THIS NEWS STORY is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.
The official record is in the meeting’s minutes.
They were speaking in the third technical symposium organized jointly by the World Health Organization (WHO), World Intellectual Property Organization (WIPO) and World Trade Organization (WTO), hosted this time by WIPO — the previous two were on 16 July 2010 and 18 February 2011.
The three organizations’ directors-general summed up the latest situation as: an “evolutionary burst” in cooperation and in the way intellectual property is being used (WIPO’s Francis Gurry); a system that needs to be readjusted because of unsustainably high costs, market failure in providing a response to certain types of diseases affecting the poor, and a decline in breakthrough inventions (WHO’s Margaret Chan); and a system requiring a move from “coherence” to “convergence” in the way international organizations work together (WTO’s Pascal Lamy).
They hailed WIPO’s recently concluded Marrakesh Treaty on improving access by the visually impaired to books and other printed material, as a successful effort in international co-operation in intellectual property that is responsive to the needs of society at large.
Co-operation was an important theme of this symposium, including between organizations, between the public and private sectors, and among various other groups concerned.
The need to adapt
Speakers (their presentations available soon here) said the need for business models to adapt arises from:
- a heightened awareness of social issues (with pharmaceuticals seen by many as “public goods” because of their role in public health and public funding)
- concern about the market’s failure to produce the right innovations and to deliver the right medicines to the people who need them, at prices they can afford
- tighter healthcare budgets
- stricter regulation for pharmaceuticals to be approved, which raises costs
- changing patterns of research, development and patenting
- other factors
Some discussed how to strike a suitable balance in emerging economies, between the needs of the poor in those countries, and an increasing ability to foot the bill by their governments.
An example of the changing nature of innovation and patenting is vaccines, where development and marketing are very different from medicines. Vaccines are traditionally an area where innovators have sought patent protection more for process than for molecules, and relatively few patents were held by industry.
However, recent years have seen an exponential rise in the number of patents on vaccines, and a shift in the ownership of the patents to research institutes and universities. These developments have led to new partnerships and a review of the way intellectual property is managed.
The recent surge in patenting was partly because of an increase in biotechnology inventions, said keynote speaker Seth Berkley of the Global Alliance for Vaccines and Immunisation (GAVI). He described various ways in which GAVI has been able to spread immunization, particularly for children in developing countries. GAVI’s approach was based strictly on co-operation in order to draw on the range of expertise available, strengthen the results, and save costs, he said.
For medicines, the traditional role of large research-based pharmaceutical companies is changing, other speakers observed. Increasingly, innovation and patenting are taking place in smaller biotech companies and in research institutes, which sell or licence their inventions. This has changed not only the way innovation is handled, but also how larger companies handle the risks they face — some of the inventions developed in small units may turn out to be unsuitable for commercial production.
Harder, riskier, more expensive
As one speaker put it, innovating has become harder, riskier and more expensive. Conditions for drug approval are getting stricter. Price control and reimbursement mechanisms are increasingly based on the true clinical value of the medicines.
In addition, large pharmaceutical companies face “patent cliffs” — loss of earnings as the patents on their products expire, allowing generic versions to be sold at lower prices, with few breakthrough products in the pipeline — although another speaker from a pharmaceutical company predicted that new, significant innovations are on the way.
One way of looking at possible solutions is through “push” and “pull” mechanisms to separate research and development costs from sales prices, in order to make medicines affordable and profitable at the same time, some speakers suggested.
“Push” would be options for reducing the cost of companies’ investment in research and development, and “pull” would be support for increasing revenue, for example through purchasing agreements or patent buy-outs.
Speakers discussed a wide range of business models. These included developing more targeted treatments such as biotherapeutics (therapeutics produced using biological materials), opting for profit-to-share models (instead of profit going to one company alone), involving non-traditional players, finding ways to simplify, speed up and share information for clinical trials, or governments paying research companies or institutions to develop products that they want, while keeping control over the outcome.
Underlying the discussion was a shared view that intellectual property protection is a tool to support public health. At the same time, a balanced and flexible approach is key to avoiding obstacles that prevent access to affordable pharmaceuticals. So is managing intellectual property in a way that responds to public health needs. Co-operation was seen as the guiding principle: internationally, this could help gather empirical data that would make the policy debate better informed. It would also focus on capacity building.
In the opening session, the three directors-general praised the co-operation that has developed over the years and helped them to understand each other’s perspectives.
They paid tribute to WTO Director-General Pascal Lamy, who is leaving office at the end of August, for his efforts in achieving the co-operation between the three organizations.
