Interview With Hans Hogerzeil: Recognising Good Practices Of Pharma

The issue of medicines access for low-income people in developing countries has been of major concern to global health policymakers for years. A key issue is the inability of northern pharmaceutical producers to develop and distribute affordable medicines and recover their research and development costs.

As part of the effort to address this, a non-governmental group was formed in coordination with industry and other stakeholders to develop an index to rate companies’ efforts to ameliorate the situation.

Julia Fraser for Intellectual Property Watch recently sat down with Hans Hogerzeil, a former senior World Health Organization official and a top strategist for the Access to Medicine Index, to discuss the index’s impact, independence and the future.

Hogerzeil addressed the importance of reporting company efforts to increase access, both areas in which they are improving as well as where they are not. This creates competition between companies and acts as an incentive for improving their access to medicine practice, he said.

The Access to Medicine Index (ATMI) measures and ranks the activities of the 20 top research-based pharmaceutical companies on their efforts to promote access to medicines every two years. The efforts of the companies are based on data provided by the companies and are measured by 101 indicators in seven technical areas: organisation and management of access programmes; conduct of relationships with policymakers, competitors, customers, and the public; research and development on relevant products; pricing policies and distribution; patent and licensing practices; capacity building in developing countries; and product donations and philanthropic activities.

The Access to Medicine Foundation, which publishes the biennial index, is an independent, Netherlands-based organisation set up in 2004. It is mostly funded by the Bill and Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs and the UK Department for International Development. More about the foundation and the index can be found here.

A recent study by independent experts working at the foundation shows that pharmaceutical companies are overall improving in their “activities to promote access to essential medicines in low-income and middle-income countries.” The study compares the results of 2010 with those of 2012, and is available here.

Hans Hogerzeil is a co-author of the study and chair of the Expert Review Committee (ERC) of the ATM Foundation. The ERC provides guidance and recommendations for the index criteria and methodology. Other current members of the committee include are listed here.

Hogerzeil is also a professor of global health at Groningen University (Netherlands). He previously served as director of medicine policies and standards, and director for essential medicines and pharmaceutical policies at the World Health Organization.

Intellectual Property Watch (IPW): In the index, which are the best indicators for measuring overall access to medicines?

Hans Hogerzeil (HH): I do not think that there is any indicator better than others. The total package of indicators is balanced, and in principle you have to look at all the indicators. The patent issue is only one of seven technical areas. Of course it has to be looked at, but it is not the only thing you judge. The relative balance between the seven areas and the four components has been carefully chosen. We have not changed the balance, because then the index becomes less comparable over time.

[Editor’s note: The pricing policies and distribution score represents 25 percent of the overall score, research and development 20 percent, patents and licensing 15 percent, and the remaining four each represent 10 percent of the score.]

IPW: Are companies improving in some areas better than others?

HH: More than half of the companies have more or less achieved good management; most of them score between 3 and 5 [out of 5]. Companies are also doing well for quality of drug donations. Looking at the patent data, the average score moves from about 0.5 to about 1.5. This is still abysmally low, but it’s improving. Many companies do not disclose any patents at all, but you can see quite a number of them [10 companies] moving up.

Looking at the overall scores, each of the indicators is highly predictive for total score and measures something real. Therefore, I am pretty confident that industry is moving. Some companies are really moving more than others, in all areas.

IPW: Are companies likely to sustain their efforts or are they changing their behaviour to score highly in the index?

HH: The index helps companies guide their activities. It gives them a ‘wish list’ aspect. By telling them what you measure you suggest to them what to do. Some companies have made a high-level board decision to really get a better ranking. Johnson and Johnson, for example, have made a real effort.

Of course they present their achievements as favourably as possible. But at the same time we are pretty sure of the quality of indicators, that most indicators measure real things and are verifiable. We have specifically chosen the indicators for what they should do and we report independently whether they are doing it. Others can expose all sorts of bad things, but that is just one side of the spectrum. We really have chosen the middle field. And I am confident that when we measure progress in the indicators, I see that as a fair indication that industry is changing.

We try to be as transparent as possible. We have developed the indicators together with industry to encourage their participation. We try to make it clear what we are measuring and what we expect them to do. And then we check it. We get feedback from an expert committee, which has industry in it, as well as independent people such as governments, patient organisations and investors.

