Perspectives on access to medicines and IP rights

December 2017

By John Zarocostas, freelance journalist

On average, people around the world are living significantly longer than their grandparents. In part, this is thanks to innovation in vaccines and to medicines reaching increasing numbers of patients. But as people live longer and new medical breakthroughs create even greater opportunities for new treatments, many governments find their limited resources spread ever wider. Against this backdrop, the issues of access to medicines and intellectual property (IP) have become hotly contested topics.  Two leading experts give their views on these issues.

Photo: Courtesy of IFPMA

Thomas B. Cueni (right), Director General at the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), offers an industry perspective on the hurdles to access and the challenges that lie ahead in the search for innovative healthcare solutions.

The high cost of medicines is straining health budgets in all countries. What is the way forward?

Thomas Cueni: I understand concerns surrounding the cost of individual drugs and that companies have to justify the value they bring, but I believe the price debate is overblown. On aggregate there is no sign that drug costs are out of control. The latest OECD data, for example, show that between 2009 and 2015, there was a 0.5 percent annual reduction in per capita expenditure for pharmaceuticals. More importantly, expenditures on health should be seen as an investment towards increased welfare, productivity and economic growth. They should not be seen exclusively as a fiscal cost at a given point in time.  The research-based biopharmaceutical industry is delivering breakthrough medicines for patients. Over the last 10 years, we have seen dramatic improvements in treatments for HIV, HCV (hepatitis C), oncology and many rare diseases that have transformed the lives of patients. The wider developments driving healthcare spending, and the systemic challenges that limit access to high-quality, safe and effective medicines around the world, need to be considered. 

It is now widely acknowledged that the biopharmaceutical industry has made tremendous progress in addressing public health needs and the cost of drugs. One among many examples is the use of tiered-pricing for treatment of HIV/AIDS, malaria and vaccines, and more recently in treating multi-drug-resistant tuberculosis (MDR-TB). Johnson & Johnson’s new drug (bedaquiline), for example, both brings an effective therapy for MDR-TB to the table and introduces a very innovative and clearly structured, tiered-pricing approach.

“It is now widely acknowledged that the biopharmaceutical industry has made tremendous progress in addressing public health needs and the cost of drugs,” says IFPMA’s Thomas Cueni (photo: FotografiaBasica / E+ / Getty Images).

Are there opportunities for more public and private partnerships?

Thomas Cueni: Basically, all of the therapeutic progress that has been made comes out of the labs of private industry. But now many more public-private partnerships are emerging and there is greater openness to collaboration and open innovation. There are, in fact, currently over 300 active health partnerships listed in our directory. There is a strong sense that we have to tackle healthcare issues together. This is most evident in tackling neglected tropical diseases (NTDs). The pharmaceutical industry together with the Gates Foundation, the United Nations (UN) and the World Health Organization (WHO) have made great progress in meeting targets set out in the 2012 London Declaration on NTDs. With this Declaration, pharmaceutical companies, donors, endemic countries and civil society groups pledged to work to control, eliminate or eradicate 10 NTDs by 2020. The work of the Medicines for Malaria Venture (MMV) and GAVI, the vaccine alliance, are two important examples of progress in terms of research and access. But there is clearly scope to do much more.

The UN High-Level Panel on Access to Medicines and the Lancet Commission on Essential Medicines have called for R&D to be de-linked from drug prices. What are your views on this?

Thomas Cueni: De-linkage as called for by the UN High-Level Panel is a dead end. Companies should be paid for the therapeutic value of their drugs to society and patients rather than the cost of research and development or manufacturing. You want to pay for outcomes rather than input. In my view, the delinkage debate focuses too narrowly on intellectual property and fails to address the multi-faceted and complex issues that prevent so many people from accessing the medicines they need.

Health is one of the priorities of the Sustainable Development Goals (SDGs). What can be achieved between now and 2030?

