Expensive medicines: a global problem. Corporate greed trumps public health

Transcription

1 Campaigner briefing 1 Why the corporate control of medicines is a global justice issue September 2017 The pharmaceutical industry makes billions in profits each year from charging high prices for medicines. Meanwhile, millions suffer and die from treatable conditions because they can t afford extortionate prices. This is a system driven by corporate greed and leaves vital medicines out of reach for millions of people and cash-strapped public health systems - in the UK and around the world. Medicines should be accessible for all and democratically controlled in the interest of public health. Expensive medicines: a global problem In 2015, Martin Shkreli or pharma bro hit the headlines for hiking up the price of Daraprim - a lifesaving anti-parasite drug widely used by AIDS patients. After acquiring the rights to the drug, he raised the price by 5,000% overnight - soaring from USD $13.50 to $750 per dose. After a public backlash, he was forced to reduce its price. This is not a case of one bad apple. Unfortunately hiking up the prices of vital medicines is commonplace among the pharmaceutical industry in a system designed to maximise corporate profit. Almost two billion people worldwide lack access to essential medicines. Historically the impact of expensive medicines has been a problem for people living in low and middle-income countries. But with increases in diseases like cancer and diabetes, combined with financial pressures on national health budgets, the problem of expensive medicines is hitting richer countries as well and the NHS has had to increasingly ration or reject effective medicines because of high prices. At the end of 2013, drugs company Gilead launched a new medicine that could cure hepatitis C. However, Gilead has priced the drug so high that millions of people cannot access it. Across the world an estimated 400,000 people die unnecessarily each year from hepatitis C, even though a cure exists. Even in the UK, this treatment is unaffordable. At a cost of 39,000 for a 12-week course, NHS England has been forced to ration it to less than 1 in 20 patients, reserving the drug for the most severe hepatitis C cases. Corporate greed trumps public health Pharmaceutical companies can charge high prices because new drugs are patented. This gives companies exclusive rights on that drug for 20 years. Realistically, it takes a few years to get medicines to market and so in effect patentholders get approximately 7 to 15 years monopoly. This situation is made worse by the practice of evergreening - minor changes made to a drug as it comes to the end of its patent period. The drugs company can then be re-patented to effectively prolong the drug s monopoly. This monopoly system is entrenched globally through the trade agreement, Trade Related Aspects of Intellectual Property Rights (TRIPS), that sets global standards on patents. (See campaigner briefing: How global trade deals boost the power of pharmaceutical companies) Pharmaceutical companies justify patent protection and high prices by saying they need to recoup their research and development (R&D) Is the tide turning? There is a growing recognition that the profit-driven R&D model is not working. In September 2016, the UN published a report calling for alternative models of R&D to be developed that prioritise public health needs over corporate profits. This has been echoed by both the European parliament and a declaration signed by all EU health ministers (including the UK) in 2017.

2 costs. But corporate research often isn t innovative but just making minor adjustments to existing drugs so that they can be re-patented. There is little transparency as drug companies often keep their R&D costs secret. But whatever the R&D costs are, we do know that marketing spend far outstrips the amount that big drug companies spend on R&D - that s the case for nine out of the top ten of the biggest pharmaceutical firms. Also frequent pricing scandals point to drugs companies charging prices based on what they can get away with. Last year, the Competition and Markets Authority fined the pharmaceutical giants Pfizer and Flynn Pharma a record 89.4 million for charging excessive and unfair prices for an epilepsy drug. The NHS had paid 2 million for the epilepsy medicine in 2012, rising to 50 million the following year as its price was hiked up by an eyewatering 2,600%. The industry argument that high prices are necessary to cover R&D costs is further undermined by the amount of public funding that goes into R&D. Globally, 30% of the annual investment into pharmaceutical R&D comes from the public sector. For innovative, early-stage research, studies have shown that this percentage is a lot higher. Often the drugs that have been developed from publicly-funded R&D is bought up by pharmaceutical companies, patented and then sold at astronomical prices. Taxpayers end up paying twice for the health innovation, first through publicly-funded research and then again by paying high prices (either directly or through public health systems). The profit-driven R&D system is failing In addition to unaffordable medicines, the profit-driven R&D model has other damaging consequences for global public health: There is a severe lack of investment into diseases that are not profitable. These are often diseases that affect and low and middle-income