WTO, WHO, WIPO examine IPRs and middle-income countries

The WHO, World Trade Organization, and the World Intellectual Property Organization held the fourth edition of their trilateral technical symposium on 5 November.

These symposia are held in the context of the cooperation between the three international organisations on public health, trade and intellectual property.

The fourth edition of the series of joint technical symposia on public health, intellectual property and trade convened by the three organisations, focused on the challenges and opportunities for middle-income countries in the field of innovation and access to medical technologies.

The programme [pdf] of the symposium showed a number of speakers from the three agencies, as well as from the private sector, governments, and civil society.

According to a background note [pdf], “Middle-income countries are also one of the most challenging markets for the pharmaceutical industry. With shrinking margins in Europe especially, companies are increasingly looking at these emerging economies as promising markets, but are struggling to find business models that are profitable on the one hand and on the other facilitate access to affordable treatment given the absence of widespread health insurance coverage.”

Opening the session, Xiaozhun Yi, deputy director-general of WTO, said Margaret Chan, WHO director general had been called away from Geneva in the context of the WHO’s response to the Ebola crisis. The dialogue between the heads of the three agencies was therefore impossible, although the symposium would be held as scheduled. The dialogue between the agencies directors is expected to be rescheduled to take place at the next trilateral event, tentatively foreseen for mid-2015, he said in prepared remarks [pdf].

Representing the WHO was Marie-Paule Kieny, assistant director general, Health Systems and Innovation, while Christian Wichard, deputy director general, Global Issues Sector, represented WIPO.

Introducing the theme of the symposium on middle-income countries, Yi said, “It is the remarkable dynamism and yet the diversity of these countries in the public health field that make them such an important focus for policymakers today.”

While middle-income countries (MICs) are a growing source of medicines and other technologies for other countries, they continue to face access to medicines challenges for their own population, he said.

Yi also remarked that given their increasing status as “producers, adaptors and innovators or medical technologies,” MICs also play an important role as a source of technology transfer to least developed countries (LDCs).

WHO Perspective

Kieny said “Universal health coverage, which is our guiding principle, is not possible without innovation and sustainable supply of affordable medicines and health technologies.” “But what are the benefits of innovation if the people who need the new medicines cannot access them?” she asked in prepared remarks [pdf].

The list of needed new products is long, she said, citing as example new antibiotics, fixed-dose combinations to improve treatment compliance, paediatric formulations for a range of childhood conditions, and new and more effective vaccines.

She underlined the need for those new treatments to be affordable and accessible, “otherwise innovation remains an empty promise,” and remarked that this is an issue that can also be applied to developed countries. “A recent report described the trend by showing that in the US the median revenue of the Top 100 medicines increased seven fold from $1,260 in 2010 to $9,400 per patient in 2014 while the patient population per specific drug is shrinking because of narrower medical indications,” she said.

Kieny also remarked that “unaffordable prices are by far not the only challenges for accessing medical treatment. … Most of the essential medicines and treatments for heart disease, diabetes, and chronic lung diseases are available as cheap generic version and still these treatments are not available in many health facilities,” [in developing countries].

On the Ebola crisis, she said Ebola “reminded us that we have diseases where the current patent system does not deliver the innovation we need.”

“The lack of expected return on investment was one of the major reasons why today we have to test the Canadian Ebola vaccine in a few months while this could have been done many years ago,” she added.

Wichard said the patent system and innovation are linked. He added that a number of MICs are increasingly filing patents in the pharmaceutical industry. This increase is largely fuelled by China and Turkey, he said.

System for Rating Countries Inadequate

Several speakers underlined the fact that one of the challenges of MICs comes from the current World Bank classification, based on gross national income (GNI). Since the 2008 financial crisis, said David Evans, director, Department of Health Systems Governance & Financing at WHO, there has been an increasing demand from external financial partners in health for countries to become self-sufficient and “prove value for money.”

