[Ip-health] IP-Watch: UN Panel Report On Access To Medicines Seen As Holding Potential For Change

Thiru Balasubramaniam thiru at keionline.org
Thu Sep 29 08:40:28 PDT 2016


UN Panel Report On Access To Medicines Seen As Holding Potential For Change


NEW YORK – Speakers at a side event to the United Nations General Assembly
last week commended a new report on access to medicines prepared by a
high-level panel hand-chosen by the UN secretary general as containing
fresh ideas and the potential to bring change to a longstanding problem.

The breakfast dialogue, entitled, The Role of Health Technology: Innovation
& Access in the 2030 Agenda for Sustainable Development, was organised on
23 September by the UN Secretary General’s High-Level Panel on Access to
Medicines, whose report was released last week (IPW, United Nations, 14
September 2016).

Speakers included Nobel Prize winner Joseph Stiglitz (US); Prof. Sakiko
Fukuda-Parr (Japan) of the New School in New York; Yusuf Hamied,
non-executive chairman of Indian generics producer Cipla; Malebona Precious
Matsoso, director-general of the National Department of Health of South
Africa; and Winnie Byanyima (Uganda), executive director of Oxfam
International. All of the speakers but Stiglitz were on the panel that
wrote the report. The moderator was Magdy Martínez-Solimán, assistant
administrator and director, Bureau for Policy and Programme Support, UN
Development Programme New York

The event was about the bigger picture questions of ensuring everyone gets
access to the latest health technologies even if they can’t afford it, as
“health takes a central place in human development,” and one of the key
commitments under the SDGs, as the moderator put it. For instance, the
report documents how 11 out of 12 cancer medicines in the United States
cost over US$100,000 per patient per year, and for rare diseases, it can be
several hundred thousand dollars per year, “placing an egregious burden” on
patients, he said.

And there are some diseases for which the market-based model has not
delivered at all, he added, such as the looming crisis in antibiotic
resistance or multi-drug resistant tuberculosis and malaria. “We need to
incentivize innovation” for such diseases, said the moderator.

But the event took a turn toward the end when the United States became
strongly outspoken from the audience in its opposition to the report and
its findings.

The United States is the only country that appears to be threatened by the
report. The report suggests alternatives to the current situation where the
world’s poorest and now even many in developed countries are unable to
access medicines, in part due to high prices brought on by lack of
competition and patent rights. The US issued a statement condemning the
report, calling it flawed and too narrow for insufficiently addressing
other impediments to access, and strongly reacting to what it sees as a
challenge to the intellectual property system and innovation. These views
were restated by the US representative in the audience of the side event,
which in turn drew a strong response from panellists and others in the

Stiglitz: US Trying to Renege on International Law

In his remarks, Stiglitz commended the report, saying it addresses issues
percolating beneath the surface. He said the United States has been “trying
to renege” on international law to which it agreed. “You sign an agreement
and then you effectively try and undermine that agreement,” he said. The
report addresses such issues, he said, making it more difficult for
advanced countries to use pressure on countries not to take advantage of
the flexibilities built in to international law.

The report may not go far enough, said Stiglitz, as it could mention
automatic licences, or changing the burden of proof of what you need to do
to get a licence, to make it more difficult for developed countries to use
their power to pressure developing countries.

The report recommendations explicitly talk about pressure on such
countries, which Stiglitz said he has “seen again and again” around the

Referring to the US statement, Stiglitz said he was “astonished” at the US
statement, and that the US “clearly” had not read the report if it said it
is not enough about innovation, as “the whole thrust of the report is about
innovation.” It was clear, Stiglitz said, that the US statement was written
by a lobbyist, which he said is understandable as the government is
“understaffed and [they] don’t have time to do their own writing.” But, he
said, “it was a little bit of an embarrassment from our government that
they should have had such a one-sided” view.

Stiglitz particularly took aim at recent trade agreements, as he said he is
troubled that they do an “end-run around” of the public discussion of
finding the right balance between protection as an incentive for
innovation, and distribution of the benefits of that.