For example, one of the indicators measures engagement with the Medicines Patent Pool. MPP gave us the feedback that what we were measuring was just licences, but there are good licences and bad licences, they can be exclusive. We spoke to them, asked them what they proposed and we have carefully reviewed the indicator. The indicator we have now on the patent pool is very much in line with what they think is reasonable and feasible.

IPW: What do you do for underperforming companies?

HH: We recognise good behaviour, we are not punishing bad behaviour. The report gives companies separate scores and rankings in each of the seven areas, they can read exactly where they are. There are also company sheets, which identify the areas they were good at and the areas in need of improvement.

IPW: Have you measured whether companies improved on the 2010 suggestions for improvement?

HH: What was more important to us was whether the companies had decided independently to make certain commitments, which they get points for. However, they may have a policy but still not have done anything. The ATM Foundation will be focusing more closely on commitment-tracking in following studies. It is difficult to catch it in the rankings, but we would catch that in case studies or in boxes for individual stories.

IPW: What incentives can be made available for companies to improve their practices?

HH: I think the index is in itself an incentive. The top group are fighting for their positions, and they’re the ones that are moving. The three Japanese companies are all at the bottom but there is some competition between them.

The index team organises several meetings at two levels – dialogue and information – before each index comes out. A high level briefing is organised to explain what the index is about and what we want to achieve. For the technical side, we have meetings for the industry staff who are responsible for giving us the data. Companies send many people from across their organisations. Many of the companies were very eager to know exactly what we were measuring and what we were expecting, and how they could present their information properly.

An increasing number of companies have also asked for interviews to further explain the index. We are careful to remain independent so as not to prejudice the ranking. But if industry makes an honest attempt to get more information we will give it.

IPW: What do you make of recent revelations concerning the “PharmaGate” scandal in South Africa and the CEO of Bayer’s comments about the market for their drugs? Will these practices/policies be reflected in the index, and does the secrecy surrounding some of companies’ practices and policies pose a problem when it comes to collecting data for the index?

HH: The information provided by companies is given under the principle of confidentiality. They upload information on a website that is only available to the researchers. It is very well protected and we get good information from companies, them knowing that we are careful with it and have had no leaks.

Some topics are more problematic than others. We are struggling with the area of pricing because some companies don’t want to disclose their information. Lobbying practices is of course a sensitive area for companies because part of lobbying is effective because it is secret. These are reflected in the index as much as we can in a standardised way.

If companies then turn around and change their activities, we would pick this up either in the index or in a box as a good example. If one company is doing something and is recognised or mentioned by us, this gives ideas to the other ones who are either more conservative or haven’t thought about it. That is the power of the ranking and the story.

We are sensitive to criticism in the way we do not succeed in measuring all examples of bad promotional activity, and we are open to advice how to improve our assessments. It is not that we don’t want to do it; please tell us how to do it. The problem is that we cannot base an index on anecdotal stories; we should look at everything. If one group reports a bad story about a company or IP, this in itself is not proof. To do it systematically is the problem.

IPW: What can policymakers take from the report?

HH: What the index wants to do is to present a proper case, to collect good information, to set a good example where companies are doing well. It puts pressure on the industry. Industry needs to change from nice and visible philanthropy to ‘this is in our new business model’. Two billion people have no real access – make it a business and not a charity. Are you continuing to charge a huge price in a country where most people cannot afford the product? Or are you going for tiered prices within the country? Companies need to either change their business model or make an additional business model for the MICs [middle-income countries].

Policymakers should know that the index exists. It is a mechanism to identify what the industry is doing in this very important sector, the matter of essential medicines, especially in lower- and middle-income countries. Policymakers can also use the wish list. This is what the public health community wants the industry to do. If now, for example, it is clear that industry is doing well on management and donations, but are making a resistance to change in the area of patents and data exclusivity, people should know that.

You can use the fact that patent and data exclusivity are the least progressed as a lobbying tool to complain about industry, but you can also use it as a tool to promote the good examples. If you identify the good companies once in a while, it can be extremely stimulating for those companies. If they manage to do something good and you recognise them publically it strengthens the positive forces within the industry.

Finally, the use of the index by big institutional investors is expanding. “Share value” is language that companies understand. Companies with a real public policy become like “green enterprise.” One CEO said that there are only two indexes he looks at – one that measures economic value and the other is the ATMI, reflecting the moral value of the company.

Julia Fraser is an intern at Intellectual Property Watch. She is currently training to be a solicitor and will start work at an international law firm in London in 2015. She has a BSc Honours in Biology from Edinburgh University where she developed an interest in public health related intellectual property issues.