India is recognized as the supplier of low-cost generic drugs to the world. To confine manufacturing to only India and to limit supply sources of active pharmaceutical ingredients (API) in the agreement is a strategy to control the Indian pharmaceutical industry and undermine its capacity to supply affordable generic medicines to other developing countries. The control of API also makes it difficult for manufacturing to take place in other countries. That includes R&D capacity in the production of fixed-dose combination and other formulations in the developing countries.

Generic competition is the most effective mechanism to make significant reduction in drug prices. The licenses given to the MPP with such restriction will jeopardize the competition of generic medicines by selectively giving license to Indian manufacturers only and limiting countries who can buy the medicines from India. Therefore, the drug prices cannot be reduced as much as they should be, and this will further limit the number of people who can access to these medicines.

We recognize such a business practice is a way to monopolize the world’s pharmaceutical market and a strategy to maximize and protect their profits, rather than to overcome the access to medicines issue as they claim. Without the free competition of the generic medicine industry, it is impossible that the drug prices will sustainably reduce and all people can equally access to essential medicines at affordable prices as they need.

Due to TRIPs plus provisions in bilateral and regional trade agreements as well as problematic conditions in voluntary licenses of the MPP and the multinational pharmaceutical industry, it discourages and undermines R&D capacity of the local generic pharmaceutical industry which play an important role in promoting competition and lowering prices of essential medicines that will lead to promote access for all.

Recommendation
1. The governments of the USA and the EU must stop pressuring the developing countries to accept bilateral and regional trade agreements with TRIPs plus provisions (e.g. data exclusivity, patent term restoration, extensive patentability criteria, patent linkage, border measures, third party liability, etc.), investor state dispute settlement (ISDS), and the TPPA’s Transparency Chapter Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices.
2. Leading international organizations, including UN’s agencies, WHO, and UNITAID, should not support voluntary licensing that has conditions limiting production and distribution of essential medicines and active pharmaceutical ingredients to a certain number of countries. Instead, they should be more active in encouraging and supporting all the countries to effectively use public health safeguards under the WTO’s TRIPs Agreement and the Doha Declaration to promote access to affordable medicines and rights to health.
3. Relevant UN agencies, WHO, and UNITAID should encourage and meaningfully support developing countries to have capacity in R&D and local production of generic medicines. Collaboration on R&D and technology transfer between developing countries should be initiated and supported.
4. The Working Group on Intellectual Property of ASEAN should not be influenced by the US and EU governments to introduce a unified patent system in the region with TRIPs plus provisions.

Bibliography and References

1) https://www.oxfam.org/sites/www.oxfam.org/files/all%20costs,%20no%20benefits.pdf, and http://www.doctorswithoutborders.org/sites/usa/files/Access_Briefing_TPP_ENG_2013.pdf

2) https://www.ag.gov.au/tobaccoplainpackaging, http://www.twn.my/title2/health.info/2015/hi151002.htm

3) Akaleephan C, Wibulpolprasert S, Sakulbumrungsil R, et al. Extension of market exclusivity and its impact on the accessibility to essential medicines, and drug expense in Thailand: Analysis of the effect of TRIPS;Plus proposal. Health Policy (2009), doi:10.1016/j.healthpol.2008.12.009(2009),doi:10.1016/j.healthpol.2008.12.00

4) Nusaraporn Kessomboon, Jiraporn Limpananont, Vidhaya Kulsomboon, Usawadee Maleewong, Achara Eksaengsri and Prinya Paothong. Impact on Access to Medicines from TRIPS PLUS: A CASE STUDY OF THAI;US FTA. Southeast Asian J Trop Med Public Health 2010; Vol 41(3)

5) National Health Security Office (information about universal coverage scheme and CL policy)

6) https://www.gilead.com/news/press-releases/2015/1/gilead-expands-hepatitis-c-generic-licensing-agreements-to-include-investigational-pangenotypic-agent

Hayel Obaidat Obaidat, JORDAN FOOD AND DRUG ADMINISTRATION

Lead Author: Hayel Obaidat Obaidat
Additional Authors: Wael Armouti and Wesal Haqaish
Organization: Jordan Food and Drug Administration
Country: Jordan

Abstract

The contribution is regarding Jordan Data Exclusivity in Pharmaceuticals Sector and their implementations at Jordan FDA, since joining World Trade Organization (WTO) in 2000, the adoption of the Unfair Competition and Trade Secrets Law, and signing a free trade agreement with the United States in 2001, Jordan has strengthened the intellectual property protection provides for pharmaceutical products.

JFDA is keen to bring new medications to the patients as quickly as possible to allow the worldwide therapeutic opportunities available in Jordan , so by applying the protection ( data exclusivity) this will encourage the international companies to invest in the pharmaceutical sector and the arrival of newer medicines, Nevertheless, JFDA has been implementing a standing operating policy and measures to accept receiving applications of generic version of an innovator during the last year protection in order to accelerate the registration of generic drugs and its affordability, also has included restricting market exclusivity to a narrow definition of “new” uses and limiting applications for data exclusivity to a short period 18 months following first market approval in worldwide..

This contribution contains some suggestion and recommendation taking in consideration human right in access to medicine

Submission

Jordan Data Exclusivity in Pharmaceuticals Sector

Since joining World Trade Organization (WTO) in 2000, the adoption of the Unfair Competition and Trade Secrets Law, and signing a free trade agreement with the United States in 2001, Jordan has strengthened the intellectual property protection provides for pharmaceutical products.
Jordan Food and Drug Administration (JFDA) the independent public sector institution that is the sole national competent authority for ensuring drug safety and efficacy in addition to food safety and quality has a role in implementing the data protection obligations, which refers to a practice whereby, for a fixed period of time (5years )( in compliance with TRIPS Agreement), drug regulatory authorities do not allow the registered data of an innovator (new chemical entities) to be used as a reference for application for a therapeutically equivalent generic version of that medicine , it is worth noting that several products that were registered prior to year 2000 were granted data protection (retrospective implementation of the law). To date, 362 products have been granted a five year data protection .
JFDA also abides by Jordan’s obligation to provide three-year protection to new indications since December 17, 2004, and since then, it has approved new indications for more than 68 products.
In order to effectively communicate the status of applications submitted and notify originators of all applications of concern to them, JFDA committed to post on its website list of products submitted for marketing approval in Jordan


JFDA is keen to bring new medications to the patients as quickly as possible to allow the worldwide therapeutic opportunities available in Jordan , so by applying the protection ( data exclusivity) this will encourage the international companies to invest in the pharmaceutical sector and the arrival of newer medicines. .
Nevertheless, JFDA has been implementing a standing operating policy and measures to accept receiving applications of generic version of an innovator during the last year protection in order to accelerate the registration of generic drugs and its affordability, also has included restricting market exclusivity to a narrow definition of “new” uses and limiting applications for data exclusivity to a short period 18 months following first market approval in worldwide.
The following measures are recommended to mitigate the negative impact of data exclusivity while still complying with our obligations set in both article 4.22 of our FTA with the United States and article 39.3 of TRIPS agreement. Many of these measures are already adopted in some countries without any fair of WTO ruling. To apply these measures amendments of the Unfair Competition and Trade Secrets Law and registration criteria in the JFDA or to establish a special regulation for granting data exclusivity, the followings are needed:
- Shortening the term of data exclusivity for new chemical entity: neither TRIPS nor Jordan-US FTA request the five years.
- Start Date of Data Exclusivity: a country can consider that the start date for granting data exclusivity is the first registration of the product worldwide.
- JFDA should examine the test data protection conditions before granting data exclusivity: Then, JFDA can issue a protection certificate confirming complaint of data exclusivity conditions:
- Undisclosed test data: this should be defined in the registration criteria and JFDA should examine this condition by requesting a certificate from the originator company declaring that the submitted test data have not been published by any means or in any way. If the data become non-confidential, then the JFDA has the right to end the data exclusivity period.
- Considerable efforts: this should be defined in the registration criteria and JFDA should examine this condition by requesting evidence from the originator company to show that the generation of the submitted test data involved considerable efforts by reporting the cost and the period involved in the generation of the submitted test data.
- Data exclusivity term should not extend beyond the patent term.
- Allow registration of the generic product for the purposes of export.
- Grounds for revocation of the data exclusivity period: such as anti-competitive practices of the originator company: high prices, delay in marketing the product more than six months from approval date, stop marketing for more than six months or insufficient marketing of the product.
- Waive data exclusivity protection in cases of compulsory licensing : in case of the issuance of a compulsory license, the generic company is still required to submit clinical trials. Therefore, data exclusivity should be waived in such cases.
- Waive data exclusivity in cases of emergency and public interest.
- Waive data exclusivity for products intended for the treatment of life threatening diseases.
Applying all these measures may raise many challenges for Jordan and it will take time, but some of these measures are more easily to be implemented especially those not requiring law amendments. JFDA can apply some of these measures, which may need only regulations amendments or create a new regulation to control data exclusivity granting.
In future negotiations of bilateral agreements, the governments should involve all concerned stakeholders to prevent any negative consequences.

Bibliography and References

US- Jordan FTA..
Jordan unfair completion law
Jordan Drug and pharmacy law
Jordan patent law
www. jfda.jo.
Data exclusivity for pharmaceuticals was it the best choice for Jordan, Wael Armouti ,thesis , university of Jordan, faculty of law

South Centre_C

Submission: South Centre
Country: Switzerland

Abstract

This submission explains how a binding international instrument/convention/treaty on medical product R&D to be negotiated under the auspices of the UN, can address the misalignment between the pharmaceuticals R&D model under the present trade rules and public health, in order to promote more effective and less costly innovation and increase access to medicines.

Submission

Introduction
A fundamental public health challenge that must be addressed to achieve the health related sustainable development goals and targets is that the current incentive model for pharmaceutical research and development (R&D) has failed to incentivize R&D for new medicines to treat a number of diseases that do not offer substantially profitable markets. Several reports and studies, as well as the WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPOA) adopted by WHO Members States (2003-2008) have acknowledged this problem. On one hand, there is little investment in R&D in relation to diseases that are prevalent in developing countries, since major pharmaceutical companies concentrate on the development of products to satisfy the demand of wealthy markets. On the other hand, products that are subject to patents and other forms of exclusive rights are normally sold at prices that are out of reach for large sectors of the population.

The failure of the current incentive model to provide needed medicines, especially in southern countries, calls for urgent action. Today, in the 21st century, communicable diseases still kill more than 10 million people every year, 90% of whom live in developing countries. One-third of the global population does not have regular access to needed medicines. This situation is worsened in Least Developed Countries (LDCs) where up to 50% of the population does not have access to necessary medicines. At the same time, the context for tackling the problem of access to pharmaceutical products is changing. Developing countries – including India, the largest provider of generic medicines – are now implementing the WTO’s agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) with respect to the patentability of pharmaceutical products. As a result, the proportion of drugs that is being protected by patents is on the increase and it is expected that this will imply higher prices.

Ten years ago, the report of the Commission on Intellectual Property Rights, Innovation and Public Health (known as the CIPIH Report), 2006, submitted to the WHO, recognized that intellectual property rights incentives were not meeting the needs for the development of new products to fight diseases in countries where “the potential paying market is small or uncertain”. The CIPIH Report also recognized “the need for an international mechanism to increase global coordination and financing of R&D medications”, and recommended that work toward the adoption of an R&D treaty should continue “in order to develop these ideas, in a way that governments and other people in charge of the formulation of policies can make a decision based on it”.

In April 2012, the WHO Consultative Expert Working Group (CEWG) on R&D Financing and Coordination recommended the WHO member States to start negotiations on a binding international instrument on health R&D under article 19 of the WHO Constitution, as the best way to create an appropriate framework to ensure priority setting, coordination, and sustainable financing of affordable medicines for developing countries. The CEWG stated that “… a binding instrument on R&D is necessary to secure appropriate funding and coordination to promote R&D that is needed to address the diseases that disproportionately affect developing countries.” The CEWG recommendation was made after considering a number of proposals that recommended the conclusion of a binding R&D treaty, including a proposal by Bangladesh, Barbados, Bolivia and Suriname for WHO discussions on a biomedical R&D treaty.

However, this recommendation of the CEWG has still not been adequately considered by the WHO member States owing to political opposition from developed countries to the idea of an alternative R&D mechanism. The work in the WHO has been limited to undertaking some specific R&D demonstration projects which have failed to generate sustainable financial resources.

The problems that are faced in this field cannot be resolved only by means of improvements on or adaptations to the existing incentive-based model. IP does not produce the innovation necessary to address the public health needs in developing countries, and the CIPIH Report recognized that this problem can, in fact, affect developed countries, as is now the case for the new medications for Hepatitis C:

“This is an important issue, because even in developed countries, the rapidly rising cost of health care, including drug delivery, is of great public concern. In developing countries, and even in some developed countries, the cost of drugs, which often cannot be acquired through the public health care systems, can be a matter of life or death.”

Therefore, new mechanisms are needed in order to simultaneously and effectively promote innovation and access to medicines, particularly for diseases that mainly affect developing countries.

After the call for a global pharmaceutical R&D (GSPOA and CEWG), there have been numerous initiatives and policy processes related to global health innovation. In addition, there are ongoing efforts through product development partnerships (PDP’s) to step up R&D for neglected diseases. There is a major risk that the multiplication of such proposed R&D frameworks could lead to further duplication and fragmentation and lack of consistent application of the CEWG principles that R&D mechanisms must be based on – affordability, effectiveness, efficiency and equity.

Elements of a binding international instrument on R&D for medical products

A binding international instrument or international treaty on R&D can be negotiated under the auspices of the UN to provide an adequate framework to define medical R&D priorities and ensure the coordination and sustainable financing of R&D on drugs that could be made available at affordable prices.

The conclusion of a binding R&D instrument under the UN will contribute to the realization of the Sustainable Development Goals (SDGs), and particularly the health related SDG Goal 3 and Targets 3.8 and 3.b which states:

SDG Target 3.8 - Achieve universal health coverage, 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.

SDG Target 3.b - Support the research and development of vaccines and medicines for the communicable and non-communicable 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 regarding flexibilities to protect public health, and, in particular, provide access to medicines for all.

A binding international R&D instrument under the UN would provide a global framework for financing R&D in a way that delinks costs from prices for new medical products, and for improved coordination to avoid the fragmentation of medical R&D efforts.

A global instrument on R&D of medical products negotiated at the UN could have the following specific objectives:

(i) To promote R&D for all diseases, conditions and problems (including non-communicable diseases), while prioritizing those for which there is little R&D investment such as neglected diseases that disproportionately affect developing countries;
(ii) To set priorities for R&D on the basis of the global disease burden;
(iii) To provide alternative incentives to the intellectual property systems for the engagement of private and public actors involved in R&D based on public health needs rather than market expectations
(iv) To develop sustainable financing mechanisms including pooled financing to increase available resources for R&D;
(v) To promote coordination of R&D and make better use of existing R&D capacities of the private and the public sector in both developing and developed countries;
(vi) To build R&D capacity in developing countries
(vii) To promote greater transparency in the costs of R&D and sharing of data and information, particularly in early research and clinical trial stages.
(viii) To establish ethical criteria and financial mechanisms for conducting clinical trials with full disclosure of test data
(ix) To promote that the results of R & D are in the public domain or otherwise accessible to all populations.


Though the proposed binding international legal instrument on biomedical R&D pursues public health objectives, the establishment of an alternative mechanism for medical R&D will have to necessarily involve multiple government agencies besides ministries of health, such as finance, trade, science and technology, and industry. As this proposed instrument would address a diverse range of government agencies and also a number of the SDGs, it is submitted that it will fall within the ambit of the UN to negotiate a binding international legal framework or convention on biomedical R&D.

Therefore, it is submitted that the High Level Panel should recommend that negotiations be undertaken for a UN Convention on Coordination and Financing of Biomedical Research and Development.

Bibliography and Refernces

Velásquez G et Seuba X “Rethinking global health: A binding convention for R&D for pharmaceutical products” Research papers 42 ; South Center ; Dec. 2011

WHO and HAI “Measuring medicine prices, availability, affordability and price components” second edition (2008).

Gehl Sampath P. “India's product patent protection regime: less or more of ‘pills for the poor’?” The Journal of World Intellectual Property 2006 ; 9 (6): 694 – 726.

WHO, Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination, 2012, http://www.who.int/phi/CEWG_Report_5_April_2012.pdf?ua=1

WHO, CIPIH Report, 2006

United Nations treaty collection, https://treaties.un.org/Pages/overview.aspx?path=overview/definition/page1_en.xml#introduction

World Health Organization “Global strategy and plan of action on public health, innovation and intellectual-property” WHA Resolution 61.21 (May 24, 2008).

List of submissions made to the WHO CEWG, http://www.who.int/phi/news/cewg_submissions/en/

South Centre_B

Submission: South Centre
Country: Switzerland

Abstract

Limitations of the paragraph 6 system of the TRIPS agreement and the need for WTO members to be dissuaded from ratifying the protocol to the TRIPS Agreement incorporating the system under Article 31bis of TRIPS and should instead undertake a comprehensive review and evaluation of the paragraph 6 system.

Submission

The Need for Revision of the WTO mechanism under the 30th August 2003 decision for the export of pharmaceuticals to countries with insufficient or no manufacturing capacity

Pursuant to paragraph 6 of the 2002 Doha Declaration on TRIPS and Public Health the WTO General Council adopted a decision on August 30, 2003 allowing WTO members with insufficient or no pharmaceutical manufacturing capacity to import generic medicines under a compulsory license, as a waiver from the general requirement under Article 31 (h) of TRIPS that a CL can be issued only predominantly for being used by domestic manufacturers. In 2005 the WTO General Council adopted a Protocol amending the TRIPS Agreement which incorporated this mechanism as an amendment to the TRIPS Agreement (Article 31bis).

Till date, only a limited number of countries have adopted legislation to implement the August 30th Decision as an exporting country. The WTO Secretariat has been urging member States to ratify the August 30th Decision to bring Article 31bis of the TRIPS Agreement into force. However, there has been very limited use of the system. Only one importing country (Rwanda) used the mechanism to import cheaper life-saving medicines from the Canadian generic company Apotex for 21000 HIV/AIDS patients.

Therefore, while the Paragraph 6 system has been celebrated as a ‘solution’ to the problems faced by developing countries and LDCs in accessing affordable medicines, in actual practice it has not contributed to address such problems.

This is largely due to the fact that the system is unnecessarily burdensome and complicated. The Paragraph 6 system places obligations on importing countries making use of the system that are more onerous than those for countries that can issue a CL to supply the domestic market.

The experience in making use of the system also suggests that there are hurdles within the Decision that make it difficult for countries to import a generic drug under a CL, and also makes it difficult for generic manufacturers to export a drug under CL. In the Canada-Rwanda case, the only instance in which the Paragraph 6 system has been used, it took almost 27 months to meet all of the requirements. Thus, the system is less effective than it should be. Therefore, it is important that WTO members carefully examine the reasons behind the limited use of the system and address systemic deficiencies before making it permanent as article 31bis of the TRIPS Agreement (currently in the process of approval by WTO members).

Some of the key problems in using the Paragraph 6 system are:
Generic companies need to undertake negotiations for voluntary licenses with the patent holder before applying for a CL. Such negotiations may be protracted and complex, and a source of considerable delay and discourage generic manufacturers to participate in the process.

The Decision comprises a succession of complex procedural steps. First, a potential purchaser has to forecast the need for a medicine and identify a generic producer willing to participate in the process and fill the drug order. Second, the manufacturer has to try to negotiate a voluntary license with the patent holder. Third, if the negotiations are unsuccessful, a CL application must be filed in the home country of the generic producer. Fourth, if a patent exists in the country of export the generic producer has to apply for and obtain a CL in that country too. Each of these steps is time-consuming, involves substantial financial expense and holds no guarantee of success.

A country importing medicines using this system must also give a written notification to the TRIPS Council which must include the specific names and expected quantities of the product needed. Unless the importing country is classified as an LDC, it must also specify whether the product is under patent, and provide information that establishes that it lacks sufficient manufacturing capacity in the pharmaceutical sector to develop the drug being ordered.

The system also imposes conditions for commercialization of the products made under the CL. They must be clearly identified as being produced under the system through specific labelling; they should be specially packaged to be distinguishable from the branded product and in respect of its shape or colour. The generic manufacturer must post specific information about the quantity of the product, its destination and distinguishing features. These ‘anti-diversion’ measures are to ensure that the product will only be exported to the destination stated in the CL.

The Paragraph 6 system requires a drug-by-drug, country-by-country and case-by-case decision-making process. Indeed, the CL application must stipulate the destination and the quantity of drugs that are to be purchased and exported under the licence. Drug needs must therefore be determined with precision beforehand. If more patients are included, the only way to purchase more drugs is to begin the process again. A stock-out due to the procedural hurdles may lead to the treatment being interrupted and as a consequence patients may develop increased drug resistance (as in case of HIV/AIDS), creating the need for more expensive treatment. Conversely, if the needs have been overestimated, re-exportation of medicines imported under the system to another developing or least developed country in a similar situation is not permitted, unless there is a regional trade agreement between the two and the majority of its members are LDCs.

There is substantial scope for the patent holder to undermine the system. For example, the patent holder may decide at any time to offer the medicines at lower cost or for free, thus frustrating any efforts made to use the system in that particular case. This creates a huge uncertainty and additional risk and disincentives for potential suppliers.
In view of these limitations of the paragraph 6 system, WTO members should be dissuaded from ratifying the protocol to the TRIPS Agreement incorporating the system under Article 31bis of TRIPS and should instead undertake a comprehensive review and evaluation of the paragraph 6 system.

Bibliography and References

World Trade Organization, Members’ laws implementing the ‘Paragraph 6’ system, http://www.wto.org/english/tratop_e/trips_e/par6laws_e.htm

South Centre, The Doha Declaration on TRIPS and Public Health Ten Years Later: The State of Implementation, Policy Brief No.7, 1 November 2011, http://www.southcentre.int/wp-content/uploads/2013/06/PB7_-Doha-Declaration-on-TRIPS-and-Health_-EN.pdf

Stacey B. Lee, “Can Incentives to Generic Manufacturers Save the Doha Declaration’s Paragraph 6?”, Georgetown Journal of International Law, vol.44, 2013, p.1387, https://www.law.georgetown.edu/academics/law-journals/gjil/recent/upload/zsx00413001387.PDF

Ademola Adelekan, UNIVERSITY OF IBADAN

Lead Author: Ademola Adelekan
Additional Authors: Philomena Omoregie, Olasunkanmi Olejiya, Elizabeth Edoni, Hillary Osori,
Organization: University of Ibadan
Country: Nigeria; Mexico

Abstract

Lack of regular access to essential medication is said to account for enormous death. While developing countries like Nigeria are grappling with their obligations under the World Trade Organization (WTO), Trade Related Aspect of Intellectual Property Rights Agreement (TRIPs) which became operational since 1995, industrialized nations are resorting to higher standards of intellectual property protection through regional and bilateral free trade agreements.

Poor access to essential drugs is a global problem with other causes beside patent rights. Poor access is rather due to insufficient research and development and drug production especially in developing countries without manufacturing capacity. The local drug industry in Nigeria currently meets 20% of the drug needs as against the projection that it will meet 80% of demand by 2000. Other factors include exchange rate, high tariffs and taxes on drugs and chemicals which range between 17- 20% in Nigeria making drugs cost 2-64 times more expensive than the international reference price. Also lack of political will and poor regulation makes Nigeria a market for substandard and counterfeit drugs constituting about 48% of circulating drugs. However evidence suggests that patents are unnecessary for innovations and actually reduce access to drugs especially in developing countries.

Instead of adopting the TPPA including TRIPS-plus provisions that can hinder access for those in poor countries, the hands on deck are better off if they delineate factors that would bolster and build on the milestone already achieved towards increasing access to treatment. Bureaucrats are much better off if they resort to anchor on rational and sound measures in which trade and intellectual property policies are formulated in a way that strengthens the agenda of providing long-term, cheaper and perpetual access to medicines.

Submission

Background
The underprivileged around the globe from resource poor countries particularly, from Sub-Saharan Africa have one of the highest count of those affected with epidemics like HIV/AIDS, Tuberculosis (TB) and Malaria. It has been reported that, about 3 million patients die every year as a result of these fatal illnesses. This amounts to a global catastrophe. Lack of regular access to medication is said to account for these enormous death. According to a research conducted by the World Health Organization (WHO) with access to medication, about five – ten million deaths could be averted in the next six years. Similarly, a 2001 report by DFID (Department of International Development) reveals, “people lack access to medicines where they cannot obtain the products they need to prevent or treat a medical condition. This might be because a product is unavailable or is not offered, or because it is unaffordable.” This reality is a truism as the problems are not mutually exclusive.

The 2001 World Trade Organization (WTO) Doha Declaration on Trade Related Aspects of Intellectual Property Rights (TRIPS) and Public Health as well as the 2008 World Health Assembly (WHA), adopted the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPOA), that advocated for an accelerated, supportable premise for targeted, requisite health Research and Development (R & D ) relating to ailments that excessively affects the poor in emerging and developing countries. Other innovative plans range amongst others, the use of innovative Public-Private Partnerships (PPPs) for health like the Global Fund to Fight AIDS, Tuberculosis and Malaria, The GAVI Alliance, the Roll Back Malaria (RBM), the Stop TB, the President’s Emergency Plan For Aids Relief (PEPFAR/Emergency Plan), The African Network for Drugs and Diagnostics (ANDI), the Innovative Medicine Initiative (IMI) amongst several other archetypes in the fight against the communicable diseases since market based innovation models fail to address the disease-burden specific to developing countries – the so-called neglected diseases.

Mechanisms like patent pools, prize funds, or Research & Development treaties allow for the de-linking of the costs of research from the price of the final product and provide a pathway for orienting R & D towards priority health needs. This is in tandem with the Millennium Development Goals (MDGs) Goal 8, the UN Political Declaration on HIV/AIDS and the Abuja Declaration on HIV/AIDs, Tuberculosis and Other Related Infectious Diseases. In the same direction, the Okinawa commitment on infectious and parasitic diseases came up with an ambitious plan on deadly diseases, notably HIV/AIDS, Malaria and Tuberculosis.


Global strategy and plan of Action on Public Health, Innovation and Intellectual Property
The global strategy and plan of Action on Public Health, Innovation and Intellectual Property brought to a close about 2 years of tasking multilateral negotiations under the auspices of an Intergovernmental Working Group (IGWG). Furthermore, the UK Commission on Intellectual Property Rights (CIPR), and the WHO Commission on intellectual Property Rights, Innovation and Public Health (CIPIH) reports, directed lots of attention on the increasing impact of ailments and situations that beyond proportion is affecting resource poor countries. To date, the WHO, UNAIDS (Joint United Nations Programme on HIV/AIDS) and a couple of other UN agencies and organizations have identified four essential elements of an access framework for drugs, each of which is regarded as being expedient in ensuring access to these medications in poor regions of the globe and they include rational selection, affordable prices, sustainable and adequate financing and a reliable health care and supply system. Perhaps, another major but ignoble factor that is yet to be taken account of is the issue of security in most of these endemic nations. Of course, the scenario of September 11, 2001 will ever remain fresh in our minds. Not just because of the bloody attack on the World Trade Centre in New York, but the challenges this has brought with it in global public health. This is because any regional or global focus must bear in mind the challenges posed by security concerns like terrorism. Potentially, atrocities of such magnitude are likely to be higher if chemical and biological compounds explored in the manufacturing of pharmaceuticals are loosely protected via a scheme of more reliable intellectual property rights and public sectors enforcement of IPRs.

Intellectual property protection through regional and bilateral free trade agreements
While developing countries like Nigeria are grappling with their obligations under the World Trade Organization (WTO), Trade Related Aspect of Intellectual Property Rights Agreement (TRIPs) which became operational since 1995, industrialized nations are resorting to higher standards of intellectual property protection through regional and bilateral free trade agreements.
However, the proliferation of these arrangements or agreements has added another layer in the access to medicine debate. A case in point is the US proposed Trans-Pacific Partnership Agreement which is viewed as having a very convoluted background. It was supposed to be a Free Trade Agreement (FTA) between Chile, New Zealand and Singapore, and subsequently Brunei Darussalam, referred to as the “Trans-Pacific Strategic Economic Partnership Agreement.” The bargain was gradually broadened to crystallize into a Trans-Pacific Partnership Agreement (TPPA) and en-compassed other negotiating countries like Australia, Peru, the United States of America, Malaysia and Vietnam. Others who became interested afterwards are Canada, Japan, and Mexico.

This TPPA is largely viewed as translating far and above ancient trade challenges, and incorporates elaborate requirements tied to intellectual property and investor protection. These “TRIPS-plus” requirements drew world’s scrutiny as the 2007 and 2008 shipments of generic medications from India to other needy nations were held at central European ports on the violation of intellectual property rights. Amongst the consignments are HIV/AIDs medicament purchased for an undertaking by the Clinton Foundation in Nigeria. The United Nations (UNITAID) in a reaction following the detention of the goods in transit said:

“… Interruption in HIV therapy is extremely dangerous and can cause resistance to the medicines. We therefore strongly urge the Dutch government to release the medicines so that they can reach patients as soon as possible. UNITAID is worried more generally about the trend that seems to have taken hold in recent months where generic medicines are stopped or confiscated while transiting through the Netherlands. Generic medicines are not counterfeit medicines.”

This current negotiation has indeed drawn enormous discussions and arguments in different forums. The secretive atmosphere under which the agreement is negotiated has been critically evaluated as the leaked text in the public domain has given rise to tremendous speculations concerning the text under review. Most discussions revolved around the intellectual property chapter proposed by the USA relates to patents. Overall, the USA’s TPPA proposal appears tilted in support of patent applicants by demanding lower levels of disclosure, lower standards of patentability, no pre-grant opposition proceedings, as well as numerous possibilities to amend patent applications. The long-term effect of these measures is likely to be the granting of a greater number of patents on medicines and medical technologies, including a greater number of weak or “poor-quality” patents. Beyond the TRIPs-plus intellectual property provisions included in the TPPA, other knotty issues relating to finances and/or re-imbursements of drugs plus investment-related matters are said to pose another major hurdle in the access to medicine conundrum and global public health as a whole.

Patent rights and essential medicines in developing countries: is access compromised for innovation in Nigeria?
Absence of patent rights discourages research into neglected diseases in developing countries [1]. Morally, patents can be justified on natural rights, distributive rights and utilitarian (economic) grounds. Man has ‘rights to his idea’ and fairness means he should be rewarded for inventions. Patent system prevents copying by competitors until profit has been made. It also serves a ‘disclosure function’ so that applicants reveal inventions and the knowledge can be used globally as basis for new inventions and for economic growth [2;3]. In cases of joint inventions patent system serves a ‘transactional function’; it prevents conflict and determines how profits are shared [3].

Notwithstanding, poor access to essential drugs is a global problem with other causes beside patent rights. Only 319 drugs on the WHO Essential Medicines List (EML) are patented; and in 65 countries only 1.4% of EML drugs are patented [4]. Since less than 10% of drugs used in developing countries are patented, conciliation of patents will not lead to significant improvement in access to drugs (Bale, 2001). Poor access is rather due to insufficient R&D and drug production especially in developing countries without manufacturing capacity. The local drug industry in Nigeria currently meets 20% of the drug needs as against the projection that it will meet 80% of demand by 2000 [5]. The products are mostly generic analgesics, antimalarials, antibiotics and vitamins. The Research and Development (R&D) effort depends on few public sector institutes like the Nigerian Institute of Pharmaceutical Research Development (NIPRD) currently involved in developing local drug against Sickle cell anaemia and Nigerian Institute of Medical Research (NIMR) occasionally in collaboration with the private sector (NIPRD). The National Agency for Food and Drug Administration and Control (NAFDAC) is poorly financed and has been accused of contributing to high costs of drugs through high registration fees [5].

Other factors include exchange rate, high tariffs and taxes on drugs and chemicals which range between 17- 20% in Nigeria making drugs cost 2-64 times more expensive than the international reference price [6]. Also lack of political will and poor regulation makes Nigeria a market for substandard and counterfeit drugs constituting about 48% of circulating drugs [7;8]. There is low demand in these countries because of poverty. Nigeria with GDP of 915 and over 70% of people living below poverty line and average monthly salary of 52 USD cannot afford drugs [7; 9]. However evidence suggests that patents are unnecessary for innovations and actually reduce access to drugs especially in developing countries.

Patents reduce access to drugs and are unnecessary for innovation
Health is a fundamental human right and essential medicines are required to maintain it. Therefore it is morally unjust and unethical to compromise access to medicines for commercial interests. Pharmaceutical companies actually use patents to stifle competition, increase price and create monopolies [10]. Generic competition is the best strategy of lowering drug prices. Anti-retrovirals (ARV) prices reduced from 10,000 to 136 USD per patient per year with supply of generics from India [11]. The threat of introducing generics actually forced down ARV and antibiotic prices in Brazil and USA respectively (during the anthrax scare).

Globally, the generic industry runs profitably with low R&D cost and standards are maintained.
Apparently, R & D is not as costly as industry claims, figures are often inflated and higher opportunity costs claimed by the companies. In 1990s actual R&D cost per new molecule discovered was 114-150 million USD [12]. Also, only a small fraction of the profit is reinvested into R&D. In 2000, eleven biggest drug companies spent 30% of their revenue for marketing and administration but a paltry 12% for R&D [13]. Moreover, public funds are used for R&D especially basic research which may be unprofitable [3;14]. Government contributed 44%, ‘not for profit’ organizations -7.6% and pharmaceutical companies-48% to the global 106 billion USD spent on R&D [15]. Also 45 out of 50 top selling drugs in the USA in 1992-1997 received government funds during R&D [13].

Industry often develops drugs from unpatented traditional knowledge like Chinese Artemisin which is received free [3]. Moreover, patents have not induced right innovations, instead old drugs are slightly altered or new dosage forms introduced. A lot of these ‘me too’ drugs should not be patented. Only drugs reflecting market patterns like anti-cancer, anti-hypertensive and not public health priority are developed. Ninety percent of research is directed against 10% of global disease burden. Only 31% of 1,223 drugs patented between 1973 and 1997 were truly innovations and only 1% was for tropical diseases. It is doubtful that patents can induce R&D in neglected and tropical diseases as the developing countries have a very small share of the drug market [14]. Patents may rather hinder development as access to information is restricted during the development phase and companies may duplicate efforts and waste resources [16].

Meanwhile, patents reduce access to drugs in developing world. The population offers a potentially large market for ARVs including patented new second line drugs [17]. Nigeria has about 2.8 million people living with HIV/AIDS (PLWHA). Access however is further reduced by the ‘TRIPS plus’ conditions included in the Free Trade Agreements (FTA). Oxfam (2006) estimates that Colombia will need extra 940 million USD for drugs and compromise access of 6 million people by 2020 and Peru will expect 100% increase in drug prices by 193 million USD as a result of these FTAs. Consequently, there are other incentives for motivating research apart from patents. Companies can be motivated by advance purchase commitments for future products like vaccines. Peer recognition, academic rewards and prizes are time-proven alternatives. Industry can be rewarded with big one-time financial reward and global fame and recognition and they may get R&D tax waivers [16;18].

Conclusion
If the fight against communicable diseases is to be won in the 21st century, voices must be raised by all stake holders, especially NGOs and even people suffering with these ailments to oppose the coming into affect of the TPPA that amongst other factors, will block generic medications from penetrating into the market, therefore, rendering those affected from poor countries to lose the hope of living and of a better society. Also, this will negate the spirit of the Doha Declaration on access to medicines. Instead of adopting the TPPA including TRIPS-plus provisions that can hinder access for those in poor countries, the hands on deck are better off if they delineate factors that would bolster and build on the milestone already achieved towards increasing access to treatment. Bureaucrats are much better off if they resort to anchor on rational and sound measures in which trade and intellectual property policies are formulated in a way that strengthens the agenda of providing long-term, cheaper and perpetual access to medicines. In aligning with UNITAID as well as other interested non-state run entities, the writer supports the endorsement of a “positive agenda”, which translates into stakeholders logically identifying and implementing policies that could enhance to attain the remit of trade and economic growth in tandem with the objectives of making access to medication and the safeguarding of public health.

Recommendations
There is need to encourage innovations without making drugs inaccessible, therefore the current patent system should be modified. There should be strict regulation of the pharmaceutical industry by neutral people without conflicting commercial interests. There should be a system for ‘capping” or controlling drug prices and only ‘true inventions’ should be patented.

The level of public sector involvement should be increased and should not be limited to initiating basic research and development but should continue up to the stage of commercializing the drugs. Capacity will need to be built in the public sector. Some research institutes like Nigeria’s NIPRD need to be upgraded and get better funded to ensure cost-effectiveness. There should be increase in research grants given to researchers and institution; this can be raised from both public and private sources. This should be given through an equitable and transparent system. Corporate organizations should be made to contribute to R&D efforts and tax credits can be received for these. Individuals in countries with low drug taxes can be made to pay special R&D taxes.

There is need to strengthen public–private partnerships for R&D as private sector tend to be cost effective. In Nigeria, more private interest should be generated and it should be linked with public institutes like NIPRD which is currently developing drugs against Sickle cell anaemia. The health systems of developing countries require strengthening to promote access and rational drug use. There is need to improve data management, drug distribution and bulk purchasing mechanisms. There is need to encourage prescriptions of generics. The drug regulatory agency should be adequately funded so as to ensure that good standards and combat drug counterfeiting.