Once the countries “graduate” out of low income country status they lose support, for example, they fall out of the GAVI Alliance eligibility. Graduating does not necessarily correspond to the ability to pay, he said, even though those graduating countries have room to allocate more of their resources to health, he added.

Evans said a new more refined index would be useful. A continuous index, which would allow a slow phase-out of external assistance might be preferable to ensure affordability of health products for the MIC population, he said.

Carsten Fink, WIPO chief economist, underlined the wide difference between MICs, for example between Lao, the poorest of the MICs, and Hungary, the richest. Some MICs have managed to reduce extreme poverty to very low levels, such as Hungary, while in some MICs, such as India, a large portion of the population lives with less than US$2 a day, he said.

The growth in research and development (R&D) in MICs is growing faster than in high income countries but most of this is due to China, he said. China, he added, has shown the highest rise in patenting seen in economic history. He also presented the Global Innovation Index, co-published by WIPO, Cornell University, and INSEAD, a global business school. (IPW, WIPO, 18 July 2014).

Closing the session, Zafar Mirza, coordinator, Public Health, Innovation and Intellectual Property at WHO, quoted Chan’s opening speech at the last World Health Assembly, saying that the present system assessing countries is going to pose a number of serious challenges in terms of access to health services in MICs.

Markets in the MICs might offer huge commercial opportunities in the field of health for foreign companies, he said, but for local population it may mean huge difficulties, including unaffordable medicines and health technologies.

Manica Balasegaram, executive director of the Access Campaign at Médecins Sans Frontières (MSF, Doctors without Borders), also said the current World Bank classification using macro-economic criteria lead to loss of overseas development aid and global health funding.

More Policy Involvement Needed From MICs, Some Say

Balasegaram said tiered pricing, in which MICs pay more depending on their economic size, leads to higher costs and exclusion from patent voluntary license. Pressure is exerted on MICs to adopt strict level of IP protection going beyond the requirement of the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS), in particular in bilateral trade agreements, he added.

He called for increased political collaboration between MICs and for the adoption by MICs of global solidarity mechanisms. In particular, he said MICs should invest more in terms of financial, scientific and political resources for needs-driven innovations.

A stronger ownership of organisations like the WHO by MICs – in which they could contribute funding, and support programmes that they need – would be helpful, he said.

Mirza deplored that MICs are not stepping up their engagement in WHO, such as in the Consultative Expert Working Group on Research and Development: Financing and Coordination.

“We do not see contributions from MICs,” he said, although they see the problems, recognise it and “fight it very well” in multilateral fora. They are not “taking the bull by the horns,” he said.

It is important to define success, he said. “How do we define success for a growing pharmaceutical industry in developing countries?” Mirza asked. Some 80 percent of anti-retroviral drugs in the African continent come from India, he said. However, according to UNAIDS, 64 percent of HIV patients in India do not have access to first line anti-retroviral drugs, he said, qualifying the situation as “very tragic.”

He gave a similar example for Nigeria which have some 200 pharmaceutical companies and where some 80 percent of HIV patients in Nigeria do not have access to anti-retroviral medicines.

The situation for vaccines is even worse, he said, adding “the existing way or public policy formulation” in the area of innovation and access to medicines “has to go a long way.”

Ebola, Illustrative of Market Failure

Kieny presented recent developments on the quest for Ebola treatments and vaccines (IPW, Public Health, 24 October 2014). She said the research on the Ebola virus was sponsored in some countries, such as the United States and in Canada for many years by their defence sectors. Those countries considered Ebola as a possible bio threat so there was significant investment to develop counter measures to protect domestic interests should any terrorist group want to use the Ebola virus as a biological threat, she said.

Because of those initial investments by defence sectors, “we had at least candidate vaccines” near their term, she said, but most of them had not undergone clinical trials in humans. Some of those candidate vaccines had been there for nearly ten years, she said. The vaccine from Canada was first tested in animals back in 2004.

In the context of rare diseases affecting mainly poor people, mostly in remote places and villages, such as Ebola, there is no market and no prospect of revenues for the pharmaceutical industry to develop new interventions for the prevention and therapy of infectious diseases, or health problems in general, she said.

