Innovation and Equitable Access to Medicines: A New Global Framework for R&D

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Innovation and Equitable Access to Medicines: A New Global Framework for R&D Seminar at SOAS, University of London 24 October 2013 Suerie Moon, MPA, PhD Research Director & Co-Chair, Forum on Global

1 Innovation and Equitable Access to Medicines: A New Global Framework for R&D Seminar at SOAS, University of London 24 October 2013 Suerie Moon, MPA, PhD Research Director & Co-Chair, Forum on Global Governance for Health, Harvard Global Health Institute Lecturer, Department of Global Health and Population, Harvard School of Public Health Co-Director, Project on Innovation and Access to Technologies for Sustainable Development smoon@hsph.harvard.edu

2 Overview 1. Why does R&D matter for access to medicines? 2. Why might we need a global framework? 3. What are the key unanswered questions?

3 Overview 1. Why does R&D matter for access to medicines? 2. Why might we need a global framework? 3. What are the key unanswered questions?

4 $2700 $800 $700 $10,400 HIV Treatment Scale-Up & Access Generic to Competition affordable medicines & Treatment Scale-Up 7 6 Millions $600 $500 $400 $300 $200 $ $ People in LMICs on treatment Lowest generic price first line ARV regimen Originator price of first-line ARVs Source: Medicines Patent Pool

5 Innovation and Access Source: JA Rottingen 2012

6 Traditional Pharma Industry R&D Model 1950s: emergence of modern chemicals-based pharmaceutical industry in a few Western countries Patent laws (1800s-1900s) pre-date pharma industry, but become key policy tool Sizeable public investment into biomedical research (earlier stage), few HICs Sizeable private investment into product devt (later stage), highly concentrated in a few countries. Estimated >$1 billion average R&D costs Industry priorities driven by potential profitability Public policies to provide access in HICs; New medicines reached LMICs with significant delays ~$240 billion on health research;

7 The Global IP Regime: 1994 TRIPS Agreement Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Controversial: major expansion in GATT/WTO subject matter Enforceable, Western-standard IP in all Members Uniform minimum requirements, e.g.: Patents on medicines and food/agriculture 20 year patent terms Flexibilities: Transition periods for LDCs and developing countries Compulsory licensing, patentability criteria, others Global burden-sharing for R&D finance Multisectoral effects: medicines, food security, education, culture, industrial development

8 Critiques of traditional R&D business model Critiques re: innovation: Markets fail to stimulate sufficient R&D investment for: Diseases that affect the few (orphan) or Only the poor (neglected diseases), or Entail high risks (pediatric, pregnant women, limited basic science) Monopolies on knowledge deter follow-on innovation Critiques re: access: Time-limited monopolies to recoup investments enable high prices that block access

9 Imbalances in R&D Only $3 billion (1-2% of total) invested globally on R&D for neglected diseases Source: JA Rottingen 2012

10 Institutional Innovation in Global Health R&D (1 of 3) PULL: Advanced market commitments for pneumococcal vaccine (GAVI) Donor financed (Northern governments, Gates Foundation) Success in securing production but not yet in innovation Pediatric AIDS drugs (UNITAID) Donor financed (Northern and middle-income governments, Gates Foundation) Success in inducing formulation innovation Milestone prizes for TB drug synthesis, ALS biomarker (Prize4Life) Success, questions regarding prizes beyond milestones; re: access with innovation? PATENT POOLING UNITAID-supported Medicines Patent Pool for HIV drugs Early to assess, but two licenses from patent-holders in Year 1; more accessoriented GSK/BioVentures/WIPO Knowledge Pool for Neglected Diseases Early to assess, rapidly evolving model

11 Institutional Innovation in Global Health R&D (2 of 3) REGULATORY: Priority review vouchers US FDA : shortened time for regulatory decision on profitable drug Criticized for poor design, outcomes still unclear US PTO: shortened decision on patent appeals procedures Pilot launched in 2012 PRIVATE: Pharma research into most neglected diseases (sleeping sickness, visceral leishmaniasis, malaria) Pharma research into mid-range profitable diseases (e.g. TB, dengue Chagas?), New research centers in India & China CSR rationale & emerging markets rationale Outcomes still unclear, very early for some initiatives

12 Institutional Innovation in Global Health R&D (3 of 3) New approaches proposed: Large-scale end product prizes e.g. Sanders bill, Health Impact Fund, Finkelstein/Temin (MIT), Patent buy-outs R&D Treaty (Hubbard & Love 2004) Revising TRIPS Agreement All require greater public involvement, coordinated state action