The effort of international organizations like WHO, UNDP, World Bank in advocacy for drug access should be continued. Also their involvement through initiating and funding institutes for R&D of drugs for tropical diseases should be encouraged. International partnerships like the ‘International AIDS Vaccine Initiatives’ and ‘Drugs for Neglected Diseases Initiative’ (DNDi) should be strengthened. The American ‘Orphan Drug Law’ program which has generated modest R&D on drugs with high therapeutic but low economic value can be explored and reproduced in other countries.

Finally, there is need to exploit flexibilities present in the TRIPS agreement. Moreover, experts should closely examine future international treaties, agreements and bilateral FTAs and ensure that they do not compromise the health of the populace. The Nigerian government should reduce tariff on drugs and local manufacturing capacity should be developed. Foreign direct investments and drug donations should be attracted through good governance.

Bibliography and References

1. Cohen-Kohler JC (2007).The morally uncomfortable global drug gap. Clinical Pharmacology and Therapeutics, vol 82(5) 610-614.
2. WTO (2006). Intellectual Property (TRIPS) fact sheetPharmaceuticals.http://www.wto.org/english/tratop_e/trips_e/factsheet_pharm01_e.htm
3. WHO (2006). CIPIH Report: Public health, innovation and intellectual property rights
4. Attaran A (2004). How do patents and economic policies affect access to essential medicines in developing countries? Health Affairs vol. 23(3)155-166
5. Peterson K, Obileye O (2002). Access to drugs for HIV/AIDS and related opportunistic infections in Nigerian. POLICY project/ Nigeria.
6. Bate R, Tren R (2006). The WTO and access to essential medicines: recent agreements, new assignments. American Entereprise institute for public policy research. Health Policy outlook, vol. 4, available at www.aei.org
7. FMOH (2006). Medicine prices in Nigeria, prices people pay for medicine. Available at
www.haiafrica.org/index.php?option=com_content&task=view&id=172&Itemid=133 - 32k –
8. WHO 2007. Medicine prices in Africa. Available at: http://www.haiweb.org/medicineprices/
9. WHO Africa (2006). Health situation analysis in the African Region, Basic Indicators
10. Abbott FM (2005). WTO Medicine Decision: world pharmaceutical trade and the protection of Public Health. The Am. J. Int. Law. 99; 317-358
11. Westerhaus M, Castro A How do intellectual property law and international trade agreements affect access to antiretroviral therapy? PLoS Medicine 3(8).e322.DOI:10.1371/journal.pmed.0030332.www.plosmedicine.org
12. Public Citizen (2001). Rx R&D Myths: The Case Against The Drug Industry’s R&D "Scare Card"
http://www.citizen.org/congress/reform/drug_industry/
13. Public citizen (2002). Drug Industry Profits: Hefty Pharmaceutical Company Margins Dwarf Other Industries. http://www.citizen.org/congress/reform/drug_industry/corporate/articles.cfm?ID=9923
14. Sterckx S (2004). Patents and access to drugs in developing countries: an ethical analysis.Developing World Bioethics,.vol 4(1):58-75
15. Efpia (European Federation of Pharmaceutical Industries and Associations) 2007.
16. WHO (2003). Intellectual Property rights, innovation and public Health. 56th World Health Assembly Provisional Agenda item 14.9 A56/17
17. Morgan M (2006). Medicines for the Developing World: Promoting Access and Innovation in the Post-TRIPS Environment. Available at:
http://www.law.utoronto.ca/accesstodrugs/documents/trips
18. Love JP (2006). Drug development incentives to improve access to essential medicines. Bulletin of World Health Organisation, 84(5.408

Greg Perry, MEDICINES PATENT POOL

Lead Author: Greg Perry
Organization: Medicines Patent Pool
Country: Switzerland

Abstract

Voluntary patent pooling in public health is a mechanism for the management of intellectual property (IP) rights that seeks to promote innovation and access particularly in developing countries. Voluntary patent pools operate within the existing trade and IP framework and can contribute to the realisation of “the right to health” and “the right to enjoy the benefits of scientific progress” as guaranteed in the Universal Declaration of Human Rights (UDHR) and in the International Covenant on Economic, Social and Cultural Rights (ICESCR). Voluntary patent pooling also provides a practical example of an approach to promote policy coherence in the field of public health.

This contribution reviews one experience in the implementation of voluntary patent pooling to improve health outcomes. It also analyses other areas in which the concept could potentially be applied to address specific access and/or innovation challenges for health technologies as well as to support the achievement of new health-related Sustainable Development Goals through 2030.

Submission

Patent Pooling in Public Health

In recent years, patent pooling has emerged as a mechanism for addressing some of the innovation and access challenges related to essential life-saving health technologies. While voluntary patent pooling has existed for decades in other fields of technology, it is a relatively new concept in the biomedical field where it has been adapted to pursue public health objectives. Public health-oriented patent pooling aims to improve access to medicines and facilitate innovation in the development of new products, thereby contributing to the realisation of the right to health and the right to enjoy the benefits of scientific progress. By also recognising the rights of inventors, it is a practical example of a mechanism that promotes policy coherence as sought by the UN High-Level Panel’s Call for Contributions.

This submission begins by outlining the concept of voluntary patent pooling as it has evolved over recent years in the public health field. It then reviews the Medicines Patent Pool’s approach to improving access to HIV medicines through voluntary licensing and voluntary patent pooling initiatives. The authors explore the potential applicability of voluntary patent pooling beyond HIV and the mechanism’s role in addressing specific access challenges in these areas. The paper also includes an analysis of how patent pooling contributes to the advancement of human rights and the achievement of the 2030 Agenda for Sustainable Development. It concludes with some considerations for the operational implementation of voluntary patent pools in public health in general.

1. The concept of patent pooling in public health

Early calls for patent pooling in the biomedical field focused on developing mechanisms to enable access to patents on upstream technology in order to facilitate further innovation. A specific case followed the outbreak of severe acute respiratory syndrome (SARS) in 2002-2005. The filing of multiple patent applications on the genome of the virus responsible for SARS threatened to stall progress on the development of a vaccine and thus the international community pushed for the provision of non-exclusive licences to facilitate innovation. While the end of the outbreak removed the sense of urgency and the SARS patent pool was never established, similar patent pools have been proposed for other upstream technologies.

In 2006, the WHO Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) reviewed the arguments for the establishment of patent pools and recognized their potential for upstream technologies. In particular, the CIPIH highlighted their possible use to promote innovation relevant to developing countries. The report suggested that the relative lack of market incentives for technologies relating to diseases that disproportionately affect developing countries could enable agreements that would otherwise be more difficult to achieve.

The WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPOA) went further by recognizing the role patent pools could play not only in facilitating innovation, but also in improving access. In recommending the development of new mechanisms to promote access to key health-related technologies, the GSPOA called for examining the “feasibility of establishing voluntary patent pools of upstream and downstream technologies to promote innovation of, and access to, health products and medical devices.”

In reviewing proposals to improve research and development to meet health needs in developing countries, the WHO Consultative Expert Working Group on Research and Development (CEWG) noted the potential for combining patent pools with possible incentive mechanisms such as prize funds to promote innovation for new formulations needed in developing countries. Patent pools (and in particular downstream pools) were also recommended as cost-effective approaches to improving access in developing countries and as a way of delinking the cost of R&D from the final price of products.

2. Patent Pooling for HIV medicines

UNITAID established the first patent pool with a clear public health mandate in 2010. With its initial focus on HIV, the Medicines Patent Pool’s mission is “to improve health by providing patients in low- and middle-income countries with increased access to quality, safe, efficacious, more appropriate and more affordable health products, through a voluntary patent pool mechanism.”

The Medicines Patent Pool (MPP) operates as a voluntary licensing mechanism through partnerships with the pharmaceutical industry that facilitate access and promote innovation. Specifically, the MPP aims to:
- Improve access to affordable quality-assured HIV medicines in developing countries by enhancing competition among manufacturers leading to reduced prices;
- Enable the development of formulations adapted to developing country needs, such as paediatric formulations and fixed-dosed combinations.

Given its public health mandate, the MPP works with IP holders to include terms and conditions in its licences that are important from a public health perspective and that promote policy coherence among trade rules, the rights of inventors and the right to health. Examples of key terms and conditions in MPP licences to date include:
- Broad geographical scope allowing sales by generic manufacturers in countries that are home to up to 93.4% of people living with HIV and 99.3% of children living with HIV in low- and middle-income countries;
- Ability to sub-license in a non-exclusive and non-discriminatory manner to multiple generic manufacturers;
- Flexibility to sell outside the licensed territory under certain circumstances, including to countries that have issued compulsory licences in accordance with the TRIPS Agreement;
- Reasonable royalty rates (royalty-free for paediatric formulations);
- Freedom to develop new formulations or fixed-dose combinations;
- Waivers on data exclusivity, where applicable;
- Obligation to meet strict quality assurance requirements.

A key characteristic of MPP licences is that they are all published in full form on the MPP website. This practice has introduced significant transparency in access-oriented licensing of pharmaceuticals and contributed to setting new standards.

Since its establishment in 2010, the MPP has signed voluntary licences with seven patent holders for 12 HIV medicines, one direct-acting antiviral for hepatitis C, and for one technology that can be used for the development of nano-formulations of HIV medicines. It has also established collaborations with two additional patent holders (for paediatric formulations as well as a medicine for an HIV opportunistic infection). The organisation has sub-licensed to 12 generic manufacturers who have already supplied 7.2 million patient-years of WHO-recommended HIV medicines to 117 low- and middle-income countries.

By mid 2015, the MPP’s work had saved the international community USD 119.6 million through the purchase of more affordable treatments. This is equivalent to one year of first-line treatment for approximately 950,000 people.

With the market introduction of generic versions of new ARVs, it is estimated that savings from MPP licences could reach USD 1.4 billion over the coming years, enabling significantly more people to access needed HIV medicines in developing countries. The MPP’s initial achievements thus contribute to Sustainable Development Goal 3 and specifically to SDG target 3.3 to end the AIDS epidemic, through, among other initiatives, HIV treatment scale-up.

The MPP seeks to accelerate the availability of quality-assured generics of new HIV medicines for use in developing countries as a key objective. The organisation negotiates voluntary licences with patent holders as early as possible, in some cases even before they receive regulatory approval, to enable manufacturers to begin development earlier. The preparation of joint forecasts with the WHO, technical support to licensees where appropriate, and regular reviews of development plans, also facilitate and accelerate the development process.

The successful experience of the MPP in HIV has provided a concrete example of how voluntary patent pooling and public health-oriented voluntary licensing can contribute to addressing some of the innovation and access challenges relating to health technologies. In November 2015, following requests from certain governments and other stakeholders and extensive consultations, UNITAID extended the mandate of the MPP to hepatitis C and tuberculosis, two areas where significant access and innovation challenges remain.

3. Patent Pooling and its Potential Applicability to Other Public Health Challenges

Currently, the Medicines Patent Pool’s mandate is limited to access programmes in these three disease areas. However, after reviewing the MPP’s experience in HIV patent pooling, the High-Level Panel may wish to explore other areas in which such approaches could promote research, development and innovation in the health sector and facilitate access to new products.

3.1. Patent pooling to enhance access to affordable health products in developing countries

As demonstrated in the case of HIV, non-exclusive voluntary licensing through a patent pool can be a cost-effective mechanism to enhance access to needed health technologies in developing countries. World leaders acknowledged “voluntary patent pooling and other business models, which can enhance access to technology and foster innovation,” in the 2015 Addis Ababa Action Agenda, the financing framework for the SDGs. Moreover, according to a recent WHO/WIPO/WTO study, new models of socially responsible licensing, such as patent pools, protect IP rights while ensuring that new medical technologies are available and affordable for underserved communities.

In principle, the model could be applied to other patented health products for which competition among multiple manufacturers could contribute to improving access in developing countries. This could include, for example, patented health technologies needed to achieve the SDGs such as certain medicines for other communicable diseases (SDG target 3.3) non-communicable diseases (SDG target 3.4), essential medicines (SDG target 3.8) or vaccines (SDG target 3.8). The case of medicines included in the WHO Model List of Essential Medicines may merit attention. In each case, the public health need, feasibility of implementation, likely impact, as well as the potential interest of patent holders in participating, would need to be assessed.

3.2. Patent pooling to facilitate R&D and access in combination with innovative incentives

(a) The case of antimicrobial resistance

The recent WHO Global Action Plan on Anti-Microbial Resistance reviews the urgent need for new antibiotics and for increased investments. Discussions are ongoing on possible new incentive mechanisms that would contribute to strengthening the current antibiotic pipeline. There is general agreement that incentives should be designed in a manner that delinks the financing of R&D from the prices of new antibiotics to encourage companies to develop new products without incentivizing high sales volumes in ways that may accelerate the development of resistance. There is also broad recognition that there may be a need for novel IP-based approaches in this area, recently promoted in a pharmaceutical industry statement on combatting AMR at the World Economic Forum in Davos.

A number of recent proposals have identified patent pooling as a way in which IP on new antibiotics could be managed in a public health-oriented manner. Further analysis is needed to explore their feasibility and to understand how the current pooling model could be best adapted to the different requirements of tackling antibiotic resistance.

(b) The case of upstream tuberculosis

Combining patent pooling with incentive mechanisms has also been proposed in the context of addressing the challenges in TB drug development. The “3P: Push Pull and Pool project” aims to improve financial incentives for TB drug development both at the pre-clinical and clinical stage and ensure access and affordability of new regimens once developed. The “push” and “pull” incentives would be linked to the pooling of intellectual property in order to promote open collaborative research to spur development of new TB regimens. In terms of access, the project envisages licensing for the competitive production of the final products to ensure that new TB regimens are available at affordable prices. The initiative is already supported by several leading TB organisations and is of interest to key countries with high TB prevalence.

3.3. Patent pooling to facilitate follow-on innovation

Licensing through a patent pool can provide a simple mechanism for entities engaged in follow-on innovation to obtain access to the necessary IP to undertake further R&D. This could include, for example, entities seeking to develop new formulations of patented medicines that have limited market potential but that address specific public health needs in developing countries.

In HIV, this model is being applied to the development of new formulations of existing HIV medicines, in particular for children. With the MPP’s entry into tuberculosis, the model could also be used to re-purpose existing drugs for TB patients. There may be many other opportunities in which follow-on innovation could be facilitated through non-exclusive voluntary licensing. In these instances, patent pooling could contribute to making patented medicines available to multiple developers on public heath-oriented terms and extend the benefits of scientific progress to more populations.

3.4. Patent pooling to overcome “patent thickets” to access upstream technology

In certain instances, patent thickets on upstream technology can become a barrier to the development of health products. The SARS case mentioned above is one example of the potential of a large number of overlapping patent applications to block the development of needed vaccines and diagnostics. Similar concerns have been raised in relation to other upstream technology (e.g. research tools, genomic sequences, vaccines), leading to calls for collaborative licensing models such as patent pools. The objective in these cases is to facilitate access to technology enabling further scientific development.

4. Patent Pooling, the Right to Health and the Right to the Benefits of Scientific Progress

Access to medicines is an integral part of the right to the highest attainable standard of health under international human rights law. General Comment 14 of the UN Committee on Economic, Social and Cultural Rights provides some helpful guidance on the interpretation of the right to health, outlining a number of principles that are essential including: availability, accessibility, appropriateness and quality. By increasing the availability of affordable and appropriate quality medicines, patent pooling initiatives in public health can contribute to the realisation of the right to health.

In the field of HIV, patent pool licences seek to ensure faster availability of new HIV medicines in developing countries. Accessibility at affordable prices is central to the work of the MPP and is achieved through competition among multiple manufacturers, which leads to lower prices. The development of more appropriate formulations that meet the specific needs of people with HIV in developing countries (including children) is also central to the MPP model. Finally, all MPP licences have strict quality assurance provisions.

At the time of the establishment of the MPP, the Human Rights Council “welcome(d) the creation of the Medicines Patent Pool Foundation by UNITAID, with a view to improving access to appropriate, affordable antiretrovirals in developing countries”. The MPP was considered a mechanism that could contribute to the realisation of the right to health, at least in relation to one major disease: HIV. More recently, the 2015 Social Forum of the Human Rights Council devoted to access to medicines identified the MPP as a “good practice in promoting access to medicines.”

The right of everyone to share in scientific advancement and its benefits is also part of the Universal Declaration of Human Rights. In this context as well, ensuring that the benefits of science are available and economically affordable is a central feature and very much in line with the objectives of public health patent pools as described above. In addition, access to scientific advances to undertake further research is also critical to the “right to science.” The UN Special Rapporteur’s report on the right to science emphasised approaches that encourage collaboration and the possible use of incentives for entities that are “ready to share knowledge, materials and technologies for product development.” In that context, the report highlighted the role of the HIV patent pool in promoting collaboration and “facilitat[ing] new drug combinations for simpler treatment.” A further report noted that “this ‘collective management’ of patent rights is an approach that might be extended to promote access to other medicines.”

5. Considerations with respect to implementation

From an operational perspective, public health voluntary licences and patent pools operate within the existing trade and IP framework and do not require changes to international legal instruments. They recognise the rights of inventors, while also recognizing the importance of ensuring that public health considerations guide the management of IP, in particular in addressing access and innovation needs in developing countries.

From an institutional perspective, the governance and institutional structures of patent pools can vary significantly. In the case of the MPP, the organisation was established as an independent, non-profit foundation. It was established and is fully funded by WHO-hosted UNITAID. This arrangement has enabled the MPP to be integrated into the international response to the HIV epidemic, to have the needed political credibility and to work in close partnership with all stakeholders, including governments, civil society, patient groups and industry.

Other patent pool initiatives, such as proposals to establish a patent pool for antibiotics, would rely on public funding and a governance structure that directly or indirectly includes governments. While this may require significant political buy-in, it also contributes to providing legitimacy to the instrument, which is critical for its success and to attracting patent holder participation. It also ensures that the mandate of the patent pool remains firmly grounded on public health principles.

6. Conclusion

Patent pooling mechanisms contribute to improving policy coherence in rules between rights of inventors, international human rights laws, trade rules and public health objectives. In accordance with Article 7 of the TRIPS Agreement, patent pools "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."

Voluntary licensing through public health patent pools offers a mechanism to manage IP rights for the public interest, respecting the rights of innovators while promoting access to medicines. Access-oriented and non-exclusive voluntary licensing through patent pooling mechanisms with a clear public health mandate contribute to achieving this goal and to overcoming a number of access and innovations challenges. In doing so, they also support the realisation of the right to health and the right of all to benefit from scientific progress as well as international efforts to reach new Sustainable Development Goals in the future.

Bibliography and References

1. See for example, USPTO, Patent Pools: A Solution To The Problem Of Access In Biotechnology Patents?, December 2000.
2. See for example Simon J. et al, “Managing Severe Acute Respirator Syndrome (SARS) Intellectual Property Rights: the Possible Role of Patent Pooling” in Bulletin of the 3. 3. World Health Organization, September 2005, 83(9). Also, WHO/WIPO/WTO Promoting Access to Medical technologies and Innovation, 2013.
See WHO, Friede M et al, “Innovation for vaccines against poverty diseases: The need for new support mechanisms” available at: http://www.who.int/immunization/research/forums_and_initiatives/02_Friede_Business_Model.pdf?ua=1 (accessed on February 15, 2016)
4. WHO, Report of the Commission on Intellectual Property Rights, Innovation and Public Health 2006
5. WHO, Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property.
6. WHO, Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination. Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination, 2012.
7. UNITAID/EB/12/2010/R7
8. UNITAID is a global health initiative, established to provide sustainable, predictable and additional funding to significantly impact on market dynamics to reduce prices and increase the availability and supply of high quality drugs and diagnostics for the treatment of HIV/AIDS, malaria and tuberculosis for people in developing countries. It is hosted by the World Health Organization.
9. Memorandum of Understanding between the MPP and UNITAID
10. A recent analysis by the Access to Medicines Index concluded that “based on an analysis of the licences available for examination, those negotiated via the Medicines Patent Pool provide licensees with the highest level of flexibility and broadest geographic scope.” ATM Index 2014 available at: http://www.accesstomedicineindex.org/
11. The full text of MPP licences, as well as summaries of key terms and conditions, are available at: http://www.medicinespatentpool.org/current-licences/
12. This includes licences with AbbVie, Bristol-Myers Squibb, Gilead Sciences, MSD, National Institutes of Health, the University of Liverpool and ViiV Healthcare. In addition, collaborations have also been established with Janssen (on paediatrics) and with Roche on a medicine for an opportunistic infection.
13. Based on a treatment cost of USD 125.68 per patient per year as per GPRM 2014.
14. MPP, Progress and Achievements of the Medicines Patent Pool 2010-2015 (2015); E. Burrone and G. Perry, “Ensuring new medicines reach those in most need”, Lancet HIV, 09/2015; 2(9):e362-e363
15. Further details available at: MPP, Progress and Achievements of the Medicines Patent Pool 2010-2015 (2015)
16. See the independent feasibility studies published on the MPP website in July 2015
17. Addis Ababa Action Agenda of the Third International Conference on Financing for Development
18. WHO/WIPO/WTO Promoting Access to Medical technologies and Innovation, 2013.
19. WHA resolution 68.7
20. See, for example, AMR Review, Securing New Drugs For Future Generations: The Pipeline Of Antibiotics, 2015; Kieny, M.P., “Creating and Intergovernmental Consortium for New Antibiotics: a New Development Model” in AMR Control, 2015; Chatham House, Towards a New Global Business Model for Antibiotics, 2015
21. Declaration by the Pharmaceutical, Biotechnology and Diagnostics Industries on Combating Antimicrobial Resistance, January 2016.
22. Kieny, M.P., “Creating and Intergovernmental Consortium for New Antibiotics: a New Development Model” in AMR Control, (2015); Chatham House, Towards a New Global Business Model for Antibiotics (2015)
23. See proposal selected by WHO European Region as a possible health R&D demonstration project: http://www.who.int/phi/implementation/EURO_procedure_for_selection_of_demo_projects.pdf ; a summary of the original proposal “Accelerating Innovation and Access to Medicines for Tuberculosis through Open Collaboration: A Push, Pull, Pool Approach” at http://www.who.int/phi/implementation/10_summary_EN.pdf and a more recent summary entitled 3P: Push. Pull. Pool. Better TB treatment. Faster. Proposal to accelerate innovation and access to new treatment regimens for TB available at: http://www.msfaccess.org/sites/default/files/TB_3P2pager_Dec-2015_ENG.pdf
24. While there are many definitions of a “patent thicket”, one that is widely cited definitions is “an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licenses from multiple patentees” in Shapiro C., Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Settin (March, 2011).
25. See WHO, Friede M et al, “Innovation for vaccines against poverty diseases: The need for new support mechanisms” and USPTO, Patent Pools: A Solution To The Problem Of Access In Biotechnology Patents?, December 2000
26. For example, Geertrui van Overwalle ed. Gene Patents and Collaborative Licensing Models: Patent Pools, Clearinghouses, Open Source Models and Liability Regimes (2009)
27. Committee on Economic, Social and Cultural Rights, General Comment 14, The right to the highest attainable standard of health (Twenty-second session, 2000), U.N. Doc. E/C.12/2000/4 (2000)
28. UN Document A/HRC/15/L.28:
29. UN Document A/HRC/29/44
30. Document A/70/279
31. UN Document A/HRC/20/26
32. Kieny, M.P., “Creating and Intergovernmental Consortium for New Antibiotics: a New Development Model” in AMR Control, (2015)

Feroz Ali, INDIAN INSTITUTE OF TECHNOLOGY MADRAS

Lead Author: Feroz Ali
Organization: Indian Institute of Technology Madras
Country: India

Abstract

Patents are unilateral declarations by an inventor which when approved by the patent office stand unchallenged for the remainder of its life. The only way by which its credibility or truth can be questioned, is by putting forward a challenge before a court of law. This is a hugely expensive and inefficient way to find the truth about patents. Open prosecution offers an ex ante opportunity to test the validity of patents. By transposing the point at which the validity can be challenged (usually the courts) and placing it within the patent office within the grant process at the patent office (for e.g. by the introduction of pre-grant opposition), open prosecution brings in the much needed peer-scrutiny of patents. This is not an alien thing to do. Open prosecution is similar to the re-examination procedure in the United States. The new patent law in the United States, the America Invents Act also allows for post-grant review of a patent. This recognizes the fact that it is primarily the competitors who are empowered to challenge the patent. By making the analysis ex ante, open prosecution not only empowers a resource-crunched patent office but it also saves on future litigation time and costs. The evidence from 10 years of pre-grant opposition procedure in India, which can be regarded as the first step towards open prosecution, demonstrates the high rate of success of pre-grant opposition in invalidating patents could be a boon for improving access to medicines.

Submission

Open Prosecution: Towards Ex Ante Validation of Patents

Impact on remedying policy incoherence

The Role of the Public in the Patent System
Democracy plays a key role in having a patent system, a system that encourages its citizens to invent. Democratic governance relies upon participatory action. In a democratic set up, it is hard to envisage a system creating exclusive rights without some form of consultation with the public, especially when such rights have an impact on the public. Even from a procedural perspective, patent law is a misfit. Audi alteram partem, one of the foundational principles of natural justice on which Common Law stands, does not find a place in patent granting process. Modern patents can be filed in secrecy, kept unpublished until grant and used stealthily to stop the business activities of others without hearing the parties who would be affected by the grant of such patents. The absence of public participation in the patent system remains an unsolvable puzzle, which everyone has learned to live with.

Historically though this did not appear to be the case. In the early days of patent law where the demonstration of inventions was through working models, we notice a time when the public were poised to play a participatory role. Though patent law developed in a secretive manner with minimal public participation, this period was a bright spot in history where things seemed to move towards greater public participation. However, the hopes of having a participative patent system crashed when the representation of the invention became textualized ⎯ a move that arguably added the ‘intellectual’ bent to intellectual property law ⎯ to enable the description of the invention in words and figures as opposed to its material embodiment by working models. While working models allowed for the immediate ascertainment of the value of the invention, giving the impetus to the public to see these models, the textual representation allowed the public to know about the invention only upon the publication of the patent specification. This abstract, interpretational description of the invention embodied in modern patent specifications by its very design left very little room for public participation.

Patent Prosecution as a Closed Process

Traditionally prosecution of patents involves interactions between the patent applicant and the patent office. Patent prosecution, the process of examination of patent applications, is neither open nor adversarial. Most patent systems allow for a deferred publication of the patent application. In some cases, patent applications can be kept unpublished until the grant offering no means for the public to participate in patent prosecution. Non-participation by the public in the prosecution process has several drawbacks. Some of them, like, inadequacy of the notice function, the practice of endless amendments, and the grant of frivolous and abstract patents can be curbed to some extent by effective public participation. Ideally the public should participate in the patent prosecution process as the rights granted by a patent can affect the public at large. One of the ways the patent system promotes participation is by having a procedure for the opposition of patents before their grant.

Opposition procedures at the patent office may either be before the grant of a patent (pre-grant) or after the grant (post-grant). Much of the problems in the prosecution pertain to the information asymmetry that affects the patent office. The introduction of opposition procedures at the patent office is premised on the idea that knowledge embodied in a patent application is likely to be at the hands of the competitor than the patent office. The patent office, in itself, is not competent in many of the streams of technology where applications contain cutting-edge research and its application. Moreover, the patent office suffers from a troubling attrition rate, which make it hard to retain good talent. Research shows that the patent office would spend on an average eighteen hours on the examination of a patent application, which by some accounts, is grossly inadequate for scrutinizing applications covering high-technology. Despite the shortcomings in the manner in which the patent office works, the patent system has not encouraged peer-review mechanism for scrutinizing patents. The Common Law system is built on the adversarial process for bringing out facts. The introduction of peer-review in patent prosecution will not only alleviate the burden of the patent office but will also be significant to addressing quality issues in the grant.

Towards Open Prosecution
Pre-grant opposition is unique as it is the only procedure which allows for an ex ante validation of patents. It is definitely the first step a country can take to incorporate a culture of open prosecution of patents. Open prosecution can be defined as an approach where patent offices use external and internal expertise in the prosecution of patent applications. Open prosecution refers to a participatory, decentralized approach to prosecution of patents recognizing the fact that cutting-edge knowledge that is described in patent applications is widely distributed and no patent office can have access to all of it. Open prosecution can reduce costs and improve the time taken to grant a patent. It is the antithesis of traditional prosecution where the patent office relies on internal expertise in prosecuting patents.

Pre-grant opposition refers to the first challenge a third party gets to make while the patent application is pending before the patent office. This procedure has some distinct advantages when compared to other revocation methods. First, it allows the challenge to be made before the authority that grants the patent, i.e., the patent office, the institution within the patent system where technical arguments on the subject matter are most likely to be appreciated. Second, it allows the challenge by peers who could bring vital knowledge about the invention to the patent office. Third, the time-bound nature of pre-grant opposition allows challenges to be made before the grant of the patent, unlike validity challenges, which could be made at any point in time during the life of a patent. Fourth, compared to the cost involved in patent litigation, pre-grant opposition is cost-effective.

The Absence of Peer-review
The patent system evolved without a provision for peer-review of patents. Peer review makes the patent prosecution process participative and benefits the patent office by bringing external expertise into the prosecution process. Incorporating the peer review into the patent prosecution process will enhance the quality of patents by introducing an additional level of scrutiny.
As a peer stands in a better position than the examiner to prove the invalidity of a patent, there have been calls to include a third party review mechanism into the patent law. Some scholars have called for a peer-review mechanism for patents. Those supportive of peer-review, advocate it at an early stage of the application. Others have pointed that a peer-review system may not be feasible for patents. They argue that the way a patent is drafted does not suit them for peer-review. Much of the critique against the peer review mechanism emerges from the failure of disclosure function of patents. Since patents with inadequate disclosure result from not complying with the existing standards of disclosure, peer review can be seen as a tool for enhancing the disclosure requirements.


Impact on public health

Pre-grant opposition and Access to Medicines
Generally, opposition proceedings serve as an opportunity for a competitor to oppose unjustified protective rights. Pre-grant opposition, as a procedure exercisable before the grant of a patent, offers the earliest opportunity to challenge a patent. The significance of pre-grant opposition grew with a steady increase in the number of patent applications filed before the Indian Patent Office after the post-TRIPS amendment to the Indian Patents Act which allowed for product patents for pharmaceutical products. In 2006, 28,940 patent applications were filed—19 % increase over the previous year. That year witnessed 44 pre-grant oppositions. In the year 2007, 64 oppositions were filed, and in the following year the number grew to 153. The year 2009 saw 103 oppositions and the following year witnessed 294 oppositions. In 2011 there were 193 oppositions. The following year saw 262 oppositions. One can see that the rate of filing oppositions has been increasing steadily over the years.

The low number of oppositions initiated in comparison to the applications filed is not an indication of its ineffectiveness. Rather there is evidence to suggest that only the commercially valuable patent applications get opposed and litigated. In fact, some of the best-selling drugs in recent history have been victims of pre-grant opposition in India. They include, Novartis’ Glivec and Exforge, Eli Lilly’s Forteo and Cialis, AstraZeneca’s Iressa and Nexium, Gilead’s Viread, Pfizer’s Caduet, Tibotec’s Prezista, Glaxo SmithKline’s Hepsera and Roche’s Tamiflu. Recently, the patent application covering Gilead’s blockbuster drug Sovaldi (sofosbuvir) for the treatment of Hepatitis C was rejected by the Indian Patent Office noting the pre-grant oppositions filed by a generic company.

Impact on human rights

Patents and Access to Life-Saving Medicines
Patents present one of the biggest barriers to the access of life-saving medicines. There is a growing concern that patent protection for pharmaceutical products has the effect of putting live-saving medicines beyond the reach of a very large section of world’s population. Despite the variety of remedies that exist, the strongest response to the issue of access has come by availing the flexibilities offered by the patent system. Two international responses, both of which occurred around the turn of this millennium, illustrate this. The events occurred when the debates in relation to access to live-saving medicines were being resolved in favor of lowering trade barriers to access. The first response happened when the members of the World Trade Organization (WTO) unanimously agreed upon the relevance of intellectual property rights on the price of live-saving drugs and passed the Doha Declaration allowing countries to control the patent rights in order to avoid any adverse impact on public health. The second response pertains to the reaction of Indian generic manufactures to the HIV/AIDS crisis when the high cost of anti-retroviral (ARV) drugs made them affordable to only a small segment of the people in the developing countries afflicted with AIDS. The supply of generic versions of the ARV combinations by Indian generics at a fraction of the cost at which the originator companies supplied brought the situation under control. The solution came about because of the different levels of patent protection offered for live-saving drugs around the world. The legal regime in India then allowed for manufacturing ARV drugs, as the TRIPS Agreement had not obligated India to offer patent protection for drugs until 2005.

The debate surrounding the impact of patents on access to essential medicines is stimulated by the differences in opinion on what “essential medicines” and “access to medicines” mean. Access could generally mean access to “essential medicines” as classified and updated frequently by the World Health Organization (WHO). The WHO List of Essential medicines (WHO-EML) enumerates the minimum needs for a basic-health care system detailing the most efficacious, safe and cost-effective medicines for priority conditions. By this yardstick, the problem of access may appear to be a minor one: patents for essential medicines are uncommon in poor countries and prevailing views attribute the lack of access of medicines more to poverty than to patents.

However, many medicines that are essential are not included in the WHO-EML as they are expensive or under patent protection. A more reasonable approach to determine the impact of patents on access would be to compare the number of persons in need of particular drugs who “would gain or lose access or would have their access to drugs unaffected if patents that did exist in their country were removed or modified.” Patents grant exclusivity on live-saving medicines and act as barriers to access. They allow pharmaceutical companies to practice monopoly pricing. Monopoly pricing is not the best way to incentivize research and development (R&D) and has often been criticized as the cause of lack of access to live-saving drugs.

Pharmaceutical companies who own the patented medicines cite the high cost of R&D as the reason for the high price. They also tend to follow a universal price for all the markets irrespective of the market’s ability to afford the medicines. In developing countries where majority of the population have a low per capita income and cannot afford health insurance, the high price of patented medicines on life-saving drugs hinders access. Resultantly, most of the population in developing countries do not have access to such medicines.

The measures to promote access to patented medicines can pertain to either non-legal or legal reforms. Some of the non-legal reforms include established initiatives like the direct purchase programs (like the US PEPFAR), bulk buying (like the program by Clinton Foundation), differential pricing, medical patent pools (like the one spun off from the UNITAID program), Priority Review Vouchers, Price Funds, Advance Market Commitments, and reform ideas such as the establishment of Health Impact Fund. Of the legal reforms that relate to making changes in an existing law, the provisions on compulsory licensing and price control of drugs are popular. Most of the proposals look at changing the existing regime or introducing a new program sometimes with radical measures. However, the approach of enhancing access to medicines by changing the patent laws is of recent origin.

Implementation

Pre-grant Opposition in India

In India, which has a novel pre-grant opposition in place, the results so far have been encouraging. Opposition procedures have helped examiners to identify suspect patents. Though India did provide for pre-grant opposition when the 1970 Act came into force, the procedural formalities did not make it a viable option and consequently only a few pre-grant oppositions were initiated. With the introduction of product patents for pharmaceuticals which saw a deluge of applications for pharmaceuticals and related inventions filed in the period between 1995 and 2005 and with the revisions made to the procedure of pre-grant opposition, the mechanism of pre-grant opposition used increasingly.

Despite its profitability, the Patent Office is burdened with issues relating to examination standards, transparency and unexpected growth arising out of an exponential increase in the number of new applications. Viewed in the light of the difficulties faced by the Indian Patent Office, the pre-grant opposition procedure offers hope to remedy some of these issues by supplying vital information into the Patent Office. Pre-grant opposition impacts the patent system in three significant ways: it can leverage information of third parties to help patent offices identify important and suspect patents; it can induce the applicant to give examiners information that may be relevant to patentability; and it can increase compliance costs for applicants.

Empirical Evidence
In an empirical study conducted surveying the pre-grant opposition decisions published between 2007 and 2014 on the Indian Patent Office website, it was found that pre-grant opposition procedures had a high rate of success.

Effectiveness of the Process
Out of the 155 decisions on section 25(1), oppositions had a success rate of 65.16% resulting in the rejection, withdrawal or abandonment of patent application in 101 cases. The impact of opposition proceedings were analyzed under 4 categories: (1) in 70 cases, the grounds of opposition raised were successful resulting in the rejection of the patent application; (2) in 17 cases, the grounds of opposition raised were successful resulting in the amendment of the patent application; (3) in 9 cases, though the grounds raised by the opposition were unsuccessful, the patent applications were eventually rejected possibly indicating a higher vigilance by the patent office in cases where oppositions are filed; and (4) in 5 exceptional cases, where the grounds of opposition were not considered as the patent applicant abandoned the application. I consider the patent opposition which leads to the amendment of the patent application as an effective one as amendment under the Indian Patents Act can be done either by way of a disclaimer, correction or explanation, or for the incorporation of an actual fact, and such amendment usually results in improving the notice function of the claim. Similarly, the cases where the Patent Office rejected the application despite the opposition not able to prove the grounds could be indicative of higher vigilance by the patent office in scrutinizing the application possibly prompted by the importance of the application highlighted by the opposition filed.
Conclusion

A case for ex ante validation of patents can be made within the structure of the contemporary patent system. By bringing out the importance of peer-review procedure for embodiments of technical knowledge, it should be possible to shift the point of validation of patents to the prosecution stage preferably through an inter partes proceeding, as opposed to its present position after the grant. If worked well, the process of ex ante validation could lead to improved quality in the grant. Some scholars regard patents are ‘probabilistic property rights’ and note as one of the reasons for the uncertainty, “the inability of third parties to participate effectively in determining whether a patent should issue.” Others have been more specific in linking patent’s unreliability with the lack of peer-review.

