Essential Action on IGWG Negotiations

Essential Action Comment on the negotiations of the World Health Organization’s Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG)

April 2008

The great promise of the IGWG exercise is that it will be innovative in its own right — that country negotiators will leave ideological predispositions aside, and advance experiments with new institutional arrangements to promote the complementary public health objectives of innovation and access. The country negotiators have it in their power to realize this promise.

Essential Action encourages IGWG negotiators to support systemic approaches to support R&D that do not rely on patent monopolies or the prospect of charging high drug prices as a reward, and mechanisms to make the fruits of R&D widely accessible. We encourage negotiators to achieve consensus around the Bolivia/Barbados prize fund proposals, and other concrete, common-sense measures to promote innovation and access. These include a global patent database covering medical technology, improved medicine registration systems, patent pools, and mechanisms to spur generic competition for biologics and vaccines.

[Full statement follows on the continuation of this post.]
Medical research and development breakthroughs have made the world a better and healthier place. Vaccines, antibiotics and drugs for HIV/AIDS have kept countless millions alive and reduced untold suffering.

The world — and especially developing countries — needs more innovation. To have public health benefit, however, the fruits of the innovative process must be available to people who need them.

The current patent monopoly-based system of R&D has proven inefficient at advancing a needs-driven public health agenda. This is true for rich countries as well as poor, though the situation is much worse in poor countries.

Whether the system works for rich countries is controversial, although our view is that the evidence is overwhelming that it does not.

But if ideology and industry defensiveness are set aside, there is really no debate about the failure of the patent monopoly-based system of R&D for developing countries. This was a key message of the Commission on Intellectual Property, Innovation and Public Health. The current corporate sector system of R&D is driven by the prize offering of a patent monopoly. That prize is not worth much if it offers a monopoly on sales to a population that — no matter how large — has little buying power. And if the prize incentive is too small, it will not induce R&D, no matter how much it may be needed as a public health matter. This has nothing to do with the ethics of Big Pharma. It is how the system is designed.

The value of the patent monopoly is based on the holder using it to profit maximize as a monopolist. It is therefore no surprise that companies holding patent monopolies charge high prices. This is what the patent enables. High prices are an increasing problem in rich countries, but the brand-name pharmaceutical industry’s current pricing model — which commonly runs into the thousands of dollars a year for a single medicine, and may involve charges of over $100,000 — leaves new medicines completely out of reach of the vast majority in developing countries.

Apart from ignoring these realities, there are two basic alternative responses. One is to rely on charity. Private foundations and companies seeking good will may contribute to R&D for products targeting diseases in developing countries, or modifications to existing treatments designed to meet developing countries’ particular needs. They may offer discounted versions of their drugs, or give some away. Charitable initiatives may accomplish quite a bit, but in general they suffer from being ad hoc, unsustainable, erratic, episodic, short-lived and insufficiently resourced. Charity may be helpful, but it is no solution to meeting public health priorities on a sustained basis.

The second option is to examine systemic approaches to support R&D that do not rely on patent monopolies or the prospect of charging high drug prices as a reward, and mechanisms to make the fruits of R&D widely accessible.

Bolivia and Barbados have put forward a series of concrete proposals for prizes to incentivize R&D, with the resulting fruits of the innovation made available at competitive prices. These are simple and compelling proposals. Will they work in creating innovation where now there is none or much too little? There is no guarantee. The prospect of huge riches for breakthrough cancer or Alzheimer’s treatments, to take just two examples, has with few exceptions not succeeded in generating important innovations. Sometimes the scientific problems cannot easily be overcome even with large investments. But incentives do matter, and the prizes included in the Bolivia/Barbados proposals, if adopted, may lead to life-saving innovations. It is also worth noting that they have an additional advantage over the existing patent monopoly-based system: they would encourage open research and sharing of information.

Apart from the funds involved — which are not especially large in development aid terms, and could make existing aid programs much more efficient, were new products to emerge from the prize systems — what possible reason is there, on the merits, not to adopt these proposals? What conceivable rationale, on the merits, is there for opposing ongoing discussion of these ideas, as Bolivia and Barbados propose? Those with an ideological commitment to maintaining patent monopolies, at the expense of public health, should recuse themselves from participating in the debate.

There is a long list of common-sense proposals on the IGWG agenda. Along with efforts to achieve consensus on broad principles, hopefully the final IGWG negotiation will reach agreement on several specific, concrete measures, or at least resolve to further investigate specific proposals. In addition to the Bolivia/Brazil prize fund proposals, these should include creation of a publicly accessible, global patent database covering medical technology; mechanisms, perhaps building on WHO’s pre-qualification program, for expedited registration of new medicines, taking into account the potential perils of harmonized standards, and seeking to address the problem of firms’ refusing to register drugs out of retaliatory animus; and ongoing discussion of patent pool proposals, including the very attractive Bolivia/Barbados proposal. Attention should also be paid to creating competitive, generic markets for biologics and vaccines, including through the Bolivia/Barbados proposal on cancer treatments.

The great promise of the IGWG exercise is that it will be innovative in its own right — that country negotiators will leave ideological predispositions aside, and advance experiments with new institutional arrangements to promote the complementary public health objectives of innovation and access. The country negotiators have it in their power to realize this promise.

For More Information, contact:

Sarah Rimmington, (Geneva, week of April 28, 2008 only) (+41)(0)76-269-2246), [email protected]

Robert Weissman, (Washington, DC) (+1) 202-387-8030, [email protected]

Essential Action
PO Box 19405
Washington, DC 20036
www.essentialaction.org/access