[Med-privacy] Re: [cipih] 2nd Discussion: advance purchase contracts

[Jeff Williams]

Adian and all,

  Ok thank you Adian for your clarification...  My remaining question
would be than, what specific information would the doctors be ask
to provide regarding how they prescribe that would/would not
require patient specific data?  I ask this because most patients
have nearly unique other complications, or at least most would.
Hence leaving the at least a possibility that some specific patient
medical information would be necessary given MRI complications
ect...

  And BTW I believe discussing this in the open is advantageous as
well and informative given that this is a "Discussion"...


Aidan Hollis wrote:

> Jeff,
>
> I don't believe that my proposal requires any giving up personal medical
> records. At most, it might take surveying of doctors as to how they
> prescribe, but IMS Health already does this.
>
> To everyone else, sorry to fill up your inbox; but I didn't want to leave
> this uncorrected. If you have questions about the proposal or seek
> clarification, I would of course welcome a direct email.
>
> Aidan Hollis
> ahollis@ucalgary.ca
>
> ----- Original Message -----
> From: "Jeff Williams" <jwkckid1@ix.netcom.com>
> To: "Commission on Intellectual Property Rights, Innovation and Public
> Health" <cipih@astro.lyris.net>; <ahollis@ucalgary.ca>
> Cc: "med-privacy" <med-privacy@venice.essential.org>
> Sent: Saturday, November 13, 2004 8:10 PM
> Subject: Re: [cipih] 2nd Discussion: advance purchase contracts
>
> > Adian and all,
> >
> >  The biggest problem I see with what your proposal requires is that the
> > patient has to give up his/her medical and personal privacy in order to
> > be treated with these lower cost developed vaccines.  That is far to
> > high a price as well as far to big of a risk to receive said treatment at
> > a reduced price and one of the biggest risks is that of identity theft
> > of misuse of those medical records...
> >
> > CIPIH wrote:
> >
> >> Commission on Intellectual Property Rights, Innovation and Public Health
> >> Open Discussion Forum
> >> *********************
> >> This posting was submitted by: "Aidan Hollis" <ahollis@ucalgary.ca>
> >> Advance purchase contracts provide an excellent method to enhance our
> >> existing patent system. They allow for innovators to anticipate obtaining
> >> a
> >> substantial return on an investment into a vaccine. As I understand the
> >> proposed mechanism, a vaccine authority would stipulate vaccine
> >> characteristics, including effectiveness, side effects, morbidity, ease
> >> of
> >> vaccination, pricing, and a copayment to be made by the vaccine
> >> authority,
> >> in advance. Innovators who developed such a vaccine would be free to take
> >> up
> >> the offer if they wished to do so. The anticipated price would presumably
> >> be
> >> approximately average production cost, with the copayment by the
> >> authority
> >> adequate to provide a suitable risk-adjusted return to the innovator.
> >> Assuming 200m doses provided, the idea is that the copayment would be
> >> around
> >> $15 per drug, or about $3bn. The innovator would be required to continue
> >> to
> >> price the vaccine at approximately cost for doses above 200m.
> >>
> >> The key benefit of this proposal is that it would likely draw extra
> >> resources into developing vaccines which met the pre-specified technical
> >> requirements. If no suitable vaccine was developed, then no money need
> >> actually be paid, so that it is a case of pay for performance, an
> >> important
> >> characteristic of any scheme trying to elicit effort when the costs and
> >> abilities of firms are unknown.
> >>
> >> The key problem to such a scheme is that it requires the authority to
> >> know
> >> in advance the characteristics of the vaccine, including effectiveness,
> >> side
> >> effects, duration, costs, etc. But are these things knowable? It might be
> >> more attractive, in such a circumstance, to promise different
> >> co-payments,
> >> depending on the characteristic of the vaccine developed. Those which are
> >> better should receive more, and those which are less effective should
> >> receive a smaller reward. In addition, it is possible that other
> >> treatments
> >> for the relevant diseases might appear -- for example, a course of drugs
> >> which eliminated the parasite effectively. Such drugs would fail to meet
> >> the
> >> terms of the purchase commitment, of course, and would not be eligible,
> >> although it might be desirable to stimulate development of those drugs
> >> too.
> >> So it would be helpful if the purchase commitment could include other
> >> medical innovations which addressed the relevant health needs.
> >>
> >> There is an alternative model which could address exactly these concerns:
> >> a
> >> model in which any patented medical innovation which was useful for
> >> treating
> >> the diseases of concern -- tuberculosis, malaria, schistosomiasis, and
> >> perhaps HIV/AIDS -- would be eligible to receive rewards for treatment of
> >> those diseases in developing countries, based on the incremental
> >> therapeutic
