“The People’s Prescription”: New Report Calls For Value Creation Instead Of Value Extraction In Pharmaceutical R&D 15/10/2018 by David Branigan for Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)A new report, “The People’s Prescription: Re-imagining health innovation to deliver public value,” calls for restructuring research and development innovation systems to create, rather than extract, value. It also calls for long-term “mission-oriented” public investment, and a public return on this investment. “Health innovation is about making new treatments and cures available to the people that need them. Profits might be earned but not at the cost of doing what the health system is meant to do: heal,” Mariana Mazzucato, professor in the Economics of Innovation and Public Value at University College London (UCL), and director of UCL’s Institute for Innovation and Public Purpose, said in the introduction of the report. The People’s Prescription: Re-imagining health innovation to deliver public value [pdf] was released today, 15 October, and is the result of a collective effort between Mazzucato through the UCL Institute for Innovation and Public Purpose, and STOPAIDS, Global Justice Now and Just Treatment, according to the report press release. The report will be officially launched on 17 October in London. “This report maps the fault lines of this system and sets out principles for a new model,” it states. “While it suggests quick fixes that policymakers can implement in the short term, it crucially proposes concrete policy actions that can be taken in the long term to actively shape and co-create a health system that delivers real public value.” The report is structured into two sections. The first is “DIAGNOSIS,” with chapters on “Problems with the current health innovation system,” and “Principles for a health innovation model that delivers public value.” The second section, “REMEDIES,” includes chapters on “Immediate policy actions: Getting better prices today,” and “Transformative proposals: Re-imagining our health innovation system to deliver public value.” “A pharmaceutical industry that makes billions in profits without providing the affordable medicines that people need is one of the scandals of our time,” Heidi Chow, senior campaigns manager at Global Justice Now, said in the report press release. “Until governments follow the recommendations in this report and set about creating a pharmaceutical system that puts patients and public health at its core, our health and our health systems will continue to suffer as pharmaceutical profits continue to soar,” Diarmaid McDonald, lead organiser from Just Treatment, also said in the release. Saoirse Fitzpatrick of STOPAIDS on “The People’s Prescription” To gain an inside perspective on this new report, Intellectual Property Watch spoke with Saoirse Fitzpatrick, senior advocacy adviser at STOPAIDS, who was involved in writing the report. “STOPAIDS is a membership network of 70 organisations with a distinguished thirty year history of engagement on international development and HIV and AIDS,” according to the STOPAIDS website. “Four years ago, we [STOPAIDS] came to the decision that we were going to have to keep on campaigning for access to ARVs [antiretroviral drugs] and drugs for related co-infections as long as we have the current system that we do, that rewards innovation with market monopolies,” Fitzpatrick said. According to Fitzpatrick, the new report provides “an analysis of how biomedical innovation is currently happening, and the shortcomings of that process in terms of health outcomes, because we’re not getting the drugs that we need at the prices that we can afford.” She continued that the report also looks “at the innovation process itself,” and “the fact that it’s hugely inefficient.” “There’s such a waste of resources because of the over-financialization of the sector, because we don’t have public health driving the R&D agenda. We have all this money going into producing these ‘me-too’ drugs, these ‘copy-cat’ medicines, rather than doing meaningful R&D from scratch. The whole process is un-transparent – there’s not enough public accountability anywhere,” she said. The report takes “all those problems and then it sets out some key principles of how a ‘healthy’ innovation model for health would work, and it does an analysis of case studies from different countries and different contexts, looking at where innovation has been done well,” she said. Alternative Models for Health Innovation Among the ways that the report “re-imagines” health innovation, Fitzpatrick sees delinkage as a particularly powerful policy prescription to address the dysfunction of profit-driven R&D. She explained that delinkage “not only helps us ensure that R&D is public health-driven, but makes sure that we get affordable drugs at the end of the process as well.” According to the report, delinkage “decouples the price of a needed medical technology from the cost of its R&D,” and “is based on the premise that the costs and risks associated with R&D should still be rewarded but the incentives for R&D can be provided by means other than financial returns from charging high product prices.” Fitzpatrick highlighted the ways that the report also rethinks models of corporate governance and ownership. “Looking at the pharmaceutical sector, as most private industries, it’s a share-holder-driven model that is very short-term focused,” she said. The report, she explained, explores alternative models such as “putting members of the public or employees on the board of these companies, [and] making sure that executive pay isn’t just tied to shareholder value, but tied to the therapeutic benefit of the drugs that the pharmaceutical company is producing.” “So, we’re trying to promote this value creation into a model which at the moment is very focused on value extraction,” she said. Public Return on Public Investment “A key message within the report is that we need the expanded role of the state, we need to redefine roles and the relationship between private and public actors, and in that, balance the risks and the rewards between those actors,” Fitzpatrick said. She explained that “the public plays a huge role in biomedical R&D investment,” but “doesn’t get to see research go into the things that have the most public value,” doesn’t “see a return on that investment financially,” and “often can’t get access to the drugs they helped to research.” “A more just sharing of rewards,” according to the report, “needs to be based on a reinvigorated concept of ‘public value’ – in other words value that is both created but also shared by the public. This could happen in various ways, including attaching conditions on public funding such as reinvesting profits from innovative products to support future R&D (rather than hoarded), a commitment to share knowledge and fully disclose data related to R&D, including expenditures and data from failed clinical trials; the possibility of the public retaining a golden share from IPR (and on occasion equity of profits), and a requirement that manufacturers supply treatments on reasonable terms.” “As the number of countries struggling to afford new medicines grows by the month, and patients are increasingly denied access to treatments that could heal them, the question for political leaders and policy makers is not whether they should initiate action to deliver a public value centred health innovation model, but when,” the report concludes. Contributors to the report include: John Abraham (King’s College London), Brook Baker (Northeastern University School of Law and Health GAP), Christine Berry (independent researcher), Michelle Childs (Drugs for Neglected Diseases initiative), Jamie Love(Knowledge Ecology International), Rohit Malpani (I-MAK), Kaitlin Mara (Medicines Law & Policy), Azzi Momenghalibaf (Open Society Foundations), Yannis Natsis (European Public Health Alliance), Judit Rius Sanjuan, Jack Scannell (Innogen), Ellen ‘t Hoen (Medicines Law & Policy), Els Torreele (Médecins Sans Frontières, Access Campaign). 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