MIHIR MANKAD, Save the Children UK

Lead Author: Mihir Mankad
Organization: Save the Children UK
Country: UK

Abstract

There have been very significant improvements in maternal and child health over the last 20 years but many medicines and vaccines still do not exist for health conditions that are common in the poorer parts of the world. There is a desperate need to both develop new health technologies and ensure that they are accessible to those that need them. This is more true for children in low- and middle-income countries (LMICs), who suffer both from a lack of health technologies for conditions that primarily affect these parts of the world and health technologies that are suitable for their age, than any other group.

While the international community has repeatedly attempted to address this problem over the last decade, efforts have mostly been piecemeal and have left unaddressed the structural factors driving the policy incoherence between human rights, international trade, intellectual property, innovation and access to medicines. International human rights and public health goals, however, require that creative and concerted action be taken by all stakeholders – governments, the private sector and donors – to systematically address the lack of health technologies for children and resolve these problems.

Doing so will require a combination of new solutions which are human rights compliant. First, it must ensure an increased and more stable source of public funding to make up for the current absolute deficit in R&D funding for neglected conditions and adaptation of products. Second, it must allow for greater and better coordination of this funding, so that areas of greatest need can be adequately addressed. Third, it must ensure that all R&D ultimately results in access, so therefore must make use of the three key principles - delinkage, open innovation and licensing for access.

Submission

Introduction

There have been very significant improvements in maternal and child health over the last 20 years but many medicines and vaccines still do not exist for health conditions that are common in the poorer parts of the world. Millions people a year die from preventable infectious diseases and other conditions and these numbers do not include the lifelong disability and suffering caused by illnesses gone untreated. There is a desperate need to both develop new health technologies and ensure that they are accessible to those that need them. This is more true for children in low- and middle-income countries (LMICs), who suffer both from a lack of health technologies for conditions that primarily affect these parts of the world and health technologies that are suitable for their age, than any other group.

Currently, there is a failure on the part of the whole global community to represent and protect the needs of the world’s most vulnerable and marginalised people in this area. While the international community has repeatedly attempted to address this problem over the last decade, efforts have mostly been piecemeal and have left unaddressed the structural factors driving the policy incoherence between human rights, international trade, intellectual property, innovation and access to medicines. International human rights and public health goals, however, require that creative and concerted action be taken by all stakeholders – governments, the private sector and donors – to systematically address the lack of health technologies for children and resolve these problems.

Doing so will require a combination of new solutions which are human rights compliant. First, it must ensure an increased and more stable source of public funding to make up for the current absolute deficit in R&D funding for neglected conditions and adaptation of products. Second, it must allow for greater and better coordination of this funding, so that areas of greatest need can be adequately addressed. Third, it must ensure that all R&D ultimately results in access, so therefore must make use of the three key principles - delinkage, open innovation and licensing for access.

This submission will first briefly discuss the human rights obligations incumbent upon governments when it comes to R&D and related private sector responsibilities. It will then describe the core problem of R&D for health technologies for LMICs, including the lack of financing and structural problems with the existing incentive model. It will then examine potential solutions that focus adequate and sustainable financing, improved coordination and design based the three principles listed above.

Human rights and research and development

Governments and the private sector both have responsibilities to address this issue, albeit different ones, under international human rights law. Nearly all of the major international human rights agreements and treaties recognise the right to health, including the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Convention on the Rights of the Child and the WHO Constitution. Access to medicines is a core component of this right, which requires that special attention be paid to vulnerable and marginalised groups, communities, and individuals, including mothers and children. The right to enjoy the benefits of scientific progress and its applications is also widely recognized and found both in article 27 of the Universal Declaration of Human Rights and, in slightly different terms, in article 15 (1)(b) of the International Covenant on Economic, Social and Cultural Rights.