> >> effect of the innovation on health status in those countries. To ensure
> >> low-cost pricing, and to claim the rewards, the developers would have to
> >> give up patent protection in those countries. The reward to the
> >> innovators
> >> would come entirely from rewards paid by the authority to the innovators.
> >> Instead of specifying technical characteristics, price, etc in advance,
> >> the
> >> rewards would specify the desired health impacts (eg, an increase in
> >> QALYs).
> >> A vaccine or medicine which had small sales, or had only small impact on
> >> health status, would receive small rewards; a vaccine or medicine which
> >> had
> >> large sales and a significant impact on health outcomes would receive
> >> large
> >> rewards. A more complete description of the sort of scheme proposed is
> >> provided at
> >> http://econ.ucalgary.ca/fac-files/ah/drugprizes.pdf (revised Nov 12 2004)
> >>
> >> One criticism of the scheme I am proposing is that it is difficult to
> >> determine what the health impact of a given vaccine or medicine is at the
> >> time it is given. Admitted. But then how hard is it to know the health
> >> impact of a vaccine before it is even developed? This latter problem is
> >> the
> >> problem facing the advance purchase commitment scheme.
> >>
> >> The proposal described in my paper (above) suggests a complete reform of
> >> the
> >> system of rewarding drug innovation. A much more modest implementation of
> >> it
> >> would, I think, be comparable to the advance purchase commitment. A
> >> reward
> >> program could be set up which would offer rewards for medical innovations
> >> relating to a specific disease, such as malaria. Any new patented
> >> treatment
> >> of malaria would be eligible to attract rewards, with total payments set
> >> at
> >> say $200m per year, for a period of say 20 years. Firms would have a
> >> choice
> >> between keeping their patents witih no reward, or allowing zero-royalty
> >> licensing in the relevant countries and obtaining a reward. The $200m
> >> would
> >> be divided between treatments based on their incremental therapeutic
> >> effects
> >> in the selected countries. It would be necessary to make estimates of
> >> these
> >> incremental therapeutic effects, based on the effectiveness of the
> >> medicine
> >> and the total amount of the medicine or vaccine sold.
> >>
> >> I want to address a few of the questions posed by CIPIH below.
> >>
> >> One of the problems with advance purchase commitments is the uncertainty
> >> of
> >> meeting the authority's technical and pricing requirements. My proposal
> >> does
> >> away with that concern, since the only relevant criteria are whether the
> >> drug or vaccines are sold widely and are therapeutically effective.
> >>
> >> The authority dispensing such rewards (or deciding on whether a vaccine
> >> qualifies) would likely face considerable political pressure. However,
> >> pricing authorities such as Australia's PBS have successfully faced down
> >> political pressure, so this appears to be possible.
> >>
> >> I hope that these comments will be helpful in thinking about the advance
> >> purchase commitments proposals, which I believe would in any case be a
> >> significant step forward. I would welcome any response.
> >>
> >> Aidan Hollis
> >>
> >> Associate Professor
> >> Department of Economics
> >> University of Calgary
> >>
> >> 2500 University Dr NW
> >> Calgary Alberta
> >> T2N 1N4 Canada
> >>
> >> tel: 403 220 5861  fax: 403 282 5262
> >> email: ahollis@ucalgary.ca
> >> web: http://econ.ucalgary.ca/hollis.htm
> >> ----- Original Message -----
> >> From: "CIPIH" <cipih-participant@who.int>
> >> To: "Commission on Intellectual Property Rights, Innovation and Public
> >> Health" <cipih@astro.lyris.net>
> >> Sent: Thursday, November 11, 2004 5:11 AM
> >> Subject: [cipih] 2nd Discussion: Are advance purchase contracts the
> >> answer?
> >>
> >> > Commission on Intellectual Property Rights, Innovation and Public
> >> > Health
> >> > Open Discussion Forum
> >> > *********************
> >> > This posting was submitted by: "Muge Olcay" <olcaym@who.int>
> >> > Are advance purchase contracts the answer?
> >> >
> >> > A proposal for accelerating vaccine research has been made by a Working
> >> > Group sponsored by the Centre for Global Development. It is available
> >> > on
> >> > our website at the following link:
> >> > www.who.int/intellectualproperty/submissions/en.
> >> >
> >> > The basic idea of this is simple. Governments, international
> >> > organisations
> >> > and other possible funders such as foundations would enter into a
> >> > contract
> >> > which would promise the developer of a vaccine (with defined
> >> > characteristics) a guaranteed market at a price which would reward
> >> > investment in the R&D necessary to develop such a vaccine. A specified
> >> > number of doses would be purchased at this (higher) price. Thereafter
> >> > the
> >> > contract would specify distribution at a cost-plus price.
> >> >
> >> > As a concrete example, it is proposed that sponsors (funders) would
> >> > make a
> >> > legally binding promise to pay 90% of the cost of up to 200 million
