Global Pharmaceutical Industry Launches Ethics Code, Highlights Importance Of Patents

By Tove Iren S. Gerhardsen
As part of its greater focus on accountability and transparency, the global pharmaceutical industry will launch a new code of marketing ethics next year, it announced at its recent biennial meeting in Geneva. Meanwhile, its stand in support of patents will remain unchanged, although its strategy was challenged at the meeting.

Patents constitute a temporary monopoly, but in the end society benefits, Fred Hassan, CEO of Schering-Plough and newly-elected president of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) told Intellectual Property Watch at the meeting. He replaces the CEO of Novartis, Daniel Vasella, who has held the post for the past two years.

Separately, the director general of IFPMA, Harvey Bale, will step down within the next two years, according to the meeting.

“[We] need to educate people on the importance of intellectual property,” Hassan said, adding that in some parts of the world, such as in Singapore, patents are often better understood than in countries such as the United Kingdom or the United States.

The IFPMA’s 23rd general assembly in Geneva on 11-12 October brought together some 230 participants from the industry, non-governmental and governmental organisations and research institutions. On the agenda were issues such as meeting the United Nations Millennium Development Goals health challenges, healthcare system choices in emerging countries, the future of pharmaceutical innovation and research into neglected diseases.

There was a good spirit of collaboration, especially compared with the situation five to 10 years ago, sources said. “The value system in which we operate has changed,” said Vasella, referring to both the industry’s self-image and expectations.

Acting Director General of the World Health Organization Anders Nordström said that during the past five to 10 years there has been quite a change as there is “a much broader understanding of health” now. He said organisations such as the Global Fund to Fight AIDS, Tuberculosis and Malaria have become effective at bringing in the civil society but “not that brilliant in bringing in the private sector.”

But Nordström said that the IFPMA Assembly, and its agenda, showed that there was willingness from the industry for dialogue on public health issues.

Disagreement Over Patents and Drug Access

But despite a general atmosphere of collaboration, there were still some areas of disagreement. And perhaps not surprisingly, most of them dealt with patents.

“We still have inadequate access to drugs,” said Regina Kamoga, country manager of the International Alliance of Patients’ Organizations in Uganda.

Nordström encouraged technology transfers, including know-how, especially when it comes to vaccines. An industry representative asked him to explain his view on sharing intellectual property rights for these products and the link to innovation.

Nordström replied that this is a “balancing equation,” and that “certain things can and should be available for everybody.” He said the WHO wants as much sharing as possible, while recognising that there is a role for patents. But there is an issue of developing products when there is not a large market, he said. “Patents should be there,” he said, but then one should “discuss exactly how [the scheme] should function.”

Many of the representatives from public-private partnerships for neglected diseases described successes, but called for more money and more engagement from the industry.

Michel Zaffran, deputy executive secretary of the Global Alliance for Vaccines and Immunization, said that investments had been slower than expected, and what was missing was to ensure the pharmaceutical industry that the markets exist in developing countries, and are not just “small, risky and unpredictable.”

Bernard Pécoul, executive director of the Drugs for Neglected Diseases initiative, said that DNDi had 22 projects in its portfolio in 2006, but needed more in clinical trials, and invited the industry to “help us fill that gap.”

Chris Hentschel, CEO of the Medicines for Malaria Venture, said that patents are not only a problem but “part of the solution.” He said that if only as much time had been spent on “creative deal-making” as on criticising the intellectual property rights system, that would have been fruitful.

Nordström said that there are gaps in the research and development of medicines for certain types of diseases, and he called for more innovation in areas such as HIV/AIDS, avian influenza and malaria. What is needed is “money, medicines and motivated health force,” he said. But, speaking to industry, he said: “The WHO’s dialogue with you is very good.”

He welcomed the engagement of companies such as Novartis, Roche and Sanofi-Aventis in projects such as advance market commitment, but called for more “as long as we are clear about the business rules.”