“They are trying to use trade agreements to get a more favourable agreement
for big pharma than they could if they had an open discussion with each of
our countries,” he said, which can upset the “delicate balance” reached
through the political process.

Stiglitz made another distinction: In other issues in economics, “there are
not lives at stake.” But when talking about access to life-saving
medicines, “we are talking about lives.” The outcome of this battle is not
just an economic trade-off, as, he said, it “is going to determine who
lives and who dies.”

And with this issue, the government is always going to be budgetarily
involved in a big way, he said, as the public is going to bear a large
burden of the cost of drugs. So when the costs go “sky-high” through
monopoly rents, the cost is “borne by the average taxpayer,” he said.

And to go further, most of the research done by drug companies is financed
by the government, so “the drug companies are living off knowledge that has
been publicly produced, then capturing for themselves and making us pay
twice,” Stiglitz said. Then this creates a distortion in the choice of
drugs and the direction of research. Profits are not a good guide to where
we ought to be doing research, he said.

“You have to realise this is not like producing a better tablecloth. This
is fundamentally different,” he said. When we pay higher prices or higher
taxes, we sacrifice some other need.

On innovation, the report talks about alternative arrangements and finds
that the current arrangement “actually impedes innovation,” he said. The
report suggests ways that promote innovation.

Stiglitz said the US had an experiment with the case involving the company
Myriad, regarding whether genes can be patented. In this case, he said,
hundreds of thousands of people were dying and Myriad had a patent on two
genes. The company’s test was inferior to one developed by Yale University,
but the company would not let Yale use its test. Because of the inferior
test, a woman did die, he said. The Supreme Court ruled that these patents
were not valid. And in the elimination of those patents, innovation has
increased, said Stiglitz, who worked on the case: Now there are better
tests and prices have come down 90 percent.

Working on that case one of the most important things he’s ever done, the
economist said, referring to the lives they saved.

There is a broad consensus among economists, according to Stiglitz, that
intellectual property provisions should not be included in trade agreements
because they restrict the movement of goods and ideas across borders. Trade
agreements are about facilitating the movement of goods.

For many years, some people have argued that what is needed is a
“TRIPS-minus” agreement, he said, one that eases the ability to use
flexibilities in the World Trade Organization Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS). But instead governments
keep pushing for TRIPS-plus agreements.

The patent system, TRIPS, is not about innovation. It’s about monopoly
profits. He and others were also concerned about the US Section 301,

As to the US violating laws, Stiglitz said when you try to unilaterally
decide not to follow the international law, that’s not the rule of law,
that’s breaking the rule of law.

Most governments cave in to the pressure, he said. But the linkage of
profits of monopolists to other actions by governments is “unconscionable.”
It is wrong to threaten say, Colombia, not to help them with fighting the
drug war if it resists on IP issues, he said. He said senators and
congressmen who are making that linkage ought to be brought out in the
open, and that there should be a register in order to bring such things out
in the open.

In another point, Stiglitz said that science changes very rapidly, so it’s
hard to write rules now that are current in 25 years. He noted that the
number of years of data exclusivity has become a focal point, but said it
is hard to see that number will be same in 25 years. Biologics didn’t
exist. These trade agreements need to be living agreements. A lot of
experts in biologics say it should be zero years, that keeping exclusivity
is impeding innovation, he concluded.

Finally, Stiglitz said that President Obama and the Office of the US Trade
Representative (USTR) differ. USTR seems to working for the drug companies,
while Obama was trying to bring costs of healthcare down. He also raised
concern about budgetary implications, as longer monopoly power, the higher
the price. Less innovative companies want more monopoly profits, he said.
But the equation is that the taxpayers pay.