13 Overview 1. Why does R&D matter for access to medicines? 2. Why might we need a global framework? 3. What are the key unanswered questions? Adapted from JA Rottingen 2012

14 Critiques of R&D System 1. Affordability: Recouping R&D investment linked to high prices 2. Sustainable financing: insufficient, uncertain 3. Efficiency: efforts fragmented, uncoordinated, repetitive 4. Health-centered legitimate governance: who sets the agenda? Source: Moon S, Bermudez J, 't Hoen E (2012) Innovation and Access to Medicines for Neglected Populations: Could a Treaty Address a Broken Pharmaceutical R&D System? PLoS Med 9(5): e doi: /journal.pmed

Background Longstanding recognition: market-driven global

majority of the world s population, 80% of which lives in

Programme for Research and Training in Tropical Diseases

(1990) Investing in Health Research and Development (1996)

15 Background Longstanding recognition: market-driven global R&D system does not sufficiently meet the needs of majority of the world s population, 80% of which lives in developing countries WHO-UNICEF-UNDP-World Bank Special Programme for Research and Training in Tropical Diseases (1975) Commission on Health Research for Development (1990) Investing in Health Research and Development (1996) Commission on Macroeconomics and Health (2001) Adapted from JA Rottingen 2012

A 10-year process 2003-2013 2003 2006 2008 2010 WHA56.27 WHA59.24 WHA61.

28 Intellectual property rights, innovation and public health Public

rights: towards a global strategy and plan of action Global strategy and

Establishment of a consultative expert working group on research and

Property Rights, Innovation and Public Health Intergovernmental Working

16 A 10-year process WHA56.27 WHA59.24 WHA61.21 WHA63.28 Intellectual property rights, innovation and public health Public Health, innovation, essential health research and intellectual property rights: towards a global strategy and plan of action Global strategy and plan of action on public health, innovation and intellectual property Establishment of a consultative expert working group on research and development: financing and coordination Commission on Intellectual Property Rights, Innovation and Public Health Intergovernmental Working Group Expert Working Group on Research and Development: Financing and Coordination Consultative Expert Working Group on R&D: Financing and Coordination

17 2012 CEWG Report

18 Context: Pharmaceutical R&D Fall in the approval of new drugs while investment in R&D has increased. Top-selling medicines going off patent, not replaced by new patented products with comparable commercial prospects. Greater focus on emerging markets which offer opportunities for rapid growth. Spate of mergers and acquisitions resulting in a decline of the number of traditional PhRMA companies researching any particular area. Increased attention to new approaches to R&D: e.g. open innovation, product development partnerships (PDPs) Source: JA Rottingen 2012

19 Context: Pharmaceutical R&D Source: JA Rottingen 2012

Public support and public financing are required when public goods are under-supplied by the market.

20 The Problem market forces alone will not lead to the development of sufficient, affordable, and appropriate new technologies and goods for these diseases. Public support and public financing are required when public goods are under-supplied by the market. Position paper on the EU Horizon 2020 research strategy endorsed by 23 organizations including public-private partnerships. Source: JA Rottingen 2012

a wide range of tools, partnerships and approaches will be needed Andrew Witty, GSK Witty A.

21 The Problem lack of research into diseases that disproportionally affect developing countries. the financial returns are often limited. a wide range of tools, partnerships and approaches will be needed Andrew Witty, GSK Witty A. New strategies for innovation in global health: a pharmaceutical industry perspective. Health Aff (Millwood) Jan;30(1): Source: JA Rottingen 2012

R&D Funding Neglected Diseases Source: G-Finder Report 2011 In 2010, nearly US$ 3.2 billion (around 2% of total health R&D) was invested in research for Type II and Type III diseases.

22 R&D Funding Neglected Diseases Source: G-Finder Report 2011 In 2010, nearly US$ 3.2 billion (around 2% of total health R&D) was invested in research for Type II and Type III diseases. 65% from public sources: 90% increase of public funding from developed countries for neglected diseases (from US$ 590 million in 1986 to US$ billion in 2010) but small and unclear contribution from developing countries (about $70 million not including China and other large developing countries). 18.5% from philanthropic sources: a five-fold increase from US$ 60 million in 1986 to US$ 568 million in Bill & Melinda Gates Foundation accounted for 80%, of which over half goes to product development partnerships. 16.4% from industry: US$ 500 million in 2010, stagnating or declining in real terms since 1986 Compared to around 60% private sources of the total US$ 160 billion on health research (2005) Source: JA Rottingen 2012