The proposal to introduce ex ante validation should not be seen as a move towards detailed examination of all patents. Peer review of every application will neither be possible nor efficient. The process of ex ante review should be an option which could be exercised in the case of valuable patents. Peer-review mechanism by way of inter partes opposition proceedings could “give the PTO greater access to relevant industry knowledge.” Peer review of patents may not eliminate all the problems in the patent system. To be sure, peer review did not do that for science. But the patent system could gain by emulating the scientific method as theoretically the standards of patenting and scientific publishing are the same.

Bibliography and References

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The author conducted an empirical study of the patent office decisions rendered between 2007 and 2014 and made available at the Indian Patent Office website: http://ipindiaservices.gov.in/patentdecisionsearch/patentsearch.aspx. The study was confined to the decisions rendered under section 25 (1) of the Patent Act, 1970. The decisions are searchable by any of the 6 modes (Applicant Name, Opponent, Application Number, Section, Patent Number and Decision Date) as mentioned in the site. The results for the search term “25” under the category “Section” gave 212 decisions, out of which 155 decisions pertained to section 25(1), i.e., the provision relating to pre-grant opposition. The decisions that were not considered included those rendered under section 25 (2) relating to post-grant opposition and null entries which had to be excluded due to non-availability of documents on the website. Certain decisions though categorized under section 25 (2), were decisions rendered under section 25 (1) and hence they were looked into.
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Publication, the quality of which is enhanced by the peer-review process, only makes the research available to a larger audience. It does not make the published knowledge scientific. HENRY H. BAUER, SCIENTIFIC LITERACY AND THE MYTH OF THE SCIENTIFIC METHOD 47 (University of Illinois Press, 1992).
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LILA FEISEE, The Biotechnology Innovation Organization

Lead Author: Lila Feisee
Organization: The Biotechnology Innovation Organization
Country: USA

Abstract

The Biotechnology Innovation Organization (BIO) believes that the implication that Intellectual Property protections impede access to medicines is erroneous. BIO believes that there is evidence that countries with little or no IP protections, or countries with a focus on generic medicines still face significant challenges in providing much needed medicines to their populations. There are many factors unrelated to IP that stand in the way of access to medicines including inefficient and inconsistent regulatory systems, tariffs, poor health infrastructure and delivery mechanisms, and lack of capacity and education in the healthcare space to name a few. And BIO believes it is weak and unpredictable IP laws in countries that create a difficult if not impossible environment for the development of new medicines, and for providing the incentives necessary to introduce new and innovative medicines for populations that need them. BIO believes that IP is a tool for enabling the development of biotech products, which rely heavily on patent protections to generate investment into the development of these products, and BIO urges the Commission to look at ways to strengthen IP laws to enable investors, companies and researchers to take the risks necessary to develop innovative medicines to reach those who need them most.

Submission

Comments of the Biotechnology Innovation Organization (BIO)

The Biotechnology Innovation Organization (BIO) represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations in the United States and 30 other nations, including both developed and developing economies. BIO’s members are involved in the research and development (R&D) of health care, agricultural, industrial and environmental biotechnology products and services. More than 90% of BIO’s members are innovative small businesses.

BIO is a strong proponent of successful partnerships towards making medicines available for all who need them. In 2010, our members adopted the BIO Options for Increasing Access to Medicines in the Developing World , which provides a series of options companies should consider as they conduct business. In addition, global health related programming is a regular feature at our International Convention , which attracts more than 16,000 biotechnology professionals, thought leaders, government officials from around the globe. These programs focus on identifying challenges associated with the development of medicines for neglected diseases, and also bring together companies and other interested parties including funders, universities and others interested in this space.

BIO members, and the global innovative biotechnology in general, are leading the world’s search for new medical treatments and cures, as noted in detail below. The financing and advancement of these treatments rely critically on the protection of intellectual property. Therefore, as an organization representing innovative companies active in developing new healthcare products, BIO has a keen interest in the work of the UN High Level Panel on Access to Medicines and is pleased to provide comments in response to the call for contributions.

The UN High Level Commission’s call for contributions asks for submissions to focus on addressing policy incoherence in relation to the rights of inventors, international human rights law, trade rules and public health objectives including increased access to medicines, vaccines, diagnostics and medical devices in accordance with Sustainable Development Goal 3. It is important to note that BIO’s members have long been actively engaged in addressing these goals as well as SDG 1 and 9.

At the outset we note that the scope of the call for contributions appears to be narrower than the apparent mandate of the Commission. In fact, the call presupposes that the concept, and advances that notion that IP protections are inconsistent with public health. We disagree with this assessment and we believe that the facts prove this assertion to the contrary. For example we note that while 95% of essential medicines, as defined by the WHO, are off patent, still one third of the world’s population does not have reliable access to them and, in parts of Africa and Asia, that is true for half the population. And despite all the current mechanisms in place to facilitate no-or-low costs access to non-patented HIV medicines, only 15.8 million of the estimated 36.9 million people living with HIV globally (about 43%) were accessing treatment in 2014.

Moreover, despite the wide availability of no-or-very low cost non-patented HIV medicines, in at least 14 African countries, 80% or more of people who were estimated to be eligible for treatment under the WHO guidelines were not receiving antiretroviral therapy as of 2013. First-line treatments for killer diseases like malaria and TB are available as generic products at very low cost, and yet many people are denied access to them. And finally, according to the WHO, and estimated 649 million people, or about 50% of the population in India do not have regular access to the hundreds of non-patented drugs on India’s EML. Despite its large domestic generic drug industry, India’s investment in health as a percentage of its GDP has averaged around 4% for the last decade. India’s current level of 4.5% is one of the lowest figures in the world ranking it below such countries as Haiti and Ethiopia.

For these reasons, we urge the commission to consider other known factors that affect the ability of populations both in developing countries and developed countries, to access medicines, not the least significant of which are trade barriers such as tariffs, regulatory inefficiencies; poor health infrastructure (including health education), availability of care, the availability of health insurance, and mechanisms to pay for healthcare among others. BIO believes that in order for countries to be able to address issues of access, they must look at the full range of barriers to access that exist. Looking at the rights of inventors in relation to access to medicines alone will not help address the access issue that plagues many in the developing world. For as we have indicated above, the availability of a medicine in a country even at the lowest possible prices, does not guarantee that the patient population in need of the medicine will actually be able to access it.

However, to the extent that laws in countries prevent the appropriate protection for innovative products making it difficult to make medicines available, BIO will address these points. To do this, it is first necessary to understand about the biotechnology industry, and the role that IP plays in the development of biotech products, since in order for a product to be accessible, it must first exist.

The Biotechnology Industry:

The biotechnology industry is one of the most research-intensive industries in the world. The global biopharma industry spends more than 140 billion dollars in R&D annually . These investments are paying off. BIO’s industry research shows that since the sequencing of the human genome, there are more than 455 new drug products and vaccines on the market, and there are more than 5000 currently in development. In the U.S. 70% of all of the clinical programs are being sponsored by small companies which put more than 19% of revenues generated back into R&D spending. Most of these companies have yet to realize any revenue from that work, much less a profit.

These products are now improving, and will continue to improve, the lives of hundreds of millions of people worldwide, and offer hope for cures for a wide range of illnesses. Medicines represent some of the most effective and efficient use of health care expenditures. Their value is reflected by dramatic health improvements, improved quality of life, hospitalizations/emergency room cost avoidance, return to work and community. It is well known that medicines account for only about 10% of overall healthcare costs, a figure that has remained stable for decades. Through the use of innovative therapies there are savings in other areas of the healthcare system as well. The U.S. Congressional Budget Office credits each dollar of additional spending on medicines with a twenty-cent reduction in other healthcare expenses.

Advances in agricultural biotechnology have already had a profound impact on the world’s capacity to feed itself, dramatically improving yields of crops while decreasing dependence on chemical pesticides. Industrial biotechnology is affecting numerous sectors of the economy, and is presenting a realistic alternative through biofuel production.

The key to the success of the biotechnology industry – across of all its sectors – is a business model that is based on taking significant risks to develop products based on innovation. Specifically, the biotechnology business model is based on making significant investments (often hundreds of millions of dollars) in early stage research and development with the hope that some of these investments and efforts will yield a commercial product. This model has worked despite the fact that it is lengthy (often taking more than a decade) and that most biotechnology R&D investments and efforts do not result in a commercial product reaching the market (only 5 in 5,000 compounds that enter preclinical testing make it to human testing and only 1 of those 5 are approved by the FDA) . It is only by pushing boundaries of science and taking these risks that breakthrough inventions are discovered and converted into commercially viable products and services.

Thus, the biotechnology business model requires an environment that, as much as possible, eliminates unpredictability in the commercial sector making it more conducive for companies to take risks. One important factor in this environment is the guarantee of patent exclusivity. Specifically, by ensuring that the products or services that may eventually be marketed can be protected from unauthorized copying and use – for a limited period of time -- companies can justify taking risks and making significant R&D investments. Introducing unpredictability by changing the availability of patent rights, or the conditions in which patent rights can be asserted, will adversely affect the business environment, and the delicate balance that has been reached over past decades, that is so crucial to supporting innovation in the biotechnology sector.
Patents and the Biotechnology Industry

To illustrate the role of patents in the typical biotechnology venture, consider the following example. A researcher, typically in a university laboratory, discovers a gene that is expressed only by a particular type of cancer cell. This discovery can result in a variety of distinct research and development initiatives – ranging from diagnostic tools for detecting the presence of the gene or its expression product in test samples taken from patients, to therapeutic agents that selectively kill cells that express the gene or inhibit the expression of the gene. As soon as practical after the discovery of the gene and its practical value, patent applications must be filed. BIO’s industry research shows that in the biopharma sector, the patent that covers the composition of matter--the key patent which companies use to generate investment funding--is almost always developed by the company.

These patents will be used to justify the investment of millions of dollars into development of these diagnostic and therapeutic agents. Translating this initial discovery into a tangible product can take more than a decade and hundreds of millions, and even, billions of dollars. The exclusivity that patents on these compositions provide is what investors will rely upon to provide funding for development of products, and will be a key factor affecting the decision of a larger company to work with the startup company or university that owns the patent to do clinical development of products based on the discovery. Of course, the road to development from this point is long and arduous, has a significant likelihood of failure, and is fraught with other commercial setbacks. However, the faith that the discovery will help improve the lives of patients, and the confidence that patent rights will protect products that are developed, propel the transfer of technology and research and development work that follows.

Virtually all new treatments and cures reaching global patients are developed using the model outlined above. In fact, 91% of drugs are developed by the private sector with no direct government role. It is true that government agencies such as the NIH in the United States do much important work on the causes and underlying biology of diseases. But they do not develop new medicines nor are they able to manufacture, supply or commercialize these or any other products.

Patent law policies that impede the development of biotech products:

It is the early stages of drug development that the development of a product is most vulnerable to perturbations in the capital markets. If, for example, the strength of a key patent on a life-saving product is cast into doubt, or if there is a gap in patent protection to cover the entire product, investors will not invest in that particular project. Likewise, if for example, in a particular key market a product is not patented, or there is uncertainty about the strength of its patent in that market, investors may also look elsewhere. Recent studies now provide greater evidence that strong intellectual property protection facilitates access. In particular, these studies show that strong IP protection is not only important to incentivize the development of new medicines, as acknowledged in the global consensus of the Doha Declaration, but also results in faster launch and faster access to new medicines in developing countries. Moreover, health outcomes improve when strong IP systems exist that act as an incentive for innovators to develop a local market. Thus, weakening IP rules demonstrate a policy incoherence that weakens justifiable rights of inventors in contradiction to international human rights law and the pursuit of public health policies to result in positive public health outcomes.


Policies that weaken IP rights serve only to exacerbate the policy incoherence that impede access to medicines in both developed and developing markets. BIO has found that in certain countries it can take up to 10 years or more to issue a patent on a key product. This is often times due to backlogs in patent offices, but it is also the case, that certain countries have laws, which prevent timely issuance of patents. For example, in Brazil, even after an application has been deemed to be patentable by the competent authority (the patent office) it must wait for the approval of the regulatory agency (ANVISA) before the patent is actually issued. Investors looking to invest in the R&D of that product will be discouraged by such a delay. Lack of investment will then lead to possible delay in the development of the product, or even worse, the abandonment of the project. Hence, a potential life-saving medicine may not be available to the public.

In addition, once a patent has been issued, investors looking for a project to fund will look to see whether the patent is enforceable and predictable. If enforceability of a patent is unpredictable, for example, in countries where compulsory licensing is liberally employed, investors will withdraw from that project in that particular country. This is because investors will not invest millions, perhaps hundreds of millions on the development of a product simply to risk the copying of the product by a competitor. The result of such a policy may be the loss of a manufacturing facility or an R&D facility in that country. Or worse, the result may be the lack of availability of that particular product for the patients in that country. Systematic use of compulsory licenses to address industrial policy needs is an incoherency in the patent laws of some countries, which prevents the development and the introduction of new drug products in those countries and thereby impedes access to medicines.

Along the same line, certain countries have incoherencies in their country’s patent laws that may result in the revocation of a deserving patent in one country, while other countries still have that patent in force. In some instances these incoherencies can be used as a means to delay the review of, and or granting a patent. Companies who have relied on a patent to obtain funding will now, no longer be able to attract the investors or the relevant partners necessary to carry on the R&D or to invest in the very costly clinical trials which will be necessary in order to carry out an endeavor. These restrictions on patentability undermine the incentives mentioned to develop new products and enhance their dissemination in developing countries.

Access to Medicines:

BIO recognizes the questions have been raised about the connection between strong intellectual property protections and access to medicines. We believe that access to medicines is indeed a complex and multifaceted problem, as noted above. However, as established in a recent study published in one of the world’s leading peer reviewed economic journals, the American Economic Review , stronger IP regimes actually promote the dissemination of new medicines, controlling for a host of other factors. Furthermore, since the adoption of TRIPs standards by most countries (i.e., non-least developed WTO members) over 20 years ago, the market for both generic and innovative chemical medicines has grown at an explosive pace, and by virtually any measure, access to both new and older chemical medicines around the world is much greater. On the other hand, there is no evidence that the lack of IP protection afforded the world’s least-developed countries under TRIPS has conversely had an impact on their access to medicines.

BIO members are working with developing country governments every day to arrive at deals that permit new medicines to be introduced to their populations in a sustainable manner. BIO and its member companies are committed to finding ways to improve access to new medicines, including through increasing the technical capacity of regulatory agencies to efficiently assess and approve new medicines and through creative contracting and distribution mechanisms.

It is our industry’s hope to find partners in developing and other countries that can help us find solutions to unmet medical needs. But for this to happen, universities and researchers in these countries will need the economic incentives to engage and partner in such research. They will need a level of intellectual property protection akin to the one that has created the world’s leading biotechnology industry here in the United States.

As indicated at the outset of these comments, BIO believes that there are many factors involved that affect the accessibility of a product, many of which have nothing to do with the rights of inventors. Below we outline some of possible approaches countries may want to consider in order to improve access to medicines.

How to Promote Access to Medicines (and Remedy Policy Incoherence) In a Meaningful Way:

In light of the factors mentioned above, BIO urges the High-Level Panel to take a holistic approach and consider pragmatic solutions to improve access to medicines. There are several approaches that have shown promising results in a pragmatic manner. It is imperative that the Panel build on these successes rather than focusing unduly on the role of intellectual property rights or that may be misinformed. Thus, we propose that High-Level Panel consider ways to build on the following mechanisms:

Product Development Partnerships (PDPs) – these partnerships provide a mechanism to succeed by leverage public sector funding with expertise from industry to develop medicines and vaccines where other mechanisms have failed. BIO Members are engaged in these programs. Major PDP’s such as the Medicines for Malaria Venture, the TB Alliance, and the Drugs for Neglected Diseases Initiative represent only a small sample of the work ongoing in this area.

Innovative Voluntary Licensing Initiatives – As noted, compulsory licensing is counterproductive to achieving access to medicines and is part of the problems concerning policy incoherence regarding IP, trade and public health policies. To the contrary, measures that find new ways to manage IP rights, e.g., through voluntary licensing, can help address unmet medical needs by fostering innovation or dissemination of healthcare products through leverage multiple resources. For example, recent activity of the Medicines Patent Pool (MPP), which has more recently shown creativity and flexibility in engaging both innovators and follow-on product manufacturers has shown promise in increasing access.

Strengthening, rather than weakening, regional trade and other international agreements. As noted previously, there is new evidence confirming that a robust IP system is not a barrier to access but instead facilitates access to medicines. Thus, it is imperative that the Panel not weaken IP incentives, but rather should encourage greater adherence to “best practices” enshrined in regional trade agreements. Many regional trade agreements recognize the need for flexibilities in extraordinary circumstances, while promoting systems that support the ability to obtain IP on deserving inventions and that provide certainty over procurement and enforcement of such rights. These agreements help spur development and diffusion of new technologies to address unmet medical needs and should continue to be pursued. Moreover, regional agreements regarding regulatory and other measures relevant to overcoming access barriers are paramount to achieving pragmatic results. For example, regional agreements regarding mutual recognition procedures for regulatory approvals can help facilitate access to high-quality essential medicines in developing countries. Recent efforts, including the African Medicines Regulatory Harmonization Program (AMRH) are good examples that could be replicated around the world to achieve results.

We appreciate this opportunity to comment.

Bibliography and References

1) https://www.bio.org/sites/default/files/Access_to_Medicines_Policy_Statement_Final.pdf.\
2) http://convention.bio.org
3) World Health Organization and Health Action International (Global), Measuring Medicine Prices, Availability, Affordability, and Price Components (Geneva: 2008).
4) USAID, AIDS By the Numbers,
5)Médecins Sans Frontières (MSF) estimates the average price of ARVs per patient, per year is $67. Access to Medicines is a Global Struggle, The Pharmaceutical Journal, October 2, 2014.
5)Ibid.
6) Laing, R., “The patent status of medicines on the WHO model list of essential medicines,” https://www.wto.org/english/tratop_e/trips_e/techsymp_feb11_e/laing_18.2.11_e.pdf
7)India’s population in 2016 is 1.31 billion. http://www.indiaonlinepages.com/population/india-current-population.html
8) World Bank and OECD, 2006-2016.
9) World Bank and OECD, 2016.
10)See for example: Mercurio, Bryan “Resolving the Public Health Crisis in the Developing World: Problems and Barriers of Access to Essential Medicines” Northwestern Journal of International Human Rights, Vol. 5 Issue 1(Fall 2007); “Pharmaceutical Access in Least Developed Countries: On-the-Ground Barriers and Industry Successes.” The Cameron Institute, Essential Medicines and Health Products Information Portal: A World Health Organization resources (2010). Accessed at http://apps.who.int/medicinedocs/en/d/Js17815en/
11) Evaluate Pharma World Preview 2015 Outlook to 2020, Eighth edition June 2015
12) PhRMA 2013 Profile: Biopharmaceutical Research Industry at http://www.phrma.org/sites/default/files/pdf/PhRMA%20Profile%202013.pdf
13) Sampat B, Lichtenberg F. What are the respective roles of the public and private sectors in pharmaceutical innovation? Health Affairs. 2011;30(2):332‐339.
14) See, e.g., Cockburn, Iain M., Jean O. Lanjouw, and Mark Schankerman. 2016. "Patents and the Global Diffusion of New Drugs." American Econ. Review, 106(1): 136-64; 15) Margaret Kyle and Yi Qian, “Intellectual Property Rights and Access to Innovation: Evidence from TRIPS,” National Bureau of Economic Research, Dec. 2014, http://www.nber.org/papers/w20799
16) Charles River Associates, “The role of the innovative industry in ‘developing’ the market for new medicines in Emerging Markets: A case study approach,” April 2013.
17) Patents and the Global Diffusion of New Drugs, Iain M. Cockburn, Jean O. Lanjouw, and Mark Schankerman, American Economic Review 2016, 106(1): 136–164

PRERNA MINGMA BOMZAN, LDC WATCH

Lead Author: Prerna Mingma Bomzan
Additional Authors: Sanya Reid Smith and Mirza Alas Portillo
Organization: LDC Watch
Country: Nepal; Switzerland

***This contribution is submitted by LDC Watch a global alliance of civil society organisations (CSOs), networks and movements based in the LDCs (www www.ldcwatch.org); and supported by Center for Health Human Rights & Development (www.cehurd.org), The Health GAP (healthgap.org), Third World Network (www.twn.my) and Yolse Santé Publique & Innovation

Abstract

This Submission concerns achievement of the Right to Health in Least Developed Countries (LDCs) by promoting access to affordable pharmaceutical products, developing a technological base including pharmaceutical production capacity and transfer of technology for that purpose. This submission recommends inter alia

• Unconditional extension of the general transition period, which will expire on 1 July 2021 for as long as they remain a LDC;
• Implementation of paragraph 18 of the 2012 WTO Accession Guidelines that requires Special and Differential Treatment provisions of the WTO (i.e. the transition periods) to be applicable to all acceding LDCs;
• WTO Members to refrain from imposing TRIPS plus conditions on acceding LDCs.
• For LDCs to fully utilize the General TRIPS Transition Period and the Specific Pharmaceutical Transition Period and Other TRIPS flexibilities as well as avoid TRIPS-plus measures.
• Reform of the “Harare Protocol” of the African Regional IP Organization (ARIPO) to incorporate the LDC transition periods, adopt rigorous patentability standards and administrative pre- and postgrant opposition procedures.
• Review the Bangui Agreement and ensure that it fully and optimally incorporates the transition periods and the full range of TRIPS flexibilities available and avoids TRIPS plus provisions.
• An independent review of technical assistance being provided by WIPO and other agencies to LDCs to assess its suitability for LDCs, particularly from a development and public health perspective.
• Institute an independent monitoring, evaluation and accountability mechanisms with regard to technical assistance provided to LDCs.
• Implement measures to operationalize Article 66.2 of TRIPS Agreement
• The United Nations Technology Bank for LDCs should review its approach to IP and amend it to bring it in line with the achievement of right to health in LDCs. 

Submission

Least developed countries (LDCs) represent the poorest countries in the world.1 There are currently 48 countries2 designated by the UN3, 34 are members of the WTO.

LDCs are characterized by low per capita income, low level of human development, and economic vulnerability, are at bottom of technology development4 and challenged by natural calamities (e.g. Haiti and Nepal), violence and political instability, symptomatic of poverty, inequalities and social injustices.5

LDCs face significant health burdens related to communicable6 as well as non-communicable diseases (NCD).7

Health expenses in these countries are usually borne out-of pocket. Donor funding is limited to specific disease areas (e.g. HIV, TB, Malaria) and is reducing. As countries graduate from the LDC status health financing will be negatively impacted, and the strain on national health budgets will grow. Thus availability of affordable pharmaceutical products is imperative if the health needs of LDCs are to be addressed.

Access to pharmaceutical products is considered integral to the right to the highest attainable standard of health. Its integral role in achieving Universal Healthcare (UHC) and the commitment of governments to use to the full TRIPS flexibilities is noted in multiple UN resolutions and processes8 . The UNGA SDG resolution recognizes explicitly the link between treatment access and the use of TRIPS flexibilities in Goal 3.b.

Against this background, the most important policy options available to LDCs to facilitate affordable access are the transition periods, which exempts LDCs from TRIPS implementation. They are also fundamental to the development of a viable technological base including pharmaceutical production capacity. Moreover, extensive IP rights are negatively connected to their development interests.9

Despite its importance, utilization of the transition periods is inadequate, thus impacting the fulfillment of the right to health. This due to several factors but in particular technical assistance provided to LDCs by WIPO10 and other agencies (US, EU, Japan)11, regional IP systems12, the need to repeatedly request extensions of transition periods. These are also reasons why LDCs’ have yet to fully and properly incorporate other TRIPS flexibilities into their national patent laws.

LDC Transition Periods

Article 66.1 of TRIPS recognizes “the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base” and accordingly grants LDCs a transition period, which may be extended by submitting a “duly motivated request”. The preamble of TRIPS reinforces this flexibility.13

At present LDCs enjoy a general transition period until 1st July 2021 during which period LDCs do not have to implement the TRIPS provisions except for Articles 3, 4 and 5 of the TRIPS Agreement.14 LDCs also enjoy a specific pharmaceutical transition period until 1 January 2033, wherein, LDCs do not have to grant or enforce pharmaceutical patents and test data protection. 15 Further they have been granted a waiver from mailbox and provide exclusive marketing rights obligations during the transition period.16 These transition periods may be extended by LDCs on making a request to the WTO TRIPS Council (Article 66.1).17 It is clear from the text of Article 66.1 that LDCs’ request is non-negotiable.

It is of note however that LDCs’ requests for extensions of transition period sought duration of as long as a country is a LDC18 and although its requests obtained widespread support from UN agencies, civil society, developed countries opposed the requested duration eventually forcing through time limited transition periods, thus undermining LDCs rights under Article 66.1.19

Utilization of General TRIPS Transition Period

The general transition period allows LDCs full flexibility to not implement the TRIPS Agreement until 1 July 2021 and beyond (if extended).

Most LDCs inherited their current patent regimes through colonial rule or adopted maximalist IP provisions recommended by WIPO. A review of LDCs’ patent laws shows that despite the availability of transition periods, some LDCs’ patent laws are TRIPS compliant. Those not fully compliant with TRIPS still accords high patent protection and several appear to be considering bills for early TRIPS compliance20. Of the LDCs still negotiating their agreements for accession to the WTO, Bhutan and Sao Tome and Principe appear to have TRIPS compliant patent laws in place from as far back as 2001. A majority of LDCs, including non-WTO members have joined the Patent Cooperation Treaty21 though there is no requirement to do so even under TRIPS.

Two regional IP groupings in Africa have expedited TRIPS and TRIPS-plus compliance for a large number of African LDCs.

For members of the African Intellectual Property Organization (OAPI), TRIPS-plus compliance has come through the “Bangui Agreement”. OAPI is made up of 17 Francophone countries, of which 14 are LDCs. The Bangui Agreement covers various IP matters including patents. It centralizes the filing of applications and grant of patents, as well as prescribes on post grant matters and enforcement. Effectively the Agreement supersedes national laws.

Another regional IP grouping, the African Regional Industrial Property Organization (ARIPO) is limited to the examination and grant of patents leaving other aspects to national laws. ARIPO is made up of 19 anglophone countries of which 18 are members of the “Harare Protocol” (of this 12 are LDCs (3 are nonWTO members)), which governs industrial property.

ARIPO's Harare Protocol allows some flexibility for its members, which may, within 6 months, notify that a patent granted at ARIPO would not have effect in that particular country. However, most ARIPO 4 members do not actually take advantage of this rule resulting in hundreds of pharmaceutical patents being granted. 

It is apparent the utilization of general transition period is inadequate. Transition period was granted in view of the special needs and vulnerabilities of LDCs and their need for maximum policy space to develop technological capacity. The history of IP and development confirms that premature implementation of TRIPS compliant patent regime hinders development prospects as it prevents “reverse engineering” and access to tools and technologies needed to develop a technological capacity including pharmaceutical production capacity.22 LDCs simply do not have the national conditions to be able to benefit from such a regime such as market power, highly skilled personnel, solid technological base and infrastructure, government investment in R&D etc.

Utilization of Pharmaceutical Transition Period 5

In the case of the pharmaceutical transition period some LDCs have taken steps to incorporate the same into their domestic patent law (e.g. Cambodia, Burundi, Madagascar, Uganda, Rwanda). 23.

However some of these countries are members of ARIPO (Burundi, Uganda, Rwanda), which has yet to implement a pharmaceutical transition period at the regional level. Consequently patents granted extend to their territories.24 25 In short policy incoherence between national and regional laws is undermining effective use of the pharmaceutical transition period and fulfillment of the right to health.

In the case of OAPI, it recently amended the Bangui Agreement. Article 46 now reads: Member States that are LDCs are not obliged to implement the provisions of Annex I regarding patents consisting of, or related to, a pharmaceutical product, nor to implement the provisions of Annex VIII regarding confidential information, until 2033 or the date on which they stop to be classified as an LDC. It is hoped that with this provision, pharmaceutical patents granted by OAPI will not apply to LDC members of OAPI. Failure to effectively operationalize this provision will affect the right to health. 

Variable incorporation and use of TRIPS flexibilities by LDCs

There are multiple flexibilities in the TRIPS Agreement that could be used for access to affordable generic pharmaceutical products.

A review of LDC laws shows that flexibilities have been incorporated in a variety of ways, often by not optimizing the policy space available to them. For instance, pre-grant opposition procedures feature in the patent laws of Burundi, Zanzibar and Uganda. However some of the conditions in these laws may create barriers for public interest groups to file an opposition. It is recommended that LDCs should have strict patentability standards to avoid frivolous patents and patent evergreening.26 Even so few LDCs have adopted specific provisions to prevent evergreening. 27 Even where provisions are incorporated in national patent law, in practice they are not utilized. Most LDCs do not undertake substantive patent examination, and often rely on regional patent offices (ARIPO/OAPI) or foreign patent offices (e.g. the European Patent Office, the Japan Patent Office etc.) for examination of patents, which in turn facilitates patent evergreening.28 In fact the regional patent offices have been criticized for failing to incorporate key pre-grant flexibilities that are important to promote affordable access (such as pre-grant opposition).29

Once a patent has been granted, there are policy options available to address adverse effects on access to pharmaceutical products or to research and development (e.g. bolar and research exceptions, compulsory licenses, parallel importation etc.). However, these are not universally incorporated in all the patent laws in LDCs.30 The laws of all LDCs do provide non-voluntary licenses, albeit under different conditions and through different procedures, in some cases restrictive and burdensome. Ensuring that the grounds for issuing CL are broad, the procedures simple to use, are not subject to injunctions and other procedural restrictions will require a review of these provisions.

In Asia, Myanmar, Cambodia and Laos are members of the Association of Southeast Asian Nations (ASEAN) which is rapidly moving towards IP harmonisation that so far has concentrated on putting in place higher IP protection than on the use and incorporation of TRIPS flexibilities.31

Another area of concern is anti-counterfeit legislation reportedly being considered by the East African Community (EAC), Uganda, Tanzania, Zambia and Malawi that extends to patents and prescribes TRIPS- 6 plus IP enforcement measures, which will harm rather than protect public health. 32 Criminal penalties for patent infringement which features in a majority of the laws of LDCs is also a huge concern33.

TRIPS-plus IP enforcement initiatives adversely impacts access to affordable pharmaceutical products as well as local production, as it deter or creates a chilling effect with regard to, production, import or export of pharmaceutical products.

TRIPS-plus measures in LDCs: WTO Accession and FTAs

Since the WTO was established, nine LDCs have negotiated entry into the WTO.34 Although the health safeguards discussed above should be available to all LDC members of the WTO, LDCs that negotiate accession to the WTO after it was established have often faced demands by developed countries to forego some of these rights35 inconsistent with achievement of the right to health.

Paragraph 18 of the 2012 Accession Guidelines explicitly reaffirms “that the Special and Differential Treatment, as set out in the Multilateral Trade Agreements, Ministerial Decisions, and other relevant WTO legal instruments, shall be applicable to all acceding LDCs from the date of entry into force of their respective Protocols of Accession.” 36 This means that developed countries demands aimed at nullifying the use of the transition period are illegimate. Paragraph 18 confirms that acceding LDCs may utilize transition periods available to other LDCs which are members of the WTO.

The inclusion of LDCs in free trade agreement negotiations such as Cambodia, Myanmar and Lao PDR in the Regional Comprehensive Economic Partnership (RCEP) negotiations or of many African LDCs in economic partnership agreement negotiations with the European Union is also of concern as negotiations involving developed countries are likely to include limitations on the ability of LDCs to make full use of the transition periods or fully incorporate public health safeguards in their laws.

Technology Transfer

Article 66.2 of the TRIPS Agreement requires developed countries “to provide incentives to enterprises and institutions in their territories” to promote technology transfer to LDCs. The importance of technology transfer is underscored in the Doha Declaration37. However thus far there has not been any meaningful transfer of technology to LDCs.38

Developing local or regional pharmaceutical production capacity is a fundamental aspect of access to pharmaceutical products and thus imperative to the fulfillment of the right to health. There is growing concerns of the impact of the overwhelming reliance on pharmaceutical imports on affordability, availability and long term sustainability.39 Multiple African LDCs are covered by a plethora of regional pharmaceutical manufacturing plans40 including the African Union's Pharmaceutical Manufacturing Plan for Africa Business Plan (PMPA) 2012 which "is based on the belief that industrial development and the development of the pharmaceutical sector is not in conflict with public health imperatives and that the industry should in fact be developed with the long term aim of promoting access to quality essential medicines."41

RECOMMENDATIONS

i. For WTO Members

• The LDC general transition period, which expires on 1 July 2021, should be extended for as long as a country remains a LDC and not be subject to any conditions. 7
• Implement paragraph 18 of the 2012 WTO Accession Guidelines that states “the Special and Differential Treatment, as set out in the Multilateral Trade Agreements, Ministerial Decisions, and other relevant WTO legal instruments, shall be applicable to all acceding LDCs from the date of entry into force of their respective Protocols of Accession.”
• Ensure that acceding LDCs fully enjoy and utilize the transition periods  Refrain from imposing TRIPS plus conditions on acceding LDCs.
• Implement measures to operationalize Article 66.2 of the TRIPS Agreement42

ii. For Least Developed Countries:

• Fully utilize the General TRIPS Transition Period and the Specific Pharmaceutical Transition Period.
• Review national intellectual property laws especially the patent law to ensure that they fully and optimally incorporate the transition periods as well as the TRIPS flexibilities available to LDCs.
• Seek pro-development and pro-public health technical assistance.
• Undertake transparent public consultation that includes civil society concerned with affordable access when amending or formulating patent laws.
• Make full use of public health safeguards incorporated in national laws
• Reject TRIPS-plus requirements including in WTO accession or FTA negotiations.

ii. For Regional IP Systems and Initiatives

• ARIPO’s Harare Protocol should exempt the territory of LDCs from the grant of any pharmaceutical patents.
• ARIPO should reduce reliance on foreign examination systems and adopt rigorous patentability standards with regard to examining of pharmaceutical applications, paralleling those adopted by Argentina43 to avoid patent evergreening.
• ARIPO should increase its fees related to the filing and examination of applications and maintenance of patents to avoid proliferation of frivolous patents.
• The Harare Protocol should establish administrative pre- and post-grant opposition procedures, to enable any person to file a notice of opposition before the ARIPO Office.
• OAPI members should ensure that the Bangui Agreement fully and optimally incorporates the transition periods as well as TRIPS flexibilities available to LDCs and avoids TRIPS plus provisions.
• A review of the recently amended Bangui Agreement should be undertaken to examine the extent to which TRIPS flexibilities are incorporated and to identify TRIPS plus provisions.
• OAPI Secretariat should implement Article 46 of the recently amended Bangui Agreement by ensuring that pharmaceutical patents granted do not apply to LDCs in the OAPI region.

iii.For Developing Countries

• Provide technology transfer to LDCs in local pharmaceutical production
• Support LDCs negotiating to join the WTO and ensure that conditions of accession do not compromise transition periods, TRIPS flexibilities or include TRIPS-plus demands.

iv. For Developed Countries

• Fully support LDCs in use of the transition periods and refrain from setting any conditions for LDCs in WTO accession, transition period requests or FTA negotiations that impose TRIPS-plus measures, undermine their right to use TRIPS flexibilities or pressure the world’s poorest countries into early compliance with the TRIPS Agreement. 8
• Fulfill obligation under the TRIPS Agreement and provide incentives for genuine technology transfer.

v. For WIPO and Other Agencies (e.g. EPO, JPO, USPTO) providing Technical Assistance

• Undertake an independent review of technical assistance being provided by WIPO and other agencies to LDCs, to assess its suitability for LDCs from a development and public health perspective.
• WIPO and other agencies providing technical assistance to LDCs should ensure that LDCs fully and optimally utilize the transition periods and other TRIPS flexibilities.
• WIPO and other agencies should provide full information to the public on the type of information and legal advise being provided to LDCs with regard to IP implementation.
• Independent monitoring, evaluation and accountability mechanisms should be established with regard to technical assistance being provided to LDCs by WIPO and other agencies.
• LDCs should not accede to IP Conventions that facilitates protection of IP such as the Patent Cooperation Treaty, the Patent Law Treaty. Where LDCs are already Contracting Parties, LDCs should be exempted from the obligations of such instruments.
• The United Nations Technology Bank for LDCs should review its approach to IP44 and amend it to bring it in line with the achievement of right to health in LDCs. As stated by UNDP and UNAIDS: “…without the requirement of providing intellectual property protections, LDCs are free to follow the historic path of copying and adaptation to develop their technological capacities, at the same time strengthening their human, administrative, financial and other capacities…” 45. It is imperative that the Technology Bank promotes the utilization of transitions periods and full use of TRIPS flexibilities by LDCs.
  
  These recommendations are aimed at remedying policy incoherence and maximizing policy space for LDCs to facilitate access to pharmaceutical products, which in turn will have a positive impact on public health and enable fulfillment of human rights. 

