[A2k] A global R&D treaty could boost innovation and improve the health of the world’s poor—and rich.

Ellen 't Hoen ellenthoen.ip at gmail.com
Wed Oct 10 07:19:55 PDT 2012

A global R&D treaty could boost innovation and improve the health of
the world’s poor—and rich.

Dear A2Kers,  You  might be interested in this article Suerie Moon and  
I wrote for The


Kind regards, Ellen 't Hoen

A global R&D treaty could boost innovation and improve the health of
the world’s poor—and rich.

By Suerie Moon and Ellen ’t Hoen | October 1, 2012

Evidence is mounting that the existing global system for
pharmaceutical R&D is badly out of tune with the needs of society.
Recently, national health systems in the United Kingdom and the
Netherlands shied away from providing certain recommended medicines
due to price. In the United States, waiting lists for state HIV drug
assistance are lengthening due to the high cost of drugs (frequently
more than US$20,000 per patient per year)—a painful irony as evidence
rapidly mounts that earlier treatment of HIV not only benefits the
patient, but also reduces the risk of transmission. Medicine prices
are often just as high in developing countries, though incomes are far
lower and social safety nets much weaker. In India, a year’s supply of
the patented kidney cancer drug sorafenib is priced at more than US
$60,000 per year, though the average annual income is less than
$1,500. Governments, insurers, and households everywhere are
struggling to afford new medicines.

At the same time, illnesses that primarily affect populations with
little purchasing power, such as Chagas disease or malaria, are
“neglected” because they offer little return on investment for
industry. It is not only diseases of the poor that get neglected, but
also those with small patient populations, such as ALS, and any other
area of research that fails to generate sufficient market returns. For
example, the empty pipeline for antibiotics has raised concern in rich
and poor countries alike. These drugs are generally given to patients
for a few days, and thus tend to be less lucrative than long-term
treatments for chronic diseases such as diabetes, HIV, and heart
disease. We are saddled with an R&D system that suffers from declining
rates of innovation, unaffordable prices for end products, and a
misalignment between research investments and the medical needs of

Patents are a blunt policy tool: they require trade-offs between
innovation and the high prices that restrict patient access to

No single country can manage this problem alone. Pharmaceutical R&D is
increasingly a global endeavor, undergirded by global rules. Today,
research advances produced anywhere can benefit people and contribute
to scientific progress everywhere. But financing knowledge production
is tricky. Some countries may be tempted to benefit from the knowledge
contributed by other countries, but not make commensurate investments.
Such “free riding” could, in turn, result in global underinvestment in
R&D or limitations on knowledge sharing. A set of rules is needed both
to ensure that countries contribute fairly and to create norms and
incentives to share knowledge as widely as possible.

This past April, a group of international experts convened by the
World Health Organization (WHO), known as the Consultative Expert
Working Group on Research and Development (CEWG), recommended just
this solution—that countries begin negotiations over a binding treaty
on medical R&D.

Better than patents

At the moment, the main set of global rules shaping R&D is the 1994
World Trade Organization Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), which requires countries to
provide patent protection for drugs and other health technologies.
Patents allow pharmaceutical firms to recoup their investments by
charging a monopoly price (higher than the cost of production) for new
medicines. All countries purchasing patented medicines are thus making
contributions towards R&D through these higher prices.

But patents are a blunt policy tool: they require trade-offs between
innovation and the high prices that restrict patient access to
medicines. Such trade-offs can be deadly and are neither morally
acceptable nor politically sustainable in a world where 85 percent of
the population lives in low- and middle-income countries (with annual
per capita incomes from $230–$12,000). Patent rights are also
insufficient for directing R&D activities to those areas most needed
by society, as the examples of neglected and rare diseases and the
shortage of new antibiotics make clear. Finally, by erecting walls of
property rights around bundles of information, patents can impede the
aggregation of knowledge that powers innovation.

A global R&D treaty could encompass a number of measures that would
improve the existing system. For example, countries could commit to
making sustainable contributions to an international R&D fund. This
fund, analogous in some ways to the US National Institutes of Health,
could pay the full costs of R&D so that there would be no need to
recoup investments and medicines could be sold at cost, making
treatments much more affordable and health systems more sustainable.

The system could also drive research into priority diseases, either
through traditional grant funding or through novel incentive
mechanisms such as prizes for the successful development of products.
Furthermore, the treaty could establish norms for open innovation and
create incentives to share research findings quickly in order to
accelerate the R&D process. Finally, it could codify obligations for
the ethical conduct of clinical trials, which are taking place in more
and more countries but may not always be overseen by strong,
experienced regulatory institutions. All of these measures are geared
toward a global R&D system that would deliver both innovation and
equitable access to medicines.

While crafting such a system may seem ambitious, it is not such a
radical departure from existing initiatives. For example, an
interesting precedent was set by UNITAID, an international
organization funded by 29 countries that has raised $2.1 billion
dollars over 5 years, primarily through a tax on air travel. The funds
are used to make drugs and diagnostics for HIV, tuberculosis, and
malaria more affordable or better adapted for use in resource-poor
settings. The lower prices and new products generated through this
effort are global public goods that provide potential benefits for
everyone. UNITAID demonstrates that a critical mass of countries can
come together to address global system failures that affect them all.
The broken R&D system is ripe for such a collaborative effort.

Since the CEWG report was issued, many questions have arisen regarding
the treaty proposal: How much would countries contribute? How many
countries would be needed to make the system work? How would
priorities be set, and how would progress be monitored? These all
remain open questions. While the CEWG made some specific
recommendations, such as for financing, incentives, and monitoring,
these remain proposals that governments will now need to debate and
negotiate—the onus now rests on them to build a better system for drug
R&D. (See the full report at http://bit.ly/CEWGreport)

Next month, government representatives will convene at the WHO in
Geneva to decide how to move forward. When they do so, they should not
forget the urgency of fixing a system that fails to meet the needs of
the majority of the world’s population. While a treaty won’t solve
every health challenge or all the woes of industry, building a system
of global norms, rules, and incentives that makes public health the
key driver of pharmaceutical research would move us towards a more
equitable, healthier world.

Suerie Moon is research director of the Forum on Global Governance for
Health at the Harvard Global Health Institute.

Ellen ’t Hoen is a lawyer and a research fellow at the IS Academy HIV/ 
AIDS School for Social Science Research at the University of  
Amsterdam, the Netherlands.

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