23 Some basic underlying ideas Affordable products can best be achieved through free open market competition in production Requires delinking of R&D costs and prices of products Requires upfront public financing of the R&D R&D is reestablished as a global public good where there is need for collective action and agreed financing contributions to avoid free riding Source: JA Rottingen 2012

24 "Open Knowledge Innovation * Open approaches to research and development and innovation which include precompetitive research and development platforms, open source and open access schemes. Prizes, in particular milestone prizes. Equitable licensing and patent pools, may facilitate access to research results on equitable terms and/or with low transaction costs. Direct grants * Open Knowledge Innovation can be defined as research and innovation that generate knowledge which is free to use without legal or contractual restrictions. Adapted from JA Rottingen 2012

25 Coordination: Recommendations 1) A Global Health R&D Observatory to monitor: Financial flows to R&D The R&D pipeline Learning lessons. 2) Advisory Mechanisms. A Network of Research Institutions and Funders An Advisory Committee. Source: JA Rottingen 2012

26 Implementation: A global binding instrument Need for a coherent global framework that combines the different elements and recommendations in a concerted mechanism. Conventions as a means by which countries enter into agreements with legal force to achieve common goals (i.e. WHO Framework Convention on Tobacco Control). Conventions can have funding provisions attached to them (i.e. Global Environment Facility (GEF)). Propose an international Convention on Global Health R&D under WHO Constitution Article 19: The Health Assembly shall have authority to adopt conventions or agreements with respect to any matter within the competence of the Organization. ( ). Source: JA Rottingen 2012

27 Assessment of 15 grouped proposals Key recommendations Open Knowledge Innovation Convention on Global Health R&D Open approaches Equitable licensing Milestone and end prizes Patent pools Financing commitments Pooled funding Global R&D Observatory Advisory functions at WHO Direct grants Global Framework

28 A Fairer Global Vaccine Pricing System Global GDP (2010) LMIC 7% LIC 1% 50 UMIC 22% Price USD HIC 70% Population (hundred millions) Cost of goods Reward for innovation

29 Bottlenecks Bottlenecks in the in the antibiotic pipeline. pipeline Open Knowledge Innovation Public financing fair sharing Affordable health products So A D et al. BMJ 2012;344:bmj.e by British Medical Journal Publishing Group Source: JA Rottingen 2012

Antibacterials - delinking «A variety of incentives probably have to be applied, but having all in common that the financial return has to be separated from the use of the product Richard Bergström,

30 Antibacterials - delinking «A variety of incentives probably have to be applied, but having all in common that the financial return has to be separated from the use of the product Richard Bergström, EFPIA Bergström R. The role of the pharmaceutical industry in meeting the public health threat of antibacterial resistance. Drug Resist Updat Apr;14(2):77-8. Epub 2011 Apr 13. Source: JA Rottingen 2012

31 Summary of Recommendations 1. Principles: Affordable products can best be achieved through free open market competition. Requires delinking of R&D costs and prices of products. R&D is a global public good where there is need for collective action and agreed financing contributions to avoid free riding. 2. Functions/operational: Need to increase public investments to at least $6 billion annually (the double of current total investements). All countries should commit to spend at least 0.01% of GDP on governmentfunded R&D % of funds should be channeled through international pooled mechanisms to improve efficiency and coordination More efficient and collaborative R&D processes through sharing of results: Open Knowledge Innovation: precompetitive research and development platforms, open source and open access schemes, and the utilization of prizes, in particular milestone prizes, equitable licensing and patent pools. Strengthening research and development capacity in and technology transfer to developing countries. Establish a Global Health R&D Observatory and relevant advisory mechanisms under the auspices of WHO. Source: JA Rottingen 2012

32 Summary of recommendations 3. Implementation instrument: Need for an agreed upon global framework A global legally binding instrument would be most effective Propose an international Convention on Global Health R&D Processes and Next steps: Resolution at 2012 World Health Assembly called for: Aug-Oct 2012: National & regional consultations Nov 2012: Member State meeting in Geneva to discuss next steps Jan 2013: WHO Executive Board May 2013: World Health Assembly Key Question: How to ensure that the process leads to a stronger, more equitable global R&D system that provides for both innovation and access? Adapted from JA Rottingen 2012

Since the 2012 CEWG Report Nov 2012: Intergovernmental Meeting No treaty yet Demonstration projects needed Observatory: yes May 2013: World Health Assembly Demonstration projects: new

33 Since the 2012 CEWG Report Nov 2012: Intergovernmental Meeting No treaty yet Demonstration projects needed Observatory: yes May 2013: World Health Assembly Demonstration projects: new incentives, financing, governance Observatory Need evidence for long-term solutions treaty? Dec 2013: Intergovernmental Meeting May 2014: World Health Assembly May 2016: World Health Assembly

34 Overview 1. Why does R&D matter for access to medicines? 2. Why might we need a global framework? 3. What are the key unanswered questions? Adapted from JA Rottingen 2012

35 Open questions 1. Demonstration projects: Will they work? What will they demonstrate regarding incentives, financing, governance? 2. Who will contribute financing and how much? 3. How will coordination be achieved? 4. What is the best possible outcome for health by 2016?