Thomas Cueni: Clearly, any progress in delivering on the SDGs will require partnerships and joint action by governments, civil society and the private sector. In terms of non-communicable diseases (NCDs), most of the essential medicines to treat cardiovascular disease are off-patent, but still patients do not have access to them. This is a clear indication that patents are not a barrier to access. If we are to improve access, we need stronger health systems, more professional health workers, and we need to empower women in health care and to address the lifestyle factors that cause poor health. We need to make sure that treatments for diseases like diabetes, cardiovascular disease and cancer reach patients. Coalitions of partners across the health delivery spectrum are critically important. That’s why IFPMA recently joined a multi-stakeholder coalition led by PATH, a global non-profit health organization, to support initiatives like their No Empty Shelves project, which is looking at why essential medicines and technologies to treat diabetes are not reaching patients in low-resource settings.

The nexus between innovation and patents has been politically contentious since TRIPS took effect in 1995. Does it need to be revisited?

Thomas Cueni: Revisited? No. The TRIPS Agreement acknowledges that IP is a driver of innovation. The pharmaceutical industry has learned since the South African lawsuit in 2001, where it was seen as getting in the way of people being properly treated. That was perhaps the dumbest thing the industry ever did. But now, least developed countries (LDCs) enjoy a waiver of TRIPS provisions relating to patenting of pharmaceutical products up to 2033. And with the Doha Declaration, LDCs can import the drugs they need from manufacturers in third countries. These adjustments certainly help to meet public health needs. But all parties have to work together and the industry has to make sure that patients in less developed countries have access to innovative drugs. That is one of the reasons why 23 of our companies joined ranks with the World Bank and the Union for International Cancer Control (UICC) in January 2017 to launch the Access Accelerated partnership to tackle access barriers to NCD medicines in low and lower middle-income countries.

“Many more publicprivate partnerships are emerging… There is a strong sense that we have to tackle healthcare issues together,” says Thomas Cueni (photo: SolStock / E+ / Getty Images).

Could multilateral agencies like WIPO be more creative in addressing patents and medicines?

Thomas Cueni: On October 1, in partnership with WIPO, IFPMA signed an agreement establishing the Patent Information Initiative for Medicines, or Pat-INFORMED. The initiative will clearly link public patent information to registered medicines in a new online gateway. The purpose is to help health agencies responsible for procuring medicines assess the patent status of medicines in different countries. Under the partnership, 21 leading research-based pharmaceutical companies represented by IFPMA have committed to make available their patent data on small molecules via a data bank to be hosted by WIPO. We expect to launch the platform in early 2018. The objective is to make the management of patent issues in medicines procurement less time- and resource-intensive and to help ease access to patent information for public health authorities and help them establish smarter procurement strategies.

Pat-INFORMED is a major step forward and shows the sort of practical action that can be taken to help reduce the complexity surrounding patent information. Then, of course, there is WIPO Re:Search, established back in 2011 by WIPO with the active participation of leading industry players and others to catalyze the development of medical products to treat neglected tropical diseases, malaria and tuberculosis. The industry also has a number of other well-established partnerships with, for example, the Medicines Patent Pool (MPP), the Drugs for Neglected Diseases initiative (DNDi) and its joint initiative with the WHO, the Global Antibiotic Research Development Partnership (GARDP). I envisage and certainly hope we will see more partnerships like these in the future.

Do you agree that there is a need for greater transparency in the pricing of medicines and vaccines? 

Thomas Cueni: Clearly, governments and companies need to show value for money, but pharmaceutical companies also need to be able to argue for the value of the products they bring to the market. The flaw in the transparency debate is that it tends to look at the costs of drugs that make it to market and to overlook how much is spent on those that don’t. Calls for cost-plus pricing are a recipe for creative accounting, not for driving efficient outcomes. Companies should be paid for outcomes (value) and not for input (costs). Successful innovation should be rewarded because it’s good for patients and society. This approach, rewarding true innovation, has effectively dealt with the debate about “me-too” drugs.  Today, the focus is on significant, often transformative innovation, and on “follow-on” drugs that add value by providing a useful alternative or enhanced therapeutic options and introducing price competition.  Rewarding true innovation has led to a focus of biopharmaceutical research on areas of high medical need where significant innovation is rewarded by the market.

