Towards policies without borders
Whole communities in the developing world are being crippled by neglected infectious diseases. Changing the way intellectual property rights are managed is vital for attracting the pharmaceutical investment needed to tackle them. Every eight months a new infectious disease appears, joining the roster of those that already affect one in six people on earth. The vast majority of those infected live in developing nations.
But diseases do not recognise borders, and as the SARS outbreak demonstrated, it took only five months for a virus to spread from China to 28 countries, on its way devouring an estimated $10-30 billion before it was brought to heel. Imagine the result of an influenza pandemic. Quite simply, OECD countries have a direct interest in tackling infectious diseases in the developing world.Of the 10.8 million people who died from infectious diseases in 2001, 10.6 million lived in the developing world. The impact on society is devastating. In sub-Saharan Africa, infectious diseases are the top five causes of mortality, whereas in rich countries, the big killers are non communicable cardiovascular disease, cancer, etc. Infectious disease also cuts productivity, saps physical endurance and keeps children out of school–if it does not kill them. Where infectious diseases are rampant, the human capital necessary for development is eventually depleted.Malaria control in Africa costs about $3 billion per year, woefully inadequate to meet just the losses from the disease, which amount to some $12 billion. Along with the rest of the disease burden, this means that each year, Africa sacrifices an estimated 1.3% of its economic growth to a disease that can effectively be treated.What is the cause of this situation? Is it poor access to medicines? Or should we blame the low quality of many health services? These factors clearly play a role, but what we also know is that big pharmaceutical companies are widely accused of faint-hearted efforts to reduce the cost of drugs, with some saying their real concern is protecting patent rights. Is this true? The fact is that most of the drugs currently used for neglected infectious diseases are no longer under patent. The bad news is that some of these drugs are outdated, that many are simply not formulated for the needs of developing countries and that for many of the diseases faced by the poor there are no effective drugs at all - either patented or not.The world urgently needs to accelerate investment in medicines that address these issues. That means finding a new generation of drugs for infectious diseases which are specifically designed for cases in developing countries. A HIV vaccine for the US may be inappropriate for strains found in Africa. Or a short-term anti-malarial vaccination for tourists may be useless to local residents, and even weaken the natural immunity system.Part of the problem lies in the nature of the global pharma business: all too often, research and development on infectious diseases focuses on demand in rich markets, neglecting the needs of the very large poor populations who suffer from them. Pharmaceutical firms shy away from R&D for diseases like malaria, sleeping sickness (trypansomiasis), a skin disorder (leishmaniasis) and river blindness (onchocerciasis). Less than 10% of R&D expenditures in health focus on such poor country diseases, because the cost of doing the research is just too high and too risky and there are few if any prospects of a return on investment.Consider that to obtain just one new drug for at a cost of about $20 million each. The pre-clinical drug discovery costs of identifying 48 clinical candidates–that means at least six for each TDR disease–are around $1 billion, a sum greater than the drug discovery budgets of the largest pharmaceutical companies. Many drugs fail to make it through the discovery phase, let alone the most expensive part of drug development, which are the clinical trials. Facing such odds, how can more companies and laboratories be encouraged to enter poor country markets? Governments can start by identifying combinations of strong “push” (reducing R&D costs) and “pull” incentives (increasing demand for R&D products) so as to spur innovation. Another step is to get the players involved to talk it through.In June, the OECD held a high-level forum to discuss the matter in the Netherlands (see references). The consensus was simple enough: improving the availability of medicines for neglected infectious diseases requires paying attention to the entire innovation cycle–from fundamental research, to product development, to improved access and health care systems. The full system includes not just the business/research end, but also users and civil society. For some time now the OECD has been getting governments, pharmaceutical companies, aid and health professionals to talk to one another about how to make the entire chain more effective, efficient, and still profitable.Accelerating the availability of needed medicines is not just about money, however. The closed, sometimes even jealous nature of research and development has to change. Innovation suffers when laboratories work in isolation, and when research efforts are not aligned to the most pressing scientific challenges. Also, firms lose time negotiating contracts or access to each other’s intellectual property. One major victim of this is the unknown number of firms and laboratories that would perhaps eagerly take on global health challenges, but cannot get involved because of the cost, especially if it means running their own programmes or institutes.What is needed is a more open system of innovation, whereby the barriers to the sharing of knowledge, data, tools and expertise are removed and where firms can share their skills and resources more easily, not least via virtual networks. “Open innovation” can work because networked research brings in more researchers and improves the success rate of finding new drugs in neglected diseases.One such new form of organisation that focuses on global health problems has emerged since 2000. Called PDPs—which is shorthand for Product Development Partnerships–they run on the idea that developing effective medicines is best achieved via global networks of public and private researchers. They try to minimise risk by developing a portfolio of products for neglected diseases. The trouble is that without long-term financing, innovations run out of steam before the kettle comes to a boil. Guaranteeing a pipeline of drugs without funding is impossible.
