Transcript Document

Understanding the Medical
R&D Treaty Proposal
James Love, CPTech
MSF meeting on ensuring innovation
for neglected diseases
London, 8 June 2005
Some context
The market for patented
medicines
More than $500 billion globally
• Roughly 1.5 percent of global GDP
• Share of GDP is not highly correlated
with incomes
• Africa is a little more than 1 percent of
global market
US FDA Priority and Standard NME Approvals
Calendar Years 1993-2002
Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Total
P ercent
P riority Standard
13
12
13
9
9
19
18
35
9
30
16
14
19
16
9
18
7
17
7
10
79
180
31%
69%
Among All Anticancer Drugs That Received FDA Approval for
Marketing in the United States as of January 1, 1996, 50 of 77
products approvals relied upon National Cancer Institute Sponored
Clinical Trials
50
NCI Sponsored IND
27
No NCI IND
Source: National Cancer Institution, Division of Cancer Treatment,
Program Information Booklet, Fiscal Year 1995.
US: Cancer Weapons, Out of Reach
Robert Wittes, June 15, 2004, Washington Post
•
Third-party payers will not react passively to pricing that increasingly threatens
their balance sheets, especially as more drugs like these are commercialized
over the next few years. They will carefully scrutinize all proposed uses
of expensive new drugs. Historically, an FDA judgment of "safe and
effective" -- the statutory criterion for drug approval -- has almost automatically
triggered an agreement by payers to reimburse, which is the real gateway to
widespread use and market success. We may now see payers deciding, for the
first time, that certain novel "safe and effective" medicines are simply not worth
paying for. In addition, payers will surely try to limit "off-label" uses of these
drugs -- that is, uses other than the FDA-approved ones. Unlike other areas of
medicine, physicians have commonly prescribed cancer drugs for a broader
array of indications than specifically approved by the FDA, as clinical research
routinely reveals additional uses after market introduction. A very high bar to
new uses by payers is a virtual certainty.
Price of Singulair as a share of per capita
income in South Africa
Income
decile
Percent of income
Novartis at the World Bank in
2004
• We consider India to be a market of 50
million
The patent system raises prices and investments in
R&D, but it is a costly way to finance R&D, particularly
for products that are new and better than existing
products
Research and
Development
Trade Disputes Involving
Medicine
Agreements regarding
intellectual property rights
• Multilateral
– TRIPS, SLPT (TRIPS II)
• Regional
– NAFTA, CAFTA, FTAA, APEC, etc
• Bilateral
– US, EU
• Unilateral
– US (301/AGOA, GSP, etc), EU (actions in
accession states, etc)
Selected countries with trade
disputes over the price of medicine
• Australia - (US/AU FTA)
• Canada - US unilateral trade pressure
• Costa Rica - Government reimbursement policies raised
in CAFTA negotiation
• Germany - US unilateral trade pressure
• Korea - 1999 A7 pricing agreement, following US and
EU pressures, current US and EU disputes
reimbursements
• New Zealand - US unilateral trade pressure
• Thailand - Bush I/Clinton agreement to weak price
control measures
• Turkey - Current EU unilateral trade dispute
Public Sector Investments in Medical R&D are
left out of the “hard” trade framework, but
remain part of the soft discussions
• Human Genome Project
• Fauci proposal at G8 for global AIDS
vaccine effort
• Dozens of PPPs and other regional and
multilateral collaborations
• Etc
Global frameworks compared
• Agreements that strengthen IPR and raise
drug prices
– Backed by dispute resolution
– Unilateral trade sanctions
• Agreements to support public sector
research, PPPs, priority research etc
– Completely voluntary
– Based upon moral suasion and public opinion
The Medical R&D Treaty as a
new paradigm for
globalization
Main ideas
• Address the legitimate global issue of sharing
the burden of financing R&D for new
medicines
– Include both public and private sector R&D
– Flexible on choice of instrument to finance R&D,
including both push and pull mechanisms
• Introduce new mechanisms to address areas
of priority
• Use economic incentives to drive research
into areas of greatest need
Basic obligations
1. Every country is required to support medical
R&D
The obligation would be a fraction of GDP
The fraction would depend upon the level of
development
Minimum support for priority medical research
2. Countries would have flexibility in terms of
how the R&D was financed and managed
Purchases of patented medicines, public sector
research, prize funds, etc, would be allowed, to
the degree that they stimulate R&D
Investments in certain projects will earn
credits. These credits are tradable
between countries
• Priority research/neglected diseases
• Open research
• Preservation and dissemination of traditional
medical knowledge
• Technology transfer, capacity building
• Exceptionally useful projects
Global and Local Decision
making
• Global
– Fraction of GDP to support medical R&D,
including priority R&D
– Identification of prior projects
– Accounting principles
• Local/National
– Choice of R&D funding mechanism (public,
private, pull/push, etc)
– Selection of specific projects
Impact on funding R&D for neglected
diseases
• Driving investment
– Credits for neglected disease R&D set at rate high
enough to stimulate investment
– Credits can be used to satisfy treaty obligations.
– Countries that have an excess of credits can sell
them to countries to are below treaty threshold.
• Capacity building and employment
– Developing countries could become net suppliers
of R&D credits
– Treaty also provides credits for technology transfer
and capacity building
Innovative pull mechanism – the US proposal
for a medical innovation prize fund (HR 417)
• Radical change in method of stimulating
private investment
–
–
–
–
Separate market for innovation and product
No marketing monopoly
.5 percent of US GDP in innovation prize fund
10 year period of eligibility for new products
• Payments based upon evidence of
incremental health care benefits
– Some prize funds set aside for priority projects,
including $2.4 billion annually for neglected
diseases
Treaty mechanisms overview
Treaty parties
Assembly for Medical Innovation (AMI)
Council Medical Innovation (CMI)
Treaty Secretariat
Committee on Traditional
Knowledge (CTK)
Another
country’s
project
Prize
Fund
Buy out
Approved
drugs
Committee on Exceptionally
Useful Projects (COEPUP)
Committee on Technology,
Transfer and Capacity (CTEC)
Country A
Purchase of
patented drugs
Committee on Open
Public Goods (COPG)
Committee on open
Access publishing (COAP)
Report of treaty
Qualifying projects
13%
Committee on Priority
Medical Research (CPMRD)
International
Projects
e.g. PPPs
Directed
research
Country B
For more information
CPTech
http://www.cptech.org
[email protected]