countries, such as tuberculosis (TB), ebola and malaria. TB killed 1.5 million people in 2014 alone but until the end of 2012, no new drug had come to market for nearly fifty years. This system also discourages scientific collaboration and hampers technological progress as scientists work in competition and secrecy. Often researchers cannot use patented drugs as a basis to develop other new drugs or combination drugs. Confronting corporate power The overwhelming power of global corporations is a major problem in today s global economy. Profit and the interests of the richest become more important than human rights or fighting poverty. There can be no global justice without tackling corporate power. This requires a mix of solutions including alternative economic models and creating better systems to regulate and hold corporations to account. This new campaign is part of our continuing work to challenge and control corporate power. Global Justice Now s campaign This campaign will challenge the structures that enable corporations to charge extortionate prices for vital medicines and push for alternative models of R&D investment that prioritise public health needs, accessibility and affordability for all. The campaign will: Call on the UK government to attach conditions to public funding given to R&D to ensure that medicines developed with public funding are affordable and accessible for all patients - in the UK and globally. Push the UK government to support negotiations for a R&D convention at the World Health Organisation. We will work with the international movement to create a global R&D system where public health needs are prioritised over corporate profit. Challenge the expansion of intellectual property protection. The campaign will work with the global movement to prevent the expansion of TRIPS at the WTO and in post-brexit trade deals. Global Justice Now campaigns for a world where resources are controlled by the many, not the few. With thousands of members around the UK, we work in solidarity with global social movements to fight inequality and injustice. Global Justice Now, 66 Offley Road, London SW9 0LS t: e: offleyroad@globaljustice.org.uk w: globaljustice.org.uk

3 Campaigner briefing 2 Big drug companies are bleeding our NHS dry September 2017 Access to medicines has historically been a problem in poor countries. But as the price of medicines continues to rocket, even rich countries are struggling to keep up. This briefing gives an insight into the crisis the NHS is facing over high drug prices. England and the devolved nations have separate NHS institutions and budgets. Where nothing else is mentioned, the statistics in this briefing are for NHS England. The NHS is in crisis. In early 2017 the Red Cross stepped in to address the humanitarian crisis. Budget cuts combined with an aging population are the main factors responsible. But drug prices have shot up dramatically over the past decades and are cutting deeply into the budget that s supposed to pay for nurses and hospital beds etc. The NHS hands over billions of pounds to big pharmaceutical companies on an annual basis. And that amount is going up. The NHS drug bill rose by 3.8 billion in 2016 compared with That is more than twice the total NHS deficit last year ( 1.85 billion). NHS budget under pressure The NHS budget for the whole of the UK in 2015/16 was billion (of which NHS England s Budget was billion) which accounts for 29.7% of UK public spending. The NHS budget is around 6% of GDP (and is falling compared to GDP) compared to the EU average of 8.5%. NHS budgets are under increasing pressure. The budget squeeze is hitting particularly hard as people are generally living longer and older people tend to need more health care. At the same time council-run social care is on the brink of collapse due to cuts to local government budgets and fewer people are receiving care at home, resulting in more pressure on NHS hospitals. With stagnating wages and removal of student bursaries, the NHS and social care providers are also facing a staff shortage crisis. The budget for the NHS has grown every year to meet increasing demand and costs, at an average of 4% since it was founded in Under the last Labour government, NHS budget growth reached close to 6%, but under the Lib Dem / Conservative and the current Conservative government, growth of NHS budgets have been squeezed to closer to 1%. To make ends meet on the current budget, the NHS will have an efficiency requirement (i.e. cuts) of 22 billion by 2020/21. How fast are drugs prices going up? There are many reasons why drug prices are rising but with the lack of transparency surrounding how much the NHS is paying for many patented drugs, it s impossible to get a complete overview. What we do know is that some drug prices are going up drastically. Occasionally the Competition and Markets Authority (CMA) fines drug companies when price hikes get too extortionate. But these fines have not changed the behaviour of those companies. In early 2017, researchers revealed that the price How much does the NHS spend on drugs? NHS spending on drugs is going up rapidly, both in absolute terms and as percentage of the total NHS budget. Part of this increase is because of increasing demand on the NHS, but drug companies are consistently putting up prices of their drugs, ramping the NHS bill up much faster both in real terms and as a proportion of the NHS budget.