Bibliography and References

1 More than 70% of the LDC population lives on less than $2 per day, according to the UN
2 The majority of the LDCs (34) are in the Sub-Saharan region.
3 Based on gross national income (GNI) per capita, the human asset index (HAI), economic vulnerability
index (EVI)
4 For example according to data available 38% of the Ugandan population, 68% of the Tanzanian
population, 63% of the Rwandan population, 81% of the Burundi population lives on less than $1.25.
Access to electricity in 2012, was just 34% in LDCs, compared to 85% in World. GNI per capita for LDCs
was US$928 as at 2014, compared to US$44289 for high-income countries and $10,857 for the World.
LDCs represent nearly 13 percent of world population, but only 1% of the global income. LDCs are at the
bottom of the human development index.
5 Out of the 20 member countries of the g7+ group of countries in post/conflict situations and fragile
states, 18 are LDCs.
6 For example it is reported that in Uganda only 22% of children (0-14) and 40% of adults living with HIV
are receiving ARVs while in Tanzania only 16% of children and 41% of adults living with HIV are
receiving ARVs6. Overall at the end of 2013, 63% of the 10.7m people living with HIV in LDCs did not have
access to ARV therapy.
7 According to a WHO Status Report of 2010, on non-communicable diseases, in the African Region, a
region with many LDCs, the prevalence of NCDs is rising rapidly and is projected to cause almost three quarters as many deaths as communicable, maternal, perinatal, and nutritional diseases by 2020, and to
exceed them as the most common causes of death by 2030. In the specific case of cancer, data from low income countries suggests that cancer incidence is expected to rise by 82% from 2008 to 2030, whereas
in high-income countries incidence is expected to rise at a much lower rate of 40%, in part due to
widespread access to vaccines and medicines.
8 For e.g. the 2008 WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual
Property, the 2011 UN General Assembly Declaration on HIV and AIDS, the 2012 UN General Assembly
resolution on UHC, the 2013 WHO Global Action Plan for the Prevention and Control of NCDs 2013-2020.
9 The history of intellectual property and development does not support the proposition that strong IP
can be a driver of development. The history of today’s developed countries reveals that they went through
a period of using both legitimate and illegitimate means to acquire foreign technologies to support
nascent industries in order to become competitive. In the 16th and 17th century pre-IP era, Britain
borrowed manufacturing methods, skilled artisans, and machinery from Venice and so-called Low
Countries to develop its wool- and silk-based industries. Thereafter, France, Russia, Sweden, Norway,
Denmark, the Netherlands, and Belgium engaged in industrial espionage, often state supported, to obtain
advanced technologies from England. Most advanced countries were still routinely violating the IPRs of
other countries’ citizen well into the 20th century. According to Ha-Joon Chang: “....when they were
backward themselves in terms of knowledge, all of today’s rich countries blithely violated other people’s
patents, trademarks and copyrights. The Swiss “borrowed” German chemical inventions, while the
Germans “borrowed” English trademarks” and the Americans “borrowed” British copyrighted materials –
all without paying what would today be considered “just” compensation « . The experience of many
Asian countries that build technological capacity is also similar. See Ha-Joon Chang ‘Intellectual Property
Rights and Economic Development – Historical Lessons and Emerging Issues’ Third World Network
Intellectual Property Rights Series No 3 2001, available at http://www.twn.my/title2/IPR/pdf/ipr03.pdf
and Ha-Joon Chang ‘Kicking Away the Ladder: the “Real” History of Free Trade’ Foreign Policy in Focus
Special Report (2003), available at
http://www.fpif.org/reports/kicking_away_the_ladder_the_real_history_of_free_trade. See also Chapter 1 of
UK Commission Report on Intellectual Property at
http://www.iprcommission.org/papers/pdfs/final_report/Ch1final.pdf. See Richard Gerster, “Patents
and Development: Lessons learnt from the economic history of Switzerland”,
http://www.twn.my/title2/IPR/pdf/ipr04.pdf
10 WIPO’s technical assistance is heavily criticized as being against public interest and development needs
as well as inadequate and inappropriate on flexibilities. See WIPO Doc IIM/1/4 “Proposal to Establish A
Development Agenda for WIPO” at
https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0ahUKEwiE1K7L5JfLAh
XIORQKHTVCAQ4QFggkMAI&url=http%3A%2F%2Fwww.wipo.int%2Fedocs%2Fmdocs%2Fmdocs%2Fen%2Fiim_1%2Fiim_1_4.doc&usg=AFQjCNHdVUFQMzh9o8DKOMRiW8IleVMY0Q&sig2=vR2P4hoinLe_BAyFmhkvvQ; See also An External Review of WIPO Technical Assistance in the Area of Cooperation for Development (CDIP/8/INF/1) at http://www.wipo.int/meetings/en/doc_details.jsp?doc_id=254006. This independent review is critical of WIPO’s technical assistance and has even found examples of TRIPS plus advice being given to developing countries and LDCs. Further see also Expert Review Calls For Technical Assistance Reforms, Further Investigation by Sangeeta Shashikant (15 Nov 11); WIPO: Technical assistance criticized for shortcomings by Sangeeta Shashikant (14 Nov 11)
11According to Prof. Peter Drahos, “[o]ver the years the steady drip of technical assistance leads to the
formation of technocratic trust in the EPO’s systems. A strong belief forms that the EPO’s systems produce
quality results and that belief in turn forms the basis of decision-making by patent examiners in underresourced developing country patent offices. Technocratic trust thus fosters a circle of decision-making in which the EPO trains developing country examiners to make decisions in their own countries that
predominantly benefit foreign companies, including European companies”. Peter Drahos, “Trust Me”:
Patent Offices in Developing Countries, Working Paper, Centre for Governance of Knowledge and
Development <http://www.anu.edu.au/fellows/pdrahos/pdfs/2007Drahostrustmessrn.pdf; See also NGO letter to WIPO on organizing “Africa IP Summit: Lacking a Development Dimension” with the US Department of Commerce and a number of large US corporations (Microsoft, Eli Lilly. Pfizer, etc).
http://www.ghwatch.org/sites/www.ghwatch.org/files/AfricaIPSummit2012_0207.pdf
12 Shashikant Sangeeta (2014) “The African Regional Intellectual Property Organization (ARIPO)”:
Implications for Access to Medicines” South Centre Research Paper 56 available at
http://www.southcentre.int/wp-content/uploads/2014/11/RP56_The-ARIPO-Protocol-onPatents_ENl.pdf;
Drug patents in French-speaking Africa” available at
http://www.eldis.org/go/home&id=29848&type=Document#.VtGGhikpSWA; “Regional Issue Brief:
Intellectual Property & Access to Medicines” Intellectual property rights and access to medicines, Global
Commission on HIV and Law.
13 Preamble of the TRIPS Agreement states: “Recognizing also the special needs of the least-developed
country Members in respect of maximum flexibility in the domestic implementation of laws and
regulations in order to enable them to create a sound and viable technological base.”
14 See WTO doc. IP/C/64 at https://www.wto.org/english/news_e/news13_e/trip_11jun13_e.htm
15 See WTO doc IP/C/73.
16 See WTO doc WT/L/971
17 Article 66.1 of the TRIPS Agreement: “The Council for TRIPS shall, upon duly motivated request by a
least-developed country Member, accord extensions of this period”.
18 See Communication From Bangladesh On Behalf Of The LDC Group, WTO Doc. IP/C/W/605 (23
February 2015) and Request for an Extension of the Transitional Period, Under Article 66.1 of the TRIPS
Agreement from Haiti, WTO Doc. IP/C/W/583 (5 November 2012).
19 US stands in the way of LDCs' pharmaceutical transition period; "Unconscionable and indefensible" -
U.S. 10-year offer to LDCs for pharmaceutical patent waiver; US and EU demand TRIPS plus concession
from poorest countries (30 Apr 13) ; Academics Worldwide Support LDCs' Request for TRIPS Extension
(29 Apr 13) ; LDC Watch concerned with developed countries' position on LDC extension (27 Apr 13)
20 For e.g. Afghanistan, Bangladesh, Democratic Republic of the Congo, Madagascar, Myanmar and Nepal.
21 Allows patent applicants to file patent applications simultaneously in multiple jurisdictions
22 History of IP is full of examples about the ways in which developed countries adapted the IP rules to
their changing needs and how the levels of protection increased as their industrial and technological
capacities improved over time. Japan: benefitted from IP generated in other developed countries. Its
patent protection was designed with an ultimate objective of contributing to the industrial development.
For e.g. until 1975 it excluded food, beverage, pharmaceutical products and chemical compounds from the
scope of patent protection. This weak patent protection is how Japan obtained technology and facilitated
its absorption. There were complaints of discrimination by the Japan Patent Office in that foreign
applicants had to wait longer to obtain patents compared to domestic applicants. It only increased patent
protection on receiving pressure from the US. In any case by then Japanese enterprises that developed
significantly and were developing their own innovations. Taiwan: employed weak policy to facilitate local
absorption of foreign knowledge through reverse engineering. Its government openly encouraged
counterfeiting as a strategy to develop local industries. Only under pressure from the US beginning 1983 it instituted stronger IP law. Case of Switzerland: For example in the 19th century, Switzerland’s
chemicals and textiles industries were strongly opposed to the introduction of patents as it would restrict
their copying of processes abroad. Then Switzerland was a poor country without many natural resources,
whose economy was largely reliant on farming. In 1859 a small company based in Basel “borrowed” the
aniline dying process which had been developed and patented in Britain two years before. The company,
later called Ciba, soon became a massive industrial enterprise, swiftly outstripping competing firms in
Britain. In 1995, Ciba merged with another Swiss firm, Sandoz, to form the conglomerate
Novartis…..currently a huge multinational pharmaceutical company. Case of United States: US was a
notorious pirate particularly of English work. For almost 100 years the US refused to grant copyright
protection to foreign authors on the grounds it was important to meet the nations needs for knowledge
and enlightenment and to reduce deficit in international royalty payments. As a result American publishes
and producers freely pirated foreign literature.
23 Zanzibar (part of Tanzania) excludes both pharmaceutical products and processes from patent
protection.
24 If countries fail to object to the grant of pharmaceutical patents as required by the Harare Protocol (i.e.
6 months following notification of a grant by the ARIPO Secretariat).
25 The African Intellectual Property Organization (ARIPO): Implications for Access to Medicines, Sangeeta
Shashikant, Research Paper 56, South Centre. See http://www.southcentre.int/wpcontent/uploads/2014/11/RP56_The-ARIPO-Protocol-on-Patents_ENl.pdf
26 It is recommended by the UN, agencies, the UK’s Commission on Intellectual Property Rights and the
WHO’s Commission on Intellectual Property, Innovation and Public Health (CIPIH). See also Correa, Carlos M. 2007a. Guidelines for the examination of pharmaceutical patents: developing a public health
perspective. A working paper. Geneva: International Centre for Trade and Sustainable Development,
United Nations Conference on Trade and Development and World Health Organization. Available at
http://ictsd.org/downloads/2008/06/correa_patentability20guidelines.pdf
27 The Zanzibar patent law prohibits patents on new uses and new forms of known substances. Samoa's
patent law includes a provision similar to Section 3(d) of India's patent law while Burundi and Rwanda
exclude patents on new uses of known substances.
28 Shashikant, Sangeeta. 2014. The African Regional Intellectual Property Organization (Aripo) Protocol
On Patents: Implications For Access To Medicines. Research Paper No. 56. South Centre: Geneva. Available at http://www.southcentre.int/wp-content/uploads/2014/11/RP56_The-ARIPO-Protocol-onPatents_ENl.pdf
29 Shashikant, Sangeeta. 2014. The African Regional Intellectual Property Organization (Aripo) Protocol
On Patents: Implications For Access To Medicines. Research Paper No. 56. South Centre: Geneva. Available
at http://www.southcentre.int/wp-content/uploads/2014/11/RP56_The-ARIPO-Protocol-onPatents_ENl.pdf
30 For example, Cambodia, Uganda, Yemen, Burundi and Sierra Leone recognise the international
exhaustion rule for parallel importation. Others such as Bhutan, Madagascar, and Lesotho only recognise
national exhaustion limiting their ability to parallel import cheaper pharmaceutical products from other
countries.
31 ASEAN Working Group on Intellectual Property Cooperation (AWGIPC). Undated. ASEAN Intellectual
Property Rights Action Plan 2011-2015. Available at
https://www.aseanip.org/Portals/0/PDF/ASEAN%20IPR%20Action%20Plan%202011-2015.pdf
32 As noted by the Global Commission on HIV and Law, "the recent proliferation of anti-counterfeiting
legislation in East Africa, promoted by multinational pharmaceutical companies, reflects the increasing
conflation of generic with counterfeit drugs— substandard formulations that endanger people who take
them—and the myth that generics are inferior to originator brands." See also Kenya’s High Court Strikes
down Anti-Counterfeit Act, https://www.opensocietyfoundations.org/press-releases/kenya-s-high-courtstrikes-down-anti-counterfeit-act
33 While some like Yemen and Mozambique provide for fines for infringement, those like Cambodia,
Angola, Cape Verde, Madagascar, Lesotho, South Sudan, Rwanda and Sierra Leone also provide for
imprisonment.
34 Two (Samoa and Cape Verde) have since graduated from the LDC status and the entry of Afghanistan
and Liberia that was approved in December 2015 will be finalised by mid-2016.
35 For instance, the two most recent accessions, based on the limited information released by the WTO
seem to imply that Afghanistan has a transition period to comply with TRIPS only till 2019 and a no-roll
back commitment while Liberia's accession commitments on TRIPS appear to be simply that it will
comply with TRIPS. Pressure on LDCs regarding data exclusivity featured explicitly in the working party
reports of Cape Verde, Vanuatu and Yemen.
36 See WTO Doc. WT/COMTD/LDC/21
37 “We reaffirm the commitment of developed-country members to provide incentives to their
enterprises and institutions to promote and encourage technology transfer to least-developed country
members pursuant to Article 66.2.” WTO Ministerial Conference. 14 November 2001. Declaration on the
TRIPS Agreement and Public Health. Para 7
38A review of the reports filed by developed countries with the WTO between 1999-2010 found that " of
384 unique programmes or policies reviewed, 33% were targeted specifically towards LDC WTO
Members...[o]f the 128 programmes that specifically targeted LDC WTO Members, about one-third (42
programmes) qualified as technology transfer according to the definition we adopted. If we consider the
full set of 384 programmes listed by the reporting developed countries, only 11% met the criteria of
targeting an LDC WTO Member with a programme or policy that encourages technology transfer."; See
Suerie Moon 2011 http://www.ictsd.org/downloads/2011/05/technology-transfer-to-the-ldcs.pdf
39 “Local production of pharmaceuticals in Africa and access to essential medicines: 'urban bias’ in access
to imported medicines in Tanzania and its policy implications”, Mujinja, 2014,
http://globalizationandhealth.biomedcentral.com/articles/10.1186/1744-8603-10-12
40African Union. (2012b). “Pharmaceutical Manufacturing Plan for Africa Business Plan”, prepared as part
of the AUC-UNIDO partnership, Addis Ababa, 2012; EAC Regional Pharmaceutical Manufacturing Plan of
Action (2012- 2016); the South African Development Community Pharmaceutical Business Plan (2007-
2013); the Economic Community of West African States (ECOWAS) Regional Pharmaceutical Plan,
UNAIDS 1 May 2014.
41 African Union. (2012b). “Pharmaceutical Manufacturing Plan for Africa Business Plan”, prepared as part
of the AUC-UNIDO partnership, Addis Ababa, 2012. Available from
http://apps.who.int/medicinedocs/documents/s20186en/s20186en.pdf
42 See Moon Surie. December 2008. Does TRIPS Art. 66.2 Encourage Technology Transfer to LDCs? An
Analysis of Country Submissions to the TRIPS Council (1999-2007). UNCTAD - ICTSD Project on IPRs and
Sustainable Development. Policy Brief Number 2. Available at
http://www.iprsonline.org/New%202009/Policy%20Briefs/policy-brief-2.pdf. See also Correa, Carlos
M. 2007. Intellectual Property in LDCs: Strategies for Enhancing Technology Transfer and Dissemination.
The Least Developed Countries Report 2007. Background Paper. UNCTAD. Available at
http://unctad.org/sections/ldc_dir/docs/ldcr2007_Correa_en.pdf
43 Joint Resolution of the Ministry of Industry, Ministry of Health and Instituto Nacional de la Propiedad
Industrial 118/2012, 546/2012 y 107/2012. See http://www.moellerip.com/non-patentable-subjectmatter-
according-to-the-new-guidelines-of-the-argentine-pto-2/
44 The proposal for Technology Transfer Bank is based on flawed assumptions that IP laws and
enforcement in LDCs must underlie this technology transfer and the work outlined for the "IP Bank" in
this proposal. See http://unohrlls.org/custom-content/uploads/2015/10/Feasibility-Study-ofTechnology-Bank.pdf
45 UNDP (United Nations Development Programme) and Joint United Nations Programme on HIV/AIDS
(UNAIDS). 2013. TRIPS transition period extensions for least-developed countries. Issue Brief. Geneva
and New York: UNAIDS and UNDP. Available at
http://www.unaids.org

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35. UNDP. 2012. Anti-counterfeit laws and public health. Discussion Paper. Available at http://www.undp.org/content/dam/undp/library/hivaids/English/UNDP%20Discussion%20Pape r%20-%20(revised).pdf

36. United Nations Department of Economic and Social Affairs (UN DESA). Undated. LDC Information: Graduation and Transition Process. Available at http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_graduated.shtml

37. United Nations General Assembly. 10 June 2011. Political Declaration on HIV and AIDS: Intensifying Our Efforts to Eliminate HIV and AIDS. A/RES/65/277. Available at http://www.unaids.org/sites/default/files/sub_landing/files/20110610_UN_A-RES-65-277_en.pdf

38. United Nations General Assembly. 25 September 2015. Transforming our world: the 2030 Agenda for Sustainable Development. A/RES/70/1

39. UNOHRLLS. 2014. List of Least Developed Countries in 2014. Available at http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_list.pdf

40. UN-OHRLLS. 2015. Criteria for Identification and Graduation of LDCs. Available at http://unohrlls.org/about-ldcs/criteria-for-ldcs/

41. WHO SEARO and WHO PAHO. 2006. Data Exclusivity And Other “TRIPS-Plus” Measures. Briefing Note: Access to Medicines. Available at http://www.searo.who.int/entity/intellectual_property/data-exclusively-and-others-measuresbriefing-note-on-access-to-medicines-who-2006.pdf

ACKNOWLEDGMENTS: This submission relies extensively on a review of LDC patent laws done by Kajal Bhardwaj as part of a fellowship at the Indian Institute of Advanced Studies and on an extensive study of ARIPO by Sangeeta Shashikant for the South Centre. Professor Brook K. Baker contributed to its conceptualization and drafting

Mike Frick, TREATMENT ACTION GROUP

Lead Author: Mike Frick
Additional Authors: Erica Lessem, Brian Citro, Mihir Mankad, Colleen Daniels, Allan Maleche, and Kiran Raj Pandey
Organization: Treatment Action Group, University of Chicago, Save the Children UK, Stop TB Partnership, Kenyan Legal & Ethical Issues Network on HIV (KELIN)
Country: USA; UK; Switzerland; Kenya

Abstract

This contribution discusses how the current approach to innovation, detached from human rights standards and favoring the intellectual property (IP) interests of inventors and investors, has created an access to medicines crisis in tuberculosis (TB). Globally, development of and access to TB drugs and diagnostics remain severely constrained. As a consequence, TB has become the leading cause of death from an infectious disease, despite being preventable and curable since the 1950s. The paradigm under which TB research is financed, conducted, and owned has emerged as a major driver of inequitable access to TB medicines. Research and development for TB and other diseases now occurs along an IP maximalist orientation, principally defined by the Agreement on Trade-Related Aspects of Intellectual Property Rights. Reorienting innovation in ways that draw on States’ obligations to respect, protect, and fulfill the right to the highest attainable standard of health and the right to enjoy the benefits of scientific progress and its applications can help to resolve the policy incoherence that has placed the rights of inventors and investors in conflict with public health needs. We propose four rights-based strategies governments can pursue to reduce this incoherence: 1) more purposive public investments in research to benefit disadvantaged groups; 2) stronger public stewardship of research and its results; 3) greater public accountability over scientific agenda setting; and 4) clearer normative guidance to States on their obligations under the right to science. These solutions not only hold promise for TB, but also for other diseases for which current approaches to innovation have delayed, restricted or precluded access to medicines.

Submission

Globally, development of and access to new and repurposed drugs to treat tuberculosis (TB) remain severely constrained. Treatment for the nearly 10 million people who develop TB disease annually is lengthy—ranging from six months to over two years—and difficult to tolerate, making adherence challenging and fueling the rise of drug resistance. Eighty-percent of the estimated 500,000 people who develop multi-drug resistant tuberculosis (MDR-TB) each year receive no treatment at all.[i] Of those diagnosed and linked to care, most are treated with drugs developed decades ago that impart serious—and sometimes irreversible—adverse effects, including hearing loss and psychosis. More than two years after receiving marketing approval from stringent regulatory authorities, the first new TB drugs in 40 years—bedaquiline and delamanid—have reached fewer than 3,000 people, even though an estimated two-thirds of individuals with MDR-TB may benefit from receiving them.[ii],[iii]

As a consequence of these factors, TB—a disease that has been preventable and curable since the 1950s—kills 1.5 million people a year and is now the leading cause of death from an infectious disease.[iv] Limited access to TB testing and treatment is not only a result of market failures, inefficiencies, or inequitable global delivery systems. The paradigm under which TB research is financed, conducted, and owned contributes to inequitable access to TB medicines. Research and development (R&D) for TB and other diseases now occurs within a system built around a “maximalist approach to intellectual property protection,” principally defined by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[v] By setting required minimum levels of protection without specifying upper limits, TRIPS and related trade laws have allowed an ever-upward expansion of intellectual property (IP) protection that has produced a growing misalignment between the interests of inventors and investors and public health.[vi],[vii] Using international human rights law to set ceilings on such protections would engender an approach to innovation that does not, from the outset, prioritize protection over access to medicines for TB and other diseases.

This submission details how the R&D system’s IP maximalist orientation has created an access to medicines crisis in TB. We begin by framing this crisis in terms of human rights—particularly the right to the highest attainable standard of health (e.g., Article 12 of the International Covenant on Economic, Social and Cultural Rights, or ICESCR) and the right to enjoy the benefits of scientific progress and its applications (e.g., Article 15 of the ICESCR)[viii],[ix]—before then illustrating how current approaches to innovation, detached from these human rights concerns, have undermined innovation and access to medicines for TB. We conclude by offering four human rights-based strategies governments can pursue to realign the interests of inventors and investors with public health: 1) more purposive public investments in research to benefit disadvantaged groups; 2) stronger public stewardship of research and its results; 3) greater public accountability over scientific agenda setting; and 4) clearer normative guidance to states on their obligations under the right to enjoy the benefits of scientific progress and its applications.

Human rights compel States to act on R&D as a determinant of access to medicines

Framing the access to medicines crisis in relation to the rights to health and scientific progress can help to resolve the current incoherence between the interests of inventors and investors and public health. While there has been much attention paid to States’ need to intervene “downstream,” where approved health technologies are connected to people in need, there has been much less discussion of what States’ obligations are in the “upstream” R&D space, so that new tools are developed in ways that meet global health needs.[x] Both rights establish legal obligations that States can meet through measures that address shortcomings in the current R&D system. These approaches must limit, and where possible eliminate, all scientific, regulatory and commercial barriers to access to health technologies.

Recognizing the interrelation of the rights to health and scientific progress may help governments see and act on the consequences IP policies hold for access to medicines. The right to health requires States to take necessary steps toward “prevention, treatment, and control” of diseases.[xi] General Comment 14 of the Committee on Economic, Social and Cultural Rights (CESCR) clarifies that the right to health encompasses inter alia a requirement that health goods and services are available.[xii] For diseases like TB, where inadequate and outdated tools hinder a vigorous public health response, fulfilling the right to health requires States to ensure health technologies are available, on a nondiscriminatory basis, through promotion of medical research, especially for vulnerable or marginalized groups. General Comment 14 references medical research in several places, noting that fulfilling the right includes “the promotion of medical research and health education.”[xiii]

Where current approaches to R&D delay, restrict or preclude access to medicines, States may have additional justification to intervene. ICESCR Article 15 establishes the right of everyone to enjoy the benefits of scientific progress and its applications, without discrimination. Scholars and scientific professional associations have proposed that this requires States to engage in both the development and diffusion of science, including “investing in R&D and creating incentives for innovation to address forms of suffering experienced by [vulnerable groups].”[xiv] A plain language reading of the treaty text indicates that access is a cornerstone of the right, and that this entails enjoying the actual—and in the case of health technologies, tangible—applications of scientific progress (i.e., access to the benefits of scientific progress go beyond mere sharing in the diffuse benefits that accrue from general scientific advancement).[xv] Consequently, fulfillment of this right requires State action to ensure that the means of scientific progress, where they involve protectionist measures as under the current patent regime, do not come at the expense of access to medicines or other applications of discovery and knowledge.

Current approaches to innovation restrict access to medicines for TB

Attention to TB raises a number of important considerations for the High-Level Panel’s work. First, TB demonstrates how the consequences of the misalignment of the interests of inventors, investors, human rights and public health will be increasingly borne by countries that are graduating from aid eligibility.[xvi] TB primarily affects poor people, most of whom live in middle- and upper middle-income countries.[xvii] Together, Brazil, Russia, India, China and South Africa (the BRICS countries) account for 46% of incident TB cases, 40% of TB deaths and 56% of new cases of MDR-TB.[xviii] Second, resolving how current approaches to innovation stymie access to medicines for TB may illuminate strategies for tackling the threat of antimicrobial resistance (AMR) more broadly defined. The global rise of MDR-TB, and the paucity of new drugs and diagnostics to combat it, illustrates how existing market-driven approaches to innovation have fallen behind the development of drug-resistance.

Over time, the failure of the R&D system to replace or improve inadequate TB treatment regimens has contributed to the changing nature of TB disease itself, whereby strains of a once curable disease have turned chronic and deadly. The majority of TB drugs were developed decades ago, and several have never been studied for TB under the rigorous conditions of randomized, controlled trials. Only two new drugs from new drug classes have been approved to treat TB in the last 40 years: bedaquiline (developed by Janssen and approved by the United States Food and Drug administration in 2012) and delamanid (developed by Otsuka and approved by the European Medicines Agency in 2014).[xix] Lack of access to timely TB diagnosis and drug susceptibility testing has further contributed to poor treatment outcomes; globally, cure rates for MDR-TB are around 48%.[xx] Scale-up of new TB diagnostics like GeneXpert MTB/Rif, a test that can diagnose TB and resistance to the first-line drug rifampicin in less than two hours, remains modest. Most national TB programs continue to rely on sputum smear microscopy, which misses up to half of all TB cases (and even more among children and people with HIV).[xxi]

The inadequacy of current TB prevention, diagnosis, and treatment options can be traced back to the ways in which limited funding for TB R&D has delayed the development of new health technologies and forced compromises in specific research programs. Treatment Action Group has tracked global funding for TB R&D each year since 2006 and found that annual combined spending on TB research by public, private, philanthropic, and multilateral institutions has never exceeded $700 million per year, barely one-third of the projected $2 billion needed.[xxii] After increasing from $358.5 million in 2005 to $636.7 million in 2009, funding for TB R&D has remained stagnant since the global financial crisis. Flat funding in nominal terms masks a real trend of falling funding, since inflation decreases the purchasing power of flat budgets, and the costs of biomedical research have risen faster than inflation.[xxiii] This underfunding is especially acute for R&D for TB drugs, which in 2014 received $243.3 million in funding, one-third of the $740 million experts estimate the world must spend on TB drug development each year to eliminate TB.[xxiv]

In addition to the low absolute level of funding, the structure of TB R&D financing jeopardizes progress by concentrating resources among a small pool of donors. This has left the field vulnerable to shifting donor priorities and even the withdrawal of funders, especially from the private sector.[xxv] Sixty percent of TB research funding comes from public agencies, and 62% of public funding comes from a single country: the United States.[xxvi] Funding from non-public sectors is also highly concentrated; 86% of philanthropic support for TB R&D in 2014 came from the Gates Foundation, and 54% of pharmaceutical industry funding came from a single company: Otsuka.[xxvii]

Structural shifts in the pharmaceutical industry in the post-recession period have intensified this reliance on public funding. In 2014, the pharmaceutical sector spent just $98.6 million on TB research, a decline of one-third from 2011.[xxviii] Three major pharmaceutical companies (Pfizer, AstraZeneca, and Novartis) have closed their TB research programs since 2012 under an industry-wide pivot away from anti-microbial research.[xxix],[xxx],[xxxi] Newly developed antibiotics are not expected to generate blockbuster sales, leading major pharmaceutical companies to focus on developing treatments for chronic illnesses.[xxxii] As pharmaceutical companies pull back from TB and anti-microbial research, the onus of responsibility to respond to drug resistance will increasingly fall on country governments.

Even as pharmaceutical companies have reduced their funding for TB research, they have retained ownership over the trial data, patents, and marketing rights associated with most of the compounds in the TB drug pipeline. This asymmetry between the source of financing and ownership of the products has undermined access to medicines in several ways. First, the public has been asked to pay twice for new technologies—first through taxpayer-funded R&D, and then to purchase new drugs and diagnostics at prices set by the companies that benefitted from public research dollars.[xxxiii] This dynamic delayed the introduction of TB drug rifapentine, owned by Sanofi, in the United States following a groundbreaking phase III clinical trial funded and conducted by the U.S. Centers for Disease Control and Prevention that showed rifapentine paired with isoniazid could reduce treatment of TB infection from 9 months of daily therapy to just 12 once-weekly doses.[xxxiv],[xxxv] Although the U.S. government funded this research, public TB programs in the U.S. could not afford to buy rifapentine at the original price set by Sanofi.[xxxvi] U.S. TB programs were only able to access rifapentine after an advocacy campaign by civil society organizations, patient groups, and academic institutions led Sanofi to reduce the price by 57%.[xxxvii] Global access to rifapentine is even more restricted. Despite being studied through a series of public-private research collaborations in 12 countries, rifapentine is only registered and available in the United States.[xxxviii]

Second, IP protections have undermined the development of new TB drug regimens. The need for multiple drug candidates is essential, since treating TB requires combination therapy to protect against the development of resistance. Yet there are few new drugs to study, and even those recently developed have not yet been studied in combination due to the reluctance of manufacturers to collaborate and share IP, and to the slow progression of research resulting from insufficient resources.[xxxix] New TB drugs bedaquiline and delamanid were studied as add-ons to existing regimens, potentially improving their efficacy, but doing nothing to address the toxicities, intolerabilities, drug interactions, and long duration of existing regimens. Bedaquiline and delamanid each received approval and marketing authorization with little to no data about the safety and efficacy of their use in combination with each other, with repurposed drugs, or with other new drugs under development. This lack of data contributed to the relatively narrow indications for bedaquiline and delamanid’s use under initial WHO guidance and has slowed their global uptake.[xl]

Third, inadequate financing combined with a maximalist approach to IP protection means that many promising TB drug compounds get stuck in early stages of development while remaining unavailable for study by outside investigators, including those associated with public research networks, universities, or non-profit product development partnerships. For example, TB drug candidate sutezolid entered phase I trials in 2009. It then took four years to complete just three phase I and phase IIa trials—each under two weeks in duration. Even though the drug showed promising signs of safety and efficacy, sutezolid has yet to begin phase IIb trials more than two years after the phase IIa trial ended.[xli]

Proposed policy solutions to advance human rights and promote public health

The following recommendations offer ways to recalibrate existing approaches to innovation that favor the rights of inventors over public health. Acting on these ideas would not mean invalidating the rights of inventors. Rather, these proposals acknowledge that knowledge is a resource that grows rather than diminishes when shared.[xlii] Where knowledge advancement results in the development of new health technologies, such sharing may be required to uphold human rights and advance public health

(1) Public investment. Fulfilling the right to scientific progress requires governments to purposively allocate resources toward research that addresses harms disproportionately felt by poor and marginalized communities.[xliii],[xliv] Targeted government investments may be essential to meet innovation needs for diseases like TB for which market-driven R&D schemes result in chronic underfunding and little scientific advancement.

(2) Public stewardship. Purposive public investments in science must be accompanied by mechanisms that create the conditions required for equitable access to medicines. Here, states can draw on several tools to ensure taxpayers do not pay twice for innovation or fund research that remains privately held and inaccessible.

a.     Patent pooling and non-exclusive licensure of IP. Governments could require that inventors, as a condition of receiving public funding, agree to pool IP with other developers. When paired with upfront grants (i.e., push funding) and prizes for meeting pre-determined development milestones (i.e., pull funding), patent pooling can form a central pillar in a comprehensive strategy for accelerating research by removing barriers to collaboration. For example, Médecins Sans Frontières has proposed the combination of push, pull and pool mechanisms under the so-called 3P Project as a way to incentivize the development of new TB drug regimens.[xlv]

b.     Technology and knowledge transfer. The global scale-up of antiretroviral therapy for treating HIV has demonstrated that generic competition is one of the most powerful tools for expanding access to medicines.[xlvi] Patent pools alone will not enable generic competition; for this to occur, states will need to create platforms for the transfer of technology, manufacturing process information, and industrial know-how from originator to generic companies.[xlvii] Pharmaceutical companies themselves frequently transfer technology to individual generic manufacturers to expand their production reach in specific regions.[xlviii] Instead of relying on these bilateral technology transfer arrangements—which reflect the protectionist concerns of TRIPS rather than public health needs—states should establish more transparent initiatives for sharing technology among a wide array of partners. For example, the WHO has successfully used technology transfer hubs to increase global production capacity of influenza vaccine.[xlix] Agreements on technology transfer should be brokered in early stages of R&D and could come as a condition for receiving government funding.

c.      Legal instruments. Other ways to align public funding and public ownership include creating legal instruments to review the impact of IP protection on access to medicines. This could include public funders reserving march-in rights allowing them to reclaim innovations from companies that fail to make them publicly available (as allowed in the United States under the 1980 Bayh-Dole Act).[l] Other legal mechanisms might include reviewing patent applications with respect to whether granting a patent would likely result in an outcome that violates human rights. Countries could also create avenues for third parties to oppose patents on health technologies based on human rights grounds either before or after patents have been granted (as is currently possible in India).  

(3) Public accountability. Ensuring that the above mechanisms effectively broaden access to medicines will require building accountability through public participation in decision-making about science and technology. The input of diverse stakeholders into major decisions about scientific prioritization and governance upholds the human rights principle of participation and could help to ensure that research addresses the needs of vulnerable communities. Participation—and the accountability it engenders—should unfold on multiple levels. Nationally, governments should involve public stakeholders in setting national plans of action to address unmet research needs. These plans should come with clear timetables, goals, and milestones, enabling public groups to track States’ progress.[li] Second, communities affected by a particular disease should be empowered to participate in research as more than just trial participants. One effective strategy in HIV and TB research has been the involvement of community advisory boards in setting the research agenda, overseeing the conduct of trials and advocating for research results to be made accessible through the translation of evidence into policy and practice.[lii]

(4) Normative guidance to States on the right to scientific progress. The UN CESCR should consider drafting a General Comment articulating the content and scope of Article 15(b) in the context of innovation of and access to health technologies. To date, normative guidance on Article 15 has focused on Article 15(c) regarding IP protection (General Comment 17),[liii] and Article 15(a) regarding the right to take part in cultural life (General Comment 21).[liv] This has left a gap in State understanding of obligations under Article 15(b), the component of Article 15 that recognizes “the right of everyone to enjoy the benefits of scientific progress and its applications.” The formation of a General Comment would build on the 2012 Report of the Special Rapporteur in the Field of Cultural Rights, which recommended “further work be done to enhance the conceptual clarity of the right.” In addition, the development of human rights indicators for measuring state progress in respecting, protecting, and fulfilling this right would help States translate core obligations under the right into operational standards.[lv]

Bibliography and References

[1] World Health Organization. Global tuberculosis report 2015. Geneva: World Health Organization; 2015. Available from: http://www.who.int/tb/publications/global_report/en.

[2] Bonnet M, Bastard M, du Cros P, et al. Identification of patients who could benefit from bedaquiline or delamanid: a multisite MDR-TB cohort study. Int J Tuberc Lung Dis. 2016 Feb;20(2):177–86. doi: 10.5588/ijtld.15.0962. 

[3] Mitnick C, van den Hof S. Using existing data to illustrate—and close—the gap in access to new anti-tuberculosis drugs. Int J Tuberc Lung Dis. 2016 Feb;20(2):145. doi: 10.5588/ijtld.15.0911.

[4] World Health Organization (see note 1).

[5] Shaver L. The right to science and culture. Wisconsin Law Review;2010(1):121–184. Available from: http://wisconsinlawreview.org/volume-2010-no-1/.

[6] Ibid.

[7] Kapczynski A. The access to knowledge mobilization and the new politics of intellectual property. Yale Law Journal. 2007;117(5):804–885. Available from: http://www.yalelawjournal.org/article/the-access-to-knowledge-mobilization-and-the-new-politics-of-intellectual-property.

[8] International Covenant on Economic, Social and Cultural Rights (ICESCR). G.A. Res. 2200A (XXI), Art. 12. (1966).

[9] International Covenant on Economic, Social and Cultural Rights (ICESCR). G.A. Res. 2200A (XXI), Art. 15. (1966).

[10] Frick M. Applying the right to health to medical research: opportunities for advocacy. Bioethica Forum. 2015;8(3):102–103.

[11] ICESCR (see note 8), para 12(2)(c).

[12] UN Committee on Economic, Social and Cultural Rights. General Comment No. 14, The right to the highest attainable standard of health. 2000. UN Doc. No. E/C.12/2000/4, para 12(a)

[13] Ibid, para 36.

