New Global Norms for Supporting

Medical Research & Development

There are serious flaws with the existing global system to support medical research and development (R&D). Research money is not directed to priority health needs. The products that are invented are frequently priced so high as to burden public and private health insurers, and to deny access to many individuals in the United States and to huge numbers in developing countries who must pay for drugs out of pocket.

Globally, the rules to support medical R&D are currently established not through health organizations, but through the intellectual property provisions of trade agreements. The World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) requires all member countries to adopt U.S.-style patent rules for all products, including pharmaceuticals. In a series of bilateral and regional agreements, the United States has pressured countries, including very poor nations, to adopt even more stringent patent and related rules. The rationale for these demands is that countries must contribute their fair share to the cost of R&D for new drugs.

It is in this context that the call has emerged for new global norms for supporting medical R&D. These norms would not represent a commitment to a new binding law, but movement towards a new understanding of what is required to resolve global public health concerns that are not being addressed by the current market-based R&D model. These norms must seek to promote a sustainable basis for a needs-driven essential health agenda, including the imposition of appropriate and reasonable obligations on high, middle and lower income countries.

Why are new global norms for medical R&D needed?

The current system for determining the R&D agenda is responsive to buying power demand. When R&D is driven solely by market demand, important health needs are not met. The current system of R&D has resulted in:

• Very high prices for new medicines. The hundreds of millions of people living in developing countries are the most acutely affected by the status quo. But the current R&D model is delivering imperfect results for the United States as well.
• Too much investment in treatment of less important conditions (including lifestyle conditions such as baldness).
• Too little investment in neglected diseases (diseases which disproportionately affect developing countries and that are therefore not profitable).
• Too little investment in preventative approaches (including but not limited to vaccines as opposed to daily treatments).
• Too much investment in me-too drugs (nearly identical drugs with incremental benefits) because they are easier to manufacture and a market is already demonstrated.
• Too little investment in high-priority health concerns where it is not obvious what tools will work; this includes both new classes of drugs and treatment for diseases for which there currently are not good tools for prevention or treatment (such as Alzheimer’s disease).

More generally, the current system can be criticized for forcing the sick, through inflated drug prices, to bear the cost of future innovations that benefit all.

Moving toward new R&D norms

The first step is to acknowledge imperfections in the existing system of medical R&D, and to agree to explore other approaches that may work as complements. Major philanthropic efforts have an important role to play, but public policy should undertake commitments to funding or incentive structures that will guarantee lasting and ongoing investment in needs-driven medical R&D.

What might be some elements of new R&D norms?

Norms that might emerge include:

• Establishment of a system to incentivize private R&D priority setting that is based on identified health needs, rather than market demand for a product.
• Systems to reward innovators financially by means other than patent-based marketing monopolies. Instead of protecting high drug prices from competition, one promising model would offer prizes to the developers of new medicines, with the prize amount based upon the health impact of the product.
• Special incentives for R&D in diseases specific to poor countries, or open and collaborative approaches, modeled on the Human Genome Project, that involve the widespread sharing of information.
• Management of the fruits of publicly funded R&D to ensure that they are affordable and available in developing countries, and priced reasonably in rich countries.
• Agreement that all countries should have to offer contributions to the global R&D pool, or at least participate in the system, but that there should be differential obligations based on degrees of wealth. In other words, the burden on Guatemala should be less than that on the United States. The concept of differential obligations is well established in the United States and internationally. For example, both TRIPS and TRIPS-plus measures in trade agreements impose on rich and poor countries equivalent obligations (through unitary patent and intellectual property standards), but there is a significant transition period for less developed countries to enter into the system (which is still in effect for Least Developed Countries).
• Recognition that no single policy instrument is likely to provide comprehensive solutions to the current crisis in R&D and access to needs-driven health tools.

Does this proposal involve creating a new legal regime for R&D?

The emerging new norms involve a commitment to needs-driven medical R&D goals that address price concerns, not to a specific set of laws. While there are a number of existing proposals as to how to solve some of the dilemmas arising from market-based R&D, the development of new norms is more flexible. It leaves room for a multiplicity of efforts as long as they work to advance these broad principles.

For more information contact: Sarah Rimmington at srimmington@essentialinformation.org or (202) 387-8030