4 of 20 cancer drugs had gone up by more than 100% in the last five years - two of them by more than 1,000%. These price hikes had cost the NHS 370 million in one year. The drugs in this case are generic, showing a particularly worrying trend in price rises across patented as well as nonpatented drugs. And in some cases price hikes have forced the NHS to stop or restrict the use of some medicines such as when the company AMco increased the price of its life-changing thyroid medicine by more than 5,000% in How does the NHS safeguard itself against expensive drugs? The UK has put in some safeguards against rapidly rising drug prices. The main one is the National Institute for Health and Care Excellence (NICE) which decides whether new drugs are cost effective for the NHS. Once NICE approve a new drug, the NHS normally has 90 days to introduce it. However this rule is being changed for drugs expected to cost the NHS more than 20 million a year. For these top priced drugs, the NHS can ask NICE to extend the amount of time to introduce the drug in some cases for three years. This has faced criticism by health campaigners for delaying the introduction of new drugs into the NHS but it is also a reflection of the financial burden that expensive medicines are having on an already strained NHS. Between 2000 and 2015 NICE rejected on average 15% of new drugs in general, including almost a third of new cancer drugs - compared to France and Germany rejecting only 20% of new cancer drugs in the same period. In some cases after rejections by NICE, companies strike deals with the NHS in which the cost of the drugs are not disclosed to the public. That was the case in 2017 when Roche struck a deal with NHS England to reintroduce breast cancer drug Kadcyla. The slower introduction of new medicines in the UK is bad for patients, but the fault is with companies charging extortionate prices that the NHS cannot afford. The NHS is constantly caught in a battle between profiteering corporations and patient groups who understandably want access to new drugs immediately. The Cancer Drugs Fund was set up in 2010 by the coalition government to give cancer patients access to drugs that were deemed too expensive for NICE. But the scheme is increasingly under fire for high costs ( 1.27 billion from ) and lack of effectiveness. Recently several drugs, including breast cancer drug Kadcyla (when it was unavailable on NHS England), were axed because the Cancer Drug Fund couldn t afford them. Another attempt to allow better access to new medicines is the Pharmaceutical Price Regulatory Scheme, which guarantees a refund from the company for a drug if the NHS spends more than an agreed amount of money on that drug in one year. However, the scheme is voluntary and the money is refunded to the department of health rather than the NHS trusts paying for the medicine. It also doesn t help patients who need drugs rejected by NICE - so the actual impact is dubious and the scheme could be perceived as a way for drug companies to circumvent NICE restrictions. NHS Scotland NHS Scotland is also facing severe budgetary pressures exacerbated by high drugs prices. Drug costs for NHS Scotland went up by 150 million or 10% between 2012/13 and 2014/15 (after adjusting for inflation). Over a ten year period from 2004/05 to 2014/15 the costs of drugs for Scottish hospitals went up 53%. And last year, 13 out of the 14 territorial NHS boards in Scotland mentioned drug costs as a financial risk. Global Justice Now campaigns for a world where resources are controlled by the many, not the few. With thousands of members around the UK, we work in solidarity with global social movements to fight inequality and injustice. Global Justice Now, 66 Offley Road, London SW9 0LS t: e: offleyroad@globaljustice.org.uk w: globaljustice.org.uk

5 Campaigner briefing 3 Global trade deals boost the power of pharmaceutical companies September 2017 Expensive medicines have left millions of people around the world without access to effective treatment. The rules that enable pharmaceutical companies to charge soaring prices for medicines were written by corporations themselves in an international trade agreement called Trade-Related Entrenching corporate interests in international law The TRIPS agreement came into force in It was a major victory for the pharmaceutical industry and was the single biggest expansion of intellectual property protection in history. Intellectual property is the catch-all term used for patents, copyright, trademarks and similar tools which give people recognition or financial benefit from what they create or invent. TRIPS extended the rich country s approach to intellectual property and made it the global standard that all World Trade Organisation (WTO) members had to comply with. Business lobbyists played a big part in driving this agenda and shaping the agreement itself so it s no surprise that the biggest winners were corporations. TRIPS introduced a standard 20 year patent for new medicines from when they