Taken together, these two point to a number of government obligations with regards to R&D of new drugs and access to these medicines:
• As a minimum, governments must ensure that essential medicines and health technologies are available, accessible, acceptable and of good quality;
• Governments, must do all that they can to ensure the development of new medicines and access to those medicines without discrimination;
• Where the private sector is not meeting the demands of the rights, governments must provide greater support for R&D into conditions that affect vulnerable and marginalised groups and develop an enabling environment fostering the conservation, development and diffusion of science and technology;
• Where government resources are limited, the international community has a responsibility to provide support to ensure that the requirements of the right to health are met and;
• Other countries and key stakeholders, including private companies, must also refrain from actions that interfere with another government’s ability to realise the right, such as through expanding intellectual property (IP) protections in free trade or similar agreements.

As stated, governments are obligated by international human rights law to ensure that the rights to the most vulnerable and marginalised are protected and fulfilled. Although international human rights prescribes no specific system through which this is accomplished where the government has ceded responsibility to the private sector and the needs of the most excluded are not met, governments must step in.

This may be accomplished in a number of ways, but there seem to be two primary methods. The first will be through increased used of or modifications of existing laws and policies and creating new ones which meet the governments’ obligation to protect human rights. The second will be through appropriate methods of public support, financial or otherwise, and changes in the overall policy environment, which meet the governments’ obligation to fulfil human rights. In terms of the latter this may mean modifications of IP law to ensure it does not present a barrier to access, the mandatory use of TRIPs flexibilities and other such issues, In terms of the former much will involve potentially mandatory increased public financing for R&D for neglected conditions, international support and cooperation in these areas, changes in regulatory regimes or the creation of new laws that give priority to human rights and R&D of the appropriate kinds over existing IP where it is a barrier to development or access.

The private sector, based on the UN Guiding Principles on Business and Human Rights, bears a responsibility to respect and remedy human rights. This means that businesses should take active steps to avoid infringing rights and remedy violations where they occur. In the case of the R&D this means that companies should endeavour to increase research into and development of medicines, vaccines and other health technologies that will be used by or are necessary to ensure realisation of the rights of vulnerable and marginalised populations, which will generally mean for neglected conditions.

How R&D is meant to work, but fails in for so many people in LMICs

As the Panel knows, developing new products, is a costly and time-intensive process – from identifying the problem, finding potential compounds, testing and trialling products, determining appropriate formulations, manufacturing a product and finally bringing it to market. Over the course of this process many different stakeholders – governments, the private sector, health care workers, academics, patients and others – are involved.

Most early research – determining how biological pathways work or looking at the nature of a particular pathogen – research for which there is not yet any clear commercial application – tends to be publically funded and conducted by public research entities and academic institutions. As basic scientific research progresses towards commercial application, and specifically drug development – bringing the drugs to market, including going through various regulatory processes such as conducting clinical trials – more and more work, and most of the financing, is done by private companies.

Successful production of new medicines and vaccines under this model is predicated on the existence of a market that affords private companies a sufficient return on sizeable financial investment made in the development of a product. Estimates of the costs of R&D of a medicine vary significantly, ranging from civil society estimates of $500m up to the $2.5bn indicated in a study by Tufts University. Exact figures are difficult to determine because there is very limited transparency related to costs and investments in medicines and vaccines. Regardless of the precise figure, which will vary greatly depending on the kind of medicine, drug R&D is clearly costly. More importantly, however, these costs along with projected returns play a key part in decisions about whether to move forward with the development of a drug.

In order to ensure companies can both recoup investment costs and generate profit, under the current global model they are granted a period of market exclusivity in the form of intellectual property rights, specifically patents, by countries. This exclusivity allows innovator companies to be the only producer of the medicine on the market and thereby theoretically able to set the highest price possible. In some countries, factors such as price controls or reimbursement schemes may have an impact on the price, but the point remains the same. The impact of this can be seen, for example, in the pricing of Gilead’s new Hepatitis C treatment, sofosbuvir, was priced at $84,000 for a 12-week course, even though MSF and the Liverpool School of Hygiene and Tropical Medicine reported that the medicine could actually be produced for $100 dollars per course.

