[Ip-health] TWN Info on IP/Health: WHO - Is the Secretariat’s proposal on medicines shortage a windfall for big pharma?

K.M. Gopakumar kumargopakm at gmail.com
Thu Jan 28 02:54:58 PST 2016


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From: TWN News <news at twnnews.net>
Date: Thu, Jan 28, 2016 at 3:51 PM
Subject: TWN Info on IP/Health: WHO - Is the Secretariat’s proposal on
medicines shortage a windfall for big pharma?
To: TWN Mailing List <news at twnnews.net>


*Title :* TWN Info on IP/Health: WHO - Is the Secretariat’s proposal on
medicines shortage a windfall for big pharma?
*Date :* 28 January 2016

*Contents:*

TWN Info Service on Intellectual Property Issues and Health
28 January 2016
Third World Network
www.twn.my

*WHO: Is the Secretariat’s proposal on medicines shortage a windfall for
big pharma? *

Geneva, 28 January (K M Gopakumar) – A proposal by the World Health
Organization secretariat to address shortage of medicines would be a
windfall for big pharmaceutical companies.

The 138th session of the WHO Executive Board is to consider a Secretariat
document titled “Addressing the global shortages of medicines, and the
safety and accessibility of children’s medication” (EB138/41).

The document suggests the possibility of a multi-year advanced market
commitment and a global minimum price as a response to a global shortage of
medicine. The document states:

“At the global level, a set of essential medicines could be identified for
which shortages have been reported or there exists a risk of shortages, and
an international agreement about ensuring continuity of manufacturing and
supply could be investigated … Questions that a general international
agreement would have to resolve include: could a multi-year global advance
purchase commitment be worked out? Would an agreed global minimum price
that is commercially attractive help to keep a medicine on the market? How
would such a price be set?”

Often big pharmaceutical companies stand to benefit from global level
advanced market commitments and it may affect competition in the market.
Further, global advanced market commitments require high level regulatory
compliance and often it helps big pharma, including big generic companies.

The document contains two different issues viz. the global shortages of
medicines and the safety and accessibility of children’s medication. The
part on shortage of medicines provides an introduction, consequences of
shortage, country approaches to shortage and new strategies on shortage of
medicine. It also suggests a potential approach to prevent and manage
shortages of essential medicines.

The Secretariat has not given a satisfactory explanation on shortage of
medicines. It simply states: “The reasons for shortages have been
investigated in many studies and in several countries, and the leading
possible causes include: difficulties in acquiring raw materials,
manufacturing problems, barriers to competition, business decisions, the
impact of new technologies, expensive medicines, and fragmented markets”.

However, the document has not provided any citations of the studies.

Further, the document also cites the following three reasons for shortage
of medicine: “… there is poor availability and quality of data on actual
demand; inadequate management practices in procurement and the supply
chain, combined with large tender contracts that do not sufficiently define
quality standards but whose sole emphasis is on obtaining the lowest
prices; and too small profit margins for manufacturers – all these factors
may lead to shortages”.

The document does not provide any detailed list of instances of such
shortages.

The document recognises the role of generic companies in lowering prices
and increasing affordability. However, without giving any concrete
examples, it warns that: “Too low prices, however, may drive manufacturers
out of the market, and higher prices of alternative newer products may
result in them being preferentially supplied, with a decline in market for
vital but cheaper medicines”.

The document also conflates medicines shortages (the non-availability or
lack of supply) with stock outs (the non-availability of medicines in
health care facilities irrespective of the availability of medicine in the
market). It states: “Continuing to react to stockouts on a case-by-case
basis, especially those caused by market dynamics, will severely compromise
the ability to achieve equitable access to essential medicines; more active
approaches to shaping the market for essential medicines on a global scale
will be needed”.

According to an observer, the shortage of medicines is one of the reasons
for stock outs but all stock outs cannot be attributed to shortage of
medicines.

Further, without providing any evidence yet again, the document states that
shortages of medicines would increase the incidence of circulation of
substandard/spurious/falsely labelled/ falsified and counterfeit (SSFFC)
medicines.

Instead of insulating the availability of medicines from market dynamics,
the solutions suggested by the Secretariat such as advanced market
commitments and global minimum price would eliminate competition and makes
the availability of medicines completely subservient to market dynamics.

The Secretariat proposed the following actions for a potential systemic
approach to prevent and manage shortage of medicine.

   - application of a globalized notification system and response
   mechanisms;
   - proper assessment to define products at risk;
   - global agreement on actions to diminish specific shortages;
   - expansion of regulatory collaboration on essential medicines
   susceptible to shortages;
   - centralized negotiation to preserve essential medicines susceptible to
   shortages including definition of minimum volume and fair price;
   - analysis and understanding of costs of research and development for
   medicines for uncommon diseases in children;
   - expand the activities of the Paediatric medicines Regulators Network
   to promote appropriate legislation, regulatory strategies and capacity, and
   monitoring of medicines in children;
   - continue to promote ethical and appropriate clinical trials in
   children of all age groups;
   - work with partners to ensure appropriate demand for medicines for
   children, including medicines for uncommon diseases.

An observer described the proposed global agreement on actions to diminish
specific shortage as “a camouflage term for advanced market commitments”.

The Secretariat proposed that the Executive Board “note” the document. Even
though there was corridor talk of a resolution on the shortage of
medicines, till today no draft resolution on the subject has been proposed.
However, Member States are negotiating a draft resolution on medicines for
children titled “Promoting the safety and accessibility of children’s
medication”, proposed by China and Thailand.

In the absence of a resolution on shortages of medicines, explicit
objection from Member States is required to prevent the Secretariat from
proceeding with some of the problematic suggestions on future work, such as
a global agreement on actions to diminish specific shortages as set out in
its document.

Third World Network learned that the original proposal on shortages of
medicines was proposed by the United States of America and South Africa
(USA proposal). It proposed several potential measures to address the
issue, including the lifting of price controls in force in many WHO Member
States. The USA proposal stated: “More importantly long term solutions to
these shortages must be sought. These could include dialogue with
manufacturers, changes to policy related to numerous critical points such
as possible lifting of price controls, exploration of pooled procurement or
other approaches to increase production incentives where appropriate,
modifications to procurement practices and developing sustainable local
manufacturing capacity that can reliably step in and respond to specific
needs where global producers have failed to do so”.

This proposal also proposed decision points as follows: “Discussion at the
(Executive Board) with a view to develop decision points for action,
recognizing the urgency of this emerging challenge to universal health
coverage, linked to current work streams, and highlighting the need for
concerted action in this regard, both by Member States and WHO”.  The
Secretariat’s document is silent on this proposal, seeking Member States to
only take note of the document. Interestingly, the USA proposal suggests
“modifications to procurement practices and developing sustainable local
manufacturing capacity that can reliably step in and respond to specific
needs where global producers have failed to do so”. However, the
Secretariat’s document is silent on the suggestion of local production.

Similarly, the Secretariat’s document is also silent on the two-day
Consultation on Managing Global Stock-Outs of Essential Medicines held on
8-9 December 2015. The concept note of the consultation suggested the same
solution as contained in the Secretariat’s document. The concept note
proposed: “Whether it is possible to identify a core set of medicines that
there is international agreement about ‘preserving’ could be investigated.
For example, it is hard to imagine what would happen to the treatment of
many oncological and immunological conditions without methotrexate – yet
this is a product that has been reported as in short supply repeatedly.
Would an agreed global minimum price that is commercially attractive help
keep it on the market? How would such a price be set?”

One observer remarked with concern that the Secretariat’s document based on
the USA proposal shows that big pharma is making the next move to grab the
global generic market.




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