36 Thank you Comments welcome at:

37 Extra slides

38 Introduction to Intellectual Property National rights: patents, copyrights, trademarks, industrial designs, trade secrets, geographical indications Patents as (national) social contracts To promote innovation, technology transfer & dissemination Inventor: Time-limited monopoly Society: Inventors disclose publicly information about their invention State right to regulate patent rights to protect public interest Pre-1994 International patents regimes Variation: eg 5-10 yr patents in South vs yrs in North Social considerations: eg food and medicines unpatentable Non-invasive / difficult to enforce

39 Public-private product development partnerships (PDP) PDPs are defined as public health driven, not-for-profit organisations that typically use private sector management practices to drive product development in conjunction with external partners. PDPs tend to focus on one or more neglected diseases and aim to develop products suitable for DC use. While their primary goal is the advancement of public health rather than commercial gain, they generally use industry practices in their R&D activities, for instance portfolio management and industrial project management. -G-FINDER 2011

40 Basic PDP model Frequently-conducted functions include: Finances research ($ to and from private & public sectors) Negotiates access to private sector compounds, experts, labs Reduces risk of projects Offers reputational benefits, CSR, employee morale Provides access to research with profitable spillovers (Amyris) Liaises with developing countries re: clinical trials & delivery Helps open up new emerging markets Focuses on adaptedness and affordability Advocates for more R&D Sometimes: Conducts in-house research (Aeras, IAVI)

41 IP and Access to Medicines: 2 Key Questions 1. TRIPS impact on medicines prices Higher prices As way to extract rents to finance global R&D 2. TRIPS impact on R&D How to ensure R&D where market fails, eg for neglected diseases? How to ensure affordability of end-product? How to share global burden of R&D finance in politically sustainable manner?

42 Public-private product development partnerships (PDPs) Definition: Public health driven not-for-profit organisations that drive neglected disease drug [product] development in conjunction with industry groups (Moran et al., 2005) Aeras: Global Tuberculosis Vaccine Foundation BVGH: BIO Ventures for Global Health CONRAD: Contraceptive Research and Development Program CICCR: Consortium for Industry Collaboration in Contraceptive Research DNDI: Drugs for Neglected Diseases initiative EMVI: European Malaria Vaccine Initiative FIND: Foundation for Innovative New Diagnostics Gates/UNC: Gates Foundation/University of North Carolina Partnership for the Development of New Drugs GMP: Global Microbicide Project HHVI: Human Hookworm Vaccine Initiative IAVI: International AIDS Vaccine Initiative IDRI: Infectious Disease Research Institute IOWH: Institute for OneWorld Health IPM: International Partnership for Microbicides LAPDAP: LAPDAP Antimalarial Product Development MDP: Microbicides Development Program MMV: Medicines for Malaria Venture MVI: Malaria Vaccine Initiative MVP: Meningitis Vaccine Project at PATH PATH: Program on Technologies for Health PDVI: Pediatric Dengue Vaccine Initiative PneumoADIP: Pneumococcal Vaccines Accelerated Development and Introduction Plan RotaADIP: Rotavirus Vaccine Program SAAVI: South African AIDS Vaccine Initiative TB Alliance: Global Alliance for Tuberculosis Drug Development

43 The Case for Public Action 1. The economic case for public action: The incentive offered by intellectual property rights fails to be effective in correcting the market failure in developing countries due to the lack of reliable demand for the products generated by R&D. 2. The ethical and legal case for public action: the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition (WHO Constitution). 3. R&D as a public good: Knowledge generated by research is a true public good if it is made available to anyone to make use of without restrictions. Source: JA Rottingen 2012

An Essential Health and Biomedical R&D Treaty

An Essential Health and Biomedical R&D Treaty Submission by Health Action International Global, Initiative for Health & Equity in Society, Knowledge Ecology International, Médecins Sans Frontières, Third