[14] American Association for the Advancement of Science Board of Directors. AAAS statement on the human right to the benefit of scientific progress. 16 April 2010. Available from: http://www.aaas.org/sites/default/files/migrate/uploads/Article15_AAASBoardStatement.pdf.

[15] Shaver L (see note 5).

[16] Glassman A. Health aid eligibility and country income status: a mismatch mishap? Center for Global Development. 5 May 2014. Available from: http://www.cgdev.org/blog/health-aid-eligibility-and-country-income-status-mismatch-mishap.

[17] World Health Organization. Global tuberculosis report 2014. Geneva: World Health Organization; 2014. Available from: http://apps.who.int/iris/bitstream/10665/137094/1/9789241564809_eng.pdf.

[18] Creswell J, Sahu S, Sachdeva K, et al. Tuberculosis in BRICS: challenges and opportunities for leadership within the post-2015 agenda. Bull World Health Organ. 2014 Jun;92(6):459–60. doi: 10.2471/BLT.13.133116. 

[19] Lessem E. The tuberculosis treatment pipeline: moving beyond “making the most of what we’ve got.” In: 2015 pipeline report. Edited by Andrea Benzacar. New York: Treatment Action Group; 2015. Available from: http://www.pipelinereport.org.

[20] World Health Organization (see note 1).

[21] Dorman S. New diagnostic tests for tuberculosis: bench, bedside, and beyond. Clin Infect Dis. 2010 May;50(3):S173–7. doi: 10.1086/651488. 

[22] Frick M. 2015 report on tuberculosis research funding trends, 2005–2014: a decade of data. Edited by Andrea Benzacar, Mark Harrington, and Erica Lessem. New York: Treatment Action Group; 2015. Available from: http://www.treatmentactiongroup.org/tbrd2015.

[23] N.A. “Don’t hide the decline.” Nature. 2014;507(7491):139.

[24] Frick M (see note 22).

[25] Ibid.

[26] Ibid.

[27] Ibid.

[28] Ibid.

[29] Dandekar V. Pfizer draws curtain on anti-infective research; refocuses on next-generation vaccines. PharmAsia News. 13 May 2013. Available from: https://www.pharmamedtechbi.com/publications/pharmasia-news/2013/5/13/pfizer-draws-curtain-on-antiinfective-research-refocuses-on-nextgen-vaccines.

[30] Mullin E. Global tuberculosis R&D takes hit with AstraZeneca site closure. FierceBiotech. 24 February 2014.  Available from: http://www.fiercebiotechresearch.com/story/global-tuberculosis-rd-takes-hit-astrazeneca-site-closure/2014-02-24.

[31] Copley C. Novartis hands over experimental TB drugs in antibiotic pullback. Reuters. 20 August 2014. Available from: http://www.reuters.com/article/2014/08/20/us-novartis-tuberculosis-idUSKBN0GK19J20140820.

[32] Infectious Diseases Society of America. Bad bugs, no drugs: as antibiotic discovery stagnates, a public health crisis brews. Alexandria, Virginia: Infectious Diseases Society of America; 2004. Available from: http://www.idsociety.org/BBND/.

[33] Balasegaram M. Drugs for the poor, drugs for the rich—why the current research and development model doesn’t deliver. BMJ. 13 February 2014. Available from: http://blogs.bmj.com/bmj/2014/02/13/manica-balasegaram-drugs-for-the-poor-drugs-for-the-rich-why-the-current-research-and-development-model-doesnt-deliver/.

[34] Sterling T, Villarino E, Borisov A, et al. Three months of rifapentine and isoniazid for latent tuberculosis infection. N Engl J Med. 2011 Dec;365(23):2155–66. doi: 10/1056/NEJMoa1104875. 

[35] McKenna L. Punk’d by pharma: public funds for private products. TAGline. 2014; 21(1):12–13. Available from: http://www.treatmentactiongroup.org/tagline/2014/spring/punked-pharma-public-funds-private-products.

[36] DeLuca A, Frick M, Lessem E, Kanouse J, Wegener D, Ruiz Mingote L. Activism on rifapentine pricing: removing cost barriers to improve the uptake of tuberculosis research innovations. Public Health Action. 2014;4(4):1–5. doi: 10.5588/pha.14.0089.

[37] Deluca A, Macaraig M, McGinnis K, Wegener D, Kanouse J, Frick M, McKenna L. Impact of rifapentine price reduction on utilization for TB treatment in the USA. E-poster presentation: 46th Union World Conference on Lung Health, Cape Town, South Africa. 4 December 2015. Abstract no. EP-134-04.

[38] Community Research Advisors Group. Letter to the 20th Expert Committee on the Selection and Use of Essential Medicines Re. Rifapentine (Addition)—EML and EMLc. 31 January 2015. Available from: http://www.who.int/selection_medicines/committees/expert/20/applications/rifapentine/en/.

[39] Bridgen G, Nyang’wa B, du Cros P, et al. Principles for designing future regimens for multidrug-resistant tuberculosis. Bull World Health Organ. 2014;92(1):68–74. doi: 10.2471/BLT.13.122028.

[40] Furin J, Brigden G, Lessem E, Rich M, Vaughan L, Lynch S. Global progress and challenges in implementing new medications for treating multidrug-resistant tuberculosis. Emerg Infect Dis. 2016 Mar;22(3). doi: 10.3201/eid2203.151430.

[41] National Library of Medicine. NCT00990990 Safety, tolerability, pharmacokinetics and measurement of whole blood activity of PNU-100480 after multiple oral doses in healthy adult volunteers. Bethesda, MD: National Library of Medicine, August 2013. Available at https://clinicaltrials.gov/ct2/results?term=sutezolid&Search=Search.

[42] Shaver L (see note 5).

[43] American Association for the Advancement of Science Board of Directors (see note 14).

[44] Chapman A. Towards an understanding of the right to enjoy the benefits of scientific progress and its applications. Journal of Human Rights. 2009;8(1):1–36. doi: 10.1080/14754830802701200.

[45] Médecins Sans Frontières. Push, pull, pool: accelerating innovation and access to medicines for tuberculosis. 2015 March. Available from: https://www.msfaccess.org/our-work/tuberculosis/article/2157.

[46] Médecins Sans Frontières Campaign for Access to Essential Medicines. Untangling the web of antiretroviral price reductions. Geneva: Médecins Sans Frontières; 2011. Available from: https://www.msf.org/sites/msf.org/files/utw_14_eng_july2011.pdf.

[47] Crager S. Improving global access to new vaccines: intellectual property, technology transfer and regulatory pathways. Am J Public Health. 2014 Nov;104(11):e85–91. doi: 10.2105/AJPH.2014.302236.

[48] International Federation of Pharmaceutical Manufacturers and Associations. Technology transfer: a collaborative approach to improve global health. Geneva: IFPMA; 2011. Available from: http://www.ifpma.org/fileadmin/content/Publication/IFPMA_Technology_Transfer_Booklet_2011.pdf.

[49] Crager S (see note 47).

[50] U.S. Code Title 35, Chapter 18 § 203: March-in rights. Available from: https://www.gpo.gov/fdsys/granule/USCODE-2011-title35/USCODE-2011-title35-partII-chap18-sec203.

[51] Chapman A (see note 44).

[52] DeLuca A, Lessem E, Wegener D, Mingote L, Frick M, von Delft D. The evolving role of advocacy in tuberculosis. Lancet Respir Med. 2014 Apr; 2(4):258–9. doi: 10.1016/S2213-2600(14)70035-9.

[53] UN Committee on Economic, Social and Cultural Rights. General Comment No. 17, The right of everyone to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he or she is the author; 2006. UN Doc. No. E/C.12/GC/17 (2006).

[54] UN Committee on Economic, Social and Cultural Rights. General Comment No. 21, The right of everyone to take part in cultural life; 2009. UN Doc. No. E/C.12/GC/21.

[55] Chapman A. Development of indicators for economic, social and cultural rights: the rights to education, participation in cultural life and access to the benefits of science. In: Human rights in education, science and culture: legal developments and challenges. Edited by Yvonne Donders and Vladimir Volodin. Farnham, United Kingdon: Ashgate Publishing; 2007. Farnham, UK.

Martin Bernhardt, Sanofi

Lead Author: Martin Bernhardt
Organization: Sanofi
Country: France

Abstract

The 2030 Agenda for Sustainable Development recognizes the importance of “the role of the diverse private sector, ranging from microenterprise to cooperatives to multinational corporations” to achieve the Sustainable Development Goal (SDGs), and calls for a “revitalized global partnership” that includes the private sector. 

Beyond extensive collaborations, addressing the issue of universal health coverage (3.8.) will require a holistic approach – one that acknowledges the challenge complexity (e.g., general poverty; health education; healthcare infrastructure; healthcare workers; distance to hospitals or treatment centers; and pricing factors including taxes, fees, markups, and many other elements in addition to intellectual property). 

Sanofi has long been engaged in improving Access to Health and advocates that new mechanisms will not achieve our shared goals unless they are pragmatic and respond to the realities of the complex global health landscape, engaging a coalition of actors in both the public and private sector. The viability of the pharmaceutical industry depends on the existence of functional pathways that bring medicines to the people who need them. Affordability for the patients is an essential condition. Access to healthcare programs and differential pricing approaches contribute to creating better conditions. But low prices alone are not always the solution and can even have negative impacts on R&D and innovation, as seen in the field of antibiotics or in the vaccines market.

Submisison

1. Lowering IPRs to Improve Access: A Major Policy Incoherence?

1.1. Structural Obstacles to Access to Medicines

One out of three people in the world do not have access to essential medicines3. In most cases, the reason for inadequate access to essential medicines lies with important factors such as poverty and inadequate national health infrastructures and financing systems4, rather than patents. Over 90% of all medicines on the WHO’s essential drugs list are off patent, and in the poorest parts of the world a significant proportion of new medicines have to date been neither registered nor covered by actively enforced Intellectual Property Rights (IPRs)5.

Patents are legal or constitutional national rights granted to a patent holder that allows the patent holder to determine who may not make, use or sell the patented invention. In exchange for the disclosure of innovations to the public, the government provides to a patent holder certain exclusive rights for the purpose of stimulating research and development of new products. The exclusivity lasts for 20 years from filing, which, for medicines, results in an effective term that often is many years shorter. During the patent term, anyone who may want to use the invention must seek the approval of the patent holder.

The international IP regime also foresees a number of exceptions and options that can be used to improve access to medicines, as clarified notably in the 2001 Doha Declaration on TRIPS and public health6. Key options include transition periods for least developed countries (LDCs). A recent example is the 6 November 2015 decision of the WTO's Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) to extend the waiver for LDCs allowing them not to enforce IPRs on pharmaceutical products to support access to medicines until at least 20337. Another important step was the decision by WTO members in 2003 to propose amending the TRIPS Agreement to make it easier for countries to import medicines produced under compulsory licensing if they are unable to manufacture the medicines themselves ("Paragraph 6 System"). In this regard, Pugatch et al8 showed, in their review and analysis of the existing body of knowledge on the role of IPRs in biopharmaceutical and biotechnological innovation, that there is growing evidence that the introduction of strengthened IP protection correlates positively with inward capital investment levels.

1.2. Access to Medicines Is Not Without Challenges in the Absence of IPRs

A policy incoherence would be to advocate for lowering IPRs to improve access while a myriad of examples demonstrates that access to medicines is first hindered by non IP-related issues.

Venezuela’s Article 15 of the 1955 industrial property law excludes, among other, medicines from patent protection (with the exception of process patents). Notwithstanding the fact that this disposition contravenes Article 27 of the TRIPS Agreement, it should be noted that this absence of IP protection did not facilitate patients’ access to medicines. In March 2015, Doctors for Health (Médicos por la Salud), a nationwide network of public hospitals medical residents, reported that 60% of routinely stocked medicines or medical supplies were entirely or partially unavailable in the hospitals, and that a majority of medicines included in the WHO’s Model List of Essential Medicines were not available in pharmacies9.

Price Gouging Scandals Impacting Some Off-Patents Drugs

Stories of staggering drug price increases in the US, mostly undertaken by newly-founded, opportunistic, small R&D-based “pharmaceutical” companies, have been put in the spotlight over the past months. However, as illustrated by the recent case of a 5,500% price increase on a drug approved by the FDA more than 60 years ago12, price gouging scandals impeding access to health are not about patented medicines.

Impact of Impaired Access to Controlled Medications

In many parts of the world, patients suffering from severe pain face immense challenges in obtaining analgesics, because the opioids that could provide such relief have been categorized as “controlled substances”. They are, therefore, subject to strong national and international controls and very often rendered inaccessible10. According to WHO11, 6 million people die annually from cancer without sufficient analgesia or even often without any treatment of their pain. In addition, nearly half of end-stage AIDS patients face severe pain, as well as many people suffering from acute severe pain from injuries (e.g., car accidents, war victims, etc.) or myocardial infarction.

These examples highlight the complex dynamics underlying access to medicines and the need for a holistic approach. Sanofi is striving towards meeting this challenge by implementing innovative programs that are designed to enable access to medicines by overcoming structural barriers, in collaboration with governments, multilaterals and other stakeholders.

2. Our Actions

2.1 Access to Healthcare

Access to a particular drug today, and access to new drugs tomorrow, can only be ensured through constructive and cooperative conversations between and actions by, all appropriate stakeholders. Sanofi is determined to work with healthcare professionals, tax payers, governments, patients’ representatives and non-profit organizations to help find economically, socially and environmentally sustainable solutions when access issues exist for medicines and vaccines. Sanofi also wants to remain an important contributor to the wellbeing of patients and to the economic development of the many countries in which it is present.

·      Since 2003, Sanofi has adhered to the ten principles of the Global Compact. Sanofi’s CEO presents the Group’s yearly communication on progress (COP) to the UN Secretary General.

·      Whenever it is both necessary and possible, Sanofi carries out actions in favor of access to healthcare, especially through differential pricing policies adapted to populations’ purchasing power, notably through the activities of its “Access to Medicines Department” and Sanofi Pasteur, its Vaccines Division. Sanofi has developed access to medicines programs for malaria, tuberculosis and neglected tropical diseases, as well as to innovative pilot programs in mental health, epilepsy, diabetes and oncology in resource-limited countries. These initiatives do not focus only on treatment, but also on prevention and diagnosis, for a comprehensive disease management that involves all healthcare stakeholders.

·      Sanofi is committed to raising awareness of and encouraging debate about non-communicable diseases (NCD). Sanofi is one of the most committed pharmaceutical companies in the field. The Group is currently running many programs in different regions of the World and is working on new NCD management projects. The Group values scientific and economic development in emerging countries. For instance, the Group develops and manufactures “Allstar”, the first Indian-manufactured, re-usable insulin pen, manufactured by a global company.

·      Sanofi also supports the development of new activities in the field of access to care, notably through its not-for-profit foundation. In 2014, Sanofi Espoir Foundation13 was involved in 42 development aid long-term programs, including 14 in the fight against maternal and infant mortality and 13 in the fight against childhood cancer in low and middle income counries, 35 main partners, 30 recipient countries. In addition to answer to humanitarian emergencies, 2.8 million people in 11 countries, of which 10 emerging countries, received free medicines and vaccines. Recognizing these achievements, the UN granted Sanofi Espoir Fondation a consultative status to the ECOSOC in July 201414.

2.2 R&D and Innovation

The protection of IP (patents, brands and proprietary information) is essential to innovation as it encourages exploration into the scientifically uncertain work of drug creation. Indeed, this scientific process is long costly and very risky with no certainty that the patent will lead to an approved drug, allowed on the market, and adopted by healthcare professionals. Significant revenue has to be generated to offset development costs. It is therefore a high-risk endeavor that involves many failures. Large amounts of time and money may be invested without market success.

With the clear objective of addressing unmet medical needs wherever they occur, the R&D based pharmaceutical industry has embraced innovative approaches to increase access to medicines where the return on investment on R&D for diseases may be too low to enable adequate allocation of resources.  This may arise because the number of patients is small or the need is for medicines adapted to a particular population. Poverty is always an underlying factor.  Many of these activities have potential for to be scaled up to benefit many more people if the scientific and financial risks that can help initiate and accelerate R&D are shared.

Product development partnerships (PDPs): Sanofi is increasingly collaborating in PDPs, which involve companies providing the technology that they have invested in for decades, as well as their development and distribution expertise, to the partnership. Participating companies do take IP into account, yet these measures do not pose a barrier to drug development in these contexts.  Public sector partners help fund the development costs while also helping to ensure that the medicines and vaccines developed reach the people who need them by financing implementation programs.  This has the double benefit of encouraging R&D and accelerating the product’s uptake in the developing world.

Here are some examples showing that he PDP approach is working:

·      The Global Alliance for TB Drug Development (TB Alliance), established in 2000, brings together AstraZeneca, Bayer HealthCare, Lilly, GlaxoSmithKline, Novartis, Sanofi and other companies with 30 NGOs, governments, foundations from around the world to accelerate the discovery and development of cost-effective new medicines. Currently, the portfolio includes eleven drugs between phase I and IV of clinical trials15. 

·      WIPO Re:Search is a global consortium through which public and private sector organizations share their IP, compounds, expertise, facilities and know-how with qualified researchers working on new solutions for NTDs, malaria and tuberculosis.  WIPO Re:Search members provide royalty-free licenses for research, development and manufacture anywhere in the world; make products available royalty-free to all Least Developed Countries (LDC); and consider in good faith access for all developing countries.  Industry members include Alnylam Pharmaceuticals, Eisai, GSK, J&J, Merck, MSD, Novartis, Pfizer, Takeda and Sanofi16.

·      Through its “Access to Medicines Department”, Sanofi has set up a public-private partnership (PPP) with the Drugs for Neglected Diseases Initiative (DNDi) to develop and manufacture the antimalarial ASAQ Winthrop®. Development of semi-synthetic artemisinin was made to complement production of vegetal origin and stabilize prices of malaria treatments at levels affordable to resource-poor countries but also sufficient to enable farmers to earn a living from vegetal artemisinin. Given the large need for safe and effective malaria medicines, Sanofi and DNDi did not seek a patent for this medicine, over 400 million treatments of which have been distributed since 2007, showing that it fulfills unmet needs. This demonstrates the Group’s flexibility under specific circumstances17. On April 2015 Sanofi received, at the White House, the prestigious “Patent for Humanity” award from the United States Patent and Trademark Office (USPTO). The “Patents for Humanity” program was launched as part of an Obama administration initiative promoting game-changing innovations to solve long-standing development challenges. Sanofi is being recognized for its patent on semi-synthetic artemisinin, a key component for the production of anti-malarial treatments recommended by the WHO18.

·      Since 2009, Sanofi and DNDi have expanded their partnership to other neglected diseases and are, in particular, collaborating on the development of an oral treatment for Human African Trypanosomiasis (or sleeping sickness), the first of its kind, which may be a decisive tool for the disease elimination targeted for 2020 by the WHO.

·      The 2012 London Declaration on Neglected Tropical Diseases: inspired by the WHO’s 2020 Roadmap on Neglected Tropical Diseases (NTDs), partners including pharmaceutical companies, donors, endemic countries and non-government organizations have contributed technical knowledge, drugs, research, funding and other resources to treat and prevent NTDs among the world’s poorest populations. Great progress has been made, and we believe that we can meet our goals by 202019.

·      Since May 2011, Sanofi has made available its library of proprietary data on neglected tropical diseases to DNDi. It was the first innovative undertaking of this kind.

·      The TB Drug Accelerator is a unique partnership that includes AstraZeneca, Bayer, Eli Lilly, Eisai, GlaxoSmithKline, MSD, AbbVie and Sanofi, and several academic and non-profit research institutions, together with the Bill and Melinda Gates Foundation. The consortium is sharing its clinical assays and expertise to speed the identification of most promising approaches to shorten and improve the quality of TB therapy20.

·      Simultaneously, Sanofi continues to invest in malaria, tuberculosis and neglected tropical diseases R&D programs in order to respond to future biological resistance to existing medicines. This R&D is an integral part of the Group’s commitments.

2.3 Technology and knowledge transfer

In November 2010, WIPO’s Committee on Development and Intellectual Property (CDIP) developed a project which aims to foster developing countries’ access to knowledge and technologies. According to the TRIPS Agreement, the protection and enforcement of intellectual property should contribute to the promotion and diffusion of the transfer of technology (TOT).

However, TOT is not yet fully implemented, and thus creates high expectations on the part of developing and emerging countries. Technology transfer for the research-based pharmaceutical industry can take many forms other than developing manufacturing facilities, such as capacity building in terms of research, development, ethics, pharmacovigilance, and education.

·      Sanofi has established more than 30 factories in emerging and developing countries. For example, the antimalarial ASAQ Winthrop® is manufactured in a factory in Casablanca, in Morocco, close to the region most affected by malaria. The site has been certified “Good Manufacturing Practices” (GMP) by WHO.

·      Sanofi Pasteur has initiated major local manufacturing projects in Thailand, Argentina, Brazil, Mexico, China and India. Due to the vast human expertise required for such initiatives, Sanofi Pasteur is limited in the number of projects it can support. Local manufacturers must have GMP processes and stronger bio-security laws.

·      Sanofi is also involved in knowledge transfer in many different ways: the company enables local professionals to participate in clinical trials in developing countries; it supports various training and information initiatives for health professionals and works with many different academic institutions throughout the world to foster a holistic management of disease including prevention, diagnosis and treatment.

Conclusion and Proposal

Although the access debate is often restricted to the price of medicines, many factors can impact the ability of patients to get appropriate access to health.  Meanwhile, the main issue for pharmaceutical companies is: how to find the right balance between contributing to improve access to medicines and ensuring sufficient profits to recoup investment in R&D. The current intellectual property system, with its flexibility, is an effective tool to promote access by incentivizing innovation. 

Access to medicines also requires access to appropriate diagnosis and to an affordable and accessible healthcare system. Sanofi has embraced a holistic approach, implementing innovative programs that are designed to enable access to medicines by overcoming structural barriers, in collaboration with governments, multilaterals and other stakeholders. Our efforts, guided by SDGs 1 (end poverty), SDG 3 (ensure health, promote well-being), and SDG 9 (foster innovation) have aimed to improve both the affordability and accessibility of medicines and vaccines by strengthening local economies and health infrastructure and employing innovative approaches to address patients’ ability to pay for medicines.  

It is important the UN HLP supports and scales-up current mechanisms (such as PDPs) that have successfully enabled stakeholders to collectively improve access to medicines. This collaborative approach was rightly promoted by UN Secretary General Ban Ki-moon who declared, at UN private sector forum held on 27 September 2015, that “realizing the Sustainable Development Goals will improve the environment for doing business and building markets. Trillions of dollars in public and private funds are to be redirected towards the SDGs, creating huge opportunities for responsible companies to deliver solutions”.

References and Bibliography

1. World Health Organization. The World Medicines situation (2004). Chapter 7. http://apps.who.int/medicinedocs/fr/d/Js6160e/9.html#Js6160e.9 . Accessed on October 1st, 2014.

2. “Equitable Access to Essential Medicines: A Framework for Collective Action”, WHO Policy Perspectives on Medicines, No. 008, March 2004, http://apps.who.int/medicinedocs/en/d/Js4962e/1.1.html

3. A. Attaran. How do patents and economic policies affect access to essential medicines in developing countries ? (2004) Health Affairs. Volume 23, Number 3.

4. The WHO Model List of Essential Medicines is a guide for the development of national and institutional essential medicine lists. It was not designed as a global standard. However, for the past 30 years the Model List has led to a global acceptance of the concept of essential medicines as a powerful means to promote health equity. Most countries have national lists and some have provincial or state lists as well. National lists of essential medicines usually relate closely to national guidelines for clinical health care practice which are used for the training and supervision of health workers.

5. “Declaration on the TRIPS agreement and public health”, adopted on 14 November 2001, ttps://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm

6. “WTO members agree to extend drug patent exemption for poorest members”, 6 November 2015, TRIPS, WHO, https://www.wto.org/english/news_e/news15_e/trip_06nov15_e.htm

7. Extract from the WHO-WIPO-WTO trilateral study - the paragraph 6 System:

Special export licences for medicines, https://www.wto.org/english/tratop_e/trips_e/who-wipo-wto2013_par6_extract_e.pdf

8. Pugatch M.P. et al. (2012). Taking stock: How global biotechnology benefits from intellectual property rights. The Pugatch Consillium

9. The Washington Post, Venezuelans can’t get even the most basic lifesaving medical supplies, April 2015, https://www.washingtonpost.com/posteverything/wp/2015/04/29/venezuelans-cant-get-even-the-most-basic-lifesaving-medical-supplies/

10. WHO, Access to Analgesics and to Other Controlled Medications

http://www.who.int/medicines/areas/quality_safety/access_Contr_Med/en/

11. WHO, Impact of Impaired Access to Controlled Medications

http://www.who.int/medicines/areas/quality_safety/Impaired_Access/en/

12. FDA - Daraprim

http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm?fuseaction=Search.DrugDetails

13. Fondation Sanofi Espoir, Annual Report 2014-2015

http://fondation-sanofi-espoir.com/download/en/annual-report-2014-2015/35.html

14. ECOSOC Decision 2014/222

http://www.un.org/en/ecosoc/docs/2014/dec.2014222.pdf

15. TB Alliance (2015) TB Alliance Pipeline http://www.tballiance.org/downloads/Pipeline/TBA_Pipeline_Q3_2015.pdf

16. WIPO Re:Search, http://www.wipo.int/research/en/

17. DNDi, “Sanofi-Aventis et DNDi signent un accord de collaboration pour un nouveau médicament dans la maladie du sommeil, le fexinidazole,” http://www.dndi.org/2009/media-centre/press-releases/langues-press-releases/sanofi-aventis-et-dndi-signent-un-accord-de-collaboration-pour-un-nouveau-medicament-dans-la-maladie-du-sommeil-le-fexinidazole-09/

18. USPTO Announces Patents For Humanity Winners, http://www.uspto.gov/about-us/news-updates/uspto-announces-patents-humanity-winners

19. The London Declaration, http://unitingtocombatntds.org/resource/london-declaration

20. Nathan C. Cooperative development of antimicrobials: looking back to look ahead. Nature Reviews Microbiology. 2015 Oct 1;13(10):651-7.

ANN BLACKWOOD, United States Department of State

Lead Author: Ann Blackwood
Organization: Unites States Department of State
Country: USA

Submission

United States submission of views on the UN High-Level Panel on Access to Medicines

 The challenge of providing adequate access to safe, effective, affordable, life-saving medicines is one that all countries share. The United States government shares the United Nations (UN) Secretary General’s concern and interest in finding solutions to address this issue and appreciates this opportunity to provide input into the UN Secretary General’s High-Level Panel on Access to Medicines.

This opportunity to provide substantive input is the first and only opportunity for UN Member States and occurs well alter the establishment of the High-Level Panel and the determination of its mandate. The Panel’s narrowly-focused mandate leads us to believe the Panel’s work may inevitably reach a narrow set of conclusions that would be unlikely to highlight win-win outcomes to facilitate access to medicines and would not adequately address this complex issue. Because of this critical flaw and other issues outlined below related to the scope, processes, transparency, and participation, the United States strongly recommends that the UN Secretary General reconsider the Panel’s work and work with interested Member States in that reconsideration to address the above concerns,

The High-Level Panel’s mandate is too narrow to address the many and often inter-related barriers to access to safe, effective, and affordable medicines. The World Health Organization (WHO) identifies four main factors contributing to access to medicines: l) the rational selection and use of medicines,  2) affordable prices,  3) sustainable financing, and 4) reliable health and supply systems.  None of these factors are being directly studied by the Panel. With regard to affordable pricing of medicines, the WHO has identified numerous considerations, including pricing and procurement policies, taxes, markups and tariffs, and other national policies (or lack thereof) that ultimately result in higher costs for consumers and for health systems.2 In fact, even common, essential, off-patent medicines often do not achieve their intended health impact due to supply and manufacturing issues.

For example, the United Nations Commission on Life Saving Commodities suggests that access to and appropriate use of 13 essential commodity types can save the lives of an estimated 6 million women and children by 2017. A parallel effort by the WHO to address shortages of medicines has recognized the importance of evolving beyond singular, vertical approaches to strategies that embrace strengthening the entire health system. It the Panel’s mandate ignores these important factors, its work will be of dubious utility.

 The Panel has been tasked with examining only two pieces of the larger puzzle, and will be doing so in isolation, pursuant to terms of reference which are based on a description of the problem stated in a way that suggests predetermined outcomes. The United States is concerned that by conducting such a narrow review, the report issued by the Panel may be imbalanced and of limited use, or even counterproductive in building consensus among stakeholders and national governments.

We question the premise that the rights of inventors, international human rights law, trade rules, and public health are "misaligned.” Nearly all UN and other international documents recognize positive contributions of international trade to public health. Promoting innovation for life-saving medicines is critical to providing improved treatments for today’s diseases, and new treatments for tomorrow’s. The international trading system further spurs the diffusion of medicines around the world contributing to improved public health outcomes for populations that may not otherwise have access to life-saving drugs. The mandate of the Panel risks addressing alleged “misalignment” without being able to take into account the value or relative contribution of each of the pillars mentioned.

 The process being followed by the Panel is insufficiently transparent to judge to what extent it is using data and individual country circumstances to reach conclusions in the very limited time available. The creation and operation of the High-Level Panel has occurred almost entirely without UN Member State involvement or input. Furthermore, contrary to the calls for the involvement of all relevant UN agencies in initiatives within their mandates, neither the World Health Organization (WHO), World Trade Organization (WTO), nor World Intellectual Property Organization (WIPO) were consulted prior to the Panel’s establishment. This calls into question the ability of the panel to consider all relevant factors, the huge volume of policies approved by these organizations, and data and information available on access issues. At the same time, the Panel’s work overlaps with efforts taking place in these forums, including the WHO’s Global Strategy and Plan of Action on Public Health, Innovation, and Intellectual Property, and WTO agreements, negotiations and other work on trade-related matters.

Further concerns regarding the High-Level Panel include the lack of sufficient time for the solicitation and development of data (including engagement with governments and stakeholders) and the lack of variety of expertise in the composition of the Panel.

 In sum, the United States believes that the issue of access to medicines is important for global health and for all countries. We would strongly advise the United Nations Secretary General to reconsider the Panel’s work and to work with interested Member States, in recognition of the complex nature of this issue, and the need to incorporate all relevant factors into a meaningful analysis of why people in low and middle income countries do not have the access to medicines that we all believe is desirable and necessary. We question whether the current mandate, and the process for the work of the Panel, are appropriate to produce recommendations that will have this impact.

 Thank you for your consideration of these comments. 

Bibliography and REferences

' http://www. who. int/trade/gIossary/story002/en/

See also the WHO-WTO-WIPO study "Promoting Access to Medical Technologies and innovation” pages 144—201, available at: https://www. wto.org/english/rese/booksp e/’pamtiwho v'Po»*toweb13 e.pd

Maureen Mackintosh, THE OPEN UNIVERISTY

Lead Author: Maureen Mackintosh
Additional Authors: Dinar Kale, Luigi Orsenigo, and Roberto Simonetti
Organization: The Open University; University Institute for Advanced Studies
Country: UK; Italy

Abstract

Much of the current debate on health care goals, medical innovation and trade rules focuses on the misalignment between the need to provide incentives to innovation – mainly through a tight intellectual property (IPR) regime – and the resulting negative consequences in terms of access to medicines. While this clash is certainly crucial, this contribution focuses on a different aspect of the misalignment between innovation and access, concerning essential drugs and generics rather than brand new, innovative drugs. This contribution argues that the promotion of domestic drug production and innovative capabilities in low and middle income countries, and notably on the Sub-Saharan African subcontinent, can may constitute an important step towards achieving significant improvements in public health – as a human right that includes access to essential medicines. We provide background and evidence for this argument. We then draw out policy implications, arguing that increased policy coherence between health policies for medicines access and public health, and industrial and trade policies for Africa-based pharmaceutical production and innovation, are both feasible and beneficial, generating synergies between improved medicines access and local industrial innovation.

Submission

Proposition
Much of the current debate on health care goals, medical innovation and trade rules focuses on the the misalignment between the need to provide incentives to innovation – mainly through a tight intellectual property (IPR) regime – and the resulting negative consequences in terms of access to medicines. While this clash is certainly crucial, this contribution focuses on a different aspect of the misalignment between innovation and access, concerning essential drugs and generics rather than brand new, innovative drugs. This contribution argues that the promotion of domestic drug production and innovative capabilities in low and middle income countries, and notably on the Sub-Saharan African subcontinent, can constitute an important step towards achieving significant improvements in public health – as a human right that includes access to essential medicines.

As a consequence, and at the same time, the promotion of learning, technological upgrading and innovation in pharmaceutical production based in these counties becomes a central policy priority. Indeed, obstacles to such initiatives, arising in part from trade policies and procurement rules, are prominent examples of misalignment and incoherence between intellectual property rights, trade rules and public health objectives.

This contribution thus argues that global and local health policies affecting access to medicines and medical devices in low and middle income countries should be redesigned to give a stronger emphasis on their industrial impact; specifically, global and local policies should be revised to support enhanced market access and greater innovation incentives for Sub-Saharan Africa-based producers of pharmaceuticals, diagnostics and medical devices. This will require: further documentation and recognition of the public health benefit of Africa-based producers’ track record and capability in supplying medicines to those on low incomes, and their innovative record to date; and redesign of procurement principles and policies to create more coherence between health and industrial policies, to support market access and innovation by Africa-based manufacturers for public health benefit.

Background
There is an increasing body of evidence that local producers of essential medicines are able to meet the needs of rural populations for access to essential medicines significantly better than importers of medicines, whose supply has been shown to suffer from “urban bias” (Mujinja et al 2014). This is increasingly recognised by international aid agencies, as it has long been by domestic government procurement agencies, which use local producers to supplement supply from recognised importers because of the advantages of local production in terms of speed, flexibility and reach.

However, lack of coherence in current policy frameworks both at international and local level generates disincentives for the local production (that is, production based in African countries) of essential medicines. A number of policy initiatives, both at the global and local levels, in the areas of health, trade, intellectual property rights, procurement and industrial development have made it more difficult for important African producers to access the local markets and upgrade their technology successfully (Mackintosh et al 2016). The existing success stories in local production, however, demonstrate that local production can make a difference in fulfilling the human right to access to health for the sections of society that are usually excluded because of existing policy incoherence (Gebre-Mariam et al 2016; Fortunak et al 2016).

The development of domestic capabilities in the manufacturing and distribution of drugs and medical devices in African countries may therefore be considered as part of a broader commitment to sustain industrial growth as well as health, based on learning and innovation. The construction of such capabilities makes it more likely that firms will improve existing products, adapting them to local conditions and redressing the existing bias towards drugs directed mainly to rich markets. In this respect, policies targeting pharmaceuticals should be explicitly considered as one important element of a broader vision and set of growth oriented, health- and human rights-supporting policies.

It is now widely and increasingly recognized that economic growth and development are essentially based on the accumulation of knowledge and capabilities, both at the levels of individuals and organizations. Such capabilities are learned through education and formally acquired skills but also – and fundamentally – through experience, practice and the acquisition of tacit knowledge. It is also increasingly recognized that – in order to ignite and support these learning processes, active intervention and policies are needed to provide incentives for agents to engage in such activities and to define the basic and complex economic and institutional conditions that allow knowledge to be developed, shared and further improved (Cimoli et al., 2009; Rodrik, 2004 and 2009).

As a consequence, success in pharmaceuticals requires the attainment of a set of organizational and institutional preconditions which are likely to go much beyond the boundaries of this specific industry but impact on the broader ability to grow. The conditions that have to be met in order to successfully promote efficient industrial activities in pharmaceuticals will pave also the way for further growth in different sectors.

Evidence
Several arguments and types of evidence support the proposition that promotion and redesign of global and local health and industrial policies to support Africa-based pharmaceutical production and innovation can act to support African access to essential medicines.

First, current global health policies have stifled innovation and market access by important African producers. For example, the shift to new anti-malarial medication, in the form of artemisinin combination therapy (ACTs), shifted production of the first line of defence against malaria mortality from local producers to Indian exporters; this occurred despite formulation and production capability in African firms, because of the set of subsidy and procurement trading rules implemented by large scale donor-supported procurement agencies, and supported by WHO market regulation interventions (Wangwe et al 2014). Access to the much more expensive new first line anti-malarial medication, in Tanzania for example, now relies on externally subsidised imports, and has been patchy especially in rural areas at some periods, with no local production to fill gaps through domestic procurement. A further example has been international donor pressure, including WHO policy advice, on African countries to remove all tariffs on imported formulations, despite a lack of evidence to date on tariff incidence, and with the effect of disadvantaging local producers paying taxes on imports and opening African markets to unsustainable dumping especially of basic antibiotics (Tibandebage et al 2016). The result has been the undermining of local manufacturing in countries that have implemented this approach and have high donor dependency, such as Tanzania (Tibandebage et al 2016).

Second, despite these pressures, African countries do have (contrary to some perceptions) large, active and innovative pharmaceutical industries and associated scientific activity and expertise (Banda et al 2016; Fortunak et al 2016). Examples of innovative scientific work in pharmaceuticals, and associated industrial investment, in Africa include the development of the first effective treatment for sickle cell disease, Niprisan ™ , refined and tested in Nigeria as a phytomedicine developed from local treatments; also “leap frogging” technological advances such as the use of “green chemistry” and flow chemistry innovations to reduce the cost of manufacture of active pharmaceutical ingredients (APIs) in African conditions (Fortunak et al 2016). In Ethiopia, local scientific work is replacing imported wit local excipients in pharmaceutical production, and a Sino-Ethiopian hard capsule manufacturing plant is competitively supplying a large part of the Eastern and Southern African market (Fortunak et al 2016; Gebre-Mariam et al 2016). Note that these producers actively manufacturing in Sub-Saharan Africa are mainly locally owned, by African private capital, with some joint ventures involving foreign direct investment and/or government shareholding (Banda et al 2016).