No More Case-by-Case Solutions

The panel was very much aware of the need to find sustainable solutions,
said Sakiko Fukuda-Parr. There is recognition of a variety of efforts
taking place, public-private partnerships, patent pools, and progress has
been seen, with reductions in medicines prices. This is actually “a story
of remarkable success,” for some diseases, she said. But it was the result
of “incredible effort” on the part of civil society, donor agencies and

Solutions are case-by-case, disease-by-disease, product-by-product,
country-by-country, said Fukuda-Parr, and the panel found this can only be
addressed through a more overarching approach.

It is needed to eliminate gaps so people get needed medical products and to
address health needs not only of today but also tomorrow, she said. The
report gives examples of the gaps, including not only low income but also
now gaps in access for people with higher incomes, in cases such as cancer
and hepatitis C.

“These problems are not going away, so I think what we need is a new
approach, a systemic one,” she said. The core of their recommendations is
to create new models that create new incentives for innovation, she said,
as the current system that fundamentally relies on high prices for R&D is
going to leave these gaps because it is not going to areas where there is
not profit.

That is why there is a need for a system that delinks price from the cost
of R&D, she said, something that was agreed in “groundbreaking” language by
all United Nations members in last week’s political declaration on
antimicrobial resistance.

Innovative sources of financing are being used, like airline taxes. But
there is a limit to how much taxpayers will be willing to pay more taxes,
which is why alternatives need to be explored.

But there is a human rights aspect to the issue, said Fukuda-Parr.
Governments have obligations on human rights and on economy, making sure it
works right. But the commitments for human rights are not talked about very
much, and have very weak enforcement mechanisms compared to trade, she
said. She highlighted the human right to health and access to medicines.

Governments need to take appropriate measures including requiring the
ability of citizens to access affordable medicines, she said. The
commitments governments make often do not match internal rules. That’s why
the Declaration on TRIPS and Public Health was agreed.

It is necessary to put in place way for governments to fulfil their
obligations to highest level of health for their citizens, she said.

“This is an urgent global priority,” the professor said. It is not just
something that can be solved at national level, but requires a global
solution. And it is not just an issue for developing or developed countries.

The report contains a number of “actionable, supportable” recommendations,
she said, and not just for governments. For instance, it recommends
starting to negotiate a code of principles for medical R&D, to get a sense
of priorities, toward a binding convention at a later date.

The panel was mindful of immediate actions but also longer term, she said.
A binding convention is not something that can be done today, but what can
be done is to take much stronger retaliatory measures against violations of
TRIPS agreement.

Making Publicly Funded Research Publicly Available

Yusuf Hamied said access to affordable medicines and healthcare has been
the “mantra of the developing world.” In a side note, he said people may be
unaware that 30 percent of drugs consumed in US originate in India.

Hamied said the HIV/AIDS medicine access should be extended to other
diseases. That affordability factor has been extended to a couple of other
diseases already.

Unfortunately, he said, India capitulated to TRIPS-plus standards, “so we
are at a crossroads of what to do.”

He said that as a scientist he has never opposed patents. “I have only
opposed monopoly,” he said. “I believe in innovation.” But governments are
publicly funding research, therefore the public and humankind should
benefit, he asserted.

He gave an example of nuclear research, where the United States ignored
patents, and with the anthrax threat and bird flu (avian influenza) the US
was prepared. He said was approached by US government to provide generic
versions even though they were under patent in the US.

A recent example of the benefits of voluntary licensing is Gilead licensing
its drug with Cipla, said Hamied. The price was $84,000 per course in the
US, whereas in India it was available at below $300 per course. The same
with HIV, where “you all here pay $24,000 per patient per year,” while the
price is $100 in South Africa.

The divide is “vast,” he said, and the UN report has addressed this, as it
says countries should develop their own licence.

Hamied said the process should start with proposing a voluntary licence. If
not, then ask the innovator for an obligatory licence. If this is denied,
then the country could invoke a compulsory licence.

In other comments, he noted that poor countries are dependent on
international donors, but this is considered as unsustainable. And there
are questions about regulatory approvals and quality as well. Pointing to
the declaration on antimicrobial resistance, he said the generics companies
can do what is needed, as they are “well advanced” in pharmaceutical R&D.
But he said if newer antibiotics are developed with public funding then
should be made avail on an affordable basis to humankind.