One idea to avoid wasting time and money is to draw up a list of product profiles to help companies identify the most promising compounds for development. Such profiles would also indicate the optimum price of a medicine, its formulation and the required dosage.Another idea is to build collaborative networks of firms and laboratories to reduce the cost of research through the voluntary sharing of knowledge, data, tools and infrastructures. Collaborative mechanisms for the access and use of intellectual property have been advocated to improve ease of transactions. For instance, “voluntary patent pools” can reduce transaction costs as two or more patent owners agree to license their patents to one another or to a third party. Finally, companies are thinking about how to expand their R&D capacity in global health, perhaps through the use of sabbaticals and fellowships, and joint academic-industry doctoral and postdoctoral programmes. Retired drug researchers could also participate. Whether this treats the problem seriously enough remains to be seen.Some governments and civil society groups point the finger at intellectual property rights (IPRs) as the core of the problem, arguing that open innovation requires weaker or no IP protection. Yet IPRs serve as a bedrock on which arms-length, virtual drug development initiatives are built. In fact, IP is often the sticking point on which all discussion flounders. But while, it may generate some problems, haranguing governments into forcing pharmaceutical companies to surrender their IPRs will not solve them. Convincing people to get beyond the question is important to move forward, and this is just what the OECD has started to encourage.We believe pharmaceutical companies, governments, public laboratories, and NGOs can work together to research, to develop, and bring new drugs to poor country markets. Part of the trick is changing the way intellectual property rights are used and managed. Changing behaviour about sharing IP is key to creating a new, more open business environment for innovation.Governments are also thinking about the mix of push and pull incentives to create a more conducive environment for global health research. The Gates Foundation, with its $7.8 billion in global health expenditures and its commitment to research is perhaps the most important “push” mechanism in recent years. Proposals for “pull” mechanisms include patent buyouts; fast-track regulatory approval for certain drugs; revenue guarantees, which commit a sponsor not only to a minimum guaranteed price, but to purchasing a certain number of treatments; “wildcard” transferable patents, whereby the developer of a new drug is compensated with extended rights on another patent.A radical new approach in the battle against infectious diseases in recent years and one to receive wide political support is the Advance Market Commitments (AMCs). Under an AMC, companies compete to produce a vaccine or drug that meets certain specifications. The AMC sponsor promises to top-up a guaranteed price for a limited number of treatments that a poor country, international agency or NGO would buy. Once the agreed number of treatments has been bought, the supplier commits to selling further treatments at a cost affordable to poor countries. The advantage of AMCs is that donors pay only if desired products are forthcoming. A pilot AMC for a pneumococcal vaccine was launched in February with a commitment of $1.5 billion by Canada, Italy, Norway, Russia and the UK, along with The Bill and Melinda Gates Foundation. A second AMC for a malaria vaccine is expected soon.The cliché that a chain is only as strong as its weakest link is apt in the case of R&D for neglected diseases. From discovery to animal and human testing; from mass production to delivery to a village without roads or running water, perhaps in the midst of war, there is a risk the chain will break. Coherent policies, linking training, access, aid, trade, legal systems and so forth, can ensure against this happening, and keep the entire R&D network motivated. But if a weak link breaks, the poor may not be the only ones to face a world of infectious disease. No longer can rich nations afford to believe the naïve assertion that “we’ve already taken care of it here”. Diseases do not recognise borders; neither should their cures. ~ LT/RJCFor more information on the “High-Level Forum on Emerging and Neglected Diseases: Policy Coherence to Enhance their Availability”, Noordwijk-aan-Zee, the Netherlands, 20-21 June 2007, see www.oecd.org/health or contact Benedicte.Callan@oecd.orgOECD Observer No. 262 July 2007