Third, as noted in the background section, Africa-based producers have been already shown to display a capability to meet the needs of rural African populations for access to essential medicines that is greater than the capability of importers of medicines. A study in Tanzania showed that a set of essential medicines produced in Tanzania were equally likely to be available in rural as in urban areas, while imported medicines displayed “urban bias”, being much more available in urban than rural areas. Local producers of basic essential medicines had effective wide distribution in outlying as well as more easily accessed areas, and furthermore, the largest local firms’ branded generics were widely trusted by the population. Importers lacked comparable rural distribution networks (Mujinja et al 2014; Mackintosh and Mujinja 2010).

Fourth, these considerations apply also and crucially to medical devices and diagnostics, which play an increasingly significant role in effective use of medicines in treatment. However, access to appropriate and affordable medical devices has remained an ongoing challenge for most African countries. In May 2012, the 65th World Health Assembly adopted multiple resolutions acknowledging the dire need for medical devices to address the health priorities of low-income populations in African countries. It is widely recognised that addressing public health priorities cannot be achieved without ensuring access to essential medical devices (WHO, 2012). A study shows that most of the African countries depend on the imports of medical devices from advanced countries, creating challenges of affordability and appropriateness (Kale, 2010). Cheng (2007) revealing the ‘mismatch’ between supply and demand shows that in number of cases imported medical devices are mostly unsuitable for local conditions and endanger lives of patients, health workers and communities. A recent WHO (2010) report shows that more than 50% of devices remain unused in African countries due to structural and cost factors, indicating further widening of the mismatch. Referring the situation in Africa, Miesen (2013) comments that “across Sub-Saharan Africa, “medical device graveyards” litter the empty closets and spare corners of hospital”. As such, a wider understanding of factors that influence access to medical devices in African countries, and a remodelling of existing procurement policies, is essential for resolving challenge of 'medical device graveyards' and achieving the objective of inclusive healthcare.

Finally, it is possible to turn the situation, promoting innovation and development of African pharmaceutical production, using more coherent policies, thus benefitting access to medicines, public health and also industrial growth. Recent Ethiopian experience offers one example: a combination of expanding primary health care; providing some industrial protection for local pharmaceutical producers (through non-zero tariffs on finished formulations and a list of basic medicines for priority local supply); stronger local control of procurement policies through accords with donors; rising local scientific capability feeding into the local industry; and a government promotion of foreign direct investment in joint ventures incorporating technology transfer has generated a sharp increase in local production of medicines.
Implementation and benefits

In summary, the following policies can bring coherence to trade, industrial and public health (access to medicines) policies in the African context, and in other low and middle income countries also.
• Reorient procurement of medicines and medical devices, by government and donors, to support local production and upgrading by African producers through generating market access for those producers;
• Integrate health and industrial strategies both domestically and internationally in order to achieve synergies that will benefit both access to medicines and market access for African producers.
• Put an end to international institutions characterising tariffs on imports of final formulations as a “sick tax”, and replace this policy with shared investigation of appropriate medium term industrial support for local pharmaceutical and medical device production, including support for African governments that ban imports of some basic items where domestic market competition can provide the items effectively at acceptable prices (Chaudhuri and West 2014).
• Strengthen current international support for African scientific and technological upgrading in pharmaceuticals including market access for cost effective innovations.
There is already recognition at UN level of the need for this reorientation towards greater health-industrial policy coherence for Africa in particular (Sidibé et al 2014). Emerging initiatives to be encouraged include the rethinking of global procurement rules to create local tenders of manageable size, rather than constantly enlarging the pooling of tender volumes, which can support local producers at acceptable cost; creating procurement strategies that look to medium term security and diversity of supply in the interests of sustainability rather than focusing only on lowest cost for acceptable quality, thereby generating market access for African producers who can benefit from learning-by doing and reduce their prices over time; and the World Health organisation’s increasingly active support for upgrading by African producers. This rethinking can produce policy coherence between access to medicines and public health on the one hand, and the requirements of industrial development, innovation and trade in African pharmaceuticals on the other.

Bibliography and References

Banda, G. Wangwe S. Mackintosh M. (2016) Making medicines in Africa: an historical political economy overview. In Mackintosh, M. Banda, G. Tibandebage P. Wamae,W. (eds) (2016)

Chaudhuri, S. & West, A. (2015) 'Can local producers compete with low cost imports? A simulation study of pharmaceutical industry in low-income Africa', Innovation and Development, 5 (1), 23-38.

Cheng, M (2007) An Overview of Medical Device Policy and Regulation, HNP Brief 8, http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1109774792596/HNPBrief8.pdf

Cimoli, M, Dosi, G. and Stiglitz J.E, 2009, Industrial Policy and Development, The Political Economy of Capabilities Accumulation , Oxford University Press.

Fortunak, J. Ngozwana,S. Gebre-Mariam, Emeje, M. Ellison, T. ,Watts P., Nytko III, FE. (2016) Raising the Technological Level: the scope for API, Excipients, and Biologicals Manufacture in Africa. In Mackintosh, M. Banda, G. Tibandebage P. Wamae,W. (eds) (2016)

Gebre-Mariam, T. Tahir,K. Gebre-Amanuel S. (2016) Bringing industrial and health policies closer: reviving pharmaceutical production in Ethiopia. In Mackintosh, M. Banda, G. Tibandebage P. Wamae,W. (eds) (2016)

Kale, D (2010) In search of missing hand of state: Evidence from the Indian medical device industry, Paper presented at International Conference on Pharmaceuticals in Developing and Emerging Economies, Hyderabad, India

Mackintosh, M. Banda, G. Tibandebage P. Wamae,W. (eds) (2016) Making Medicines in Africa: the Political Economy of Industrializing for Local Health London, Palgrave Macmillan open access http://www.palgraveconnect.com/pc/doifinder/10.1057/9781137546470

Mackintosh, M. Mujinja, P.G.M. (2010) 'Markets and policy challenges in access to essential medicines for endemic disease' Journal of African Economies Supp 3 iii166–iii200

Miesen, M (2013) The inadequacy of donating medical devices to Africa, http://www.theatlantic.com/international/archive/2013/09/the-inadequacy-of-donating-medical-devices-to-africa/279855/

Mujinja, PG M.; Mackintosh, M; Justin-Temu, M, Wuyts, M (2014). Local production of pharmaceuticals in Africa and access to essential medicines: 'urban bias’ in access to imported medicines in Tanzania and its policy implications. Globalization and Health, 10(12)

Rodrik, D. 2004. "Institutions and Economic Performance - Getting Institutions Right," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 2(2), pages 10-15, October

Rodrik, D. 2009. "Industrial Policy: Don'T Ask Why, Ask How," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1-29.

Sidibé M., Yong L. & Chan, M. (2014) ‘Commodities for better health in Africa: time to invest locally.’ Bulletin of the World Health Organization 92, 387–387A.

Tibandebage, P. Wangwe,S. Mackintosh, M. (2016) Pharmaceutical manufacturing decline in Tanzania: how possible is a turnaround to growth? In Mackintosh, M. Banda, G. Tibandebage P. Wamae,W. (eds) (2016)

Wangwe, S. Tibandebage, P Mhede,E. Israel,C. Mujinja, P. Mackintosh M. (2014) Reversing Pharmaceutical Manufacturing Decline in Tanzania: Policy Options and Constraints REPOA Brief 43 July, Dar es Salaam.

WHO (2010) Medical Devices/; Managing the Mismatch, An outcome of the Priority Medical devices project, http://www.who.int/medical_devices/en/

WHO (2012) Local production and technology transfer to increase access to Medical Devices: Addressing the barriers and challenges in low- and middle-income countries, http://www.who.int/medical_devices/1240EHT_final.pdf

Bernard Pecoul, DRUGS FOR NEGLECTED DISEASES INITIATIVE

Lead Author: Bernard Pecoul
Additional Authors: Rachel M. Cohen, Michelle Childs, and Jean-Francois Alesandrini
Organization: Drugs for Neglected Diseases initiative (DNDi)
Country: Switzerland; USA; Brazil

Abstract

Over the past two decades there has been growing recognition that the current system for biomedical innovation fails to deliver adapted and affordable health technologies. The lack of innovation of and access to health tools that address public health needs is well-documented. This crisis was initially understood to affect ‘diseases of poverty’ in developing countries but today, despite important progress, the dominant model for financing and incentivizing R&D, which relies primarily on the intellectual property system, is increasingly problematic for all countries – regardless of disease area or income classification.

DNDi was created in 2003 as an experiment in ‘innovation for access’ by MSF and five public research institutions from India, Brazil, Kenya, Malaysia, France, and WHO/TDR, in response to the frustration of being faced with medicines that were ineffective, highly toxic, unavailable, or had never been developed.

This contribution provides concrete evidence of DNDi’s experience implementing needs-driven, open, collaborative R&D, which has resulted in the development of six adapted, affordable, and non-patented treatments and the most robust pipeline ever for some of the world’s most neglected diseases. DNDi’s model is a practical illustration of how R&D can be conducted in the public interest, if a de-linked approach is implemented, with R&D costs at a fraction of the traditional pharmaceutical business model.

It draws lessons that may be applicable to other disease areas and product types, to help inform the deliberations of the UN SG’s HLP.

Finally, it recommends a series of progressive policy steps to re-orient the global biomedical R&D system so that it responds to patient needs, particularly that the UN SG launch a political process to negotiate one or more binding global agreement(s) on the financing, prioritization, coordination, and norms required to enable the discovery, development, and delivery of and equitable access to innovations of public health importance.

Submission

I. DNDi: AN EXPERIMENT IN ‘INNOVATION FOR ACCESS’

The Drugs for Neglected Diseases initiative (DNDi) is an international not-for-profit research and development (R&D) organization created in 2003 by Médecins Sans Frontières (MSF) and five public research institutions from India, Brazil, Kenya, Malaysia, France, and WHO/TDR. DNDi was a response to the frustration of being faced with medicines that were ineffective, highly toxic, unavailable, or had never been developed.

In 2001, MSF and partners found that of the 1,393 new drugs brought to market globally between 1975-1999, only 1.1% were for tropical diseases although they represented 12% of the global disease burden. This situation was a result of both market failure, as investments in R&D were guided by market considerations leaving public health needs unaddressed, and public policy failure, as governments had not corrected this situation.

Despite important progress, today the ‘fatal imbalance’ persists. A 2012 study by DNDi and MSF showed that of the 756 new drugs approved between 2000-2011, 3.8% were for neglected diseases, despite a global disease burden of 10.5%. The 2014 Ebola epidemic and the global threat of antibiotic resistance are stark reminders of the need to steer R&D to respond to public health imperatives. Global attention has also focused on the high prices of hepatitis C (HCV) and cancer treatments, illustrating that the accessibility and affordability of new health technologies, even when they are developed, is a major concern, including in high-income countries.

DNDi was an experiment in innovation both in what it did – develop urgently needed treatments for neglected populations – and how it did it – testing an alternative R&D model based on patient needs, not profit maximization. DNDi’s 13-year experience can highlight lessons for other diseases and product types, which may inform deliberations of the United Nations Secretary General’s High-Level Panel on Access to Medicines (HLP).

II. DNDi’s MODEL

DNDi’s funding model does not require the organization to recoup R&D investments or finance its future research through the sales of products or revenues generated by intellectual property (IP). Public and private contributions pay for the cost of R&D upfront, allowing DNDi to independently identify needs, gaps, and priorities based on patient needs; promote sharing of research knowledge and data; and price products at the ‘lowest sustainable price.’ As such, the DNDi model is a practical illustration of how R&D can be conducted in the public interest, if a de-linked approach is implemented.

To date, with total expenditures of US$285 million, DNDi has delivered six new treatments for four diseases (malaria, sleeping sickness, visceral leishmaniasis, and Chagas disease) that are affordable, adapted, and non-patented. For example, 400 million treatments of the anti-malarial artesunate-amodiaquine (ASAQ) have been distributed. Developed in partnership with Sanofi and others in 2007, ASAQ is available for less than US$1 per treatment course for adults (less than 50 cents for children), was prequalified by WHO in 2008, and is registered in 35 African countries and elsewhere. The technology was transferred to a manufacturer in Tanzania for the African market. In addition, DNDi has created a robust pipeline with 30 R&D projects covering six disease areas, including 15 potential new chemical entities (NCEs).

Some key pillars of DNDi’s model include:

1) Patients’ needs at the center of the R&D process

Therapeutic impact is the most important driving force behind DNDi’s work. Exemplified in the following ways:

• Governance: DNDi’s founding partners, particularly from endemic countries, MSF, and two patient representatives on the Board ensure the organization remains rooted in the reality of patients’ needs.
• Target product profiles (TPPs): TPPs describe the ideal specifications needed for a treatment to be developed by DNDi, considering the needs of the patients and the characteristics of the related health system, and drive all R&D activities. Because they are tailored to patient needs from the start, products developed by DNDi are, by design, adapted to ‘field conditions’ and aim for maximum affordability.
• Commitment to research capacity-strengthening: Rather than ‘parachuting’ in expertise, DNDi helps increase sustainable endemic-country ownership in health R&D, for example by establishing three regional clinical research ‘platforms’.
• Continuous assessment of needs and landscape: In 2011, DNDi added filarial infections and pediatric HIV to its portfolio. In 2015, DNDi took on work on mycetoma, for which DNDi plans to test a promising treatment in Sudan; HCV, for which DNDi aims to develop an affordable (< US$300 per treatment course), pan-genotypic combination of existing direct-acting antivirals to enable dramatic treatment scale-up in low- and middle-income countries; and antimicrobial resistance, for which DNDi and WHO are collaborating to incubate a new product development partnership (PDP) to develop antibiotic treatments, promote responsible use, and ensure equitable and affordable access.

2) Scientific access to data and knowledge and patient access to medicines

IP rights can create roadblocks throughout the innovation cycle, limiting the possibility of collaboration, follow-on R&D, production, or equitable access to end-result products. To address these barriers, DNDi’s IP policy is based on two guiding principles that inform all contract negotiations: the need to ensure that drugs are affordable and accessible in an equitable manner to patients who need them; and the desire to develop drugs as global public goods.

DNDi negotiates research and licensing agreements to gain access to patented compound libraries and data, and secure the necessary freedom to operate. Such information jumpstarts the expensive and time-consuming discovery phase, avoids duplication, and reduces overall R&D costs.

Using its negotiating experience with pharmaceutical companies and others, DNDi has defined ‘gold standard’ licensing terms to ensure equitable and affordable access to treatments:

• Perpetual royalty-free, non-exclusive, sub-licensable licenses to DNDi in the contractually defined target disease(s);
• Worldwide research and manufacturing rights;
• Commitment to make the final product available at cost, plus a minimal margin, in all endemic countries, regardless of income level;
• Non-exclusivity, enabling technology transfer and local production to multiply sources of production and decrease price of product.

Licenses can be more difficult to negotiate in cases of pre-existing licenses, prospects of returns on investment from sales in certain markets, and/or significant investments of a private partner in early stages of development. A global normative framework to ensure equitable access to research knowledge and end products would speed negotiations, and enhance efficiency and affordability.

Where IP barriers exist (e.g. HCV), DNDi uses available IP flexibilities for research purposes (e.g. experimental use and/or research exemptions), and supports the use of TRIPS flexibilities to enable production/importation of products.

In an effort to encourage open access to research knowledge and follow-on R&D, data emanating from DNDi projects including clinical trials are made available primarily in open access journals and publicly accessible databases.

Open models of innovation may speed up research and reduce overall R&D costs, although they should be carefully monitored and evaluated. There are encouraging signs from industry in the field of AMR for a more open, collaborative approach. In addition, in 2015, DNDi launched the Neglected Tropical Diseases (NTD) Drug Discovery Booster, which aims to speed up the process and cut the cost of discovering new treatments for leishmaniasis and Chagas disease. By using a simultaneous search process across four pharmaceutical companies’ compound libraries, DNDi accesses millions of unique compounds to screen, significantly condensing the time it will take to find promising treatment leads. Any progress or successful new treatment resulting from the Booster will be attributed to the collective effort of all partners, which have agreed that no IP barriers for NTD indications will be imposed.

3) Decreasing R&D costs through partnerships and collaboration

DNDi does not have its own laboratories or manufacturing facilities, and consequently cannot function without the engagement of partners. Acting as a ‘conductor of a virtual orchestra,’ DNDi leverages partners’ assets, capacities, and expertise to implement projects at all stages of the R&D process, integrating capabilities from academia; public research institutions; NGOs and other PDPs; governments; and pharmaceutical and biotechnology companies (DNDi has partnered with more than 20 companies on early stage research, clinical development, and implementation).

Not all R&D efforts should function virtually, but the important lessons are that openness and collaboration are critical to reducing the time it takes to deliver new technologies and decreasing the overall cost of R&D. In 2014, DNDi published case studies to document the actual expenditures associated with several DNDi products. DNDi estimates its direct costs to range from US$6.5-22 million for an improved treatment, and US$33-44 million for a NCE. Applying the usual attrition rate in the field of infectious diseases, the cost to develop an improved treatment would be US$11-44 million and US$110-165 million for an NCE. Deeper analysis of R&D costs should be conducted, particularly to fairly quantify in-kind contributions of partners. Although it is difficult to compare R&D costs between different business models, DNDi’s experience indicates that innovative models can both deliver rapidly for patients and potentially be more efficient than the traditional pharmaceutical business model.

4) Strengthening and harmonizing regulatory mechanisms

A DNDi-commissioned report on the regulatory environment in Africa showed that new regulatory pathways are needed to expedite research, registration, and patient access to new health tools. DNDi has jointly involved regulators from endemic countries – who know patients’ needs best and are responsible for assessing the benefit/risks for their own populations – and regulators from developed countries – who have broader experience approving new drugs. For example, the dossier for ASAQ, which was first approved in endemic countries, was reviewed for a virtual approval by participants from African countries, with support from WHO’s Prequalification Programme and European Medicines Agency experts.

Ultimately, it is necessary to strengthen capacities of poorly-resourced regulatory bodies in endemic countries, and stimulate support for regional initiatives and harmonization aimed at maximizing patient access to quality medicines.

III. LESSONS LEARNED AND IMPLICATIONS FOR THE HLP

Over the past decade, there have been positive trends in the global health R&D field, including new resources from public and private donors; new incentives and financing mechanisms; increased interest in open innovation models; and new R&D initiatives from governments, academic consortia, and the pharmaceutical industry as well as PDPs.

But the patchwork of ‘solutions’ that have emerged to date is still ad hoc and highly fragmented. Scientific progress has been largely incremental and the situation for neglected patients has not fundamentally changed. Private sector engagement is still being driven primarily by public relations or corporate social responsibility concerns. Funding is insufficient and unsustainable, with unhealthy dependence on a handful of donors, often driven by national interests or a charity-based approach. Many new incentive mechanisms, such as the FDA Priority Review Voucher, though promising, need to be amended to prevent abuse, drive genuine innovation, and ensure access and affordability. There is no global body in place for identifying needs, gaps, and priorities, no effective monitoring and coordination of R&D efforts to maximize scientific collaboration and reduce wasteful duplication. And there is no overarching framework of globally agreed norms to ensure sharing of data and knowledge, and ensure the affordability of end products.

It is time to transform individual successes into a more systematic and sustainable approach for all diseases of public health importance. DNDi’s collaborative model has shown at a small scale that alternative approaches to R&D that address pressing public health needs are possible. However, individual initiatives cannot be the only solution to the problem. To fully address the scale of public health needs, public leadership is needed to redefine the ‘rules of the game.’

IV. PROPOSAL: GLOBAL BIOMEDICAL R&D AGREEMENT

DNDi recommends that the HLP launch a political process that will lead to the negotiation of one or more binding global agreement(s) on the financing, prioritization, coordination, and norms required to ensure the discovery, development, and delivery of appropriate and affordable innovations of public health importance. This should include initiatives that may be launched this year via the WHO as one of the remaining issues under the Consultative Expert Working Group: R&D Financing and Coordination (CEWG).

DNDi’s collaborative model has shown that R&D that addresses public health needs requires two policy moves that must occur simultaneously within a global framework:

• Increased financial and technical scientific resources, through new incentives and financing mechanisms;
• Reduced R&D costs, through open innovation mechanisms, public health-driven IP management, innovative regulatory strategies, and transparency of R&D costs.

Specifically, the following elements are critical to any global biomedical R&D agreement(s):

(1) Needs-driven

R&D that addresses priority public health needs must be the overarching objective. An independent body to identify R&D needs and gaps, establish clear priorities, and coordinate efforts to enhance collaboration and reduce duplication will be necessary. WHO is best placed to manage these functions. The WHO Global Health R&D Observatory could play this role, provided it is adequately financed by member states and its remit is expanded to cover all areas of public health importance for both developed and developing countries.

(2) Adequate, sustainable public financing based on the principle of delinkage

R&D requires adequate, sustainable funding from governments, which should be available at the national, regional, and international levels, as well as mechanisms to incentivize innovation and secure access, based on the principle of delinkage. Funding and incentive mechanisms should promote open, collaborative approaches that aim from the start to deliver affordable products efficiently. In order to best direct funding to agreed priorities, at least some portion of health R&D funding should be pooled. WHO is moving forward with a health product R&D fund for certain diseases, which is an important first step. However, it is essential to think beyond a narrow disease mandate so that all areas of public health importance are included.

(3) Global norms that ensure innovation and access, accelerating the R&D process and decreasing R&D costs

Public funding for R&D should be tied to the adoption of fundamental norms, which include:

• Delinkage, to ensure public health focus and access, which applies across the innovation cycle and can be implemented in a number of ways (e.g. grants, prizes);
• Accessibility, meaning universal and equitable availability and affordability of health technologies for individuals and the health systems that serve them;
• Openness, transparency, and access to knowledge, meaning the greatest possible sharing of research knowledge to ensure efficiency and collaboration, and transparency of R&D costs;
• Pro-public health IP management and equitable licensing – concerning the availability, scope, and use of research tools and affordability of end products – to enable research and the fruits of innovation to be global public goods;
• Scientific and technological cooperation to harness expertise in both developed and developing countries, encourage collaboration between research centers, and facilitate technology transfer;
• Essential regulatory standards to expedite access for patients, while ensuring that new treatments are safe, effective and of quality, reduce R&D costs linked to regulatory approvals, and strengthen regulatory capacity.

These norms should build on research ethics principles as well as the principles formulated in the CEWG report and summarized in WHA 66.22, namely ‘affordability, effectiveness, efficiency and equity, including delinking the costs of R&D from the price of end products.’

V. IMPACT ON REMEDYING POLICY COHERENCE, PUBLIC HEALTH AND HUMAN RIGHTS

Access to medicines is a core component of the right to the highest attainable standard of health. Realizing that right requires new innovation approaches so that needed medical technologies are developed and affordable.

Currently, the only global R&D agreement is TRIPS, which relies on one approach, IP, to incentivize R&D. Despite some success, there is still a major deficit in innovation and access to new tools in relation to public health needs.

WHO member states and the Special Rapporteur in the field of cultural rights have endorsed the need to look for alternative models for financing R&D, including those based on the principle of delinking R&D costs from product prices As has been noted by others, adoption of an approach that includes the ‘full implementation of delinkage to fund and incentivize biomedical innovation is the most straightforward way to bring policy coherence between the areas of law and policy that the HLP has been asked to resolve.’

By starting the process to create a new normative framework that underpins the biomedical R&D system and by elevating the decision-making process to the highest political level, the HLP can promote policy coherence between the different frameworks and initiatives being proposed at WHO and elsewhere and play a definitive role in ensuring that appropriate health tools are designed from the start to work in the places and for the people that need them, and are available and affordable in an equitable manner to all, consistent with public health and human rights principles, as well as Sustainable Development Goal 3.

VI. IMPLEMENTATION

The UN SG has the unprecedented opportunity to launch a political process that will support the progressive changes needed to re-orient the global biomedical R&D system so that it responds to patient needs. Practically, it may be valuable to adopt a progressive approach to the policy-making process. Thus, the HLP should:

• Support countries to implement and use TRIPS flexibilities to allow development of and access to medical technologies;
• Strongly encourage governments, industry, and academia to increase participation in and support for approaches to access medical technologies and data, e.g. disclosure of research data and R&D costs, pre-competitive research platforms, and patent pools that further develop licensing conditions to include all affected countries;
• Advocate for a declaration by key public and private R&D funders ensuring that R&D funding will be tied to implementation of the norms in section (IV)(3) above;
• Advocate for amending existing incentive mechanisms when they do not sufficiently induce innovation and guarantee access;
• Pilot innovative regulatory pathways that expedite research, ensure access, and strengthen regulatory capacity where needed;
• Expand the remit of the WHO Observatory to cover all areas of public health importance in all countries and request WHO to accelerate the elaboration of a process for R&D priority-setting;
• Expand the remit of existing pooled funds, or develop funds to cover all areas of need, tied to agreed priorities and norms (IV above);
• Launch a high-level political process aimed at creating a binding global agreement or agreements, based on the principle of delinkage to ensure the financing, coordination, and norms required for the discovery, development, and delivery of appropriate and affordable innovations of public health importance.

Bibliography and References

[1] The UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR).

[2] Médecins Sans Frontières and the Drugs for Neglected Diseases Working Group. Fatal Imbalance: The Crisis in Research and Development for Neglected Diseases. Geneva: MSF, 2001.

[3] Trouiller, P. et al. Drug development for neglected diseases: A deficient market and a public-health policy failure. Lancet, 359 (2002): 2188-2194.

[5] Pedrique, B. et al. The drug and vaccine landscape for neglected diseases (2000–11): a systematic assessment. The Lancet Global Health, Volume 1, Issue 6, e371 - e379
[1] See, for example: Moon, S. et al. Will Ebola change the game? Ten essential reforms before the next pandemic. The report of the Harvard-LSHTM Independent Panel on the Global Response to Ebola. The Lancet, Volume 386 , Issue 10009 , 2204 – 2221 (2015).

[6] For the full resolution text, see: http://www.who.int/phi/resolution_WHA-66.22.pdf (accessed February 26, 2016); UN (2015) press release. UN Secretary General Appoints a High-level Panel on the Global Response to Health Crises. Available at http://www.un.org/press/en/2015/sga1558.doc.htm (accessed February 26, 2016); and hundreds of other reports, commissions, publications, media reports, etc.

[7] See, for example: O’Neill. Antimicrobial Resistance: Tackling a Crisis for the Future Health and Wealth of Nations. London: 2014. Available athttp://amr-review.org/sites/default/files/AMR%20Review%20Paper%20-%20Tackling%20a%20crisis%20for%20the%20health%20and%20wealth%20of%20nations_1.pdf (accessed February 26, 2016) and WHO Global Action Plan on Antimicrobial Resistance. Geneva: WHO, 2015. Available at http://apps.who.int/iris/bitstream/10665/193736/1/9789241509763_eng.pdf?ua=1 (accessed February 27, 2016), among numerous other reports, publications, media reports, etc.

[1] For HCV, see, for example: Wyden, R and Grassley, C, Committee on Finance, United States Senate. The Price of Sovaldi and Its Impact on the US Health System. Washington, DC: 2015. Available at http://www.finance.senate.gov/ranking-members-news/wyden-grassley-sovaldi-investigation-finds-revenue-driven-pricing-strategy-behind-84-000-hepatitis-drug (accessed February 27, 2016); and hundreds of other reports, publications, media reports, etc.

For cancer, see, for example: The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood, May 2013, 121 (22) 4439-4442; DOI: 10.1182/blood-2013-03-490003; Cancer Medicine Prices in Low- And Middle-Income Countries. Global Task Force on Expanded Access to Cancer Care and Control in Developing Countries: 2011; Closing the Cancer Divide: A Blueprint to Expand Access in Low and Middle Income Countries. Boston: Harvard Global Equity Initiative, 2011.

[8] One of the most important ways in which DNDi secures financial independence is through diversification of funding to prevent unhealthy influence by or dependence upon any single donor. This is why DNDi’s funding policy, as established by its founding partners in 2003, also seeks to maintain a balance of public and private support, to minimize as much as possible earmarked donations, and to ensure that no one donor contributes more than 25% of the overall budget.

[9]See, for further information, Partnerships to Bridge Innovation and Access: 2014 Annual Report. Geneva: DNDi, 2015 (available at http://www.dndi.org/wp-content/uploads/2009/03/DNDi_AR_2014.pdf) and Business Plan (2015-2023): A dynamic portfolio approach to address neglected patient needs. Geneva: DNDi, 2015. Available at http://www.dndi.org/images/stories/pdf_publications/DNDi_Business_Plan_2015-2023.pdf (accessed February 26, 2016).

[10] Including India, Ecuador, and Colombia.

[11] For a full description of the ASAQ experience, see: http://www.dndi.org/wp-content/uploads/2014/11/DNDi_ASAQ-story_2002-2015.pdf (accessed February 26, 2016).

[12] A full report on the DNDi model was published in January 2014: An Innovative Approach to R&D for Neglected Patients: Ten Years of Experience and Lessons Learned by DNDi. Geneva: DNDi, 2014.

[13] DNDi has helped to establish three clinical research platforms: the Leishmaniasis East Africa Platform (LEAP) in Kenya, Ethiopia, Sudan, and Uganda; the Human African Trypanosomiasis (HAT) Platform in the Democratic Republic of the Congo, Angola, Central African Republic, Chad, Republic of the Congo, Sudan, South Sudan, and Uganda; and the Chagas Clinical Research Platform in Brazil, Bolivia, Argentina, Mexico, and many others.

[14] Drugs for Neglected Diseases initiative. 2011-2018 Business Plan. Geneva: DNDi, 2011. Available at http://www.dndi.org/wp-content/uploads/2009/03/BusinessPlanWebSmall.pdf (accessed February 25, 2016).

[15] Drugs for Neglected Diseases initiative. 2015-2023 Business Plan: A dynamic portfolio approach to address neglected patients’ needs. Geneva: DNDi, 2015. Available at http://www.dndi.org/wp-content/uploads/2009/03/DNDi_Business_Plan_2015-2023.pdf (accessed February 25, 2016).

[16]  A draft resolution to be debated at the 2016 World Health Assembly may add mycetoma to the WHO NTD list. See: WHO Executive Board draft resolution EB138.R1. Addressing the burden of mycetoma. Available at http://apps.who.int/gb/ebwha/pdf_files/EB138/B138_R1-en.pdf (accessed February, 26, 2016).

[17] For a summary of DNDi’s hepatitis C project, see: http://www.dndi.org/wp-content/uploads/2015/09/DNDi_HCV_Project_summary_2015.pdf (accessed February 25, 2016).

[18] For the WHO/DNDi concept note, notes from technical consultations, etc., see: http://www.who.int/phi/implementation/consultation_imnadp/en/ (accessed February 25, 2016).

[19] For the DNDi IP Policy, see: http://www.dndi.org/images/stories/pdf_aboutDNDi/ip%20policy.pdf (accessed February 25, 2016).

[20] See, for example: Moon, S. Medicines as Global Public Goods: The Governance of Technological Innovation in the New Era of Global Health. GLOBAL HEALTH GOVERNANCE, VOLUME II, NO. 2 (FALL 2008/SPRING 2009). Available at http://www.ghgj.org/Moon_Medicines%20as%20Global%20Public%20Goods.pdf (accessed February 26, 2016).

[21] World Trade Organization. Agreement on Trade-related Aspects of Intellectual Property Rights.  Marrakesh: 1994. Available at https://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm (accessed February 27, 2016) and the Declaration on the TRIPS agreement and public health (Doha Declaration). Doha: 2001. Available at https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm (accessed February 27, 2016).

[22] See, for example, the ChEMBL Neglected Tropical Disease (NTD) archive, an open access repository for primary screening and medicinal chemistry data directed at neglected diseases; Medicines for Malaria Venture’s Pathogen Box; GlaxoSmithKline’s Open Lab; the Medicines Patent Pool; etc.

[23] See, for example: Universities Allied for Essential Medicines. RE: ROUTE: A map of the alternative biomedical R&D landscape. UAEM, 2016. Available at (http://altreroute.com/assets/download/UAEM_Reroute_Report.pdf (accessed February 25, 2016).

[24] Declaration by the Pharmaceutical, Biotechnology and Diagnostic Industries on Combating Antimicrobial Resistance. Davos: 2016. Available at http://amr-review.org/sites/default/files/Declaration_of_Support_for_Combating_AMR_Jan_2016.pdf (accessed February 26, 2016).

[25] For further details, see http://www.dndi.org/2015/media-centre/press-releases/pr-drug-discovery-booster/ (accessed February 26, 2016).

[26] Drugs for Neglected Diseases initiative. An Innovative Approach to R&D for Neglected Patients: Ten Years of Experience and Lessons Learned by DNDi. Geneva: DNDi, 2014. Available at http://www.dndi.org/wp-content/uploads/2009/03/DNDi_Modelpaper_2013.pdf (accessed February 26, 2016).

[27] Moran, M. et al. Registering New Drugs: The African Context, London: Health Policy Division, The George Institute for International Health, 2010. Available online at http://www.dndi.org/advocacy/regulatory.html (accessed February 25, 2016).

[28] For additional examples, see Drugs for Neglected Diseases initiative. An Innovative Approach to R&D for Neglected Patients: Ten Years of Experience and Lessons Learned by DNDi. Geneva: DNDi, 2014. Available at http://www.dndi.org/wp-content/uploads/2009/03/DNDi_Modelpaper_2013.pdf (accessed February 26, 2016).

[29] See, for example: Policy Cures. G-FINDER 2015 - Neglected Disease Research and Development: The Ebola Effect. 2015; http://policycures.org/downloads/Y8%20GFINDER%20full%20report%20web.pdf (accessed February 27, 2016); Research and development to meet health needs in developing countries: strengthening global financing and coordination. Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination Geneva: World Health Organization; 2012.  Available at http://www.who.int/phi/cewg_report/en/ (accessed February 25, 2016); Universities Allied for Essential Medicines. RE: ROUTE: A map of the alternative biomedical R&D landscape. UAEM, 2016. Available at (http://altreroute.com/assets/download/UAEM_Reroute_Report.pdf (accessed February 25, 2016); etc.

[30] Pedrique, B., et al.

[31] See, for the foundation of the CEWG process: World Health Organization. Report of the Commission on Intellectual Property, Innovation and Public Health. Geneva: WHO, 2006. Available at

http://www.who.int/intellectualproperty/documents/thereport/ENPublicHealthReport.pdf(accessed February 26, 2016).

[32] Research and development to meet health needs in developing countries: strengthening global financing and coordination. Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination Geneva: World Health Organization; 2012.  Available at http://www.who.int/phi/cewg_report/en/ (accessed February 25, 2016).

[33] For further elaboration, see: Drugs for Neglected Diseases initiative. Transforming Individual Successes into Sustainable Change to Ensure Health Innovation for Neglected Patients: Why an Essential Health R&D Convention Is Needed. Geneva: DNDi, 2012. Available at http://www.dndi.org/images/stories/advocacy/DNDi_Policy_brief_CEWG_lowres.pdf (accessed February 26, 2016).

[34] For a more in-depth exploration of the benefits of pooled funding, see: Moon, S. Demonstration Financing: Considerations for the New International Fund for R&D. Geneva: DNDi, 2014. Available at: http://www.dndi.org/wp-content/uploads/2009/03/pilot-pooled-international-fund_web.pdf (accessed February 25, 2016).

[35] See http://www.who.int/tdr/capacity/gap_analysis/en/ (accessed February 25, 2016).

[36] See, for example, the Helsinki Declaration, available at http://www.wma.net/en/30publications/10policies/b3/ (accessed February 27, 2016) and more recent writings on Ebola and the importance of patient participation in setting research priorities, for example: Moon, S. et al. Will Ebola change the game? Ten essential reforms before the next pandemic. The report of the Harvard-LSHTM Independent Panel on the Global Response to Ebola. The Lancet, Volume 386, Issue 10009 , 2204 – 2221 (2015).

[37 For the full resolution text, see: http://www.who.int/phi/resolution_WHA-66.22.pdf (accessed February 26, 2016).

[38] ICESCR. art. 15(1)(b)-(c). See also: Human Rights Council. Access to medicines in the context of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. A/HRC/23/L.10/Rev.1.http://www.ohchr.org/EN/HRBodies/HRC/RegularSessions/Session23/Pages/ResDecStat.aspx (2013).   See also General Comment 14 of the Committee on Economic, Social, and Cultural Rights (CESCR), http://www.nesri.org/sites/default/files/Right_to_health_Comment_14.pdf (“providing access to essential drugs, as defined by the WHO Action Programme on Essential Drugs, is a core obligation” of states).

[39]  The Special Rapporteur in the field of cultural rights. The right to enjoy the benefits of scientific progress and its application. A/HRC/20/26 http://www.ohchr.org/Documents/HRBodies/HRCouncil/RegularSession/Session20/A-HRC-20-26_en.pdf at 33.  For a longer discussion on this point see submission by Yale Global Health Justice Partnership.

[40] A/HRC/20/26 at 34.

[41]  World Health Organization. Resolution WHA63.28. 2010. Available at http://apps.who.int/gb/ebwha/pdf_files/WHA63/A63_R28-en.pdf?ua=1&ua=1 (accessed February 25, 2016).

