More Transparency In Medical Product Prices Discussed At Event

The lack of access to medical products has spread from being a developing country problem to a global one as prices are now too high even for developed country patients and health systems for some medicines. An event at the Graduate Institute Global Public Health Centre yesterday was an opportunity to explore these issues.

Ruth Dreifuss, former Swiss Confederation president and co-chair of former United Nations Secretary General Ban Ki-moon’s High-Level Panel on Access to Medicines, at the event explained why transparency is important to understand how those high prices come to be. The pharmaceutical industry countered that transparency on prices would not lead to any solutions to the problem of access to medicines.

The event was moderated by Professor Michel Kazatchkine, senior fellow with the Global Health Centre, and UN Secretary General Special Envoy on HIV/AIDS in Eastern Europe and Central Asia.

The report of the High-Level Panel, issued last September, listed a number of recommendations, such as the setting up of a binding research and development convention, the full use of the flexibilities granted by the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and greater transparency.

Dreifuss explained the process leading to the report [pdf] of the High-Level Panel, and said the beginning of the exercise was quite difficult as the panel grappled with the mandate, wondering if it was too broad or too narrow.

The mandate of the panel was: “to review and assess proposals and recommend solutions for remedying the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies.”

Some developed countries have criticised the report since its publication in September, arguing that the mandate of the panel was too narrow and ignored many other factors than IP in the issue of access to medicines.

“We were all aware that there are other barriers, but had to accept the mandate” as it was given, Dreifuss said.

Consensus on Many Points in Panel

The panel agreed on many points, but not on all, she said. However, the urgency to act was accepted by everybody, she added. An “absolute consensus” was on the limit of IP rules to incentivise R&D and respond to real needs. IP rules and rights are not able to answer all the questions on R&D and access, she said.

Everyone on the panel also agreed that the issue of access to medicines is no longer only a problem of poor countries and transmissible diseases, she said. Developed countries are confronted with access problems and rationing of medicines, she said, and all countries are also confronted to the issue of rare diseases, she added.

According to Dreifuss, too much focus has been put on access to medicines and vaccines alone. Although very important, this focus has overshadowed the problems of diagnostics and medical devices, which are key for treatments and for giving people the possibility of regaining a normal life, she said, adding that IP and high prices are greater obstacles than they are for medicines.

Transparency, De-Linkage Key Recommendations

Kazatchkine commenting on the recommendations of the report said some of them could be rapidly implemented, such as the recommendations concerning transparency. The report calls for governments to “require manufacturers and distributor of health technologies to disclose to drug regulatory and procurement authorities information pertaining to: (1) the cost of R&D, production, marketing and distribution of health technology being procured or given marketing approval with each expense category separated; and (2) any public funding received in the development of the health technology including tax credits, subsidies, and grants.”

He asked if consensus was reached on this recommendation in the panel. Dreifuss said panellists agreed that there was a noticeable change of business model of the pharmaceutical industry in the last 10 to 15 years. Like in many other industries, the power of shareholders has increased in an unprecedented way, she said.

She mentioned one of the recommendations of the panel calling for the de-linkage of the price of medicines from the cost of R&D, adding that the concept of de-linkage has been around for 15 years as a possible model.

According to Dreifuss, there is at the moment a “sinister” de-linkage by which the price of medicines has “often no relation with the R&D costs.” In the well-known case of hepatitis C, it was a financial issue.

“It has nothing to do with R&D and science, but about who could offer the highest price to the little start-up which invented the medicines, under the protection of patent monopoly,” and to be able to sustain the highest possible price during the years covered by the patent, she said.

Pharmaceutical Industry: Transparency Not Solution

Thomas Cueni, the new director general of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), speaking from the audience, said there are areas where the “normal business model does not work” and where a market needs to be created, and public-private partnerships have to be established. This is the case for neglected tropical diseases and anti-microbial resistance, where incentives have to be found, he said.

On the other hand, “nothing is more motivating and more inspiring” than meeting medical needs, rather than have dry pipelines, he said. However, he added, “I don’t think that this call for transparency is really the solution.”

He cited two examples which he said show transparency does not work. One of the example was a 2008 report from the Organisation for Economic Co-operation and Development (OECD) on pricing principles, which had a “passionate plea against increased pricing transparency across the world for the reason that rich countries don’t want to pay more than poor countries.”

The call for transparency is not leading to solutions, he said, which can be created by competition, and the creation of public-private partnerships.

Dreifuss replied that the concept of transparency is important, as the high cost of R&D is the main argument for the pharmaceutical industries to justify high prices. We generally guess that the price of marketing is higher than the price of R&D, she said.

Peter Beyer, who specialises in innovation and intellectual property at the World Health Organization, also from the audience said the WHO has “relatively good data on price transparency in particular in the area of HIV.” This data allows comparisons of the efficiency of countries’ procurement systems.

Some countries with better procurement systems get better prices than those who do not, he said. The WHO would like to expand this data collection to other areas than HIV, such as hepatitis C.

“We also think it is important to know about the production cost of generic medicines,” as some countries overpay in this area too, said Beyer. He said the WHO would not however argue for rock bottom prices as this would drive some good quality manufacturers out of the market. There is a healthy market with competition of quality products, he added.

Dreifuss underlined the “crucial” role of WHO in the implementation of the recommendations of the High-Level Panel, and encouraged WHO, WTO and the World Intellectual Property Organization to continue their joint work on the topic of access to medicines. Those are different agencies with different constituencies because they do not gather the same ministers, and not the same experts, she noted. It is also important that the report be taken to the highest global level of the United Nations to bring coherence in this issue, she said.

 

Image Credits: Catherine Saez