In High-Income Countries – where populations are relatively wealthy (or there are functioning medicines reimbursement schemes through insurance or otherwise) and a greater degree of income equality – companies can charge more for their medicines because either the household or some other entity can generally afford higher prices. Being able to pay means both that people will be able to access these medicines, but more importantly for the purposes of this paper, that shifting investment in R&D to medicines for these conditions because significant profits can be generated from doing so or at least more of a profit than for conditions that largely affect the poor.

LMICs are poorer, with greater income inequality and less reimbursement or public support for the purchase of medicines. In these markets, companies have been more focused on selling medicines for the small percentage of people who are able to pay higher prices. This was the model that was being followed with antiretrovirals for HIV until campaigns by human rights activists challenged this.

So for LMIC, the consequence of the existing system is two interrelated and simultaneous problems:

• New medicines and vaccines that are produced are often too expensive for most people, including the most excluded children, to afford. There has been limited uptake of these medicines and vaccines in MICs, where 75% of the world’s poor now live.
• The right medicines and vaccines, based on public health need, particularly in LMICs, are not the medicines and vaccines that are researched and developed.

Shortfalls in financing R&D for neglected conditions

The numbers bear this contention out. In 2014, the private sector spent $534m, 16% of total funding, to neglected conditions R&D. Although this was a $98m increase over the previous year, almost $33m of that increase was funding toward Ebola. Of total private sector funding, multinational companies contributed the lion’s share, about 62%, or $279m, and small and medium pharmaceutical and vaccine businesses contributed $86m or 16% of the total. This stands in stark contrast to the 137 billion spent by the industry on pharmaceutical R&D in 2012.

Public funding currently constitutes the majority of all funding directed towards neglected conditions. In 2014, the public sector (both governments and multilaterals) provided two-thirds (64%) of all investments. The bulk of public R&D funding is directed towards basic research. For example, from 2007 to 2014, nearly half (49%) of all public funding to malaria was allocated to basic research. The US National Institute of Health (NIH) is one of the biggest public funders of R&D. Between 2007 and 2012, it accounted for nearly two-thirds (61%) of global governments funding to R&D.

In recent years, philanthropic support has been increasingly important for R&D into neglected conditions, reproductive health and other conditions that affect women and children in LMICs. In 2014, it constituted 20% ($688m) of total R&D for these conditions. Of this, the Bill and Melinda Gates Foundation made up 78% ($531m) and Wellcome Trust 19% ($128m). Although they are an important source of funding and can provide ad hoc flexible support when needs are identified, philanthropic funders cannot be the primary means of financing a solution to this problem.

As the figures above demonstrate, under the existing model, investment from all sources for R&D into medicines and vaccines that primarily affect the developing world is far too low, both compared to need and as a proportion to all R&D spending.

The way forward: financing plus delinkage, open innovation and licensing for access

Most models for increasing the scope and effectiveness of R&D for these conditions depend on increases in public investment to make up for the lack of market incentives. In order for countries to meet their human rights obligations, they must commit both to increasing public funding for R&D in relevant areas and this should ensure that all products developed from publically funded research carry strong conditions related to ensuring access to medicines.

Save the Children believes what this may mean is that countries agree to the CEWG’s recommendation that there be a global framework convention on heath and innovation housed at WHO, which would both demonstrate commitment to R&D for diseases of LMICs and also provide sustainable sources of financing to back up this commitment. The CEWG has suggested a suite of potential tools to generate additional financing for neglected conditions, including financing through various (direct) and indirect taxes, different international commitments and increased and innovation forms of voluntary contributions from business and consumers and others. To meet their obligations countries must also hold private sector partners to account, particular with respect to affordability of medicines, and especially when they make use of research funded by the public sector or public sector funding to develop products.

As stated, the private sector has a human rights responsibility to demonstrate a greater commitment in this area. The private sector can meet this responsibility, by in part, investing significantly more money, participating in innovative models of R&D for medicines which are needed in LMICs, sharing patented compounds where necessary to further drug development for children and ensuring that price is not a barrier to access. Voluntary action by the private sector may be a first step, but where voluntary action is insufficient more coercive mechanisms should be used. For example, the Brazilian government has proposed an increased tax on pharmaceutical company profits that would be earmarked towards neglected conditions. The CEWG found this to be “particularly attractive”, though the idea has yet to be explored further.