[42] See submission to the HLP from MSF/Knowledge Ecology International (Rius, Love et al), February 2016.

[43] For the full text of SDG 3, see: http://www.un.org/sustainabledevelopment/health/ (accessed February 26, 2016).

[44]  See contribution of the Global Health Law Committee of the International Law Association (‘t Hoen et al) to the HLP, February 2016.

[45] For example, the FDA PRV program. See, for example, http://www.msfaccess.org/content/open-letter-us-senate-help-committee-leadership-suggestions-fix-fda-prv-neglected-diseases (accessed February 26, 2016).

Alexandra Greenberg and Rachel Kiddell Monroe, UNIVERSITIES ALLIED FOR ESSENTIAL MEDICINES

Lead Author: Alexandra Greenberg and Rachel Kiddell Monroe
Organization: Universities Allied for Essential Medicines
Country: Canada; USA

Contributors:  Mark Chee, University of Chicago; Sam Mehr, Central Michigan University; Manuel Martin, Vienna International School; Kathi Hawlik, Vrije Universiteit; Jessica Farber, McGill University; and Merith Basey, Executive Director, UAEM North America

Abstract

Recent global health crises have highlighted the ongoing failure of the current biomedical research and development (R&D) system to address the needs of patients globally. Various self-proclaimed alternative R&D initiatives have emerged in the past fifteen years to address those failings.

To understand the myriad efforts undertaken to counteract the dysfunction of the current R&D model, UAEM began an extensive, though not comprehensive, mapping of the alternative biomedical R&D landscape. Phase 1 is a mapping of the initiatives that exist, or are proposed, and claim to be an alternative to the current system. The Re:Route Report mapped 81 such initiatives. Preliminary analysis shows that:
1. None of the initiatives included present a completely alternative model of biomedical R&D or a new system.
2. The majority focus on developing incentives for drug discovery.
3. Most are focused on rare diseases or diseases of the poor and marginalized.
4. There is an increasing emphasis on the use of push, pull, pool, collaboration and open mechanisms alongside the concept of delinkage.
5. There is a trend towards public funding and initiatives from the Global South.

Though apparently impressive in range, UAEM believes the fragmented alternative landscape needs to be evaluated to identify which initiatives not only aim to but actually do support a new approach to R&D. Phase 2, an evaluation tool, will assess if in fact included initiatives are achieving increased access to and innovation in medicines and for those that are, which practices contribute to their success. These should then be considered as building blocks to effective R&D and can inform the development of a global R&D agreement. Through this mapping and our upcoming evaluation, UAEM aims to initiate an evidence-based conversation around a truly alternative approach to biomedical R&D that serves people rather than profits.

Submission

Background: A system chronically failing patients

Today the world is witness to the tragic outcomes of the West African Ebola outbreak, the soaring price of medicines in both rich and poor countries, and the lack of major new antibiotics to address the spread of microbial disease. Together these events have further highlighted the ongoing failure of the current biomedical research and development (R&D) system to address the needs of patients globally and treat health as a human right.

For over two decades, concerns have been raised about the current biomedical R&D system. Since the passage of international patent protection laws in the mid 1990s [1], evidence of the multiplicity of ways that people in lower income settings are deprived of access to affordable and appropriate medications has grown. The WHO has maintained its estimate made in 2000 that at least one third of people worldwide lack access to essential medicines and 10 million people per year die as a result [2]. In 2009, total global investments in health R&D amounted to US$240 billion. Yet in 2010, only about one percent of all health R&D investments were dedicated to neglected diseases [3]. Furthermore, under the current system, therapeutic advances are a rarity with the majority of new drugs showing little to no added value compared to previously available treatments [4].

This crisis of high prices spans the entire disease spectrum and affects populations in all countries. From 2014 to 2015 alone, drug prices increased almost 14% in the United States [5]. A bipartisan report from the US Senate Finance Committee showed that Gilead’s “pricing strategy was focused on maximising revenue” [6]. The result is a price tag of US$84,000 for a 12-week course of their Hepatitis C treatment Sofosbuvir, brand-named Sovaldi ®. A recent study showed that manufacturing costs for similar drugs are as low as US$21 to US$63 per 12-week treatment course [7]. A study on the pricing of four oral cancer drugs found that mass generic production of the evaluated drugs could result in treatment prices ranging from US$128 to $4,020 while current US prices range from $75,161 to $139,138 [8]. Insufficient pharmaceutical innovation exacerbates this crisis. “Historically, evidence suggests that patents were not a necessary condition for innovation, that the large majority of innovations occurred outside of the patent system, and that policies that limit the scope of patents act to encourage innovation” [9].

We need a people-centered framework for R&D

On its surface, the Re:Route Report shows an impressive range of alternative biomedical R&D initiatives challenging the current system by tackling issues that have long contributed to lack of access to and innovation in medicines. Yet, initial observations from the Mapping point to a lack of fundamental systemic change. While some initiatives have undoubtedly made important advances on specific diseases and systemic issues, others are simply promoting a “business as usual” approach. And despite these manifold initiatives claiming to fix the system, shockingly little has changed for the majority of people trying to access essential medicines. The Ebola outbreak epitomizes the pitfalls of the current piece-by-piece approach. GAVI’s recent commitment to further develop, license and stockpile an Ebola vaccine previously owned by Merck & Co Inc. is laudable [10]. However, it comes too late for many. The West African Ebola outbreak has claimed over 11,000 lives [11] while GlaxosmithKline and the National Institutes for Health left the vaccine sit on the shelf for years due to lack of potential profits from its further development [12]. If a system that worked to meet the needs of all populations had been in place, a vaccine for Ebola, and now for Zika virus, would already exist and be on the market before these diseases became a global threat [13].

Various actors and policy processes have acknowledged the need for a new approach to medical innovation over the past decade, including those that recommend a new global agreement for medical R&D. We believe that the Mapping supports those ongoing calls for a new global framework. The fragmented and haphazard landscape revealed by the Mapping will not lead to a truly new approach to biomedical R&D. One reason is that many initiatives are based on the notion that the current biomedical R&D system needs to be fixed and some of its side effects remedied. Yet, the current system is not broken. It was designed to treat health as a commodity and it is successfully maintaining that approach. Many of the myriad of short and long-term fixes currently being debated will not change the fundamental nature of that profit-driven system [14]. In our view, while incremental steps are important and necessary, it is time to do more to address the underlying issues inherent in the current system.

Mapping alternatives: Methodology & Preliminary Observations

Methodology

Myriad self-proclaimed alternative R&D initiatives have emerged in the past fifteen years [15]. In light of the 2005 WHO Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) Report, the WHO Consultative Expert Working Group on Research and Development: Coordination and Financing (CEWG) actively called for projects to demonstrate alternative ways of approaching biomedical R&D [16]. Universities Allied for Essential Medicines (UAEM) wanted to understand the range of efforts undertaken to counteract the dysfunction of the current R&D model. We therefore began an extensive, though not comprehensive, mapping of the alternative biomedical R&D landscape with two phases: (1) investigating what initiatives exist, or have been proposed, that claim to be an alternative approach to R&D and (2) evaluating which of those existing and proposed initiatives are already achieving increased access to and innovations in medicines.

The Re:Route Mapping represents phase one of this effort. We reviewed more than 130 “alternative” initiatives using a simple methodology based on a specific set of defined inclusion and exclusion criteria. These were developed from accepted alternative mechanisms such as delinkage of prices from costs of R&D, openness, collaboration and use of push, pull, and/or pooling (See Inclusion Criteria). We retained 81 initiatives that claim to redress the inequity caused by the current biomedical R&D system and that fulfilled at least one of the criteria. We then separated the initiatives into existing initiatives (49), which are currently underway, and proposed initiatives (32), which are not yet in place but show signs of ongoing development.

Inclusion Criteria: Mapping Alternative Mechanisms for Biomedical R&D [17]

- Push Mechanism: Direct funding for R&D, often in the form of a grant, as well as indirect incentives, such as tax breaks and in-kind contributions, that help finance R&D upfront and thus, mitigate the R&D investment required.
- Pull Mechanism: Mechanisms to incentivize R&D activities through the promise of financial rewards once specified objectives or milestones have been met, creating viable market demand.
- Pooling Mechanism: Pooling of funds that are aggregated and managed jointly by an established entity to be allocated based on priority setting in order to distribute risk and finance biomedical R&D. Additionally, pooling of intellectual property (IP), typically via a patent pool, an agreement between two or more patent owners to pool their patent rights and license the rights to use these patents together to one another as well as third parties. These two distinct types of pooling can occur independently or jointly.
- Collaborative Initiative: Involves a network, consortium, or partnership between two or more of any academic or research institutions, non-profit organizations, NGOs, governments, government entities, or members of the private sector including biotech and pharmaceutical companies.
- Open Initiative: Applies open source, open access, open data, or open knowledge principles. Interested parties are able to contribute knowledge or know-how, data, technology, etc. to be shared in the public domain and, in the case of open source, in coordination with patent-free research.

Preliminary observations

Firstly, none of the initiatives included in the Mapping present a completely alternative model of biomedical R&D or a new system. Having classified the initiatives according to elements of the biomedical R&D process, we see the majority of the initiatives address just one aspect of the biomedical R&D chain, a few try to address multiple parts of the pipeline and very few seek to apply a revolutionary or novel approach to biomedical R&D.

Among the 49 existing R&D-related initiatives, we did not find an initiative that both addressed four or more of the five key innovative R&D mechanisms we identified (push, pull, pool, collaborative and open) and utilized the concept of delinkage. Of the 32 proposed initiatives however, we found six (19%) that covered four or more key mechanisms and embraced the concept of delinkage. Disappointingly, these six initiatives remain un(der)funded and without active projects.

Second, the initiatives are largely focused on rare diseases or diseases of the poor and marginalized. Nearly 9 in 10 of the existing initiatives focus on neglected tropical diseases (NTDs), rare diseases or malaria, TB and/or HIV, while 40% (19) of the proposed initiatives focus on NTDs and rare diseases. While NTDs represent real needs, the fact that only 3 existing initiatives and 1 proposed initiative focus on chronic and noncommunicable diseases (NCDs) highlights a lack of attention to an important portion of global health needs [18]. New antibiotic development is a key focus of only 2% of existing but 16% of proposed initiatives, all of which are based in the North and publicly funded. It is also striking to note that only 4% (2) of the existing initiatives and 32% (7) of the proposed initiatives focus on diagnostics, a critical stage of medical treatment.

Third, there is an increasing emphasis on the use of push, pull, pool, collaboration and open mechanisms alongside the concept of delinkage in alternative R&D. The number of initiatives implementing push mechanisms has increased from 14% existing (7) to 50% proposed (16), the number of initiatives with pooling has risen from 2% of existing (1) to 47% proposed (15) and openness is an overt strategy in 10% existing (5) compared to 32% (10) of proposed initiatives. Pull mechanisms have become slightly more prevalent, present in 16% of existing (8) and 25% of proposed (8) initiatives, whereas collaboration has remained fairly constant, present in 24% (12) of existing and 28% (9) of proposed initiatives. Additionally, implementation of more than two mechanisms is prevalent in both existing (32.5%) and proposed initiatives (56%). While only one existing initiative applies three mechanisms together, 8 proposed initiatives apply three or more mechanisms, indicating an increase in joint application of alternative mechanisms.

Finally, we observed that there is a trend towards public funding and launching of initiatives by the Global South. Only 20% of existing initiatives (10) rely solely on public funding sources, compared to 50% of proposed initiatives (16). As demand for public funding has grown, reliance solely on private funding sources has fallen from 29% of existing to 12% of proposed. Reliance on public and private funding sources together has also declined from 51% existing to 38% proposed. While, 78% of existing and 69% of proposed initiatives originated in the North, there seems to be a trend towards more initiatives being developed in the South.

Next steps

UAEM is now preparing to launch phase two of the mapping process. While the Mapping is an important first step, alone it does not allow us to separate what enables and supports equitable biomedical access and innovation and what does not. Only by conducting collaborative, accurate and in-depth analysis of the mapped initiatives can we identify key gaps in the alternative biomedical R&D landscape. We can then also begin to understand methodologically the approaches and mechanisms that are in fact effective and appropriate for an alternative R&D approach that prioritizes the needs of patients.

The evaluation will publicly share critical information about these initiatives through an evaluation tool, available online, that scores all 81 initiatives in key metrics relating to access, innovation, and collaboration. It will enable initiatives to be compared, fostering renewed and ongoing dialogue concerning the criteria and principles to be laid out for a framework for biomedical R&D that puts people before profits. It will also show opportunities for improvement for individual initiatives. An overall score will be allotted for each initiative as well as specific scores for each metric and section. This evaluation tool can push us to bridge both smaller and larger gaps, working from the current fragmented and incomplete landscape towards the revolutionary R&D system that currently has yet to be clearly defined. Through this evaluation, promising initiatives can serve as building blocks for an overarching framework to govern and guide R&D.

This tool will be modeled after UAEM’s Report Card project, with three overarching principles that will guide the analysis. The tool will be built around evidence-informed, expert-approved metrics, criteria and indicators that measure each initiative’s ability to and success in promoting access to and innovation in medicines and health technologies as well as whether the initiative is working towards access and innovation openly and collaboratively (See Annex for detailed draft structure of tool). These metrics, criteria and indicators are being developed to clearly and accurately measure impact. They will be weighted based on their relative importance to achieving open access and innovation and are based on both public and private data and information. The list of criteria in the Annex (included in the References section) will need to be expanded to more appropriately evaluate proposed initiatives. With the support and advice of a group of access and innovation specialists, UAEM will create a student-led team to conduct data collection and analysis. This team will publish a manuscript to share findings, based on the results of the evaluation.

Using UAEM’s Report Card as a model, we furthermore have a basis for how to develop this new tool and understand the resources that it will require for implementation. UAEM will need approximately 25,000 dollars for web design and development and PR services. This project has already garnered support from key allies in the access to medicines field including the MSF Access Campaign, Salud Por Derecho, and Open Science Foundations and we will be able to build from the momentum and interest around the mapping when seeking funding, since it has already garnered attention since UAEM publicly launched Re:Route via release of our microsite.

Conclusion

While we are morally bound to do what we can today to improve patient access to medicines, we must also be bold enough to collectively aim for and work towards a novel, ethical and rights-based way of carrying out biomedical R&D that can benefit all those who need access to lifesaving medicines. Through this mapping and through the evaluation of existing and proposed alternative R&D initiatives, UAEM aims to initiate an evidence-based conversation around a truly alternative biomedical R&D model that serves people rather than profits in order to encourage change at a global level, both in policy and practice.

To view UAEM’s Re:Route Mapping, please visit http://altreroute.com

Annex, Bibliography and References

Annex

Proposed List of Criteria for an Alternative R&D Initiative Report card for Global Equity and Biomedical Research: Structure for Existing Initiatives

1.     ACCESS: Promotes Global Access to Medicines

Metric: Minimizes barriers to access and promotes socially responsible licensing

-        Criteria 1: Socially responsible licensing strategy

-        Indicator 1a: Has a licensing policy, guidelines, or practices in place with Global Access Licensing Framework language

-        0: No such statement

-        1: Statement exists but with no clear commitment

-        2: Regularly includes GALF language in licenses

-        3: Regularly includes GALF language and has a statement promoting use of GALF+

-        4: All licenses include GALF language

-        5: All licenses include GALF language and has a statement committing to always use GALF in licenses

-        Indicator 1b: Licensing policy or list of practices/guidelines is publicly shared

-        0: Not public

-        1: Public

-        Criteria 2: Commitment to ensuring that research products are in the public domain

-        Indicator 2a: Has a licensing policy, guidelines, or practices in place to put any products of research in the public domain

-        0: No such statement

-        1: Statement exists but with no clear commitment

-        2: Regularly puts research in public domain

-        3: Regularly puts research in public domain and has a statement promoting open publication and data-sharing

-        4: All research is put in the public domain

-        5: All research is put in the public domain has a statement committing to do so

-        Indicator 2b: Licensing policy or list of practices/guidelines is publicly shared

-        0: No statement

-        1: Statement

-        Criteria 3: Action towards placing products on Essential Medicines List(s) (EML)

-        Indicator 3a: Has or is working towards getting products onto the World Health Organization EML

-        0: Never

-        1: Working on it for some products

-        2: Working on it for all products

-        3: Has some products on WHO EML

-        4: Has all products on WHO EML

-        Indicator 3b: Has or is working towards getting products onto national EML(s)

-        0: Never

-        1: Working on it for some products in some countries

-        2: Working on it for some products in all countries

-        3: Working on it for all products in some countries

-        4: Working on it for all products in all countries

-        5: Has some products on EML in some countries

-        6: Has some products on EML in all countries

-        7: Has all products on EMLin some countries

-        8: Has all products on EML in all countries

-        9: Has some products on WHO and national EMLs

-        10: Has all products on WHO and national EMLs

-        Indicator 3c: Has a policy pertaining to EML(s)

-        0: No policy

-        1: Policy endorsing placement of products on EML(s)

-        2: Policy committing to get all products onto EML(s)

Metric: Pricing strategy that ensures affordability

-        Criteria 3: Publicly available and detailed pricing strategy

-        Indicator 3a: Detailed pricing strategy

-        0: No detailed strategy

-        1: No mention of value-based pricing

-        2: Tiered pricing excluding MICs

-        3: Tiered pricing including MICs

-        4: Inclusion of delinkage as a principle

-        5: All of the above

-        Indicator 3b: Pricing strategy is publicly shared

-        0: Not public

-        1: Public

-        Criteria 4: Affordability

-        Indicator 4a: Percentage of end products that are affordable

-        0: No public strategy to ensure affordability

-        1: Affordability strategy exists but relies on tiered pricing/ government subsidies

-        2: The initiatives affordability strategy ensures the availability of >1 generic producer

-        3: The initiative’s affordability strategy ensures at cost (+) pricing of medicines

-        Criteria 5: Translational research

-        5a: Initiative participates in or takes steps to ensure that translational research occurs

2.     INNOVATION: Research purpose is driven by global health needs

Metric: Research focuses on areas of unmet global health needs

-        Criteria 1: Research focuses on Type I diseases, as defined by the WHO.

-        Criteria 2: Research focuses on Type II diseases, as defined by the WHO.

-        Criteria 3: Research focuses on type III diseases, as defined by the WHO.

Metric: Initiative’s potential for global health impact

-        Criteria 4: Product(s) treat disease more effectively than existing treatments and/or at a lower cost

-        Criteria 5: Product(s) are appropriate for low resource settings

-        Criteria 6: Product(s) are developed to best meet health needs based on North-South collaboration

-        Indicator 6a: The organization is a north-south collaboration

-        Indicator 6b: Where does the organization have offices?

-        Indicator 6c: % of work that is done with involvement of/partners from global south

Metric: Scope of initiative includes more than one alternative financing mechanism

-        Criteria 7: Initiative includes mechanisms that finance research (push)

-        Criteria 8: Initiative includes mechanisms that provide appropriate incentives for the development of new drugs (pull)

-        Criteria 9: Initiative includes mechanisms to pool funds for biomedical R&D (pooling)

Metric: The initiative’s scale, replicability and sustainability

-        Criteria 10: Initiative has been / is applied across therapeutic categories

-        10a: Initiative develops multiple types of health technologies

-        10b: Initiative works across multiple diseases

-        10c: Initiative has incorporated new technologies/diseases since its inception

-        Criteria 11: Is the funding for the initiative sustainable and can it be expanded?

-        11a: Does the initiative depend on external funding to function (or is it self sustaining)

-        11b: What are the administration costs associated with the initiative?

-        11c: Can the initiative be upscaled/can the scale be adjusted? (perhaps indicated by past expansion of initiative)?

-        11d: Has funding remained constant, decreased or increased over the past three years?

-        Criteria 12: Initiative has a business plan that works to ensure access and innovation and sustainability

-        12a: Does the initiative publicly share its business plan and/or strategy?

-        12b: Is the initiative’s business plan forward looking?

-        Clear goals for next five years and funding plans (Ex: DNDi’s goal to develop X technologies by X year)

-        12c: Has the initiative achieved its plans in the past three years, or those set out in its last plan, whichever was most recent?

3.     OPEN: Promotes open collaboration and data sharing between researchers

Metric: Access to research outputs

-        Criteria 1: Open access publication

-        Indicator 1a: % of publication output that is open access

-        Indicator 1b: Participation in data pooling

Metric: Publicly available data

-        Criteria 2: Access to clinical trial data

-        Indicator 2a: % of clinical trials that have publicly available data

Metric: Collaboration

-        Criteria 3: Initiative incorporates collaboration with other academic, government, civil society, or private organizations and institutions

-        Indicator 3a: The initiative is collaborative

-        0: No

-        1: Yes

-        Indicator 3b: % of research that is a joint effort with others

-        From alternative R&D

-        From pharma

-        From universities

-        From government

Metric: Transparency

-        Criteria 4: Research inputs and outputs

-        Indicator 4a: Full disclosure of both public and private funding of R&D

-        Indicator 4b: Full disclosure of R&D investments and other financials

Metric: Conflicts of Interest

-        Criteria 5: Is the initiative free from conflicts of interest/has the initiative incorporated some form of policy on undue influence on decision making?

References

[1] World Intellectual Property Organization Secretariat. (2008, April 15). Report on the International Patent System. Retrieved from http://www.wipo.int/edocs/mdocs/scp/en/scp_12/scp_12_3.pdf

[2] Hogerzeil, H, and Mirza, Z (2011) Access to Medicines as part of the right to Health. The World Medicines Situation 2011 WHO/EMP/MIE/2011.2.10 http://apps.who.int/medicinedocs/en/m/abstract/Js18772en/

[3] Røttingen, J.-A., Regmi, S., Eide, M., Young, A. J., Viergever, R. F., Årdal, C., … Terry, R. F. (2013). Mapping of available health research and development data: what’s there, what's missing, and what role is there for a global observatory? The Lancet, 382(9900), 1286–1307. http://doi.org/10.1016/S0140-6736(13)61046-6

[4] Health Action International, international Society of Drug Bulletins, Medicines in Europe Forum, Nordic Cochrane Center & WEMOS. (2015, October 16). “Adaptive licensing” or “adaptive pathways”: Deregulation under the guise of earlier access. Joint Briefing Paper. Retrieved from http://ec.europa.eu/health/files/committee/stamp/2015-10_stamp3/3c_prescrire_position_paper.pdf

[5] Girod, C. S., Weltz, S. A., and Hart, S. K. (2015, May 19). The 2015 Milliman Index. Retrieved from http://www.milliman.com/uploadedFiles/insight/Periodicals/mmi/2015-MMI.pdf

[6] Hatch, O. G. & Wyden, R. (2015). Executive Summary: The Price of Sovaldi and its Impact on the U.S. Health Care System. Sovaldi Bipartisan Senate Report. Retrieved from http://www.finance.senate.gov/imo/media/doc/11%20SFC%20Sovaldi%20Report%20Executive%20Summary.pdf

[7] Hill, A., Khoo, S., Fortunak, J., Simmons, B., & Ford, N. (2014). Minimum Costs for Producing Hepatitis C Direct-Acting Antivirals for Use in Large-Scale Treatment Access Programs in Developing Countries. Clinical Infectious Diseases. http://doi.org/10.1093/cid/ciu012

[8] Hill, A., Gotham, D., Fortunak, J., Meldrum, J., Erbacher, I., Martin, M., … Bower, M. (2016). Target prices for mass production of tyrosine kinase inhibitors for global cancer treatment. BMJ Open , 6 (1). http://doi.org/10.1136/bmjopen-2015-009586

[9] Moser, P. (2016, January 28). Patents and Innovation in Economic History. National Bureau of Economic Research (NBER). Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2712428

[10] World Health Organization. (2006, 3 April). CIPIH report: main recommendations. WHO. Retrieved from http://www.who.int/bulletin/volumes/84/5/CIPIH_report/en/

[11] WHO CEWG. (2015). CEWG Demonstration Projects: Background and Process [Timeline]. World Health Organization. Retrieved from http://www.who.int/phi/implementation/cewg_background_process/en/

[12] World Health Organization. (2015, January). Noncommunicable Diseases Fact Sheet. WHO. Retrieved from http://www.who.int/mediacentre/factsheets/fs355/en/

[13] GAVI. (2014, December 11). Gavi commits to purchasing Ebola vaccine for affected countries. The Vaccine Alliance. Retrieved from http://www.gavi.org/Library/News/Press-releases/2014/Gavi-commits-to-purchasing-ebola-vaccine-for-affected-countries/

[14] Centers for Disease Control and Prevention. (2016, January 20). 2014 Ebola Outbreak in West Africa - Case Counts. CDC. Retrieved from http://www.cdc.gov/vhf/ebola/outbreaks/2014-west-africa/case-counts.html

[15] Grady, D. (2014, October 23). Ebola Vaccine, Ready for Test, Sat on the Shelf. The New York Times. Retrieved from http://www.nytimes.com/2014/10/24/health/without-lucrative-market-potential-ebola-vaccine-was-shelved-for-years.html?_r=0

[16] Lancet, T. (2016). Zika virus: a new global threat for 2016. The Lancet, 387(10014), 96.

[17] Kiddell-Monroe, R., Greenberg, A., & Basey, M. (2016). Re:Route: A Map of the Alternative Biomedical R&D Landscape. Universities Allied for Essential Medicines.

[18] Emanuel, E. J. (2016, January 20). Holding Drug Companies Accountable for Prices. Huffington Post Business. Retrieved from http://www.huffingtonpost.com/zeke-emanuel/holding-drug-companies-ac_b_9011794.html

Jennifer Dent, BIO VENTURES FOR GLOBAL HEALTH

Lead Author: Jennifer Dent
Organization: BIO Ventures for Global Health
Country: USA

Abstract

Ensuring access to medicines is a complex and multifaceted challenge that requires the buy-in of key stakeholders within the public, private, and civil sectors. There are specific models and activities through which each stakeholder group can leverage its expertise to actively and productively address this public health challenge. The following contribution represents the experiences of BIO Ventures for Global Health (BVGH) and its President, Jennifer Dent, working with the biopharmaceutical industry to augment medicine access. Specific examples of companies’ activities are described. These activities include drug donation programs targeting highly-burdensome communicable and non-communicable diseases; the contribution of resources and assets to advance product development for poverty-related diseases; and the sharing of industry’s knowledge and expertise with biomedical researchers from low- and middle-income countries. These activities address several of the key barriers to access: product affordability, lack of effective products, and limited capabilities of LMICs to contribute to medical product development. The expansion of the aforementioned programs and the initiation of other innovative, multi-sectorial programs is essential to ensure that patients worldwide receive proper and beneficial healthcare.

Submission

Secretary-General’s High-Level Panel Secretariat

Dear Secretary-General Ban Ki-moon and the Secretary-General’s High-Level Panel Secretariat,

I write as the President of BIO Ventures for Global Health (BVGH), a nonprofit organization based in Seattle, WA, to praise the High-Level Panel on Access to Medicines for undertaking a mission to increase access to lifesaving treatments in all low-, middle- and high- income countries across communicable and non-communicable diseases. BVGH shares your public health goals and I believe there are initiatives underway and opportunities in front of us that will move us toward these common objectives.

In 2004, Carl Feldbaum, the President of the Biotechnology Innovation Organization (BIO), which represents over 1,200 biotechnology and pharmaceutical companies worldwide, issued a call to action to its members to commit to sharing the benefits of new scientific discoveries with all people, including those living in low- and middle-income countries (LMICs). With that goal in mind, BVGH was established. BVGH is charged by its stakeholders to develop and manage programs that leverage technologies and industry assets and resources to address unmet medical needs of people living in developing countries and to create partnerships that advance biomedical research and development for these regions.

BVGH has sought to fulfill its mission through a collection of collaboration-based research, technology transfer, and knowledge sharing programs. These programs are designed to ensure that the process of new drug research continues to be encouraged in all countries. New drug development is a risky and capital-intensive venture. In fact very few countries, even in developed regions, have the resources or the entrepreneurial culture to take on the challenges of an industry where the failure rate for the search for new therapies is so high. Most of the capital for later stage research comes from private investors who are willing to support new research with the inherent risks and with an expectation of rewards. The financial rewards are continually re-invested in new research and product development programs. This system, which is based on intellectual property protection for the pioneering companies, has delivered the medical advances we have today.

One example I would like to highlight is a program called WIPO Re:Search that BVGH manages with the World Intellectual Property Organization (WIPO). This program demonstrates the willingness of companies to share intellectual property assets and other valuable resources to advance research and development for neglected tropical diseases (NTDs), malaria, and tuberculosis. The WIPO Re:Search consortium was launched in October 2011 with 30 Member organizations. This program has exceeded our greatest expectations. By identifying and facilitating alliance opportunities, BVGH has made ground-breaking progress in connecting researchers with drug development companies, establishing collaborations, and advancing research and development in diseases of poverty. Scientists around the world have come together across multiple sectors to combine efforts to repurpose industry assets, develop new technologies, accelerate product development, and evaluate products in the field. Today we have over 100 organizations on board and engaged as Members, including 22 in Africa, and almost 100 collaborations have been established. Ten of the leading biopharmaceutical companies participate in WIPO Re:Search, including Eisai; Pfizer; Novartis; GlaxoSmithKline; Sanofi; Merck (MSD); Merck KGaA, Darmstadt, Germany; Takeda; Johnson & Johnson; and Alnylam Pharmaceuticals, to share their intellectual property assets and other valuable resources.

WIPO Re:Search brings the benefits of modern medical research to developing countries through a series of partnerships between industry and academic researchers. It is a program that actually leverages intellectual property to benefit the needs of developing nations and it fosters innovation in medicine, vaccines, and diagnostics. Public-private sector partnerships are created through WIPO Re:Search to help developing country researchers and institutions gain access to intellectual property and facilitate technology transfer. The growth in membership, number of collaborations and agreements, and the commitment of the private sector are clear signals of the success of this program. In addition to these metrics, relationships are being forged between researchers in LMICs and industry scientists. To view the impact WIPO Re:Search is having please see a recent BVGH publication, Accelerating R&D for Neglected Diseases through Global Collaborations, which highlights 25 collaborations established. You can also review our progress our 2015 BVGH Partnership Hub Annual Report. A few collaborations are described below:

GlaxoSmithKline (GSK) & University of California, San Francisco (UCSF): GSK provided researchers at UCSF with a set of small molecule protein kinase inhibitors to screen against the parasite that causes schistosomiasis. The results of the UCSF researchers' screens - which were recently published- were promising.

Pfizer & 60 Degrees Pharmaceuticals (60P): Pfizer provided 60P with its Investigator's Brochure for its drug, modipafant, which 60P was interested in repurposing for dengue fever. These data helped 60P design a dengue fever clinical trial. 60P plans to start a Phase II clinical trial on dengue fever patients in Singapore in March 2016.

Merck KGaA, Darmstadt, Germany & University of Buea: Merck KGaA, Darmstadt, Germany provided a researcher at the University of Buea in Cameroon with a subset of highly potent Hsp90 inhibitors to screen against the parasitic worms that cause onchocerciasis.

Merck & Walter and Eliza Hall Institute of Medical Research (WEHI): Merck shared a set of small molecule aspartyl protease inhibitors with researchers at WEHI to screen against malaria parasites. The initial results of WEHI’s screens are promising, and Merck has offered to share its medicinal chemistry expertise to help advance the initial hits.

Alnylam Pharmaceuticals & National Institute of Immunology (NII): Alnylam designed and synthesized optimized siRNAs for a researcher at NII in India to use to assess the role of specific hepatocyte proteins on the severity of liver-stage malaria.

The Consortium represents just the beginning of what can be accomplished through new models of partnership, cooperation, project management, and innovation sharing. WIPO Re:Search should be scaled up and similar programs developed to facilitate product development partnerships for poverty related diseases. Our experience with WIPO Re:Search indicates that companies are willing and even enthusiastic to participate and share knowledge and IP assets to support R&D for diseases of poverty.

There are a many, many initiatives underway that support and provide access to medicines in LMICs, across therapeutic areas. And there are a number of new programs being developed that will soon be implemented. The good news is we are seeing more collaboration and coordination across companies and sectors to implement access programs. Below are a few examples of access to medicines programs:

• Merck has been donating Mectizan (ivermectin) to low income countries in Africa since 1987. Mectizan is a treatment for the NTDs, onchocerciasis and lymphatic filariasis. The company has committed to donate Mectizan for as long as needed. This program is now a multi-sectoral partnership involving the World Health Organization (WHO), the World Bank, ministries of health, nongovernmental development organizations (NGDOs), and local communities.

• GlaxoSmithKline donates one billion tablets of its drug, Albenza (albendazole), every year to treat children in poor countries whose growth and learning capacity is threatened by intestinal worms. The company has invested significantly in manufacturing capacity to enable this program.

• Novartis introduced a new access to medicines program focused on 15 on- and off-patent medicines addressing four highly-prevalent non-communicable diseases: cardiovascular diseases, diabetes, respiratory diseases, and breast cancer. The products are offered at a batch price of USD 1 per treatment per month to governments, NGOs and other institutional organizations. This relatively new initiative was launched in Kenya and Ethiopia in 2015 with plans to expand to additional countries over the next few years.

• Merck KGaA, Darmstadt, Germany has been donating Biltricide (praziquantel) tablets to African countries since 2007. The company has donated more than 200 million tablets to WHO, and has committed to increasing the number of tablets donated to 250 million per year. To date, more than 54 million patients have been treated.

• Gilead is making Sovaldi and Harvoni available at significantly reduced prices in more than 100 countries including all low-income countries and most LMICs. They are working with governments and health ministries to support HCV medical education and prevention efforts. In Georgia, Gilead is working with the Ministry of Health and CDC to eliminate HCV - the company is providing Sovaldi and Harvoni free of charge. Their goal is to treat 20,000 patients per year for five years to eliminate HCV from the Georgian population.

These are just a few examples of company programs focused on increasing access to medicines. The London Declaration and Uniting to Combat NTDs program is another excellent example that we can learn from. Donations from several biopharmaceutical companies are a cornerstone of that program. Pharmaceutical companies have pledged drugs valued at USD 17.8 billion for the ten diseases through 2020.

I strongly believe that, with the right programs and opportunities, companies will participate in more research and access initiatives focused on the needs of LMICs. I advise the Commission to complete a full analysis of access to medicines programs. A proactive approach to developing innovative, multi-sectorial initiatives to address the complex issues of access to medicines is needed. So much more can be done when we communicate and work collaboratively to develop solutions. LMIC governments must be at the table and committed to implementing access to medicines programs. The recommendations of this panel should include specific outreach plans and recommendations to scale up existing programs like WIPO Re:Search and develop new multi-stakeholder and cross-sector programs to solve the issues of access.

Access to medicines in LMICs and emerging regions is complex and requires a multi-stakeholder commitment including governments, industry across sectors, enablers and implementers like BVGH. I would be pleased to volunteer my time to support the Panel in developing recommendations and programs. This is not a simple or straightforward task; it will require people to work together and to understand each party’s position and capabilities.

BVGH is currently exploring an exciting partnership around an oncology hospital and access program in Côte d’Ivoire. Cancer is a growing threat to Africa. Cancer survival rates in Africa are much lower than in the more developed world. With financing provided by South Korea and support from leading Korean companies – Samsung and GE Korea - the Côte d’Ivoire government is building a new state-of-the-art National Radiotherapy and Oncology Center. Côte d’Ivoire currently has only one cancer center with 21 beds, no radiotherapy capacity, and limited ability to expand and meet patient needs. This multi-stakeholder initiative is poised to provide a model on which healthcare needs and access can be addressed with the support of multiple stakeholders working together, including biopharmaceutical companies. This is another example of how the benefits of modern medicine and modern therapies can be shared by all. This program will also give African researchers, oncologists, and health care professionals further opportunities to collaborate with oncology companies and leading oncology centers.

BVGH also taps into the scientific know-how and expertise of companies to approach the problems of global health through capacity building programs. Sharing the scientific knowledge of companies with academic researchers in LMICs helps to jumpstart their own drug development efforts. Capacity building has included scientist exchanges, fellowships and training sessions, equipment donation and training programs. While many large pharmaceutical companies have been generous in sharing drugs to those who need them, empowering researchers and helping them strengthen their own ability to find solutions for local disease challenges is ultimately a very effective public policy approach to public health and human rights.

I understand the commission may still be accepting nominations for advisory members. I would be pleased to be considered and to contribute to the panel in any manner that would be helpful.

Sincerely,

Jennifer Dent

Bibliography and References

Jennifer Dent joined BVGH in September 2011 and was elected President in October 2012. She has 20+ years of broad-based pharmaceutical and biotechnology experience, including negotiation and structuring of deals, and management of global discovery and commercial alliances. Jennifer began her career as a sales representative in Canada working in a variety of positions for Parke Davis/Pfizer and Genentech. Following the acquisition of Genentech Canada by Roche, Jennifer held a number of senior management positions in marketing, life cycle management, global product strategy, business development, and alliance management at Roche and Genentech in Canada, Switzerland, New Jersey, and South San Francisco. Jennifer co-founded Sound Biotechnology, and prior to that, served as Vice President, Business Development, Marketing, and Sales at CombiMatrix Corporation in Washington. Prior to working in the pharmaceutical industry, Jennifer was a registered nurse working in surgical oncology at Toronto General Hospital in Canada. Jennifer obtained her R.N. from Fanshawe College and graduated from the University of Western Ontario with a BSc. She received her executive MBA at Western's Richard Ivey School of Business.

