UNCTAD forum: Local drug manufacturing a key to universal health coverage

The World Investment Forum (WIF) is a biennial event convened by the United Nations Conference on Trade and Development (UNCTAD). The fourth edition is taking place from 13-16 October. The WIF, which first took place in Ghana in 2008, is a multi-stakeholder meeting “designed to facilitate dialogue and action on the world’s key emerging investment-related challenges,” according to UNCTAD.

The 2014 WIF programme covers subjects such as women’s empowerment, sustainable stock exchanges, regional integration, the international investment agreements regime, and agricultural investments.

On 14 October, UNCTAD and the Joint United Nations Programme on HIV and AIDS (UNAIDS) co-organised a session titled, “Investing in Sustainable and Universal Access to Medicines: Local Production in Developing Countries,” looking into dynamics of providing access to medicines in developing countries.

James Zhan, director of the Investment and Enterprise Division at UNCTAD, opening the session, said access to medicines has been elusive in developing countries. He underlined the importance of local production and the work carried out on the subject by UNCTAD. Over the past decade, UNCTAD has made a sustained effort to better understand the dynamics of local production of generic pharmaceuticals in developing countries.

“We have undertaken studies on the TRIPS [World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights] flexibilities that support local production,” said Zhan.

“We have also examined the experience of emerging market economies in the local production of medicines and vaccines as part as the World Health Organization Global Strategy and Plan of Action on Public Health, Innovation, and Intellectual Property,” he added.

In addition, UNCTAD has organised a number of regional workshops on the TRIPS Agreement and its implication for local manufacturing in developing countries, he said. And it has published a guide [pdf] for policymakers on investment in pharmaceutical production in least developed countries.

According to Michel Sidibé, executive director of UNAIDS, the paradigm that has been used for the last 50 years “is obsolete” because “this paradigm was built on the premise that we would reach millions of people with treatment. Today we are talking about how to reach billions of people with medicines.”

This changed the dynamic of access to medicines, and “we have to start thinking about how to address unbalances and inequities,” he said. The world is changing, he said. New viruses, when they appear, “will not remain in a small corners” of the world, they will spread, and “we need to think about our approach when we talk about global health.”

One major challenge, according to Sidibé, is commodity security. Some 25 percent of the world disease burden is in Africa, but Africa is consuming less than 1 percent of global health expenditure, he noted, adding that Africa manufactures less than 2 percent of the medicines it consumes.

It is a “tragedy,” he said, that most diseases affecting Africa, such as AIDS and malaria, could be cured or prevented with medicines. It does not happen in part because Africa capacity in research and development and local manufacturing is amongst the lowest in the world, he said. “Health is not an expenditure, health is an investment,” he concluded.

Local Production One Solution; IP Policy Important Too

Lindiwe Makubalo, health attaché at the permanent mission of South Africa in Geneva, underlined the efforts made by the government to meet strong demand, in particular for antiretroviral (ARV) drugs. She mentioned the national anti-retroviral treatment programme.

South Africa currently imports some 65 percent of its pharmaceuticals, and 80 percent in the finished dosage form, she said. A number of years ago, she added, South Africa could not afford antiretroviral medicines to meet the local demand. “In time, we have been able to negotiate, bringing down the price of medicines,” and to increase access, she explained.

Local production is one consideration, said Makubalo, but South Africa “is still evaluating and reviewing lessons” learned. Some issues such as the economic feasibility of local production must be considered before decisions are taken, she said.

If local production is to be pursued, she added, “We should start in a progressive manner from packaging to formulation, and active pharmaceutical ingredients production.” She also underlined the importance of appropriately skilled regulatory authorities.

Policy formulation is critical, Makubalo said, in particular the intellectual property legislation to facilitate and expand the use of the TRIPS public health flexibilities. She also underlined the importance to have “different arms” of the government working together.

Greg Perry, executive director of the Medicines Patent Pool (MPP), said it is important not simply to increase access but to increase access to the most advanced HIV therapies. The MPP is seeking to ensure that they have licensing agreements with IP holders for the “very latest treatments.”

The issue is not just about the access, he said, but the quality of products. It is important to develop a fixed-dose combination for HIVAIDS patients, and specific formulations for paediatrics. Local production has an undeniable role, he said, but in the short-medium term it will not fill the gap. “This has to be a global initiative,” he said.

Local Production Helps Dependency

Jorge Bermudez, vice president of the Fundação Oswaldo Cruz (Fiocruz) and former UNITAID executive director, said the right to health is enshrined in the Brazilian Constitution. This implies that Brazil has a policy of universal access because health includes access to medicines.

Brazil has strong health facilities to manufacture medicines, which are both public and private, he said. Over the last 12 years, Brazil’s industrial policy enabled public-private partnerships with the aim to introduce new products, and have essential products manufactured locally. With over 200 million people, “we have to have our own capacity,” he said.

In 1995, Thailand was the first developing country to manufacture generic antiretroviral drugs, said Krisana Kraisintu, board member at the Government Pharmaceutical Organization in Thailand.

In 1992, some 60,000 AIDS patients needed antiretroviral treatment and only 600 could receive it, she said. The treatment cost around US$1,000 per patient per month. By 2002, some 100,000 patients could access treatments, which price had dropped to US$27 per patient per month, she said.

