[Ip-health] IP-Watch: Confidential Documents From WHO R&D Finance Group, Industry, Raise Concern

[Thiru Balasubramaniam]

http://www.ip-watch.org/weblog/2009/12/09/confidential-documents-released-f=
rom-who-rd-finance-group-pharmaceutical-industry/

Confidential Documents From WHO R&D Finance Group, Industry, Raise
Concern

By Kaitlin Mara on 9 December 2009 @ 7:22 pm

Confidential documents related to the World Health Organization Expert
Working Group on innovative financing for research and development
surfaced today, revealing the group=92s thinking as well as
pharmaceutical industry thinking about the WHO process. The documents
immediately raised concern about possible undue access to the process
by industry, but the WHO told Intellectual Property Watch the industry
group was not supposed to have them.

The documents appear to have come from the International Federation of
Pharmaceutical Manufacturers and Associations (IFPMA), and include
draft reports on innovative financing mechanisms from the working
group as well as an analysis by the IFPMA on the reports=92 contents.
They were released on Wikileaks [1], a website that anonymously
publishes sensitive documents.

=94IFPMA was not supposed to have working drafts of the expert working
group in their possession and they were not given these documents,=94
said Precious Matsoso, director of Public Health Innovation and
Intellectual Property (PHI) at the WHO, under whose auspices the
expert working group falls. =93It was understood by the working group
that its report is intended for the director general and=94 WHO members,
she added.

Public health advocates reacted strongly to the leaked documents. =93The
IFPMA document confirms much of what had been feared,=94 that there is
=93a larger WHO strategy to protect the status quo, particularly as it
relates to intellectual property issues,=94 said James Love, the
director of Knowledge Ecology International, a non-profit group
focussed on transparency in policymaking and which has been advocating
for prize funds, a biomedical R&D treaty, and other initiatives to
fund R&D.

An introductory letter included with the documents addressed to the
Public Health Advocacy Committee at IFPMA says =93the overall result [of
the working group=92s report] is in line with most of the industry
positions on this matter,=94 but says that =93there is still room for them
to introduce new language=94 as the documents date from before the final
working group meeting concluded on 2 December.

The Expert Working Group=92s =93comparative analysis of innovative
financing proposals for health R&D,=94 available from Wikileaks here [2]
[pdf], divides aspects of drug development into six categories and
then lists the ideas from =93least likely=94 to =93most likely=94 to work.

The six categories are: fundraising, research and development capacity
building in developing countries, basic research and product
discovery, product development, manufacturing and distribution, and
efficiencies.

The leaked documents are all available from Wikileaks here [3].

Expert Analysis

The draft reports available on Wikileaks do not contain final
recommendations. These will be available only in the final report,
expected to be released this week (IPW, WHO, 7 December 2009 [4]).
Instead, it contains an analysis of all proposals made thus far,
through two calls for advice from the public, and ranks them on
efficacy and feasibility.

Within =93fundraising,=94 proposals considered =93least likely to work=94
include diverting existing resources to health, reducing tax evasion
and havens, levying new charges on services or access rights. A
proposal for a =93Green IP=94 system (IPW, Inside Views, 27 June 2008 [5])
is currently =93too hard to operationalise=94 but some elements could
potentially be useful.

Most likely to work include new indirect taxes, for example on
internet users; voluntary private contributions, new donor funds, and
taxes on pharmaceutical profits. Taxing pharmaceutical profits is
estimated to generate only USD 160 million versus, for example, a
potential USD 2 billion from internet taxes.

On building research capacity, specific recommendations are not made,
but the report says there is a lot of potential in this idea as
innovative pharmaceutical development is often done in commercial
ventures and, in developing countries, =93commercial targets often have
significant overlap with public health targets,=94 as local markets
demand treatment for neglected diseases.

On basic research, prize systems and prize funds for completed drugs,
as well as a =93health impact fund,=94 are deemed least effective, as is
the idea of a biomedical R&D treaty. =93Endstage prizes=94 and the treaty
were also seen as not particularly beneficial for product development.
Prizes have been advocated as a solution to R&D financing problems by
several health advocacy NGOs (IPW, Public Health, 12 February 2009 [6]).

Deemed more effective in incentivising research were funding for
product development partnerships, grants to companies working on
neglected diseases, and prizes for reaching =93milestones=94 (such as
those provided by Innocentive). Similar incentives were considered
beneficial for product development.

Prizes were seen as possible incentives for manufacturing and
distribution, though =93likely only for diagnostics=94 as opposed to
vaccines or medicines.

=93Absolutely Fair Towards the Industry=94

The draft report, the IFPMA said, is =93absolutely fair=94 regarding
industry concerns, using =93real figures=94 on the cost of drug and
vaccines developments and containing =93many references to the
importance of intellectual property =85 to achieve further innovation.=94

As far as streamlining the current R&D system, which the report calls
=93unwieldy,=94 removing data exclusivity was seen as less effective
compared to harmonising medicine regulatory systems and =93pre-
competitive platforms=94 for R&D.

The IFPMA analysis raised two major concerns.

The first relates to proposed taxes on the pharmaceutical industry,
which the IFPMA document says =93places the burden of the R&D =85
exclusively on industry and reinforces the negative image of
pharmaceutical profits.=94

=93Operationalising this proposal may lead to companies increasing
prices to compensate which would be counterproductive,=94 it adds.
Further, it is not certain to be acceptable by all partners =93as the
tax should be imposed on the whole pharmaceutical sector, generic
included.=94

The second area of concern is drug-purchasing mechanism UNITAID=92s
proposed patent pool, and in particular its structure for royalty
payments to IP owners. These payments would be determined based on the
=93therapeutic benefits and the affordability of royalities in
particular countries,=94 the analysis says, adding that this =93does not
follow past or current patent pool structures=94 and emphasising that
voluntary participation should be an =93essential prerequisite.=94

A UNITAID board meeting on 14-15 December will review an expert study
on the patent pool, which the UNITAID board agreed in principle to
establish in July 2008. In May 2009, the board instructed the
organisation=92s secretariat to prepare an implementation plan. An
expert team analysed a range of issues and its report, completed in
November, clearly recommends the implementation of the pool, sources
told Intellectual Property Watch.

The IFPMA analysis also called for vigilance regarding the potential
use of open source systems.

NGOs: Documents =93A Step Backwards=94

Love said the expert working group process was =93a step backwards=94 and
=93evidence of a deeper problem in WHO regarding the influence of the
pharmaceutical industry, and its philanthropic supporter, the
Microsoft founder=92s Gates Foundation.=94

=94This is a very disturbing set of documents,=94 said Sarah Rimmington,
from nongovernmental organization Essential Action=92s Access to
Medicines Project. She added that the report =93embraces the status quo
and rejects the feasibility of almost every single important proposal
aimed at truly solving these complicated problems.=94


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997