are registered. This gives companies exclusive rights on that drug for 20 years. Realistically, it takes a few years to develop a medicine and so in effect patent-holders get approximately 7-15 years monopoly in the market. Patents provide legal protection to the patentowner to prevent others making, using or selling a new invention for a limited period of time - a legal monopoly. With no competition, patents enable corporations to charge whatever price they want for vital medicines. Pharmaceutical companies argue that patents provides an incentive for innovation, but the reality Aspects of Intellectual Property Rights (TRIPS). This set up the legal framework that gives monopoly protection on new drugs. It not only entrenches a high priced, monopoly system for medicines but its agenda is being further expanded through new trade deals. is very different. The big problem with patents is that they protect the profits of corporations at the expense of public health. Patent-owners only have an incentive to produce medicines for people who can afford to pay high prices. A deadly example of this is from the HIV/AIDS pandemic. The first effective treatment for HIV/AIDS became available in the mid-1990s, but millions could not afford the USD $10,000-a-year price tag for the drugs, especially in the global south. Even with developments to improve access later on, the patent system still keeps prices high for newer, more advanced treatments. There are still one million people dying from HIV/AIDS each year and an estimated 35 million deaths since the beginning of the epidemic. Attempts to reform TRIPS Within the original TRIPS agreement, there were provisions built in to address some of the pitfalls of the patent system: Patent holders can grant a voluntary license to another manufacturer to make the patented drug - often in exchange for royalties. The government can issue a compulsory licence to authorise the use of a patented drug without the consent of the patent-holder. These are known as TRIPS flexibilities i.e. they allow WTO members to have some flexibility in how to apply the TRIPS agreement in order to meet public health priorities. Compulsory licences can be used

6 to enable the sale of medicines at dramatically lower prices, particularly within public health systems. Unfortunately in practice, compulsory licensing is rarely used due to cost, complexity, and the threat of political or trade retaliation. In 1996 the first effective drugs to treat HIV became available on the market. These drugs turned HIV from a death sentence to a manageable disease but only for the people who could afford the USD $10,000 price tag. At the face of this catastrophe and under pressure from groups like Treatment Action Campaign, South Africa s government under Nelson Mandela, decided to set aside international patents on HIV medicines and import cheap, generic versions of the drugs. South Africa faced trade sanctions by the US and big drug companies took South Africa to court in 1998 for threat to their profits, but eventually had to drop the case in 2001 because of international outrage. Following South Africa s inability to use these flexibilities without sanction, a special session on the TRIPS agreement was held that led to the Doha declaration on TRIPS and public health in This reaffirmed existing flexibilities and acknowledged that something more was needed for countries that cannot manufacture medicines themselves. In 2017, an amendment finally came into effect to enable such countries to import drugs made under compulsory licence. In spite of these developments, compulsory licensing is not often used in practice due to fears of retaliation from other governments and pharmaceutical companies. The UK government has never issued compulsory licenses either and instead has a record of enforcing stringent intellectual property protection for corporations. But the framework exists to do so and the UK using compulsory licenses could encourage other governments to take similar measures to ensure essential medicines reach those who need it. Dangerous trade deals Not content with TRIPS, corporations are going even further in strengthening intellectual property rights through trade deals. Recent negotiations of multilateral trade deals such as the stalled US-EU trade deal - TTIP (Transatlantic Trade and Investment Partnership) and the Trans-Pacific Partnership have sought to expand the reach of intellectual property protection. They have included provisions that: Extend the duration of a patent beyond the 20 year limit as required by TRIPS. Make it easier for a company to obtain a patent by lowering the criteria of what can be granted patents. Prevent drug safety regulators from using the data from clinical trials conducted by the original patent-holder, thereby slowing down the approval of generic drugs. Such provisions go beyond the standards within TRIPS and are dubbed TRIPS-plus. The inclusion of TRIPS-plus provisions in future trade deals would make an already flawed and