Rico Gustav, community development manager at the Global Network of People Living with HIV, based in the Netherlands, said “donors’ agendas change all the time.” He illustrated the fact by saying that his first treatment had to be interrupted and switched to another treatment with more side effects when a donor from Indonesia pulled out its funding suddenly. He also underlined the need to have antiretroviral drugs with less side effects, less toxicity and simpler regiment.

Sidibé mentioned the 2012 UNAIDS report [pdf] on the AIDS dependency crisis in Africa, in which they found that 90 percent of people on AIDS treatment relied on resources coming from outside African countries, underlining the need to have more local resources.

Frank Schmiedchen, governmental director for the Federal Ministry for Economic Cooperation and Development (BMZ), a discussant in the panel, said in local manufacturing, the question is who is investing and who is making what products, and what are the needs.

Local production of medicines is a geostrategic need, he said. Patients cannot rely on production of one or two countries in the future, he said.

“What we need is competition” to bring prices down, Schmiedchen explained, underlying the strong involvement of the German government in local production of drugs.

Bermudez remarked on the importance of affordability of medicines and commented on licensing agreements for new drugs, alluding to the recent case of Gilead’s drug for hepatitis C, which excludes several low and middle-income countries. He said he understood why Gilead would want to exclude Brazil, even though he did not agree, but not countries such as El Salvador or Paraguay. “It is not acceptable,” he said. “You have to consider the burden of diseases in these countries,” he said.

Paradigm Shift Needed, Say UNAIDS, WHO

Sidibé said too many organisations are current managing global health. The global health architecture needs three main organisations, he said, a strong normative organisation, an advocacy and accountability organisation, and a global health fund. Ebola is one of the symptoms of the need for a new global health architecture, he said.

Zafar Mirza, director, Public Health, Innovation and IP, at the World Health Organization, invited as discussant, said the WHO is at the forefront of the Ebola crisis response.

We cannot resolve the new challenges with old ways, he said, concurring with Sidibé. “Unless we have this very deep paradigm shift about how the existing business model is trying to respond to the public health needs in developing countries, we are not going to reach very far.” He mentioned local production as being one element of this shift.

“When we hear that 80 percent of ARV medicines in the African continent” is coming from India and at the same time understand that 64 percent of HIV and AIDS patients in India are not getting these medicines “we know that there is something fundamentally wrong,” Mirza said.

This is a case, he said, where there is a fundamental disconnect between the economic and health policies of the country. He said he did not wish to put any country on the spot, and also cited Nigeria which hosts some 200 drug factories but has 80 percent of its people requiring AVR medicines not having access.

The problem is policy incoherence, he said, at global level in business models as they are practiced, and at national level when different ministries are approaching the issues from their narrow perspective. When governments do decide to tackle these issues and bring policy coherence, they achieve universal health coverage, he said, citing Brazil and South Africa.

WHO is working closely with the United Nations Industrial Development Organization (UNIDO), UNCTAD and UNAIDS, he said. And there is currently a “huge interest” among African governments for assistance to promote local production.

However, the approach is still fragmented, he said, and “the agenda is still being led by the commercial side of things,” and not by the social policy sector. There is a huge opportunity in the world today for entrepreneurs to combine social and commercial considerations, so a new paradigm can emerge, contributing to universal access and coverage, he said.

Essential Role of Private Sector

Perry said the role of the private sector is critical in the work of the MPP. The industry is more and more willing to participate in partnerships, he added. Some conditions are important for private sector involvement, he noted, such as insurance of quality of medicines, sustainable prices for the local industry, a strong regulatory capacity, and volume.

But beyond the involvement of the private sector, Perry stressed the importance of maintaining international funding.

Nevin Bradford, CEO of Cipla Quality Chemical Industries in Uganda, said one of the key issues that industry will face going forward is the sustainability of current pricing levels.

ARV prices have declined over the past several years, he said. It acted positively on access, making ARVs much more affordable, and much more available, he said. “But at the other end, if things continue as they are, quite honestly, we must question the sustainability of the current pricing model,” on the pain of seeing manufacturers leave the ARV market. Pharmaceutical manufacturing plants can produce a variety of products, and can chose to manufacture products that will be more appealing for them, he said.

Mirza said the role of governments includes providing a policy framework that is a mix of commercial considerations and public health needs. The history of industry of the industrialised world shows that governments were not just involved in strengthening regulation and providing policy frameworks but also subsidising for a “long period of time” to help companies become sustainable to a point where they could compete in the marketplace.

Governments can provide a package of incentives, including preferential procurement to promote and support meaningful local production, “which is public health-oriented and which can at the same time serve both objectives of industrial development as well as public health development,” he said.

Sidibé concurred and said the private sector role is critical, and will be even more so in years to come but the normative function of states, and collaboration between the private sector and civil society were also key.

Schmiedchen added that public-private partnerships will be crucial in the future, but remarked on the need to have a market to attract investments from the private sector. “It has nothing to do with nice or less nice people,” he said. “It is the basis of our economic system.”

There is a growing trend, he said, of going “beyond ideological discussions” on what is the role of the private sector and what is the role of states towards finding pragmatic solutions.

Source: Intellectual Property Watch