We are on the precipice of global healthcare crisis,” declared Hamied, and
acceptance of report will go a long way toward addressing this.

‘Let’s Not Ever Repeat That Again’

Malebona Precious Matsoso reviewed the bleak picture of the world in the
year 2000, when the UN Millennium Development Goals were adopted, as the
cost of antiretrovirals was more than $10,000, “leaving no hope of
survival” for most in South Africa.

Today, there is still “unfinished business,” she said, as second and third
line treatments are still not affordable. And now there is also a problem
with tuberculosis resistance, increasing the burden on the healthcare

The report is an opportunity for response, and introduces a principle of
universality so that no one left behind. The report shows the gaps and the
need to respond.

“Let’s start now, let’s avoid the mistakes of Ebola outbreak,” said
Matsoso, adding: There was development and the work stopped. With Zika,
nobody is talking about future disability and strained resources in the
future in those countries. Yellow fever shortages make no sense. All that
is needed is an outbreak in a developed country perhaps and there will be
production. This is at the heart of antibiotic resistance discussions.

There should be discussion about preservation of some of the products the
world has to make sure are affordable and accessible, she said.

The current discussions about the high-priced EpiPen in the US just
highlights lack of transparency in pricing in the US, she said. It shows
why there are recommendations for delinkage of price and cost. There are
still innovation gaps, she added, such as paediatric gaps since children
are “not small adults,” but need their own formulations.

And, “Let’s move on an R&D treaty,” Matsoso said.

This report presents an opportunity, she said. “Let’s avoid the mistakes we
saw with HIV and AIDS because a lot of people were left behind then. Let’s
not ever repeat that again.”

How Can Authorities Not Know the Real Cost of Medicines?

Winnie Byanyima highlighted that the report pays attention to transparency
and accountability. On the secrecy of the cost of R&D, she said, “how can a
national authority decide if a price is fair if they don’t know the real
cost of making it?”

It is needed to require provision of accurate price information, she said.
Pricing currently is set on the maximum that a market can bear. Secrecy on
patents has chilling effect on generics, she added.

The report calls for transparency in patent info, she noted, and said the
World Intellectual Property Organization should hold a database on drug
patents in all countries.

On drug test results, the report recommends all trials irrespective of
outcome should be made public, she said, noting that the World Health
Organization has website but it is not populated yet.

On trade agreements, she said they usually tie governments’ hands from
taking health measures, yet they are negotiated in secret.

And the report recommends a ban on intellectual property rights in trade
agreements, she said, noting that TRIPS already exists, so why should
countries have more restrictions.

She also noted that any pressure against using flexibilities for pro-health
policies is a violation.

Byanyima highlighted the recommendation that the secretary-general act
swiftly to form a task force for monitoring, and that all sides should
implement right away.


In the audience discussion, the US delegate said the government is also
trying to work on access to medicines, and that “we put our money where our
mouth is” by funding the Global Fund for AIDS, Tuberculosis and Malaria,
Pepfar and others. She also said that only 20 of the 300 medicines on the
WHO Essential Medicines List are under patent, so “we want to know why the
other 280 are not available” if not they are not under IP rights. She
further repeated that IP rights and trade are “essential to innovation,”
and that there is was not a consensus on the report recommendations among
member states nor among panellists.

The intergovernmental South Centre expressed its support for the report and
its recommendations, and encouraged implementation.

An Indian delegate called for the report to be discussed as soon as

A representative of UNAIDS suggested that the report be brought to a
ministers of finance meeting.

A representative of Medicins Sans Frontieres (MSF, Doctors Without Borders)
said they face a crisis of lack of medicines in the field, and that
patients are not going to be discriminated against no matter where they
live. She said US position shows a “complete lack of policy coherence” with
Obama administration, as many of these recommendation are among those put
forward by Obama administration. The moderator blocked ability for a
response from the US.

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