Continuing the Reform

Under Vasella’s presidency, IFPMA launched what it called a “major reform,” focused on increasing transparency, and worked on access issues with organisations such as the WHO and Médicins Sans Frontières, he said.

As part of this reform, the IFPMA has agreed to a new, clearer and stricter Code of Pharmaceutical Marketing Practices. It will become effective 1 January 2007. When a complaint is upheld, information about the case will be published at IFPMA’s website, it said. The code covers areas such as limits on entertainment and social activities paid for by member companies, or personal gifts for healthcare professionals.

IFPMA also has agreed to set up the Clinical Trials Portal, which provides easy, multilingual access to clinical trials information worldwide.

Hassan said he would continue the reform toward accountability and transparency in the healthcare sector for health promotion, disease prevention, intervention and innovation, but he also will work on developing scorecards for health providers on key health metrics. As part of this, the industry wants to collaborate on health education against obesity, for example.

Recurring Issue: Counterfeit Medicines

The agenda also contained longstanding industry concerns such as the availability of counterfeit medicines. Bale said that his wife had even encountered the problem at a pharmacy in Washington.

Howard Zucker, WHO assistant director general of health technology and pharmaceuticals, talked about counterfeit medicines and said that if the regulation of aircrafts had been subject to the same situation as medicines, one in four would not get off the ground and one in 10 would crash. He said two counterfeit medicines conferences had been held since January and the WHO would officially launch a counterfeit task force, which he is heading, in November.

But Hans Rosling, professor of International Health at Karolinska Institute in Sweden, challenged this view. He said that while two million children die of pneumonia and one million from malaria, “very few of these are due to counterfeit.” He said that “of course [counterfeit medicines] is a problem, but it is over-estimated in comparison to “the blunt lack of medication,” he said.

Delivery Problem

Nordström also talked about the difficulties in delivering medicines and pointed to the fact that one can purchase certain types of soft drinks in basically all villages in poor countries, but not necessarily drugs.

Zucker suggested that industry be more involved in training pharmacists in countries that lack this resource. He also said that one should “pull the community in” and think anew about how pharmacies could be set up, using a port town in South Africa as an example, where containers are being turned into pharmacies.

An Indian industry representative said that he had suggested to the Indian government that it start handing out medicines at the post offices, which are widely distributed throughout the country.

Should Pharma Look to Google?

Rosling had another perspective on the patent discussion and presented a challenging idea to the industry. “The pharmaceutical industry has so far been extremely conservative,” he told Intellectual Property Watch.

He called on industry to think of new “clever business models,” as the information technology and aircraft industries have done, both of which offer high-price as well as low-price alternatives. He also cited Internet companies Google, Skype and YouTube, which he said had thought successfully about alternatives to the conventional market mechanism of having a right to a patent and selling items at the same prize.

Rosling suggested that the pharmaceutical industry should think of every person on the earth as a potential customer, and find ways of providing free or at cost products in the beginning, as many mobile phone companies have done, in order to acquire potential customers, he said.

With this thinking, the industry should not be afraid that its products would be copied, he said. Even Microsoft Corp.’s Bill Gates had recognised that copiers would later purchase the products when it has helped them grow their economy, he said.

”Some companies have started new approaches for drugs needed by the poorest, the challenge ahead are the three billion entering the market economy with capacity to pay for the synthesis of the drugs they need for non-communicable diseases, but they will not be able to pay for research and development,” he said.

Rosling is the founder of Gapminder, a non-profit organisation that brings “vital global data to life,” according to a source. He said that the aim is to create a “YouTube of statistics.” Public statistics are hidden from the public, and those who have used it have either put “prices or stupid passwords” on it, he said. His group, Gapminder, aims to change this and bring statistics back into the public.

With striking “live” graphs, Rosling showed, for example, that many countries developed much faster if they were “healthier first,” meaning that the government made critical highly productive investments in public health.

Rosling’s presentation and graphics are available here.

Tove Gerhardsen may be reached at tgerhardsen@ip-watch.ch.