Photo: Reyer Boxem/Hollandse Hoogte/laif

Ellen  F.M. 't  Hoen (right), researcher at the Global Health Unit of the University Medical Centre Groningen, Director, Medicines Law and Policy and former Executive Director of the Medicines Patent Pool (MPP) offers her perspective on ways to improve access and to increase innovation in areas of unmet medical need. 

The high cost of medicines is straining health budgets in all countries. What is the way forward?

Ellen ’t Hoen: There are measures that countries can take immediately. Ten years ago access to medicine was an issue exclusively for developing countries but that is no longer the case. Today, many high-income countries can’t afford the medicines they need and are even rationing certain medicines on the World Health Organization’s Essential Medicines List. Clearly something needs to be done. We can draw lessons from the way countries dealt with the HIV drug pricing challenges, for example, by making use of flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to purchase lower-cost generics.

We are now also seeing people in some European countries and the United States calling for the use of compulsory licensing. The Irish Medical Association, for example, has asked the Irish government to make use of compulsory licensing to ensure that everyone in Ireland who needs hepatitis C treatment can get it. Similar calls have been made in France. And in Italy and Switzerland individuals are explicitly allowed to import generic medicines to treat hepatitis C. These examples show that governments can access lower-priced generic medicines even when patents exist. That’s one part of the answer. The bigger question is how to finance the development of these products in such a way that new medicines remain affordable. That’s where the real problem lies. The current mechanism for financing pharmaceutical innovation is predominantly based on granting market monopolies, which inevitably means high drug prices.

Are there opportunities for more public and private partnerships?

Ellen ’t Hoen: An important mechanism for such collaboration of course is the Medicines Patent Pool (MPP), which is now expanding beyond HIV into other diseases such as hepatitis C. They are also exploring a potential role in non-communicable diseases (NCDs) such as cancer. It is important to acknowledge that companies are increasingly willing to engage with the MPP. GSK, for example, has publicly committed to license its oncology portfolio to the MPP. But we also need to ensure that more public money is available to fund research into new treatments. We cannot exclusively rely on charitable institutions like the Wellcome Trust or the Gates Foundation. When it comes to public funding, we need to make sure that the financing mechanisms in place don’t mean that patients pay twice, first through taxes and then through high drug prices. If you look at the U.S. National Institutes of Health (NIH), or the European Commission’s Horizon 2020 program, both important funders of pharmaceutical research, the conditions placed on entities that apply for research funding are very weak. Commercial companies acquire IP rights over government-funded innovations which they can then sell at a high price. Luckily, there is an ongoing debate about the need to tackle this, including in academia, which is exploring equitable licensing policies.

The UN High-Level Panel on Access to Medicines and the Lancet Commission on Essential Medicines have called for R&D to be de-linked from drug prices. What are your views on this?

Ellen ’t Hoen: The High-Level Panel actually calls for international negotiations to conclude a medical R&D treaty to regulate the sharing of both the costs and the benefits of R&D based on de-linkage principles. You need to have a mechanism at the international level to deal with free-riders. The Lancet Commission also recommends progressive de-linking for a set of priority products – the so called missing essential medicines. Take, for example, anti-microbial resistance (AMR) and the pressing need to develop new antibiotics. The pharmaceutical industry is being honest when it says those products will not be developed under the current model because it makes no business sense for them to do so. This is an area where you see greater acceptance by companies of de-linking R&D and drug prices. But de-linkage models of innovation can also be applied for other diseases. The Drugs for Neglected Diseases initiative (DNDi) has shown how this can be done successfully. If the cost of R&D is financed directly, there is no need for market exclusivity and high prices. We have to find a way to finance the development of these products that does not depend on the ability to sell them at a high price.

“We need to encourage much greater diversity in the incentive mechanisms we use to finance innovation,” says Ellen ‘t Hoen (photo: ZUMA Press, Inc. / Alamy Stock Photo).

