UN Secretary General’s Panel on Access to Medicines Reports: Government Knows Best

By Joseph Allen
September 15, 2016

Running towards a carrot tied to a Pinocchio nose, falling off a cliffDelayed for months beyond its expected issue date the Secretary General’s High Level Panel on Access to Medicine’s report emerged yesterday.  Apparently the panelists scrambled to better disguise their predetermined agenda behind reams of soothing rhetoric. While lip service is given to the unimagined advances in medicine under the current industry led drug development system, that’s quickly discarded under the pretext of providing better access to health care for the world’s poorest citizens through a system run by international bureaucracy.  The only panel member with actual experience in drug development provides an effective rebuttal to the recommendations– but his message is buried in the report. His rejoinder should be highlighted as the report is largely directed at establishing international control over the US life science industry. If not countered, policy makers, media outlets and the general public could eventually fall prey to the siren call that a government run drug development system would be “more fair.”

As anticipated (see Are Patents the Reason Poor Countries Lack Healthcare?UN Access to Medicine Recommendations Will Increase Human Suffering, and The UN’s Misguided Focus on Patents as the Cause of Drug Shortages) the panel sees an inherent conflict between protecting human health and intellectual property protection made worse by: “The proliferation of free trade agreements containing expansive patent and test data protections on health technologies, which exceed the minimum standards for intellectual property protection required by the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) may impede access to health technologies.” But they have the remedy: increased use of compulsory licenses “left to the discretion of the governments” to seize drugs that they want.  And to minimize resistance, neither the countries nor the companies whose inventions are being taken would be able to make “explicit threats, tactics or strategies that undermine” compulsory licenses.  Such actions would be reported to the World Trade Organization triggering appropriate penalties.

The Bayh-Dole Act, which allows universities to own and license federally-funded inventions, is also on the target list.  The Executive Summary makes no mention of its accomplishments (not a single new drug was developed under the preceding policy- now more than 300 drugs arising from university inventions are combating the ravages of disease).  Instead, we read: “However, limiting access to academic discoveries (through patenting and licensing) can obstruct follow-on innovation and force taxpayers to pay twice for the benefits of publicly-funded research.”

The phrase that “the public pays twice for products arising from federally supported R&D”  is the misleading motto developed by opponents of the law. It falsely implies that the government is funding research and development of these products. University inventions are typically at a very early stage of discovery when agency funding ends. The time and expense needed to turn them into products is undertaken by the private sector, requiring many times more than what the government spent on research, with no guarantee this investment will ever be returned.  That the Panel adopted this language shows who they were listening to during the exercise.

While the essence of Bayh-Dole was cutting the bureaucratic red tape strangling the commercialization of billions of dollars of government R&D, the panel wants it back.  “Public funding agencies should strongly encourage patenting and licensing practices that benefit public health, including the use of non-exclusive licenses, the donation of intellectual property rights, participation in public sector patent pools and other mechanisms that maximize innovation while promoting access.” That would require turning Bayh-Dole on its head as agencies have no authority to micromanage university licensing decisions under the law.

The belief that exclusive rights should be discouraged is deeply embedded in the belief system of the Panel.  Contrary to the Panel’s trust in bureaucracy, experience has shown that universities are best placed to determine which type of license is appropriate to a technology they invent.  Non-exclusive licenses are not “morally superior” to exclusive licenses. Indeed, they could be deemed immoral if artificially imposed in situations where the risks and costs of development will not be undertaken without exclusivity. Drug development is a prime example. Another is the formation of start up companies– a driving force in US innovation. Unlike the rest of the world, about one half of our new drugs come from these companies.  Who would form a new drug or biotech company based only on a non-exclusive license?  But the panelists come from the world of theory where such practicalities can be ignored in favor of more government control.

And that leads to the crux of the Panel’s theory: international governments should take the lead in drug development:

Building on current discussions at the WHO (World Health Organization) the United Nations (sic) Secretary-General should initiate a process for governments to negotiate global agreements on the coordination, financing and development of health technologies. This includes negotiations for a binding R&D Convention that delinks the cost of research and development from end prices (emphasis added) to promote good health for all. The Convention should focus on public health needs, including but not limited to, innovation for neglected tropical diseases and antimicrobial resistance and must complement existing mechanisms.

As a preparatory step, governments should form a Working Group to begin negotiating a Code of Principles for Biomedical R&D. The principles would apply to public R&D funds and should also be adopted by private and philanthropic funders, product development partnerships, universities, the biomedical industry and other stakeholders. Governments should report annually on their progress in negotiating and implementing a Code of Principles as a preparatory step to negotiating the Convention in the United Nations General Assembly.

It’s an easy guess which country will be expected to fund this brave new world of drug development.

The report goes on calling for stricter standards for patenting, requirements that companies report their R&D costs for drug development to the government, etc.  But perhaps one of the most interesting parts of the report is at the end when individual panel members express their views.  Andrew Witty, the Chief Executive Officer of GlaxoSmithKline, points out where the Panel jumped the track:

Nobody would dispute the need for improvement in both innovation of healthcare technology and access to it. Everyone understands there is much to do. People are being left behind.

That said, advances in medical technologies, and new partnerships and collaborations, have led to a massive increase in life expectancy and a dramatic fall in childhood mortality in recent decades. The past 10-15 years has been a period of unprecedented progress. A   diverse portfolio of new models and mechanisms for developing and delivering medicines, vaccines and other healthcare technologies – such as AMCs, PDPs, the Medicines Patent Pool, tiered pricing, and collaborations such as the pharmaceutical industry coalition on NTDs – have delivered extraordinarily fast and impressive results in the range of medicines and vaccines available and in the number of people able to access them.