dangerous agenda much worse. In addition to these expanded provisions, new trade deals have also included mechanisms that establish private courts that allow corporations to sue governments for introducing policies that might affect future profits. For example, big pharmaceutical companies could sue governments who try to decrease medicine prices, update pharmaceutical licensing laws or reject a patent application. This restricts the ability of governments to pursue policies that meet public health priorities and instead elevates the rights of corporations over people s rights to public health. With the UK home to big pharmaceutical companies, the British government is likely to bat for the pharmaceutical companies in future trade deals for when we leave the EU. This raises big dangers when the UK tries to negotiate a deal with a country like India that continues to maintain its industry in generic medicines. We need to increase democratic control of trade deals as well as challenge upcoming trade deals that could strengthen the power of drug companies and their global grip on medicines. Global Justice Now campaigns for a world where resources are controlled by the many, not the few. With thousands of members around the UK, we work in solidarity with global social movements to fight inequality and injustice. Global Justice Now, 66 Offley Road, London SW9 0LS t: e: offleyroad@globaljustice.org.uk w: globaljustice.org.uk

7 Campaigner briefing 4 Challenging corporate control of medicines in the global south September 2017 We have plenty of life-saving medicines, yet millions of people, and even governments, cannot afford the high prices charged for those medicines. We could cure or treat many more diseases, but those who suffer from them are too poor to provide a lucrative market for drug companies. The brunt of this injustice is felt by working, and even middle class people, in countries of the global south. A bit of history In 1978 the ground-breaking Declaration of Alma Ata stated that good health must be realised as a right for all people by the year The statement critiqued the existing gross inequality and said this could only be overcome by a radically new international economic model. In 2000 a new declaration, the People s Charter for Health, was agreed in Bangladesh, criticising the failure to realise the dream of Alma Ata, laying the fault clearly at the negative forces of globalization which prevent the equitable distribution of resources and calling for the effective regulation of corporations and the transformation of the World Trade Organisation and the global trading system. The People s Health Movement was born and continues to flourish. The huge power and impact of pharmaceutical corporations, in particular, became a major focus of the anti-globalisation movement in the late 1990s. Activists fought against the attempts of the pharmaceutical industry to monopolise the sale of newly developed HIV/AIDS medication and against the new TRIPS agreement in the WTO (See campaigner briefing: How global trade deals boost the power of pharmaceutical companies). South Africa and the battle for HIV/AIDS medication The struggle for HIV/AIDS to be taken seriously, and for patients to be treated with dignity and But strong campaigns have made serious dents in the power of pharmaceutical corporations. They have tended to focus on middle-income countries like Brazil, South Africa, Argentina and, the so-called pharmacy of the developing world, India, which have become key battlegrounds for pharmaceutical corporations to expand their control over medicines. rights, was a long campaign. In 1987 activists in New York s LGBT community launched the AIDS Coalition to Unleash Power (ACT UP), which with powerful direct actions and an impressive understanding of medical research, helped spur the development of the first effective drugs to treat HIV in the mid-1990s. But the vast majority of people in the world had no access to these new drugs, as they were too expensive. In South Africa, which faced staggeringly high infection rates, the government attempted to reduce prices by passing a law which allowed cheaper generic drugs to be sold alongside their patented version both by importing generics (parallel imports) and allowing domestic companies to manufacture the drugs (compulsory licensing). In February 1998, a group of pharmaceutical corporations, backed by some rich governments, took South Africa to court in what turned into the biggest public relations disaster for drug companies in history. They dropped the case The Treatment Action Campaign (TAC) was founded in December 1998 to fight for access to HIV/ AIDS drugs for all, and was a major force in fighting the pharmaceutical industry s grip on HIV treatment and pushing the government to take action. TAC was instrumental in securing a universal government-provided AIDS treatment programme, which has since become the world s largest. TAC has 8,000 members and 182 branches and continues to fight for medicines for all.

