[corp-focus] Medical R&D That Works for the Developing World

[robert weissman]

Links and forum to comment on this and other columns at:
http://www.multinationalmonitor.org/editorsblog

Medical R&D That Works for the Developing World
By Robert Weissman
April 30, 2008

Can the world settle on a medical research and development (R&D) system 
that develops medicines and other products to meet priority health needs 
and makes those products available on an affordable basis?

Developing a strategy to meet these twin goals is the task of World 
Health Organization (WHO) negotiations in their final phase this week.

The WHO Intergovernmental Working Group on Public Health, Innovation and 
Intellectual Property is finishing talks to create a global strategy and 
plan of action to spur medical R&D focused on the health needs of 
developing countries, and to ensure that poor populations get access to 
important pharmaceuticals and other medical technologies.

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, but the situation is much worse in poor 
countries. This has nothing to do with the ethics of Big Pharma. It is 
how the system is designed.

The current corporate sector system of R&D is driven by the prize 
offering of a patent monopoly. Patents are not worth much if they offer 
monopolies 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.

Here's what this means in practice: Developing countries comprise 80 
percent of the world’s population but amount to only 13 percent of the 
global market for medical products. A review by Doctors Without Borders 
of new drugs introduced between 1975 and 2004 found that of 1,556 new 
drugs put on the market, only 21 were for "neglected diseases" -- 
diseases endemic to developing countries.

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 more than $100,000 -- leaves new 
medicines completely out of reach of the vast majority in developing 
countries.

How to respond to these problems? There are two basic alternatives. 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. 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 to identify mechanisms to make the fruits of R&D 
widely accessible.

There are a lot of good ideas, large and small, about how to do this. 
Notably at the WHO talks, Bolivia and Barbados have put forward a series 
of concrete proposals for non-patent prizes to incentivize R&D, with the 
resulting fruits of the innovation made available at competitive prices.

One of the Bolivia/Barbados proposals is for a Priority Medicines and 
Vaccines Prize Fund. The fund would offer large cash prizes to entities 
developing new products for neglected diseases, antibiotics or products 
for emerging public health threats (like avian flu or SARS). It would 
offer smaller prizes to parties that made advances toward these goals, 
meeting benchmarks short of bringing new products to market. It would 
also offer separate prize money to parties that openly published and 
shared their research. A condition of receiving the prizes would be 
licensing all resulting patent, data and know-how so that end products 
could be made available immediately on a competitive basis. In other 
words, there would immediately be generic competition and low-cost pricing.

There is no guarantee that the prize fund would work in creating 
innovation where now there is none or much too little. But it is an 
interesting and provocative proposal.

There is no legitimate rationale, on the merits, to oppose ongoing 
discussion of this prize proposal. Remember, in keeping with the focus 
of the WHO talks, the Bolivia/Barbados proposal focuses on health 
problems specific to developing countries. It involves areas where there 
is no effective market (or, in the case of antibiotics, special market 
problems) to incentivize R&D. So, there is nothing for Big Pharma to 
lose here.

But the industry and its allies are viewing this and similar proposals 
very cautiously. Some ideologues oppose any tinkering with the patent 
monopoly system. The industry is concerned that tinkering in the case of 
health problems related to developing countries will eventually threaten 
the patent monopoly system in the rich world, or interfere with its 
ability to expand sales to the wealthy in middle-income countries. (More 
on the role of Big Pharma and its proxies in my next column.)

Will country negotiators at the WHO talks ignore those who would 
subordinate public health to patent veneration or commercial concerns? 
Will they instead advance experiments with new institutional 
arrangements to promote the complementary public health objectives of 
innovation and access? We will know by the end of the week.


Robert Weissman is editor of the Washington, D.C.-based Multinational 
Monitor, <http://www.multinationalmonitor.org> and director of Essential 
Action <http://www.essentialaction.org>.

(c) Robert Weissman

This article is posted at: 
<http://lists.essential.org/pipermail/corp-focus/2008/000285.html>