Brook Baker, HEALTH GAP_B

Lead Author: Brook Baker
Additional Authors: Peter Maybarduk, Public Citizen; Steven Knievel, Public Citizen
Organization: Health Global Access Project (Health GAP)
Country: USA

Supporters: Amy Kapcyzynski & Gregg Gonsalvez, Global Health Justice Partnership, United States; Morgane Ahmar, Coalition-Plus, France; Marcus Low, Treatment Action Campaign, South Africa; Prof. Sean Flynn, American University Washington College of Law Program on Information Justice and Intellectual Property, United States; Luz Marina & Francisco Rossi, Fundación IFARMA, Colombia

Abstract

This submission discusses the desirability and feasibility of a compulsory licensing (CL) facility/consortium that would:

(1) undertake analytical work on the involuntary use provisions in the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, including the possibility of mandatory CL standards and procedures for medical technologies,

(2) develop and support the implementation of model legislation to maximize full and effective use of compulsory and government use (GU) licenses, and

(3) provide technical and advocacy assistances for adopting and using CLs not only nationally but in a coordinated way to create the aggregated markets that encourage robust generic competition.

Compulsory licenses are an essential tool for expanding access to patented medicines, including improved combination therapies and optimal formulations. At present, the use of CLs is sparse and uncoordinated. A few countries, particularly in Africa, have formally and informally issued CLs to facilitate access to medicines, particularly antiretroviral therapies. There have been additional licenses issued in Thailand, Indonesia, Brazil, India, Ecuador, and elsewhere,[1] but countries that have issued CLs often face retaliatory trade and other pressures, from certain countries and from industry.[2] Industry’s backers frequently argue that CLs should rarely be used, or used only in emergencies, although in fact countries’ rights to issue CLs are broad.

In the post-TRIPS era, more and more health technologies will be patented in more and more countries. The resulting expansion of exclusive rights gives rightholders power to charge exorbitant prices that reduce access to health technologies, especially in low- and middle-income countries, but in richer countries as well. Increased, easier, and coordinated use of compulsory licenses on medical technologies will promote competition, lead to lower costs, and expand access to needed health products while allowing reasonable compensation to rightholders.

Submission

On Countries’ Rights to Issue Compulsory Licenses

Since the 19th Century, national legislation in most countries has allowed compulsory and GU licenses. Article 5A of the Paris Convention for the Protection of Industrial Property[3] provides each country with the right to “grant compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent...” States’ practices across the globe allow both CLs and GU licenses. Canada, until the negotiation of the North American Free Trade (NAFTA) Agreement, had a particularly rich history of issuing CLs to decrease the cost of medicines and to spur local industry, and it allowed licensees to export in order to realize economies of scale.[4]

Similarly, Article 31 of the TRIPS Agreement[5] directly permits involuntary use of patents without authorization of the right holder (also known as CLs) and public non-commercial use (also known as government or crown use). Under Article 31, CLs can be issued on any grounds whatsoever as long as certain procedural requirements are followed.[6] There are expedited procedures requiring no advance negotiations “in situations of national emergency or other circumstances of extreme urgency or in case of public non-commercial use”, or as a remedy for anti-competitive practices. The Declaration on the TRIPS agreement and public health (Doha Declaration)[7] clarified the ability of countries to define grounds for CLs, to determine matters of emergency and extreme urgency, and to use CLs to advance public health and to ensure access to medicines for all. In addition, paragraph 6 of the Doha Declaration directed WTO members to find an effective and expeditious solution to the “predominantly for the supply of the domestic market of the Member authorizing such use” requirement in Article 31(f) of the TRIPS Agreement, resulting in the 30 August 2003 WTO Decision on implementation of Paragraph 6 of the Doha Declaration (30 August Decision) providing a partial solution for CL-related access for countries with insufficient manufacturing capacity to make effective use of CLs. There is also authority under Article 44.2 of the TRIPS Agreement justifying use of judicially authorized licenses upon payment of a royalty.

On the Underuse of Compulsory Licensing

Despite the clear legality of CLs and GU licenses, few countries have adopted national legislation incorporating desirable flexibilities for issuing CLs. Even where CLs are authorized by sub-optimal national legislation, few CLs have been issued.[8] Earlier surveys of post-TRIPS compulsory licenses on medicines have found only a surprisingly small number of examples, but have also found instances of such licenses issued without controversy in richer countries.

Part of the problem is that rightholders and certain rich-country governments have frowned on the use of CLs. Not only have these governments urged countries not to issue CLs, but have retaliated when countries did so. For example, the Office of the United States Trade Representative (USTR) has placed countries on the U.S. Special 301 Watch List[9] because they issued CLs or because their national legislation permitted CLs on the basis of local working requirements. One company, Abbott Laboratories (now AbbVie), retaliated against Thailand for issuing a CL on an AIDS medicine by removing all of its pending registration applications from the country’s drug regulatory process.[10]

However, it is also true that CL options are not always well-understood and that proper technical assistance on CL reform and issuance has been scant. In addition, issuing a successful CL depends on a willing licensee who is able to develop the product, register it, and bring it to market. Companies might be willing to do this in larger and richer countries, but the economic incentives are weak in smaller and poorer countries. Single-country licenses are ineffective to incentivize robust generic competition by multiple licensee/entrants competing at efficient economies of scale producing sustainable cost savings.

If the TRIPS regime stays in place, if national patent systems continue to grant more pharmaceutical patents, and if voluntary licensing and other access initiatives continue to exclude a significant number of pharmerging countries, then countries will need reliable, easy-to-use, TRIPS-compliant mechanisms to source more affordable medical technologies. That mechanism is compulsory licenses.

Proposed Activities of the Facility

Despite widespread knowledge that broader use of CLs might surmount access barriers, a significant amount of analytical work remains in clarifying the outer-bounds of permissible CL practice in TRIPS and other forums. That analytical work will lay fallow, as does some of past work on CLs, unless it is translated into actionable proposals for CL reform in-country, both through model law and technical support to policy makers, legislatures, and regulators. Even after law reform is accomplished, additional work is needed to promote effective use of CLs and coordination between countries to create a timely and effective market for generic competition.

A CL facility/consortium could help the delivery and coordination of all this work as described below.

Analytical Work
1. Further work on TRIPS compatibility of mandatory and/or presumptive compulsory licensing mechanisms. Although Art. 31 of the TRIPS Agreement requires that compulsory licenses be considered on their individual merits, that requirement may not preclude mandatory CL mechanisms. The August 30 Decision (proposed Article 31bis) may allow mandatory CLs as provided by India. Alternatively, there is no TRIPS bar to a presumption in favor of CLs.
2. Further work on TRIPS compatibility of differentiated CL policies for different fields of technology, especially medical technologies. Although the Article 27 of the TRIPS Agreement prevents discrimination between fields of technology in the recognition of patents, that provision does not apply to Article 31 so as to bar different CL policies for different fields of technology. Similarly, a leading analytic group argues that frequent use of CL and GU licenses for medicines would not constitute prohibited discrimination against a field of technology.[11]
3. Further work on open- and non-exclusive-CL standards and procedures, especially where prior negotiations are required. In some instances, licensing a single generic licensee or only a few licensees might be desirable, but having multiple licensees who can complete and provide redundant sources of supply is generally superior.[12]
4. Further work on competition-based licenses, grounds and procedures. Competition-based licenses have advantages because they do not require prior negotiations, allow for unlimited exports and lower royalties, and require attention to the interests of licensees. Defining the grounds for competition-based licenses and procedures needs further exploration.
5. Further work on judicial licenses. Article 44.2 of the TRIPS Agreement allows the equivalent of judicial CLs – the payment of reasonable royalties in lieu of injunctions or deterrent damages. Such licenses have been broadly available in the U.S. and issued once in India.[13] Further clarification of the availability of judicial CLs should be pursued.
6. Further work on Article 30 alternatives to the 30 August Decision[14] (or Article 31bis[15], if adopted), including a TRIPS Article 30 limited exception. The 30 August Decision has only been used once in twelve years. It is procedurally labyrinthine and might be interpreted to require successive licenses for each desired quantity of a particular medicine in an importing country. The ability of countries to issue a single license that would permit export and import of needed quantities should be explored. In addition, the possible legality of an Article 30 limited exception allowing production for export, proposed during the negotiation of the Decision, should be explored.
7. Further analytical work on changed conditions that might lead to termination of CLs. Article 31 authorizes termination of a CL when the conditions justifying its issuance have ceased to exist. However, the circumstances sometimes are uniquely under the control of the rightholder who might actually manipulatively offer price discounts or otherwise redress grounds, undermining the commercial feasibility of the CL for the licensee and undermining the benefits of competition and redundant sources of supply for the affected country.
8. Further work on comparative advantages of all-sector CLs vs. GU licenses. Countries can issue “ordinary” compulsory licenses that allow licensees to service all sectors, or they can issue public, non-commercial licenses for use by or for the government only. GU licenses do not require search of patent status nor prior negotiation for a commercially reasonable voluntary license. Moreover, they leave the more lucrative private sector to the rightholder, thereby reducing the risk of retaliatory action. Further work should be done on the comparative advantages of GU versus all-sector licenses.
9. Further work on march-in rights to IP generated with public support, including rights to licensee’s patented improvements. CL practice can and should be much more liberal where R&D is publicly financed. Clarifying governments’ licensing rights in such circumstances is important to expanded access.
10. Further work on CLs on pending patents. Some countries do not appear to allow CLs on pending patent applications, though medicines may be registered and marketed before patents are granted or during appeals. In order to facilitate earlier access to newer medical technologies there may be advantages to granting CLs on pending applications subject to safeguards and conditions.
11. Further work on special rules for CLs on research tools and platforms and for CLs on dependent technologies. There is a special need to assess CLs on the tools needed to conduct R&D and on base technologies underlying improvements and adaptations, including combination medicines.
12. Further work on compulsory licenses to registration-related data for the purpose of registering compulsorily licensed generic equivalents of patented medicines or other lawful generic equivalents. Data/market exclusivities can delay or prevent marketing approval of generic medical technologies even when CLs are issued or where there is no patent on the commodity itself.[16] Therefore, it is important to elucidate grounds and proper procedures for allowing permissible access to and reliance on regulatory data or prior approvals of comparator products.
13. Further work on CLs to know-how. Patent disclosure is supposed to allow effective working of the patent by other skilled in the arts, but frequently rightholders have trade-secret protected know-how that is important to the effective use of a CL. Therefore it is important to elucidate grounds and proper procedures for allowing permissible use to know-how.
14. Further work on the relationship between CLs and industrial policy/local production. Compulsory licenses can be satisfied by granting licenses to domestic licensee or to foreign importers. However, many countries want to expand their pharmaceutical manufacturing capacity both as an industrial development policy and also to ensure local sources of supply.[17] Better understanding of the economics of local production and its interface with CL policies will help inform governments when to issue local licenses, import licenses, or hybrid licenses.
15. Further work analyzing market dynamics of CLs and market size necessary to incentivize generic licensees to enter the market. The economics of robust generic competition should be better understood, including incentives to become licensees and conditions that support sustainable competition.[18] Such studies might identify different market needs for different health technologies.
16. Further work on regional CLs, e.g., for the African Intellectual Property Organisation (OAPI) and other regional IP entities. At present, regional IP entities like the OAPI[19] and African Regional Industrial Property Organisation (ARIPO)[20] allow for CLs on a national basis only. Given similar medical needs in these regional groups, member countries might find it desirable and expeditious to allow for regional grants of CLs and GU licenses.
17. Further work on transparency of voluntary licenses and CLs. Countries could consider a system of mandatory disclosure of voluntary and involuntary licenses and modify trade-secret laws to the extent that they might impede such disclosure.
18. Further work on patent status transparency on medical technologies to ease the CL process. Countries should consider adoption of requirements that patent applicant or patent rightholders disclose the identity of the medical technology to which the patent application or granted patent applies. In the pharmaceutical context, this might include the disclosure of the international non-proprietary name.

CL Model Legislation and Law Reform
Most countries have not yet optimized their compulsory licensing laws and regulations. Model law provisions can assist the desired law reform process, and countries might further need specific technical assistance for competent and effective CL law reform in a particular country or regional grouping.[21] The facility can provide mechanisms for providing CL-related law reform support nationally and regionally, e.g. ARIPO, OAPI. The Facility can:

1. Perform further work on desirable CL terms and conditions in terms of quality, registration efforts, freedom to research, etc. Governments can and should define proper standards or conditions for licensees including commercially expeditious registration, marketing, and adherence to recognized good manufacturing and distribution practices.
2. Develop model CL provisions, including, among other provisions –
a. Grounds for CLs: Compulsory licensing laws should provide for the widest possible grounds for CLs without thereby requiring onerous standards of proof. In particular, there should be health-related grounds, refusal-to-license grounds, insufficiency of affordable supply grounds, emergency grounds, and competition-based grounds. Countries might also want to consider adoption of failure-of-local-working grounds.
b. CL procedures: Countries should adopt easy-to-use administrative procedures for both CLs and GU licenses. They should require short time periods for required prior negotiations and further define commercially reasonable and unreasonable terms.
c. Appeal mechanisms: CL applications could be deemed presumptively valid with short time periods for opposition by rightholders on narrow grounds. Rightholders should bear the burden of persuasion.
d. Royalty guidelines: Countries should also adopt easy-to-apply remuneration guidelines.

In-Country Technical Assistance and Advocacy Support
When proper CL legislation and regulations are in place, technical assistance is frequently helpful in establishing the practice of issuing licenses, overcoming knowledge gaps and resolving uncertainties than can freeze action. Further, achieving proper incentives for generic entry and robust competition might well depend on coordination of CL strategies between countries. At present, there is not a fully capacitated platform for such coordination, but it is important that it be developed. Support from Facility technical experts can help guide and coordinate in-country advocates and policy makers across borders. The Facility can:

1. Create a facility that will directly assist countries and other applicants on CL applications; amassing global, regional, and local technical expertise to facilitate the reform process.
2. Help supply campaign strategies and support for local reform advocates, as well as needed advocacy materials in collaboration with national or regional efforts.[22] The IP reform process in any country rarely proceeds smoothly without advocacy support both to decision-makers and to civil society proponents.
3. Work on coordinated issuance of CLs on key medicines, particularly for countries that are currently excluded from relevant Medicines Patent Pool (MPP)[23] licenses.
4. Help establish the political partnership within BRICS[24] and other middle-income countries (MICs) formations for issuance of such CLs and to broker the issue of industrial policy. BRICS countries and other pharmerging MICs face particular challenges in accessing more affordable essential health technologies. It will be important to explore options for strengthening coordination within and between BRICS and other MICs to make coordinated use of CLs most effective.
5. Analyze whether the facility would support generic firm applicants directly, and if so, under what terms and conditions, given potential conflicts of interest. Although governments are sometimes the prime movers with respect to CLs, CLs can and should also be available based on initiation of CL applications by private generic companies. The facility should explore if, when, and how it might provide technical assistance and other support to such efforts.
6. Help defend CLs when challenged or appealed. Because of industry opposition to CLs, it is foreseeable that rightholders will challenge CL reform efforts and/or the issuance of particular CLs. The facility could provide technical and legal support in defense of CL policies and CL grants.

Benefits of the Facility

This submission has potential to significantly reduce policy incoherence between the interests of innovators and the human right of access to needed health technologies. Most CLs and GU licenses provide for adequate remuneration to rightholders, meaning that originators can receive reimbursements for R&D expenditure in the form of royalty payments from generic licensees. At the same time, the increased affordability resulting from licensee competition and generic cost-structures can greatly enhance access to health technologies.

The human right to health and of access to needed health technologies requires governments to make progressive and maximum use of lawful flexibilities to increase universal and equitable access to the benefits of scientific advancement in the health sector. Compulsory licenses are fully lawful under existing international IP norms. Accordingly, countries can and must use this available policy space by amending their laws to allow full use of lawful compulsory licensing flexibilities and to use those flexibilities to ensure access for all.

The health impact of this initiative could be quite significant. Where law reform occurs and CLs are actually issued on a more routine basis, it is clear that improved access to health technologies will occur. In addition, the mere prospect of increased use of compulsory licenses could result in more countries being included in voluntary licenses and/or being granted other, better access terms.

Implementation

The implementation of this submission would not be difficult as a technical matter. There is a significant amount of technical expertise on compulsory licensing available already. This capacity needs to be rationalized and supported and organized into an effective analytical and service delivery model. Although there might be some opposition to CL reform and utilization from industry and certain countries, such opposition does not have a sound political, legal, or moral footing. Moreover, countries might face less political opposition if they act in concert with others, pursuant to a global initiative, than if they act individually on their own. More importantly, coordinated action will produce better impacts in terms of CLs that will actually achieve their goal of facilitating cost-saving competition for needed health technologies.

Bibliography and References

[1] Public Citizen, Post-TRIPS Examples of Compulsory Licensing for Pharmaceuticals Worldwide, available at http://www.citizen.org/documents/compulsory-licenses-chart-short-version.pdf.

[2] Dina Halajian, Inadequacy of TRIPS & The Compulsory License: Why Broad Compulsory Licensing is Not A Viable Solution to The Access to Medicine Problem, Vol. 38:3 Brook. J. Int’l L. (2013); Ben Sihanya, Patents, Parallel Importation and Compulsory Licensing of HIV/AIDS Drugs: The Experience of Kenya, WTO, available at https://www.wto.org/english/res_e/booksp_e/casestudies_e/case19_e.htm. See Public Citizen, Kaletra – Abbott’s Abusive Practices, available at http://www.citizen.org/abbottabusivepractices.

[3] The Paris Convention is an intellectual property treaty covering industrial property: patents, trademarks, industrial designs, utility models, service marks, trade names, and geographical indicators. WIPO, Summary of the Paris Convention for the Protection of Industrial Property (1883), available at http://www.wipo.int/treaties/en/ip/paris/summary_paris.html.

[4] Jerome H. Reichman & Catherine Hasenzahl, NON-VOLUNTARY LICENSING OF PATENTED INVENTIONS: HISTORICAL PERSPECTIVE, LEGAL FRAMEWORK UNDER TRIPS, AND AN OVERVIEW OF THE PRACTICE IN CANADA AND THE USA (2003)

[5] The Agreement on TRIPS is an international agreement administered by the WTO that sets minimum standards for intellectual property laws for WTO Members and introduces intellectual property law into the international trade system.

[6] See TRIPS Article 31.

[7] The Doha Declaration was adopted by the WTO Ministerial Conference of 2001 in Doha. It reaffirmed flexibility of TRIPS member states in circumventing patent rights for better access to essential medicines.

[8] Cecilia Oh, Compulsory licenses: recent experiences in developing countries, 1 INT’L J. INTELLECTUAL PROP. 22-36 (2006); Reed Beall & Randall Kuhn, Trends in Compulsory Licensing of Pharmaceuticals Since the Doha Declaration: A Database Analysis, 9:1 PLOS MED e1001154 (2012).

[9] The Special 301 Report is prepared annually by the Office of the United States Trade Representative under Section 301 as amended of the Trade Act of 1974. The reports identify trade barriers to U.S. companies and products due to the intellectual property laws in other countries. The annual report list a “Priority Watch List” and a “Watch List” containing countries whose intellectual property regimes are deemed of concern.

[10] Public Citizen, Public Health Groups Launch Global Campaign Against Abbott Lab’s Monopoly on Critical AIDS Medicine (Nov 2011), available at http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=3451 “After Thailand issued compulsory licenses on AIDS, cancer and heart disease medicines, Abbott retaliated by withdrawing plans to sell several new drugs in the country, and the U.S. government attacked Thailand on a trade watch list. Many countries are hesitant to stand against this pressure.”

[11] Carlos Correa, Integrating Public Health Concerns Into Patent Legislation In Developing Countries, The South Centre at 99 (2000); James Love, Compulsory Licensing: Models for State Practices in Developing Countries, Access to Medicine and Compliance with the WTO TRIPS Accord, IPR Series Third World Network (2004); Frederick M. Abbott, Compulsory Licensing for Public Health Needs: The TRIPS Agenda at the WTO After the Doha Declaration on Public Health, Quaker United Nations Office (2002).

[12] World Health Organization, World Intellectual Property Organization and WTO, Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade (2012), available at https://www.wto.org/english/res_e/booksp_e/pamtiwhowipowtoweb13_e.pdf; Rebecca Goulding and Amrita Palriwala, Patent Pools: Assessing Their Value-Added for Global Health Innovation and Access, Results for Development Institute (Sep 2011); Rebecca Goulding and Amrita Palriwala, Patent Pools: Assessing Their Value-Added for Global Health Innovation and Access, Results for Development Institute (2012).

[13] See Indian experience in Supreme Court Says No to Bayer, Upholds Compulsory License on Nexavar, infojustice.org (Dec 2014), available at http://infojustice.org/archives/33690 The Indian generic drug company Natco obtained the compulsory license to produce generic version of Bayer’s cancer drug from the Indian Patent Office, bringing down the drug’s price by 97% per person per month in exchange for which Natco pays Bayer a royalty fee; See Knowledge Ecology International, KEI Research Note: Recent United States Compulsory License (Mar 2014), available at http://www.keionline.org/misc-docs/recent_cls_8mar07.pdf In multiple cases, the court granted royalty rate for ongoing damages in lieu of a permanent injunction.

[14] See WTO News, Decision removes final patent obstacle to cheap drug imports, available at https://www.wto.org/english/news_e/pres03_e/pr350_e.htm. The 30 August 2003 decision “takes the form of an interim waiver, which allows countries producing generic copies of patented products under compulsory licenses to export the products to eligible importing countries. The waiver would last until the WTO’ intellectual property agreement is amended.”

[15] Article 31bis is an additional article after Article 31 as a part of TRIPS Agreement amendment. It allows pharmaceutical products made under compulsory licenses to be exported to countries lacking production capacity.

[16] Judit Rius Sanjuan, James Love and Robert Weissman, Protection of Pharmaceutical Test Data: A Policy Proposal, KEI Research Paper 2006:1.

[17] United Nations, Investment in Pharmaceutical Production in the Least Developed Countries: A Guide for Policymakers and Investment Promotion Agencies (2011).

[18] Kurt R. Brekke, Chiara Canta, and Odd Rune Straume, Does Reference Pricing Drive Out Generic Competition in Pharmaceutical Markets? Evidence from a Policy Reform, TSE (Dec 2015); Luke M. Olson and Brett W. Wendling, The Effect of Generic Drug Competition on Generic Drug Prices During the Hatch-Waxman 180-Day Exclusivity Period, Federal Trade Commission Working Paper No. 317 (Apr 2013); Congressional Budget Office (CBO), Effects of Using Generic Drugs on Medicare’s Prescription Drug Spending, The Congress of the United States (Sep 2010); The OECD Competition Committee, Roundtables On Generic Pharmaceuticals, Organisation for Economic Co0operation and Development (2009); CBO, How Increased Competition From Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry, The Congress of the U.S. (Jul 1998).

[19] OAPI came into being on 13 September 1962, which was to act as national office for industrial property for 16 members. Members include Benin, Burkina Faso, Cameroon, Central African Rep., Congo, Ivory Coast, Gabon, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Mauritania, Niger, Senegal, Chad, and Togo.

[20] ARIPO was mainly established to pool the resources of its member countries in industrial property matters together in order to avoid duplication of financial and human resources. It currently has 19 States: Botswana, The Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Sierra Leone, Liberia, Rwanda, São Tomé and Príncipe, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

[21] Brook K. Baker, Processes and Issues For Improving Access to Medicines: Willingness and Ability to Utilise TRIPS Flexibilities in Non-Producing Countries, UK DFID, Health Systems Resource Centre (2004).

[22] WHO, Stop TB Infection Control Subgroup of the TB/HIV Working Group and USAID, An Advocacy Strategy for Adopting and Dissemination of the WHO Policy on TB Infection Control in Health-Care Facilities, Congregate Settings and Households: Recommended Actions at International and National Levels (Apr 2010).

[23] See About the MPP on Medicines Patent Pool website, available at http://www.medicinespatentpool.org/about/.

[24] BRICS refers to countries of Brazil, Russia, India, China and South Africa.

Dean Baker, CENTER FOR ECONOMIC AND POLICY RESEARCH

Lead Author: Dean Baker
Organization: Center for Economic and Policy Research
Country: USA

Abstract

The current system of financing pharmaceutical research through patent monopolies or other forms of market exclusivity is fundamentally flawed. It creates an altogether unnecessary problem by making drugs that are cheap to produce extremely expensive to the patients who need them. The fact that most of the cost is borne by third party payers undermines the traditional argument for market prices as conveying information about households’ desires. This system of pricing also leads to the sort of waste and corruption that would be predicted from a system in which government granted monopolies lead to items being sold at prices that are typically several thousand percent above their cost of production.

This proposal outlines a plan for a pilot project of public financed clinical trials. Under this proposal, government(s) would set aside a limited amount of funding to finance clinical trials and bring drugs through national approval processes. This funding would be awarded under long-term contracts (8-10) years on a competitive basis. The winners of the contracts would test promising compounds of their choosing in the areas where they have designated an interest. As a condition of getting the funding, all the results of the tests will be fully available to the public. In addition, whatever drugs are approved would have no exclusivity conditions, so they could be sold as generics.

In addition to making potentially important new drugs available to the public, this pilot will set a model for transparency in research. The practice of disclosing all test results in a timely manner should pressure other pharmaceutical companies to adopt the same practice. In addition, since the contracts and the number of trials will all be public information, this project will also provide substantial insights into the cost of clinical trials and drug development.

Submission

Introduction
The current system of financing research through patents and other forms of exclusivity suffers from all the problems that would be predicted when the government enforces monopolies that raise prices by several thousand percent above their free market price. In addition to the difficulties that high prices create for patients and/or government health services, they also lead to the sorts of waste, abuse, and corruption economic theory predicts.

This proposal is designed to test the merits of an alternative mechanism for supporting the development of drugs. Under the proposal, a government, group of governments, or non-governmental body would set aside a sum of money to finance the clinical tests of promising compounds. This money would be awarded through long-term contracts (8-10 years), issued on a competitive basis, to pharmaceutical companies or non-profit organizations, that developed plans to test compounds in particular disease areas.

Since a major goal of the pilot is to promote transparency throughout the industry, there will be explicit conditions attached to the awarding of the contracts:
1) The protocols for the clinical trials would be publicly available;
2) All results from the trials would be publicly available, with as much patient-level data disclosed as is consistent with preserving anonymity;
3) Tests should include not only new products, but also new regimens (combinations, different doses, etc.)
4) All the outcomes of the tests will be fully available to the public and other producers. This means that rights to test data will be freely available so that all drugs developed through this process can be immediately sold as generics.

The conduct of contractors would be subject to regular review to ensure that tests are being carried through in an ethical manner. Assuming a continuing stream of funding, contracts will be renewed and/or expanded based on the extent to which a contractor can show that their work contributed to public health. Under plausible scenarios the reduction in drug prices and gains to public health should easily exceed the cost of this project.

Publicly Funded Clinical Trials: An Outline
The rationale for a system of publicly funded research trials is to circumvent the need to recover research costs with high drug prices by directly financing the clinical trial portion of the research process. The clinical testing process likely accounts for the bulk of privately funded drug research, although the exact division is difficult to know since the industry does not provide breakdowns of its research expenditures. It is also the portion of the process where conflicts of interest and concerns about misrepresentations of data provide the greatest grounds for concern.

Clinical testing is also the portion of the process that most easily lends itself to public oversight. A clinical trial is a reasonably well-defined product, in which there are clear guidelines for phase 1, phase 2, and phase 3 trials. It is much easier to determine whether these guidelines are being followed in testing than whether pre-clinical research is following a useful path. For these reasons, it is appropriate to target the clinical testing portion of the process for public funding.
While an ideal system may entirely rely on publicly funded clinical trials, it is necessary to establish the potential benefits of going this route on a more limited basis. This could be done by committing a limited pool of funding to support a set of publicly funded clinical trials in one or more areas, such as cancer research.

The strategy would be for the funding to be awarded to private pharmaceutical companies or non-profit organizations, on a competitive basis. The funding would take the form of multi-year contracts (e.g. 8-10 years), which would allow the recipients adequate time to demonstrate the importance of their work. The bidders would indicate a general plan for conducting tests in a particular area, and not commit themselves in advance to a specific set of tests. This would give them the flexibility needed to alter their plans based on their own results and other research. The contractors would also be responsible for getting drugs through the drug approval process in at least some countries. The contracts would be subject to renewal and/or expansion (pending funding) with the major determinant being the ability of the contractors to demonstrate that their work had advanced public health.

The contracts would be attached to a series of conditions.
1) The test protocols and results would be fully available to the public. This means that the protocols should be available at the time the testing begins. The results of tests should be posted on a website on an ongoing basis, with as much patient-level data disclosed as is consistent with preserving anonymity. The goal should be to have a data set that would allow any interested researcher to have the same ability to analyze the data as the company that carried through the research.

2) All the results, including patents and data and marketing rights gains by these firms, would be available to the public on a copyleft basis. This means that any drugs developed through this process could be sold as generics immediately after approval. In cases where a contractor opted to test a compound that was still subject to patent protection they would be responsible for purchasing the rights so that it could be sold as a generic once the approval process is completed.

3) The testing process itself would be subject to regular review to ensure that it is meeting accepted ethical standards, such as proper patient consent. Failure to meet standards would a basis for forfeiting a contract.

The benefit of contracting out the process of choosing compounds and conducting the testing is that it removes the need for a government agency to micro-manage the process and also limits concerns about political interference. The public’s interest in openness and well-conducted trials, as well as open access to the fruits of the testing, is assured by the conditions of the contracts.

In carrying through their work, the contractors would first need to determine which compounds merit testing. There are a vast number of compounds already in the public domain, so for many drugs they may want to test there would be no issue of patent rights. However, there are many newly developed compounds that offer promising treatments. In these cases, the contractors would need to buy the patent rights before they proceeded with testing. In such cases, they would effectively be bidding against competitors that are relying on patent rents to cover their research costs.

Presumably contractors that expected to be testing new compounds would incorporate the projected price for buying patent rights in their bids. In subsequently making the case for a renewal or expansion of the contract they would have to be prepared to show how the health benefits from a new compound warranted the additional expense, since the cost would mean they would be able to perform fewer clinical tests than their competitors.

On the other side, by buying up a patent and placing it in the public domain, they will have opened up an area for testing by other researchers as well. If a contractor’s tests with a patented compound proved unsuccessful, but another contractor was able to successfully use the compound to treat another condition, then the purchase will still have advanced public health. This would be the sort of issue that should be taken into account in determining whether a contract is renewed.

A major difference between the outcome when a publicly funded contractor gains control of the patent and when a private pharmaceutical company has control is that in the former case the patent would be placed in the public domain. This would allow others to benefit from the patent, which could mean experimenting with their own clinical trials based on the compound. However, since the patent is subject to copyleft rules, any competitor who successfully tests the drug and gets it approved for use would also be required to make it available as a generic. In other words, they could not have monopoly rights on the test results, if they used a patent that had been purchased by a publicly funded contractor.

There is an enormous range of estimates on the cost of clinical trials. At the low end, there is data from the Drugs for Neglected Diseases Initiative (DNDI) reporting the combined cost of Phase II and Phase III trials at less than $20 million (DNDI, 2014). At the high end, DiMasi et al report the average cost of Phase I, Phase II and Phase III trials at $36.5 million, $56.4 million, and $86.3 million (in 2013 dollars), respectively (DiMasi, et al., 2014). The DNDI numbers do not include the value of in kind contributions from partner companies. Including the value of these contributions would raise the costs by at least 20 percent, according to an estimate from DNDI, and possibly by considerably more. However two factors that kept costs low are that the tests were conducted in developing countries and also the tests were being conducted on qualitatively new treatments. The latter factor meant that a large sample size was not necessary to find a statistically significant effect. By contrast, if the drug being tested is intended to treat a condition for which one or more effective drugs already exist, it may be necessary to have a very large sample in order to demonstrate a statistically significant improvement in outcomes.

From the standpoint of advancing public health, resources would generally be much better devoted to developing drugs for conditions where no effective treatments exist rather than developing drugs that largely duplicate the function of existing drugs. For this reason, the differences in the cost of the clinical trials would give the right incentives to contractors, in addition to the fact that the development of duplicative drugs would provide much less basis for renewing contracts than the development of breakthrough drugs.

The extraordinary gap between these estimates of developing costs makes it difficult to determine an appropriate level of funding for a pilot project. Ideally, the project should be large enough to produce a reasonable number of successful drugs over a relatively limited time horizon. If the target is 5 to 10 successful drugs over ten years, this could imply total costs as low as $100 million to $200 million using the DNDI estimates. By contrast, the DiMasi et al. estimates would imply costs of between $5.7 billion and $11.4 billion, assuming no new chemical compounds are used. Both figures are over a 10-year horizon, so annual costs with the DNDI estimates would be between $10 million and $20 million, with the DiMasi estimate annual costs would be between $570 million and $1.14 billion.

Even using the DiMasi figures, it is likely that a pilot project could provide savings and public health benefits that would vastly exceed its costs. If the pilot produced just one moderately successful drug (measured in sales volume) the savings could easily exceed $900 million annually. In addition, if the drugs developed primarily benefit people in developing countries, the public health value might vastly exceed the monetary savings in a counterfactual situation.

In addition, the public will benefit from having open research that other researchers could use, as well as doctors and patients. The clinical trials can have patient level data publicly available in the same way that economists make survey data available for general use. The data would show the baseline characteristics for all the patients in the tests. This would make it possible to determine the relative merits of the drugs for people with specific characteristics, such as distinctions based on gender or age, various health conditions, and interactions with other medicines.

Making this information publicly available could become a standard that would be adopted in testing more generally, even in tests that are not conducted by government contractors. This would lead to better treatment, as doctors could make more informed decisions in prescribing medicine. It would also make it more difficult for drug companies to misrepresent research findings. And, it would pave the way for more productive future research, as gaps in treatment would be more apparent.

In sum, the necessary outlays to carry through a limited number of clinical trials are relatively modest compared with current research spending and a trivial relative to the size of total health care spending. Even with modest assumptions on success, the costs should easily be recovered through lower government payments for prescription drugs, as well as reduced tax subsidies to individuals for private expenditures. In addition, this route should allow for better treatment and more effective research since all the findings could be made public for researchers, doctors, and patients could use it. If a limited test of publicly funded clinical trials proved successful, there would likely be public support for adopting this path more generally and applying it to all areas of pharmaceutical research.
 

Bibliography and References

Center for Medicare and Medicaid Services, 2014. National Health Expenditures Projections, 2013-2013. Washington, DC: CMS, accessed at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2013tables.zip.
DiMasi, Joe, 2014. “Briefing: Cost of Developing a New Drug, November 18, 2014,” Tufts Center for the Study of Drug Development,” accessed at http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_RD_cost_study_-_Nov_18,_2014..pdf.
DiMasi, Joe, Ronald Hansen, and Henry Grabowsky, 2003. “The Price of Innovation: New Estimates of Drug Development Costs,” Journal of Health Economics, V22: 151-185.

Drugs for Neglected Diseases Initiative, 2014. “An Innovative Approach to R&D for Neglected Patients: Ten Years of Experience & Lessons Learned by DNDi,” Geneva: DNDI, accessed at http://www.dndi.org/wp-content/uploads/2009/03/DNDi_Modelpaper_2013.pdf.

Schumock, Glen, Edward Li, Katie Suda, Linda Matusiak, Robert Hunkler, Lee Vermeulen, and James Hoffman, 2014. “National Trends and Prescription Drug Expenditures for 2014,” American Society of Health-System Pharmacists, Inc. v.71: e6-e21.

The Government of Japan

Submission: The Government of Japan
Country: Japan

Abstract

The Government of Japan would like to reiterate its appreciation for the efforts made by the High-Level Panel on Access to Medicines.

This year, Japan will host or co-organize a sequence of events significant to the issue of global health. These include the G7 Ise Shima Summit and the G7 Kobe Health Ministers’ Meeting, as well as the Sixth Tokyo International Conference on African Development (TICADVI), to be held for the first time in Africa and where health is obviously one of the essential items on the agenda. As always, Japan is determined to make significant contributions to global health, and we look forward to receiving the Panel’s report. 

Submission

Japan submits the following basic comments:

1)      Japan believes that there are several aspects to ensuring access to medicines, and notes that this issue has been discussed at other fora. Therefore, Japan would like to ask the HLP to consider the existing activities or mechanisms of relevant UN agencies, such as WHO, WIPO, WTO and the UN Commission on Human Rights.

2)      Japan requests the HLP to continue to hold open and transparent dialogues with the Member States as this issue is very important for most Member States and their opinions seem to be diverse.

3)      HLP members and Advisory Board Members should be composed such that this issue can be appropriately discussed from various perspectives.

4)      Japan attaches particular importance to health systems strengthening as a means to ultimately achieve Universal Health Coverage (UHC). As strengthening health systems, including supply chains, contributes to improving access to medicines, its importance should be emphasized more strongly.

5)      How to effectively supply generic medicines is also a very important question, as most basic medicines are already available as generics.

6)      Research and Development (R&D) are also very important. Japan agrees that market mechanisms alone are sometimes inadequate to supply medicines for certain neglected diseases. Based on this understanding, Japan established the GHIT fund in 2013 to promote the R&D of medicines which are not already supplied by market mechanisms and can in some cases even provide royalty free production licenses to LDCs. As such, effective public-partnership mechanisms should be considered.

7)      There are other important elements to be considered as well, including education and capacity building.

8)      Lastly, appropriately protecting intellectual property is very important for the promotion of innovation and R&D. We have to maintain a good balance of intellectual property and increased access.