Two candidates vaccines are currently being tested, she said, the rVsV-ZEBOV (called the Canadian vaccine) and the ChAd3-ZEBOV developed by GlaxoSmithKline in cooperation with the US National Institutes of Health.

Kieny wrote a commentary on the WHO website explaining “Why I am volunteering to test the Ebola vaccine.”

MICs Growing Global Importance, National Experiences

Joseph Damond, senior vice-president international for the Biotechnology Industry Organization, said two-thirds of biotech drugs in the pipeline are coming from small companies.

Emerging countries have an increasing role in the global economic ecosystem, he said. Among the factors that drive success, he cited human capital, IP protection, technology transfer from academia to commercialisation, and legal certainty.

Patent policies strongly affect how quickly new drugs can be launched, he said, citing a recent study, which also found, according to Damond, that strong pharmaceutical price regulations can significantly delay the launch of new drugs.

Vijay Raghavan, secretary in India’s Department of Biotechnology, said post-colonial India has heavily invested in R&D and has a high academic research system but that system is relatively disconnected from industry and from society.

He said the Department of Biotechnology (DBT) intervenes in multiple ways to drive the science and technology agenda in several areas, such as drug discovery for tropical diseases, and the development of new vaccines.

Peter Chun, chairman of EASE-Medtrend Biotech, a biotech company based in China with a focus on diagnostics, said the diagnostics market in China is dynamic and although foreign companies such as Roche, and BioMerieux dominate the market, there is a rapid growth of local companies.

The healthcare system in China is such that the country sets prices that hospitals can charge for interventions. The reimbursement rate for diagnostic tests is method/technology-based, he said, and depends on whether the product is a domestically made or an imported one.

Reimbursement rates affect diagnostic innovation in direct ways, one of which is that diagnostic tests need to be marketable within a certain price range.  The Chinese government funds a lot of research at the academic level and industrial level, he said, to favour the output of products. This tends to favour products which can easily obtain regulatory approval, he said.

Chua Hong Teck, director of Healthcare National Key Economic Area in the Prime Minister’s Delivery Unit, Malaysia, said Malaysia is an upper middle-income country and has universal access to healthcare.

In terms of volume, over 60 percent of the medicines on the market are generics, he said and remarked that in Malaysia a lot of original drug patents expire much later than in the originator country.

He explained this situation by blaming the inefficiency of the national patent office who is taking several years to process patent applications, due to the lack of expertise.

The country means to grow its pharmaceutical industry and take advantage of the patent expiry cliff soon to come, to pursuing generic opportunities, he said, in particular in creating export platforms.

He also cited several national initiatives, such as the Malaysian National Medicines Policy (DUNAS). According to the DUNAS website, the main aims of the policy are to promote equitable access to essential medicines, and the rational use of safe, effective and affordable essential medicines.

Index to Rate Pharmaceutical Companies’ Efforts

Wim Leereveld, founder and CEO of the Access to Medicine Foundation, which issues the Access to Medicine Index, citing a quote from the pharma industry, said a major challenge for companies is to try and segment the market in a way that they can take advantage of the real commercial opportunities that exist in the growing middle classes of MICs and at the same time try to expend access among the poorest communities.

The Access to Medicine Index, which next edition will be out on 17 November, aims to compare companies and rate them according to a set of criteria on how they do in developing countries. After being very reluctant to participate, pharmaceutical companies are now responding willingly in a transparent manner, he said.

The 2012 index ranked GSK as having the most access to medicine activities and Astellas Pharma (Japan) at the bottom of the classification.

Key areas of investigation include factors such as the inclusion of MICs in licence agreements, or the tailoring of pricing strategies towards poor population, he said.

The index is funded by the Ministry of Foreign Affairs of the Netherlands, the United Kingdom Department for International Development, and the Bill and Melinda Gates Foundation, he said.

The officials from the three organisations said they remain committed to the trilateral cooperation.

Source: Intellectual Property Watch