[Ip-health] Health Policy Watch: Japan Claims There Is No Evidence That “Delinkage” Improves Medicines Access

Thiru Balasubramaniam thiru at keionline.org
Tue Jul 16 05:16:06 PDT 2019


Japan Claims There Is No Evidence That “Delinkage” Improves Medicines Access
16/07/2019 by David Branigan

Japan said on Friday that it disagrees with aspects of an already-adopted
Human Rights Council (HRC) resolution on access to medicines, claiming that
there is no evidence that “delinkage” between the cost of research &
development (R&D) and the price of medicines improves access to medicines.
Japan also disagreed with pursuing alternative frameworks for R&D
incentives, which it said disregards existing R&D frameworks.

These and other provisions had been previously criticised by other
developed countries during the informal consultations on the resolution as
treading too far out of the Human Rights Council domain and into the
technical ground of other UN agencies such as the World Health
Organization, the World Trade Organization (WTO) and the World Intellectual
Property Organization (WIPO), where such debates are already taking place.

During Friday’s closing session of the HRC, Switzerland, on behalf of
Australia, Canada, the Czech Republic, France, Liechtenstein, Slovakia and
the United Kingdom, said: “While the Human Rights Council can consider the
right to the enjoyment of the highest attainable standard of health, it
lacks the necessary technical expertise and competence to address the full
complexity thereof.”

Debates abound regarding the best way to incentivise R&D of new medicines
while ensuring access – some member states in the HRC see this as a
technical matter, while others see it as a human rights imperative.
Delinkage is one model that, according to its proponents, can help to ease
the tension between innovation and access, by “delinking” the profit motive
from the R&D of new medicines.

Knowledge Ecology International (KEI), a leading NGO promoting access to
medicines, describes delinkage as “the idea that temporary monopolies and
the associated high drug prices should not be used to fund pharmaceutical
research and development.” Delinkage also refers to “a set of policy
proposals that would replace monopolies and high prices with alternative
incentives based upon cash rewards, and expanded funding for research, drug
development, and clinical trials through a combination of grants,
contracts, tax credits, and other subsidies.”

The day before Japan’s and Switzerland’s comments, on 11 July, the Human
Rights Council passed the resolution on “Access to medicines and vaccines
in the context of the right of everyone to the enjoyment of the highest
attainable standard of physical and mental health,” which was sponsored by
the “core group” of Brazil, China, Egypt, India, Indonesia, Senegal, South
Africa and Thailand, and cosponsored by 45 other countries.

Japan explained during Friday’s session of the HRC that it joined the
consensus of member states to adopt the resolution “given the importance of
access to medicines and vaccines,” but it raised concern that the
resolution does not accurately reflect the opinions expressed during the
informal consultations with member states, and that it does not
appropriately take into account relevant technical discussions occurring at
the WHO, the WTO and WIPO.

In the statement, Japan expressed disagreement with paragraph OP5 on
delinkage, claiming that “there has been no evidence found to prove that
delinkage between the cost of R&D and the price of medicines will improve
access to medicines.”

Japan further disagreed with paragraph OP8 on alternative frameworks to
reward innovation because “it disregards existing frameworks,” and because
a “common understanding on an alternative framework does not exist.”

Japan’s comments regarding delinkage and alternative R&D frameworks follow
intense debate among member states at the recent World Health Assembly in
May, over a resolution on the transparency of medicines markets. This
landmark resolution primarily focused on enhancing the transparency of
medicines prices, and due to the intense negotiations, included only
watered-down provisions on R&D cost transparency, which emphasised the
voluntary nature of such disclosures.

KEI Says Monopolies Cause High Prices, Calls For Delinkage From Monopolies

James Love, Director of Knowledge Ecology International (KEI), a leading
NGO promoting models for delinkage, responded to Japan’s statement at the
HRC, saying that monopolies cause high prices, and high prices limit access.

“There is certainly plenty of evidence that temporary legal monopolies,
such as patents, pediatric, orphan drug or test data exclusivity, lead to
high prices,” Love told Health Policy Watch.

There is also “plenty of evidence that when monopolies end, prices fall,
dramatically, more than 95 percent for small molecules in the United
States, and access expands. Anything that delinks the incentives from the
monopoly and high prices is going to expand access, in some cases very
dramatically,” he said.

Regarding the definition of delinkage, Love clarified that there is “of
course, not much of a direct link between R&D costs and prices, but that is
not the point. The monopoly is the primary incentive to invest in R&D, and
that incentive is very clearly and very strongly linked to higher prices.”

“As regards evidence, Japan was one of a handful of countries that is
seeking to block transparency of R&D costs, so complaining about the lack
of evidence is not a good look for Japan, as long as they oppose
transparency of R&D costs.”

“The real issues for delinkage,” Love explained, “are (1) how would
alternatives be designed, (2) what would they cost, (3) what would be the
progressive transition from the status quo, (4) how would they be
evaluated, for example, in a feasibility study?”

Love noted that KEI and others including economist Joseph Stiglitz and US
Members of Congress are calling for a balanced delinkage regime – one that
“includes expanded government funding and subsidies for research, and new
market entry rewards to replace the monopoly as the incentive mechanism.”
In such a balanced regime, “[d]ifferent governments could embrace different
approaches on delinkage, just as they do on pricing and intellectual
property policies today.”

“To move the delinkage debate forward,” he said, “there needs to be more
transparency, an issue that the World Health Assembly has advanced and
other UN bodies are debating, on the entire value chain for medical
innovations, including R&D costs, prices, revenues, access and outcomes.
There also needs to be clear specifications of the alternatives, including
the transitions from the status quo.”

“What you see in these UN debates are efforts to block any questioning of
monopolies, and even feasibility studies of alternatives. If Industry did
not think alternatives would work, and work better for the public, they
would not oppose the feasibility studies.”

Japan detailing concerns on 12 July regarding aspects of the adopted Human
Right Council resolution on access to medicines and vaccines. Photo: UN Web

Japan Narrowly Interprets Intellectual Property Flexibilities, Disagrees
Over HRC Intersessional Seminar

In addition to its concerns over delinkage and alternative frameworks to
reward innovation, Japan also disagreed with paragraph PP24 in the
preamble, which affirms the rights of states to flexibly apply intellectual
property rules. These intellectual property “flexibilities,” enshrined in
the WTO TRIPS (Trade-Related Aspects of Intellectual Property Rights)
Agreement and its amendments, allow states to override patents and legally
manufacture affordable generic versions of patented drugs for the purposes
of protecting public health.

Japan described the resolution paragraph affirming the use of these
flexibilities by states as “misleading,” and that intellectual property
flexibilities such as compulsory licensing of patented drugs “is possible
only under certain conditions.”

Lastly, Japan disagreed on the final paragraph OP14 to hold a full-day HRC
intersessional seminar “on good practices, key challenges and new
developments relevant to access to medicines and vaccines,” because a
similar discussion is already being led by the WHO; relevant technical
organisations such as the WTO are not being included; and such a seminar
has “program budget implications.”

Despite Japan’s complaint about the intersessional seminar, it will proceed
as planned and as outlined in the resolution, according to sources.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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