[Ip-health] Bridges Weekly: WHO COMMITTEE ON DRUG INNOVATION AND PRICES UNDERWAY IN GENEVA

[Thiru Balasubramaniam]

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One proposal under consideration at the WHO calls for a global medical
research and development (R&D) treaty. Once conceivable way in which
this might function would be to create biomedical R&D spending targets
for governments, allowing drugs thus produced to be sold cheaply.
Other proposed mechanisms include a 'prize fund' model, which would
provide rewards for pharmaceutical innovation; 'advance market
commitments', which guarantee future purchases of a health product to
be developed at an agreed upon price; and, 'patent pools', which
bundle together the technology in two or more patents so that they can
be licensed out collectively to third parties.



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BRIDGES Weekly Trade News Digest - Vol. 11, Number 38 7 November 2007

WHO COMMITTEE ON DRUG INNOVATION AND PRICES UNDERWAY IN GENEVA

Government officials and civil society representatives are meeting in
Geneva this week to discuss ways to spark the development of
affordable treatments for medical conditions that disproportionately
affect people in poor countries.

The World Health Organization's Working Group on Public Health,
Innovation and Intellectual Property (IGWG) is charged with developing
a global strategy for the discovery, development, and delivery of
medicines and other health products, as well as for encouraging
pharmaceutical innovation in developing nations. In theory, this
session of the committee, which runs through 10 November, is supposed
to come up with an action plan to present to the WHO's 193 member
states at the global health body's annual summit in May 2008.

Health campaigners see the deliberations as an opportunity to explore
alternatives to the current intellectual property regime as a means of
encouraging the development of new and affordable drugs. The
patent-based model, they say, encourages high drug prices, since
pharmaceutical companies have to use the time-limited sales monopoly
to recoup all costs, from marketing expenditures to spending on
unsuccessful inventions. Furthermore, the model does little to
encourage innovation when the main market for a new medicine would be
poor people who cannot afford to pay high prices.

One proposal under consideration at the WHO calls for a global medical
research and development (R&D) treaty. Once conceivable way in which
this might function would be to create biomedical R&D spending targets
for governments, allowing drugs thus produced to be sold cheaply.
Other proposed mechanisms include a 'prize fund' model, which would
provide rewards for pharmaceutical innovation; 'advance market
commitments', which guarantee future purchases of a health product to
be developed at an agreed upon price; and, 'patent pools', which
bundle together the technology in two or more patents so that they can
be licensed out collectively to third parties.

However, intellectual property, particularly for medicines, is a
controversial issue. Many industrialised countries and pharmaceutical
companies are extremely reluctant to discuss changes to the status
quo, suggesting it could threaten future innovation by making the
rewards uncertain. The US, for instance, dissociated itself from a May
agreement by member states that called on the WHO Secretariat to come
up with proposals for addressing the links between R&D costs and the
price of medicines and other healthcare products (World Health
Assembly resolution 60.30; see BRIDGES Weekly, 23 May 2007,
http://www.ictsd.org/weekly/07-05-23/story2.htm).

WHO chief: innovation and affordability crucial

WHO Director-General Margaret Chan pointed to the imperative for both
innovation and affordability while opening the gathering on 5
November. "Public health cannot move forward without innovation," she
said. "Many diseases of the poor do not have good therapeutic drugs,
or the prices are out of reach. Or diagnostic tools are outdated or
too complicated for point-of-care use close to people's homes."

Chan chief drew particular attention to the "rise of chronic
diseases," noting that they constitute the greatest burden for low-
and middle-income countries. Such ailments, like heart disease,
stroke, cancer, and diabetes, are responsible for 60 percent of deaths
around the world, according to the WHO. Chan said that this, coupled
with the long duration of treatment, made "the need for effective and
affordable medicines all the more critical."

The WHO chief acknowledged some of the obstacles confronting attempts
to promote both innovation and access. "The route to addressing these
concerns passes through many other territories, including those where
legal, economic, and trade issues have prominence. This is the
reality," she said, alluding to critics' claims that attempts to
address intellectual property treaded upon the terrain of the WTO and
the World Intellectual Property Organization.

Ahmed Ogwell, the head of international relations at the Kenyan health
ministry and a vice-chair of the IGWG, countered such claims head on
at a press conference, reports Reuters. "If something is affecting
public health, then the WHO is the proper place for it to be dealt
with," he insisted.

US 'd=E9marche' highlights differences

As the talks got underway, participants focused mainly on two
documents: a draft strategy and action plan put together by the WHO
Secretariat in July based on discussions at the previous IGWG session,
and a paper produced by 14 Latin American countries at a September
regional conference in Rio de Janeiro.

The Secretariat's draft global strategy and action plan contains a
wide range of ideas for how to identify research needs, ramp up
pharmaceutical development and innovative capacity, and improve access
to medicines (see BRIDGES Weekly, 5 September 2007,
http://www.ictsd.org/weekly/07-09-05/story4.htm).