8 Today, campaigners are pushing for stronger laws to strengthen the power to use compulsory licenses in order to guarantee the right to health. Unsurprisingly drug corporations see this as a major challenge to their power, and leaked documents show that they are spending hundreds of thousands of pounds on PR campaigns to disrupt the process, calling South Africa ground zero for the debate on intellectual property. India battles against evergreening From 1970 to 2005 India did not grant product patents on medicines. This allowed low-cost, generic versions of medicines that were patented in other countries to be produced in India, and made India a crucial source of affordable medicines for developing countries. It was Indian manufacturers that produced generic versions of branded HIV treatment bringing the price down from a staggering USD $10,000 per patient per year to just USD $1 a day. But India had to change its patent laws in 2005 to comply with TRIPS and has since had to issue patents on new drugs. However, the Indian government, pushed by campaigners including an NGO called the Lawyers Collective, has been active in resisting the practice of evergreening which is where pharmaceutical corporations make small modifications to existing drugs in order to apply for another patent to extend their monopoly. A high profile 7 year case was concluded in The Indian supreme court rejected a patent for the cancer drug, gleevec, which was an attempt at evergreening by the pharmaceutical company Novartis. But the patent application was rejected as it did not meet the strict criteria in Indian law for being sufficiently new and innovative. A new offensive in Latin America Countries like Brazil and Argentina have been particularly targeted by corporations wanting to expand their intellectual property rights. Brazil has the biggest universal public health system in the world, making it a lucrative market for pharmaceutical companies. Prices paid for drugs in Brazil increased dramatically after TRIPS came into effect, threatening public health care provision. Civil society groups such as ABIA, an HIV campaigning group, came together in 2003 in a coalition, GTPI (the Working Group for Intellectual Property in Portuguese). After years of pressure and demonstrations, they successfully pushed the government of Lula da Silva to issue a compulsory license in 2007 over a vital HIV medicine, efavirenz, patented by Merck. This has saved the Brazilian public health service USD $27 million per year and strengthened Brazil s ability to produce medicines locally. However, new trade negotiations between the EU and Mercosur, a trade bloc of Latin American countries, have clearly put TRIPS plus provisions on the agenda. New TRIPS plus provisions are being proposed in domestic law, for instance trying to stop the government buying drugs through multilateral agencies, which can be cheaper. Groups like Abia are fighting these proposals, bringing technical expertise together with mobilisation techniques to make their voices heard. In Argentina, the US is working with the new free market government to conclude a patent agreement which would lead to fast-tracked patents in one country once it has received approval in the other, preventing countries from making their own decisions as to whether a medicine is truly new and inventive, or just being evergreened. Fundación Grupo Efecto Positivo (FGEP) is working with those affected by HIV to combat these policies. They claim that the law will help prioritize commercial rights over basic human rights. Their previous work has led to massive price reductions for certain drugs, totalling USD $50 million annual savings, which can massively expand treatment programmes. Global Justice Now campaigns for a world where resources are controlled by the many, not the few. With thousands of members around the UK, we work in solidarity with global social movements to fight inequality and injustice. Global Justice Now, 66 Offley Road, London SW9 0LS t: e: offleyroad@globaljustice.org.uk w: globaljustice.org.uk

9 Campaigner briefing 5 Alternatives to corporate control of medicines September 2017 From the United Nations to the European Union, some of the world s most influential institutions are acknowledging that the current system of medical research and development (R&D) is leaving millions of people without access to essential medicines. To end this crisis, we need a system driven by public health needs and we must find alternative ways to conduct R&D to ensure that vital innovations in medicines are accessible to all who need them. Bernie Sanders, US senator, said in August 2017 that the days of allowing drug makers to gouge American consumers after taking billions in taxpayer money must end and that he would introduce legislation to demand fairer, lower prices for every drug developed with government resources. Pharmaceutical companies are charging extortionate prices for drugs developed with taxpayers money. This is not just a problem in the US, it is a global problem. We need drastic changes to our medical R&D system. We need innovation The obvious aim of medical R&D is to create innovative ways of treating health problems. But medical innovation has stalled in the last decade. Instead of generating new medicines, the pharmaceutical industry is developing me-too drugs these offer no, or only small, improvements over existing treatments. But they bring substantial profits at a much lower financial risk than developing totally new medical compounds. A recent study shows that only one out