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TRIPS: WHO/WTO WORKSHOP ON DIFFERENTIAL PRICING AND FINANCING OF ESSENTIAL DRUGS, HØSBJØR 2001
Closing remarks: Gro Harlem Brundtland

Høsbjør, Norway 8-11 April 2001
Dr Gro Harlem Brundtland
Director-General
World Health Organization

Closing Remarks

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SEE ALSO:
Opening remarks: Gro Harlem Brundtland
Introductory remarks: Adrian Otten
Closing remarks: Adrian Otten


Ladies and Gentlemen,

In my view this has been an extraordinary meeting. Extraordinary in the sense of the complexity of the issues we have been discussing. Extraordinary, too, in the wide range of views that we have heard expressed. I believe we have achieved a great deal.

Over the last three days we have come a long way in clarifying what it will take to make a real difference in ensuring that poor people in low income countries have access to the vital medicines they need.

As I said at the outset, our purpose was not to make decisions or to prepare detailed plans. Nevertheless, I believe that the discussions here in Hosbjor have laid the groundwork for positive actions in the future. By focusing both on innovation for the future and increasing access in the present, they build on foundations laid at the recent meeting convened by the UN Secretary General.

The problems we are discussing are urgent. Reaching the targets set by both the leaders of developed and developing countries alike, for reducing the burden of disease caused by HIV/AIDS, malaria, TB and the other health conditions that create and perpetuate poverty will not be easy. I am convinced that it will not be possible without a massive increase in the scale of the national and international response. And access to essential drugs is a critical component of that response.

What have we learnt?

We have heard quite clearly that the price of drugs matters — it matters to poor people, and it matters to poor countries. But little progress will be possible without a significant investment in building effective health systems. We have heard too that even with lower prices — particularly in the case of anti-retrovirals — additional finance will be essential.

We have heard that the protection of intellectual property is a necessary factor in stimulating the innovation needed to produce new drugs, vaccines and diagnostics. It is equally clear, as we have heard this morning, that effective protection of intellectual property needs to be combined with incentives that will drive research and development in the direction of the health conditions that disproportionately affect the poor.

The present regime of international trade agreements has been designed to strike a balance between the rights of patent holders and the rights of patients. The TRIPS agreement contains important public health safeguards. It has been argued here that we do not yet have sufficient experience to judge their real effectiveness. But we have also heard at this meeting some important reassurances that countries’ rights to exercise these safeguards must be respected.

When it comes to increasing access to drugs through lower prices, we cannot rely on one single solution. As one presenter put it: we need a mix of mutually supportive strategies. Such a mix of strategies needs to be geared to the circumstances of individual countries.

We have focussed particularly at this meeting on differential pricing. And here we have an important body of experience on which we can draw. The presentations we heard yesterday show that differential pricing is feasible. It can result in prices that are between 1% and 10% of those charged in high income markets. This has happened through a combination of high volume purchasing by governments and international agencies, adequate and reliable levels of finance, advocacy, corporate responsibility and market forces.

For differential pricing to work on a large scale, I think we can all agree that there must be watertight ways of preventing lower priced drugs from finding their way back into rich country markets. We have heard suggestions as to how this can be achieved. These ideas now need to be tested to show that strategies to prevent diversion can really work in practice.

There were other important lessons that came out of our review of current experience. It reinforced the point that just making drugs available — even at no cost — does not guarantee that they will be utilised. All the other pieces of the picture have to be in place as well: the distribution systems; the partnerships between public and private providers; the agreements between governments and development agencies; and — as several of the presenters stressed — clear and explicit goals and objectives. There are lessons from the experience of the onchocerciasis control programme, for example, that could benefit countries seeking to take up the offer of drugs to prevent mother-to-child transmission of HIV.

The need for significant increases in international financial assistance has been a recurrent theme. We in WHO believe there is a strong case for the establishment of a new international health fund. It will give political prominence to priority health issues including HIV/AIDS — and is a tangible response to earlier commitments on the part of the international community to mobilise more money. It offers the opportunity to capture resources from new partners, particularly those who do not have a strong country presence. It is also a means of ensuring more resources to those countries without a strong donor presence.

The issue that has struck me in this discussion is not just that we need an absolute increases in the level of resources, but that we need to think carefully about how these resources are provided. We need mechanisms that transfer money rapidly to countries. We need to combine speed with transparency and accountability. We need mechanisms that ensure that decision making and priority setting remains, where it belongs, at national level. Moreover, if funds are to be used to procure commodities, we need to build on what exists — both nationally and internationally. No reinvention of wheels, and most important, no undermining of existing capacities and systems.

Colleagues,

We knew at the start of this meeting that there would be tensions and areas where it would be difficult to agree. This is inevitable. But our task here is to think through the implications of different options — even if we do not always reach a consensus on their viability.

One of the issues that remains unresolved concerns the extent to which price reductions can or should be achieved by relying only on negotiation with producers. Much of the discussion about differential pricing is based on the assumption that it is possible to agree on a fair price — based, for example, on the marginal cost of production.

At the same time, we have seen the effect of competition on the prices of drugs.

We have heard arguments both for and against voluntary licensing of patented drugs. On one hand it is said there is no economic justification for this strategy. On the other hand it has been suggested — not just as a means of introducing competition and thus lower prices, but also as a way of ensuring that lower cost drugs produced by the licensee are easily distinguished from those produced by the patent holder for high cost markets.

Of course, voluntary must really mean voluntary. But the question we need to ask ourselves is: what conditions or incentives would be necessary to introduce greater competition through voluntary licensing — in ways which are consistent with international trade agreements — on a larger scale?

There are other issues too that merit our further attention.

I will just take three examples — but there are others that are set out in our background paper. First, we have touched several times on the issue of how to handle differential pricing in the context of middle income countries. In addition, these countries represent a potential market for the diversion of cheaper drugs.

Second, we need greater clarity around the issues of parallel trade. And as we heard yesterday, those directly involved — both trade and health officials — need better and more accessible information on what is and is not legal.

Lastly, for any strategy designed to lower prices and increase access, predictability and sustainability must remain the watchword.

Colleagues,

In closing let me say a few words about next steps.

The issues we have been discussing are essentially political. And as such require political solutions, through political processes. We need to be sure we have all the evidence that is available, but there are no technical right answers to most of the things we have been discussing.

For us in WHO, the next step is to report on this meeting to our Member States when they debate the follow up to the Revised Drug Strategy at the World Health Assembly next month.

The test of a meeting like this is not the production of a plan. Nor is it the quality of the report — although I am sure in this case, it will be a good one. The test is whether better understanding — of the issues and of each other’s position — can be translated into positive action within our own areas of influence.

Thank you.