A coordinated global financing and coordination mechanism for health R&D would allow for a number of existing problems to be address if appropriately designed. First, it would ensure an increased and more stable source of public funding to make up for the current absolute deficit in R&D funding for neglected conditions and adaptation of existing products. Second, it would allow for greater and better coordination of such funding, allowing funding to be driven more efficiently towards areas of human rights and public health need. However, this will all only be effective in addressing the problem of access to medicines if it also makes use of the three R&D design features – delinkage, open innovation and licensing for access – that will ensure affordability.
Save the Children’s proposals

Based on this analysis, alongside supporting the CEWG’s recommendation to proceed towards a binding global framework convention on biomedical R&D, Save the Children makes three recommendations.

1. At a minimum a new R&D mechanism for the sustainable development of health technologies needed for the RMNCH continuum of care and other conditions that affect significant numbers of children should be established based on the principles – delinkage, open innovation and licensing for access – described above. Such a mechanism would therefore make use of alternative incentive models that delink R&D investments from the ultimate cost of the medicine, endeavour to allow for the sharing of relevant information across the world, and enable pooling of patents where they exist for the production of new formulations and fixed dose combinations for paediatric use.

2. Ensure that the development of any new health technology within existing systems of R&D require companies commit to developing all necessary paediatric formulations and combinations where there is demonstrable need or paediatric products are currently unavailable on the market.

3. Increase transparency and accountability for products made with public investments. Where public investments have contributed to private drug development, these investments should be made known and publically available. Public investments made into products that ultimately result in private development of health technologies must also be conditioned upon access terms. This may take various forms including conditions on government grants, on the grant of marketing approval or other such points.

Bibliography and References

References are listed in order of use in the submission:

UN Human Rights Council, ‘Access to medicine in the context of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health’ A/HRC/RES/12/24, 2009.

UN Committee on Economic, Social and Cultural Rights, General Comment No. 14: The Right to the Highest Attainable Standard of Health (Art. 12 of the Covenant), 11 August 2000, E/C.12/2000/4.

UN General Assembly, International Covenant on Economic, Social and Cultural Rights, 16 December 1966, United Nations, Treaty Series, vol. 993, p. 3.

UN, UN Guiding Principles on Business and Human Rights, 2012. Available at http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

Tufts University, Backgrounder: Costs of Drug Development, 2013. Available at http://csdd.tufts.edu/files/uploads/cost_study_backgrounder.pdf.

Public Citizen, Rx R&D Myths: The Case Against the Drug Industry’s R&D “Scare Card”, 2001. Available at http://www.citizen.org/documents/ACFDC.PDF.

Reuters, U.S. lawmakers want Gilead to explain Sovaldi's hefty price, March 2014 Available at http://www.reuters.com/article/2014/03/21/gilead-sovaldi-idUSL2N0MI0UP20140321

MSF, MSF Access Campaign response to Gilead’s deal with generic companies for sofosbuvir and ledipasvir, September 2014. Available at http://www.msfaccess.org/content/msf-access-campaign-response-gilead%E2%80%99s-deal-generic-companies-sofosbuvir-and-ledipasvir

S Flynn, A Hollis & M Palmedo, An Economic Justification for Open Access to Essential Medicine Patents in Developing Countries, 2009, 37 J.L. Med. & Ethics 184.

Policy Cures, Neglected Disease Research and Development: The Ebola Effect, GFinder 2015 annual report, 2015. Available at http://www.policycures.org/downloads/Y8%20GFINDER%20full%20report%20web.pdf

International Federation of Pharmaceutical Manufacturers and Associations, The Pharmaceutical Industry and Global Health: Facts and Figures 2014. 2014. Available at http://www.ifpma.org/fileadmin/content/Publication/2014/IFPMA_-_Facts_And_Figures_2014.pdf

WHO, Research and Development to Meet Health Needs in Developing Countries:
Strengthening global financing and coordination, Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination, WHO, Geneva, 2012.