The so-called 'Rio text', though similar in format, is more emphatic
about looking into new ways of de-linking R&D costs from drug prices,
and underlines the need for sustainable funding for the implementation
of an action plan on medical innovation. It sought to limit strict
'TRIPS-plus' intellectual property rules in bilateral and regional
trade agreements, as well as to encourage the WHO to provide technical
and policy support to countries seeking to take advantage of
flexibilities in multilateral trade rules in order to promote public
health. The Rio text set out several underlying 'principles' for a
global strategy on health and innovation, among them the notions that
the "right to health" trumps commercial interests, and that
intellectual property rights should not become an obstacle to access
to medicine.

Sources report that several public health groups that had criticised
the WHO draft for being vague about funding and specific
responsibilities were happier with the Rio text.

The US government, on the other hand, was not. In a paper reportedly
sent to certain developing countries last week, Washington warned of a
"push by Brazil or other like-minded countries to use the Latin
American position paper as the basis of the negotiation." This
so-called 'd=E9marche' suggested that basing discussions on anything
other than the WHO document would significantly delay progress.

The paper, a copy of which was seen by Bridges, warned that "there
could be a push by some WHO member states during the second IGWG
(November 2007) for a 'global framework' in the context of research
and development relevant to diseases that particularly impact
developing countries. This 'global framework' proposal has the
potential to undermine existing research and development incentives
and to harm the patent system and the incentives to innovation that it
offers."

The US d=E9marche also argued that the WHO should not take a more
proactive role with regard to intellectual property for pharmaceutical
products, warning of potentially negative trade implications. "The
United States believes that the WHO Secretariat goes beyond its
technical competence when it seeks to advise its member states on
trade-related matters, including intellectual property," it said. "The
WHO should not set parameters by which WTO member states can negotiate
their trade agreements." The document urged governments to include
trade, economic, and intellectual property officials in their IGWG
delegations "in order to ensure trade issues are fully and
appropriately considered."

The US state department and permanent mission in Geneva declined to
confirm or deny the existence of the d=E9marche.

Tensions within the IGWG

US opposition to the Rio text was plainly evident as the IGWG
proceedings got underway, with delegates from the US and Brazil
disagreeing on issues such as the importance of intellectual property
protections to innovation, the WHO's role in facilitating the use of
TRIPS flexibilities, and an R&D treaty.

Canada and Norway suggested that the Rio text's proposed principles
for a global strategy may overstep the IGWG mandate. So did Mexico,
even though it had signed on to the Rio text in September. Citing
domestic decisions, Mexico explained that it could not accept the Rio
text's statement that the right to health should always take
precedence over commercial interests.

The US proposed three principles of its own for a global public health
strategy, emphasising the importance of intellectual property rights
to innovation.

While most sessions at the IGWG were open to both government officials
and representatives from a range of industry groups and NGOs, the
'drafting committee' that is putting together a new text for the
strategy and action plan is open only to governments and selected
experts.

Countries spent a significant amount of time debating procedural
issues. Questions arose over the difference between the open sessions
and drafting sessions, as well as whether there should be concurrent
drafting sessions. Several Latin American countries wanted a single
drafting group, so as to give small delegations an equal voice. The
African region argued that parallel drafting sessions working
simultaneously on the strategy and the plan of action would be most
effective. One official noted that while governments talk in Geneva,
"children are dying."

Some developing country officials suggest that the week may not be
enough time for governments to agree on a meaningful plan to address
drug prices, intellectual property, and innovation. However, they say
that WHO members might be able to use this session of the IGWG to set
up some sort of process in which they will be able to continue to
negotiate with each other on these issues.

Earlier this year, Bangladesh and Bolivia called for extending the
IGWG's mandate by one year, particularly so that it could focus on a
range of infectious or parasite diseases that heavily affect the poor
(see BRIDGES Weekly, 7 March 2007,
http://www.ictsd.org/weekly/07-03-07/story4.htm).

Progress despite initial divisions

On 7 November, officials were in closed drafting groups attempting to
come up with a new working draft for further negotiation. The chairs
reported later in the day that the pace of progress was picking up,
praising members for their "spirit of accommodation."

At time of writing, sources report that negotiators had accepted
provisions in the text that would call on governments to "encourage
further exploratory discussion on the utility of possible instruments
or other mechanisms for essential health and biomedical R&D including,
inter alia, an essential health and biomedical R&D treaty." This
acceptance increases the likelihood that an eventual strategy and
action plan would leave the door open to negotiations on such
mechanisms. Countries including Brazil, China, Kenya, India, and even
the US reportedly helped the EU and Switzerland overcome their initial
opposition to the clause. Canada proposed the phrasing that ultimately
became the compromise.

The conclusion of the WHO IGWG session will be covered in the next
edition of BRIDGES Weekly.

ICTSD reporting; "WHO health chief urges fast action on cheap drugs,"
REUTERS, 5 November 2007.