[Ip-health] UK Labour's "Medicine for the Many", on delinkage

James Love james.love at keionline.org
Tue Sep 24 13:10:30 PDT 2019

This is from the UK Labour Party's new policy document, Medicines for the
Many, on delinkage.


3.3 Research, pilot and expand new incentives for pharmaceutical innovation
through delinkage


In the current model, health innovation is rewarded by the promise and
incentive of monopoly-based profits, leading to expensive medicines which
often fail to meet public health needs. By changing the incentives that
determine what kind of health innovation happens, public health can come
first, while rationing and denial of access could end. Policy steps can be
taken immediately to start the process of changing incentives in the
system, however the impact will be felt over a longer-term period due to
the development time required for drug discovery and innovation.

Delinkage is an innovation model based on the premise that the costs and
risks associated with R&D should still be rewarded, but that the incentives
for R&D can be provided by means other than financial returns from high
product prices during the period of patent protection.

Innovation is instead supported through upfront grants or subsidies and
rewarded by a variety of prizes, including innovation inducement prizes,
market entry rewards, or open source dividends.. cxxx  These incentives,
and the kind of innovation they reward, can be focused on agreed health
priorities informed by multiple stakeholders rather than ceding this role
entirely to pharmaceutical companies, as is the case in the current system.
By replacing market incentives we can ensure that urgent public health
needs are prioritised, especially those that are currently ignored, like
the ones that affect poorer populations or represent low growth markets
such as new antibiotics. Furthermore, a much larger percentage of
investment in pharmaceutical products will go directly into R&D.

These alternative incentives can either replace patents or be used
alongside them, since patents can be managed so as not to result in high
prices. cxxxi For example, patents could play a role in terms of defining
authorship of research and the claim to the prize or market entry reward
revenues, cxxxii but the patent holder would freely license their
technology or license it for particular purposes (eg, for use in public
hospitals or by researchers). This would be included within the
stipulations of the contract of the delinked mechanism in use, whether that
is a research grant or a milestone prize. The crucial element is that the
new incentives replace the market exclusivity element of a patent or any
other exclusivity. cxxxiii

Transitioning to delinkage

Delinkage is a transformative proposal that creates a completely new
incentive structure for health innovation. Moving away from the current
system of patent monopolies, exclusivities and high prices to a fully
delinked model would require international consensus, just as the global
intellectual property model does. This cannot happen overnight but would
require a process of gradual transition over many years. The policies to
manage this transition are known as progressive delinkage, where incentives
are introduced over time in different disease areas while simultaneously
reducing prices.

A first step in this direction would be a feasibility study (see Box 9) to
test the impact of introducing shorter exclusivity periods for drug
monopolies as a way to transition to a delinked model. The evidence from
such feasibility studies, combined with other studies conducted by other
countries, can then help inform a roadmap toward a fully delinked global
R&D model. However, in the meantime, DFID, which already funds some product
development partnerships (PDP) that implement a delinked approach (see DNDI
example below), could make it departmental policy for all PDPs and research
ventures to follow a delinked model.

Box 9

Proposed feasibility study on transitioning to delinkage

A feasibility study could be commissioned to look at how the UK (possibly
in collaboration with other EU countries) could transition to delinkage.
This would involve testing the impact of reducing exclusivity periods of
patented drugs while at the same time progressively introducing non-price
incentives (such as market entry rewards and prizes). Reducing the
exclusivity period of a patent- ed drug could be done through measures such
as compulsory licensing (or alternatively, intro- ducing more aggressive
price controls) after a drug has generated an agreed target of cumulative
global revenue.

By reducing the term of exclusivity we can allow for earlier generic
competition, which implies a drastic price reduction and increased access
for patients.

The study would estimate the negative impact of a shorter term of exclusive
rights (or more ag- gressive price controls) on the industry-wide incentive
to invest in R&D. Simultaneously, the study would estimate how much money a
government would have to spend on one or more of the following four
mechanisms to incentivise biomedical innovation: (1) grants on early-stage
biomedi- cal research, (2) grants on early-stage biomedical research with
conditions attached to ensure that research outputs are kept as open
source, (3) subsidies for clinical trials on drugs to treat diseases where
innovation is a priority, and (4) market entry rewards for drugs that
provide a significant advancement in medical benefits over existing
treatments. cxxxiv--
James Love.  Knowledge Ecology International
U.S. Mobile +1.202.361.3040
U.S. office phone +1.202.332.2670
http://www.keionline.org <http://www.keionline.org/donate.html>

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