[Ip-health] Hubbard and Love in the Guardian: Lifesaving drugs must be developed differently - for all our sakes

[James Love]

http://www.guardian.co.uk/life/opinion/story/0,12981,1161123,00.html

We're patently going mad

Lifesaving drugs must be developed differently - for all our sakes

Tim Hubbard and James Love
Thursday March 4, 2004
The Guardian

Innovation can be a driving force for improving public welfare. Nowhere
is this more stark than in the creation of drugs to treat fatal
diseases. If you have the drug you live; without it you die. Whether you
have the drug depends on two issues: has it been developed, and if so,
do you have access to it? The conflict between these issues revolves
around how to stimulate innovation and how to pay for it. It is
exemplified by the issue of access to Aids drugs and is one of the most
contentious issues of international economic policy and law.

Drugs are cheap to manufacture, but expensive to develop. Much of the
underlying research comes out of academic institutions funded by
government grants. Much of the development work is by pharmaceutical
companies, which will not invest in research and development without
incentives: in this case the patent system, which rewards a company that
develops a successful drug with a 20-year marketing monopoly.

Allowing monopolies leads to bad side effects and drugs are no
exception. The economic incentive is the freedom to charge what the
market will stand, and invest in what gives the highest return, rather
than in what maximises healthcare benefits. In developing countries,
life-saving medicines are priced beyond the reach of most people, a
morally offensive outcome. Huge publicity surrounds specific negotiated
price reductions, yet the effect on the overall access problem is tiny.
But it's not just an issue in the developing world.

Governments and health insurers are finding ways to deny access to the
newest and priciest products - in the US and other countries without a
universal public health system, the uninsured cannot afford the newest
medicines. Less well known are the huge inefficiencies of the existing
system. Only about 10% of the price of a drug goes to pay for research
on new products, and three-quarters of new drugs have no significant
therapeutic benefit over existing treatments, implying that perhaps only
2-3% of the money collected from drug sales is spent on developing
medicines better than the ones we already have.

If the existing system were the only way to encourage innovation, it
would be sensible to tolerate it, as we would all eventually benefit.
However, we believe that it is possible and practical to implement an
alternative system that would reduce drug prices and drive investment
into innovations that actually address health priorities.

On January 1 2005 the Trips agreement on intellectual property rights
will come into force in most World Trade Organisation countries. It is
an unbalanced treaty, based solely on enforcing patent rights worldwide
as a mechanism to reward innovation.

We believe the way forward is to modify Trips in healthcare to require
countries to maintain a GDP-related contribution to research and
development, while being free to choose how they finance it. New methods
of research - such as non-profit collaboration or prizes for exceptional
ideas - would allow innovation to be rewarded directly, removing the
need for marketing monopolies, and allow competition. Drugs could then
be sold close to the cost of manufacture. The mechanisms to implement
this would be far cheaper than the current system, which increases
global prices by at least $300bn (=A3160bn) a year.

Evidence that alternative business models can support innovation comes
from a variety of areas including open-source software development, the
human genome project and open-access publishing. Last year, 69 respected
scientists and economists wrote to the World Intellectual Property
Organisation, a UN agency, asking that alternatives such as
collaborative open models be considered. Yet the developed world
continues to resist change. It is hard to avoid the suspicion that the
dogged advocacy of intellectual property law as the only way to
stimulate innovation is more about maintaining world economic power than
anything else. But this is short-sighted.

Although the developed world leads in patent applications owing to its
science base, the developing world will catch up, and there is evidence
that the rise in the number of patents is starting to inhibit innovation
itself. It would be more sensible to develop worldwide policies that
encourage and reward innovation, while allowing competitors to build on
each others' ideas, and protecting consumers from unreasonable prices.

Supporting the existing policy direction for drugs is indefensible,
especially after the November 2001 Doha declaration of the WTO that
health was more important than intellectual property. Extending
marketing monopolies on medicines worldwide prevents the very
competition that reduces prices and increases access to life-saving
medicines. In the face of other successful models to support innovation,
we can no longer claim we have no choice. Perhaps we should ask
ourselves if laws that restrict use of knowledge and thereby cause
unnecessary death are really weapons of mass destruction.

=B7 Tim Hubbard is head of human genome analysis at the Wellcome Trust
Sanger Institute in Hinxton, Cambridgeshire. James Love is director of
the Consumer Project on Technology (CPTech) in Washington DC. Views
expressed in this article are those of the authors and not necessarily
those of their organisations

=B7 Further reading

A New Trade Framework for Global Healthcare R&D
TJ Hubbard and J Love. PLoS Biology, 2004. 2(2): p147-150.
http://plosbiology.org/archive/1545-7885/2/2/pdf/10.1371_journal.pbio.00200=
52-L.pdf

Community Property
KN Cukier. (cukier.com/writings/opensourcebiotech.html). Acumen, 2003.
p54-60.

Information Feudalism: Who owns the knowledge economy?
P Drahos and J Braithwaite. 2002, London: Earthscan, 253.