of four new drugs launched in the UK between were highly innovative i.e. developing new medical compounds or discovering entirely new uses for existing ones. Solutions for global health crises Infectious diseases such as tuberculosis (TB) and malaria kill millions of people in poorer countries every year. But there is very little investment to develop medicines to treat these diseases as they are not profitable for pharmaceutical companies. TB kills 1.5 million people a year but in the last 50 years, only two new treatments for TB have been developed. In that same time, 14 new treatments have been developed for hay fever, which kills no one. In 2013, Médecins Sans Frontières (MSF) and partners found that of 850 new drugs and vaccines approved for all diseases, only 4% (37) were for neglected diseases (those prevalent primarily in poor countries), though these diseases accounted for 11% of the total global disease burden. And 33 out of those 37 drugs were simply repurposed versions of already existing drugs. We need access to the right medicine New medicines are only useful if people can access them. High prices charged by pharmaceutical companies are limiting access to vital treatment (see campaigner briefing: The scandal of unaffordable medicines). Drug companies often justify charging extortionate prices claiming they need to recoup high R&D costs. But there is little evidence that this is the case and there are no obligations on companies to declare their costs or make them available for public scrutiny. What are the solutions? More transparency Medical R&D is very opaque. Drug companies say this is necessary to protect commercial interests, but this means there is a complete lack of transparency. This allows corporations to ramp up prices, blame it on R&D costs and then not reveal anything about costs. We need full transparency around the costs of medical R&D as well as where and how public funds have been involved.

10 We know that alternatives can work In 2003 MSF and six other organisations set up the Drugs for Neglected Diseases initiative (DNDi) to create an alternative way of developing new medicines. DNDi receives funding from a broad range of sources including national governments, public institutions and private institutions. To date, with expenditure of 221 million, DNDi has delivered six new treatments for four diseases (malaria, sleeping sickness, visceral leishmaniasis, and Chagas disease) that are affordable and non-patented. In addition, DNDi has created a robust pipeline with 30 R&D projects covering six disease areas. DNDi has calculated their own costs for providing a new treatment for neglected tropical diseases to be as low as 100 million. By comparison, the Association of the British Pharmaceutical Industry estimates the cost of developing a new drug at 1.15 billion. Attach public health conditions to public research Governments all over the world, including the UK, are spending billions of pounds on medical R&D. But much of that research is taken over by companies who patent it and sell the resulting medicines at high prices. At the very least, governments should be setting conditions on research grants to ensure that any medicines that are developed from those grants are affordable and accessible in the UK and abroad. The government could go even further and identify other ways of incentivising research which do not require charging high prices for drugs to recoup R&D costs. De-link R&D costs from the price of medicine In the current system, drug companies claim that high prices guaranteed by patents allows them to recoup their investment. We need to move away from the idea that high prices should incentivise R&D and instead develop alternative ways of incentivising R&D. Campaigners and academics call this concept de-linkage. This could be through providing grants for new research or setting up prizes for developing medical solutions to specific problems. This would mean that the medicines developed, would be under public ownership and could be sold at affordable prices. Take patents out of trade deals Intellectual property protection should be removed from trade and investment deals. The British government should also issue compulsory licenses for important medicines as well as defend global south countries who do the same. (Please see campaigner briefing: How global trade deals boost the power of pharmaceutical companies for more information). Ensure greater cooperation Another problem with current medical R&D is that corporate control creates silos and inhibits cooperation. Researchers from different companies might be working on the same components at the same time without knowing and researchers can t build on each other s work. A stronger public control of research could allow more openness and cooperation and boost innovation. More democratic control The profit incentive as the main driver of medical R&D does not work in the interest of people - especially not people in poorer parts of the world. Therefore we need more democratic control of R&D priorities to ensure priorities are set to tackle the most pressing problems. This can be achieved by establishing public research institutes at national, regional and global levels. Global Justice Now campaigns for a world where resources are controlled by the many, not the few. With thousands of members around the UK, we work in solidarity with global social movements to fight inequality and injustice. Global Justice Now, 66 Offley Road, London SW9 0LS t: e: offleyroad@globaljustice.org.uk w: globaljustice.org.uk