By Ellen ‘t Hoen LLM. Medicines Law & Policy and Global Health Unit, University Medical Center Groningen, University of Groningen, The Netherlands.
September 13, 2016
Solving the problems of access to high priced medicines is not possible without some serious new thinking about the way we finance the development of new medicines. Today’s predominant model for development of medicines is through high prices underpinned by monopolies created through the patent system. Drug companies will tell you that without the ability to ask high medicines pricing, new medicines will not be developed. However, high medicines prices lead to rationing of treatments, even of some of the most effective drugs, even in affluent countries.
Considering the amount of money the world spends on pharmaceuticals it is time for some new thinking of how to ensure development of new essential medicines takes place while assuring those medicines are affordable and accessible to all. Global spending on pharmaceutical products is expected to reach US$ 1.4 trillion by 2020. This is money the public raises, either through out of pocket payments or through its health insurance, social security schemes or tax-based government-provided health care. The public, however, has very little say over how this money is allocated when it comes to R&D priority setting and spending.
Public policy, including at the international level, should play a much greater role in steering the R&D priorities, coordinating financing and developing approaches to access to new medicines. One way for public policy to take on this role is to develop new financing models for medicines development. And delinkage should be at the core of such models.
In 2012 a study by the World Trade Organization, World Intellectual Property Organization and the World Health Organization study offered a useful description of delinkage: “One important concept that evolved from this discussion is the concept of delinking price of the final product from the costs of R&D. This concept is based on the fact that patents allow developers to recoup the costs and make profits by charging a price in excess of the costs of production. This way of financing R&D is viewed as constituting a barrier to access to medicines in countries where populations pay out of their own pockets for medicines and thus cannot afford to pay high prices. The principle of delinking is based on the premise that costs and risks associated with R&D should be rewarded, and incentives for R&D provided, other than through the price of the product.”/1/
The drive to develop new antibiotic medicines has firmly put the spotlight on the need for delinkage models and is generating broad support for such new financing models. It has also acknowledged that no country can deal with the problem of lack of new antibiotics alone. New approaches and new agreements between countries are needed to address the issue of access and innovation for antibiotics and beyond.
The idea of an international agreement on development of medicines has been debated since Hubbard and Love made an initial proposal in 2004./2/ There are expectations that The UN High Level Panel on Access to Medicines will make recommendations for a new global convention in this area. It is indeed time for the international community to this issue on and to translate the wealth of proposals out there into policy that changes people’s lives.
1. World Health Organization (WHO), World Intellectual Property Organization (WIPO) and World Trade Organization (WTO), Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade. WHO ISBN 978-92-415-0487-4, WIPO ISBN 978-92-805-2308-9, WTO ISBN 978-92-870-3839-5. Geneva, Switzerland. WHO: 2012, https://www.wto.org/english/res_e/booksp_e/pamtiwhowipowtoweb13_e.pdf
2. Tim Hubbard, James Love, “A new trade framework for global healthcare R&D,” PLOS Biology 2, no. 2: e52. doi:10.1371/journal.pbio.0020052, 17 February 2004, http://journals.plos.org/plosbiology/article?id=10.1371/journal.pbio.0020052