[Ip-health] The Scientist: Medicines for the World: A global R&D treaty could boost innovation and improve the health of the world's poor -- and rich

Suerie Moon suerie_moon at yahoo.com
Wed Oct 3 16:33:58 PDT 2012

In this month's issue of The Scientist: http://the-scientist.com/2012/10/01/medicines-for-the-world/
Medicines for the World
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 society.
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 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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