Novel approaches and partnerships have led to tailored solutions, developed through consensus, to specific challenges and circumstances.

The huge achievements of the current system of healthcare innovation are often ignored or taken for granted. Equally, although many different stakeholders (particularly academia and    public and philanthropic funding institutions) contribute significantly, it is often forgotten that almost all of the world’s medical technology has come directly from, or with the enormous contribution of, the research-based pharmaceutical, biotechnology and med tech industries. Those contributions have been largely stimulated by incentives underpinned by   intellectual property. The approaches and partnerships referenced above all operate within and alongside the IP system. (emphasis added)

He continues:

The Report makes two false or at least highly dubious implicit assumptions which are foundational to some of the narrative and recommendations: Firstly, that the value (clinical or financial) of an innovation is clear at the time of discovery and patenting. It almost never is.

 Second, that national governments will commit, and be able to raise, the very substantial funds that are required to incentivise future innovation. This especially in the context of an R&D Convention, which may explain why this idea, in its grandest form, remains stalled in the international forums where it has been discussed.

 These two assumptions are important as they are used to reassure on alternate approaches to   the current system, when in fact neither are likely to prove robust or be broadly deliverable.  (emphasis added)

Witty then addresses compulsory licensing:

I fear that any element of automatic use of compulsory licenses for medicines would have significant unintended consequences. The journey from concept to finished medicine can take up to 25 years. If there is significant uncertainty about returns being available for    successful, value-adding products at the end of that period, investors and therefore companies would be much less willing to invest the significant levels of funding required to discover, research and develop new medicines. Innovation would be endangered for patients around the world.

Compulsory licenses should be granted in line with the provisions of the TRIPs agreement and the Doha Declaration. They should therefore not be a routine or automatic element of a country’s industrial or health policy, and should not generally be used if there are good therapeutic alternatives available at reasonable prices. If a compulsory license, or any other TRIPs flexibility, is to be pursued, it should be preceded by negotiation.

It is also important to acknowledge that the vast majority of the medicines on the WHO   Essential Medicines List are not patented, and yet a third of the world’s population do not    have reliable access to them.

Witty then raises an interesting point on a key example the Panel uses to urge a replacement of the current system in favor of one run by government, “delinked” from the profit motive:

The Report states that “Ebola and Zika are a stark reminder of the need for delinkage”. In fact the lack of treatments for these outbreaks has nothing to do with the market-driven IP model (emphasis added). The lack of preparedness was caused by many factors, not least of which is that these diseases were not regarded as global health priorities by the WHO or others, as the report acknowledges. There is no evidence that delinkage would have made a difference to readiness for these outbreaks. (emphasis added)

He cautions against poorly conceived changes to the patent system:

Patentability must be based on clear, rationale and predictable criteria. The Report proposes that Member States should have the right to define these criteria in the best interests of public health without in any way describing how that is to be judged. This would create complexity and unpredictability for all stakeholders involved in the innovation process.

Witty concludes:

The current system is not perfect, but we must be careful about how we go about improving it.  It would be wrong and irresponsible to fundamentally disrupt this model without a well-tested alternative ready to replace it. A proper assessment of the unintended negative consequences of proposed change is also crucial in such a highly interconnected policy space. Otherwise we risk undermining recent collaboration, and a loss of momentum in   innovation, and as such could jeopardize access for future generations to key innovation.

That’s one of the few recommendations of the report worth remembering.

The Author

Joseph Allen

Joseph Allen is a Featured Contributor on IPWatchdog.com, and a 30-year veteran of national efforts to foster public/private sector commercialization partnerships, and author of numerous articles on technology management for national publications.

Joe served as a Professional Staff Member on the U.S. Senate Judiciary Committee with former Senator Birch Bayh (D-IN), and was instrumental in working behind the scenes to ensure passage of the historic Bayh-Dole Act. He is our resident Bayh-Dole expert, and will write frequently about Bayh-Dole and issues surrounding the commercialization of university research.

In 2008, Joe founded Allen & Associates, through which he offers consulting services assisting clients in technology transfer issues, including developing effective communication strategies with national policy makers.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments.

  1. EG September 15, 2016 9:45 am

    Hey Joe,

    Thanks for the article. The U.S. should frankly tell the UN the no uncertain terms that this proposal that encourages the theft of patent rights (aka “compulsory licensing”) based upon a completely flawed premise is DOA.

  2. Anon2 September 15, 2016 10:48 am

    What the UN Panelists likely do not know:

    If governments seize and partially enslave the pharmaceutical industry (the likely ideal held by some UN panelists) for the so called public good, to the extent thinking individuals are still free and have enough self-esteem to know they have a moral right to the fruits of their own labor, they will choose to go on strike i.e. quit said industry to pursue their own life and happiness in another field altogether.

    When all free individuals of the mind have left pharma (or perhaps only those in a particular jurisdiction), the kind of products which emerge from government agencies filled with people of mediocre talent and no vision will be just what the consequences of reality demand… ineffective at best, miserable and atrocious at worst.

    Such consequences are not unintended so much as they are a product of evasion and willful blindness.

    What is most repugnant about the motivations of the UN Panel is not that it has the wrong idea about the ends which their proposals would achieve but the means by which they intend to achieve it. They would alienate man from his rights to the fruits of his own labor, create a rightless global society, in which more would “survive” and none would “live” as free individuals.

  3. Anon September 15, 2016 4:58 pm

    Anon2,

    Sadly, the same logic applies to ANY art field to which anti-patentists want to attack.

  4. Chris Gallagher September 16, 2016 11:40 am

    I completely agree with EG (above)