OECD Meeting Highlights New Drug Purchasing Model Despite NGO Doubts

By Tove Iren S. Gerhardsen
A recent Organisation of Economic Cooperation and Development (OECD) high-level meeting on boosting the development of medicines for neglected diseases mainly found in developing countries, focused on a new model under which governments promise up-front to buy a certain medicine once it has been developed.

The Advance Market Commitments (AMC) model commits governments to purchase a certain quantity of a treatment before it is finalised. The first AMC project was launched in February when five countries (Canada, Italy, Norway, Russia and the United Kingdom), and the Bill and Melinda Gates Foundation collectively committed $1.5 billion for the effort.

But non-governmental organisations (NGOs) disagreed with what they saw as a “strong focus” on this model at the 21 June meeting, which was co-hosted by the Netherlands in the city of Noordwijk. In the end, participants agreed to explore a number of options which are set out in the Noordwijk Medicines Agenda.

This agenda outlines areas of action for boosting research and development (R&D) into neglected diseases such as sleeping sickness and Chagas disease, which are seen as unprofitable to develop treatment for. In Liberia, for example, malaria is the leading cause of death in children under five and in pregnant women, said Liberian Finance Minister Antionette Sayeh. Another participant asked why nobody had further developed an indoor spray for malaria during the past 20 years, which might have been very effective.

OECD Secretary General Angel Gurría said of these diseases, “it is not a market failure, it is failure because there isn’t a market.” Political leadership was called for, but no political or financial commitments were made (IPW, Public Health, 22 June 2007).

The meeting discussed “push and pull” mechanisms including separating the costs of R&D from the price of medicines, as well as the AMC model. One of the three commissioned papers prepared for the meeting, co-authored by Michael Kremer of Harvard University, recommended AMC, a source said.

Carlos Monticelli, senior director at the Italian Ministry of the Economy and Finance, said that the AMC project launched in February was a pilot project and that they are in the process of defining the framework of the agreement, which would involve legally binding commitments.

An Italian official told Intellectual Property Watch the AMC model was “one of very few solutions that [has been] applied.” He welcomed the discussion as more attention to the project could lead to more funding. Among six neglected diseases, pneumococcal disease was selected by an expert group for the pilot project, he said, and would be followed by malaria.

One NGO source said Monticelli had “attacked civil society critics for failing to understand that this [the AMC pilot project] was at least something and not just aid to big pharma.” In the meeting, Monticelli said that “out there in the civil society” there are people who believe governments should fight the pharmaceutical industry, which he said made little sense from an economic and social point of view.

The NGO source said there was a concern that AMCs could lead to “overpayment for pharma” as the AMC would not only pay for developing the drugs but also to deliver them. The source argued it would have been cheaper to separate these costs and have generic companies produce and deliver the drugs.

Tido von Schoen-Angerer from Médecins Sans Frontières (MSF) was the only NGO representative on a panel at the event. He said that not enough is being done in the area of neglected diseases. For example, there are six drugs in clinical development for tuberculosis opposed to 399 for cancer, he said. With intellectual property not working in the area of neglected diseases as it does not function as an incentive for R&D, poor countries are losing out both in terms of innovation and access to medicines, he said.

Schoen-Angerer welcomed the OECD effort, which he said went beyond the Group of Eight decisions (IPW, Public Health, 8 June 2007), but called for “explicit and concrete support” for the WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG) (IPW, WHO, 27 May 2006). This was echoed by a number of speakers and achieved in the last draft of the agenda, which NGOs welcomed.

Robert Sebbag of drug producer Sanofi-Aventis talked about a joint company project with the Drugs for Neglected Diseases initiative (DNDi), which produced a product without patent earlier this year (IPW, Public Health, 5 March 2007). He said this had not been a “love wedding,” but said it was necessary to work with big pharma with its know-how. He said that neglected diseases also cover non-communicable diseases such as epilepsy and mental health, saying “it is a shame” that nobody is doing anything for these diseases in developing countries.

Tanzanian Minister David Mwakyusa said that “neglected and emerging infectious diseases” as described in the draft agenda should not mean that emerging infectious diseases such as SARS would get all attention at the expense of, and marginalising, the real neglected diseases.

Frank Schmiedchen, government director of the German Ministry of Economic Cooperation and Development, highlighted the need to strengthen the use of the IP flexibilities found in trade law “to the fullest” in developing countries. He referred to the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Hannah Kettler from the Gates Foundation said it would be important in the future to get a “better understanding of what is affordable” and try to develop products that would fit this price. She referred to a meningococcal conjugate vaccine that she said is being developed by the Serum Institute in India with WHO as an example. The vaccine, for meningitis A, is about to move into Phase III testing and is scheduled to be ready in 2009 at 40 cents a dose, a source said.

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