> >> > treatments for a malaria vaccine at $15 a dose (i.e. $3billion in
> >> > total).
> >> > This is intended to mimic the working of the market for a
> >> > sub-blockbuster
> >> > drug. In order to qualify, the vaccine would need to meet various
> >> > technical requirements concerning efficacy, duration of protection and
> >> > others.
> >> >
> >> > The idea of this scheme is to stimulate R&D on vaccines needed by
> >> > developing countries, but to reconcile through the tiered pricing
> >> > scheme
> >> > the incentive for R&D with the objective of affordable access in
> >> > developing countries.
> >> >
> >> > But there are many issues in making such a scheme operational:
> >> >
> >> > - Specifying the exact characteristics of a vaccine to qualify for the
> >> > "prize". In the real world, there will always be uncertainties as to
> >> > whether or not these had been met.
> >> >
> >> > - A Committee is proposed to rule on such matters, independent of
> >> > sponsors
> >> > or companies. Would such a committee have sufficient credibility? Would
> >> > it
> >> > not become politicised, given the potential rewards at stake, and the
> >> > potentially conflicting interests of sponsors and companies?
> >> >
> >> > - Will potential funders, governments or non-profits, be prepared to
> >> > make
> >> > cast-iron legally binding promises in the undefined future to
> >> > potentially
> >> > large financial commitments? Even if they do, can one guarantee that
> >> > their
> >> > successors will not try to avoid such commitments when they arise?
> >> >
> >> > - Given the uncertainties generated by the above, are companies likely
> >> > in
> >> > practice to shift resources to work on vaccines needed by developing
> >> > countries?
> >> >
> >> > There are many other issues but these seem to the Secretariat of the
> >> > Commission to be key ones. We would welcome other views on this
> >> > particular
> >> > scheme.
> >> >
> >> > _________________________________
> >> >
> >> > Secretariat of the Commission on
> >> > Intellectual Property Rights,
> >> > Innovation and Public Health (CIPIH)
> >> >
> >> >
> >> > ---
> >> > A posting from the Commission on Intellectually Property Rights,
> >> > Innovation and Public Health e-Forum
> >> >
> >> > You are currently subscribed to cipih as: ahollis@ucalgary.ca.
> >> >
> >> > To unsubscribe send a blank email to leave-cipih-21125K@astro.lyris.net
> >> >
> >> > To read discussion archives: www.who.int/intellectualproperty/forum
> >> >
> >> > To submit a posting, send to cipih@astro.lyris.net
> >> >
> >> > *********************
> >> >
> >> > The CIPIH e-Forum contains submissions from parties outside the World
> >> > Health Organization.
> >> > The views expressed in these submissions are solely the responsibility
> >> > of
> >> > the authors
> >> > and do not necessarily represent the views of the World Health
> >> > Organization.
> >> >
> >>
> >> ---
> >> A posting from the Commission on Intellectually Property Rights,
> >> Innovation and Public Health e-Forum
> >>
> >> You are currently subscribed to cipih as: jwkckid1@ix.netcom.com.
> >>
> >> To unsubscribe send a blank email to leave-cipih-21125K@astro.lyris.net
> >>
> >> To read discussion archives: www.who.int/intellectualproperty/forum
> >>
> >> To submit a posting, send to cipih@astro.lyris.net
> >>
> >> *********************
> >>
> >> The CIPIH e-Forum contains submissions from parties outside the World
> >> Health Organization.
> >> The views expressed in these submissions are solely the responsibility of
> >> the authors
> >> and do not necessarily represent the views of the World Health
> >> Organization.
> >
> > Regards,
> >
> > --
> > Jeffrey A. Williams
> > Spokesman for INEGroup LLA. - (Over 134k members/stakeholders strong!)
> > "Be precise in the use of words and expect precision from others" -
> >    Pierre Abelard
> >
> > "If the probability be called P; the injury, L; and the burden, B;
> > liability depends upon whether B is less than L multiplied by
> > P: i.e., whether B is less than PL."
> > United States v. Carroll Towing  (159 F.2d 169 [2d Cir. 1947]
> > ===============================================================
> > Updated 1/26/04
> > CSO/DIR. Internet Network Eng. SR. Eng. Network data security
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> > E-Mail jwkckid1@ix.netcom.com
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> >
> >

Regards,
--
Jeffrey A. Williams
Spokesman for INEGroup LLA. - (Over 134k members/stakeholders strong!)
"Be precise in the use of words and expect precision from others" -
    Pierre Abelard

"If the probability be called P; the injury, L; and the burden, B;
liability depends upon whether B is less than L multiplied by
P: i.e., whether B is less than PL."
United States v. Carroll Towing  (159 F.2d 169 [2d Cir. 1947]
===============================================================
Updated 1/26/04
CSO/DIR. Internet Network Eng. SR. Eng. Network data security
IDNS. div. of Information Network Eng.  INEG. INC.
E-Mail jwkckid1@ix.netcom.com
 Registered Email addr with the USPS
Contact Number: 214-244-4827