Health is one of the priorities of the Sustainable Development Goals (SDGs). What can be achieved between now and 2030?

Ellen ’t Hoen: The SDGs are rooted in the principle of the human right to health. That puts certain duties on governments to act. This includes making sure that the innovations that are needed happen and are accessible to those who need them. The SDGs strive for universal health coverage and will help advance that goal, but that will require government action.

The nexus between innovation and patents has been politically contentious since TRIPS took effect in 1995. Does it need to be revisited?

Ellen ’t Hoen: The TRIPS Agreement has enormous flexibility and allows governments to do the things that need to happen. Problems arise when legislation closes down those flexibilities. For example, new forms of IP rights such as data exclusivity are being introduced which can be draconian if the law does not provide a waiver to data exclusivity that can be used, for example, in the case of a compulsory license. Such legislation otherwise paralyzes a government’s ability to intervene when a compulsory license is necessary. And when these arrangements are exported to other countries through trade agreements, for example, they become a cause of concern. We also need to move away from the notion – which tends to be reinforced by the TRIPS Agreement – that patents are the only way to stimulate and finance innovation. We need to encourage much greater diversity in the incentive mechanisms we use to finance innovation. We need to find a different way – one that is not primarily driven by commercial interests – to set priorities in medical R&D. That does not require rewriting the TRIPS Agreement, it requires governments to explore different approaches.

Could multilateral agencies like WIPO be more creative in addressing patents and medicines?

Ellen ’t Hoen: WIPO remains focused on NTDs, where there is a strong consensus that progress can be made. But WIPO could do more to help countries operationalize TRIPS flexibilities, for example by providing model legislation and more detailed practical advice on how to implement legislation relating to patent law and public health. We have seen the marvelous things that WIPO can achieve for the public good with the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled. The public interest really is at the heart of that agreement. One could imagine something similar in the area of patents and health and further exploration of a variety of ways to support R&D such as open source innovation and prize fund models – see, for example, Alternatives to the Patent System that are used to support R&D Efforts (CDIP/14/INF/12).

WIPO is the UN agency dealing with IP, and yet discussions about IP and some of the most complex issues from a public policy perspective often happen outside the Organization. A more substantive and evidence-based debate should be held at WIPO that moves away from ideological postures and political positions. Only then can a sound policy debate take place. 

Do you agree that there is a need for greater transparency in the pricing of medicines and vaccines? 

Ellen ’t Hoen: The argument that it is in the public interest to keep the price of medicines secret makes no sense. Secret pricing is never a good idea. We saw with antiretroviral medicines that as soon as prices were made public and people could find them more easily, the market dynamics changed completely. Another issue of concern is the fact that governments often cannot make public the results of drug price negotiations with pharmaceutical companies. This lack of transparency goes against the basic principles of democracy and is not acceptable. Secret price negotiations put enormous power into the hands of the pharmaceutical industry and prevent countries from comparing the outcome of drug price negotiations. I don’t believe this is in the public interest. We also need greater transparency on the costs of R&D. Industry claims that the costs of drug development are astronomical. We know drug development is costly but how can we make important policy decisions on unsubstantiated claims?

Greater transparency would lead to a better-informed policy debate and better public policies. Take, for example, supplementary protection certificates granted in the EU to extend the basic patent of a registered medicine to ensure the company can recoup its R&D investment. At present, the company is not asked to demonstrate that extra market exclusivity is indeed necessary. It would be sound public policy to ask companies to open their books and show why their 20-year patent is not long enough before additional public resources are spent on high-priced medicines. Today, however, these decisions are made on assumptions, not real data.

The WIPO Magazine is intended to help broaden public understanding of intellectual property and of WIPO’s work, and is not an official document of WIPO. The designations employed and the presentation of material throughout this publication do not imply the expression of any opinion whatsoever on the part of WIPO concerning the legal status of any country, territory or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This publication is not intended to reflect the views of the Member States or the WIPO Secretariat. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by WIPO in preference to others of a similar nature that are not mentioned.