He said of the WHO-WTO-WIPO collaboration: “If one surveys the field of new forms of international cooperation […] you can’t help but think that this is the organizational equivalent of what the Cambrian explosion was for animal forms — and of course the Cambrian explosion was that sudden appearance of many major animal groups in one burst of evolutionary innovation.”
He added: “The way in which intellectual property is being used has undergone an evolutionary burst. And that burst I think shows us that in its broadest sense intellectual property is about the whole way that society produces, distributes and consumes information and knowledge. IP [intellectual property] creates rules in relation to those processes.”
She said the need to identify new business models for medicines is driven by global health needs, not commercial interests. One of the struggles is to provide incentives for research and development while containing access costs — to find the right balance between rewarding innovation and producing affordable products that can be approved more easily for marketing.
She observed a decline in the number of breakthrough inventions as newer patents tend to be for “me-too” drugs (which are similar to existing drugs) and “evergreening” (patents for improvements to existing drugs and for new applications of these drugs), and an absence of investment in the development of new antibiotics.
Meanwhile, some medicines remain expensive, she went on. Eleven of the 12 cancer medicines approved by the US Food and Drug Administration in 2012 cost more than $100,000 per year, which is expensive even in developed countries, she said.
She called for drug regulatory authorities to be involved in order to support innovation. While the quality of medicines has to be preserved, the process for the approval of medicines has to be reviewed, as the current regulations are too strict and the costs involved are too high, she said.
WTO Director-General Pascal Lamy(full text available here) also welcomed the Marrakesh Treaty for the visually impaired. He saw it as a cause for optimism among “clogged up” efforts at international co-operation. A previous example was the WTO’s 2001 Doha Declaration on TRIPS and Public Health, which was designed to ensure intellectual property rights contribute to public health, and was the foundation for the present co-operation between the three organizations, he said.
Referring to issues such as market failure, Mr Lamy said: “As a tool for innovation, [intellectual property] must itself be used innovatively.”
The biggest challenge for the future, he concluded is for international organizations like the WHO, WIPO and WTO to move from “coherence” to “convergence”.
“I hope that much more is to come in the future,” he said, “as this planet keeps realizing that there’s no way we can address this kind of issue in clusters.”
Well, let me first thank Francis [Gurry] and Margaret [Chan] for their kind words, and also for their sense of collegiality, leadership and engagement in what our three organizations have been doing in recent years.
I think it’s time to share a little secret with you, about my engagement on health-related issues along my professional life, which stems from what I would call a black-sheep syndrome. The reality is that I’m the only non-medic, in large part, of my family. My parents were pharmacists; my two brothers are doctors. So in reality, I have to remain fit for the next family gathering, which is why I had to invest so much in this field.
Now you know everything. This is one of the reasons why I’m very proud in a way of the success of this initiative we have taken together, with Margaret and Francis. I think the Secretariats of our three organizations have succeeded in building up a close trust, with a simple working relationship, and that’s something I would like to acknowledge right now.
And this culminated in the trilateral study on “Access to Medical Technologies and Innovation”, which we launched together in February.
The subject of this symposium — “Medical Innovation — Changing Business Models” — is intended to stimulate new thinking among those at the helm of the business of medical innovation.
Most of the investment in medical R&D still comes predominantly from the private sector. Yet, the usual model of maximizing profits which works relatively well in other industry sectors is increasingly coming under scrutiny in the pharmaceutical sector.
There are many reasons for that, including the tightening of healthcare budgets, and including some market failures that deprive the poor of medicines to treat neglected diseases.
Wealth and diversity of experience
So taking this into consideration, I think it is essential is to re-think and diversify business strategies in a way that is “win-win” — and it can be done — for better health outcomes for more patients on the one side, and on other side, more incentives for R&D (research and development) for the commercial sector, and at the end of the day the capacity to develop new and adapted vaccines, diagnostics, and treatments specially for neglected diseases. That’s the concept for today.
Also within the concept of today’s symposium is the need to listen and learn from a wider base of expertise in order to exploit the incredible wealth and diversity of experience, which we have in Geneva, and then to go to the policy-making level to help them change their vision and their thinking on a number of issues. This includes new streams, which we’ve seen appearing in recent years — such as the move from infectious disease epidemics to non-communicable diseases and preventive measures.
So, it’s in a way, going back to those who are practitioners, those who know, and then trying to move this up to the policy level. That’s one of the reasons why it’s great to have you here, [keynote speaker] Seth [Berkley], because you probably are one of the true visionaries in the field of vaccines, and how to move this new border of innovation.
A few words on my own vision of how this IP (intellectual property) system has to interact with trade and health: I believe that this is something that will be with us in the years to come.
In the past, we came from a situation where the IP system was seen as isolated and inadequately engaged with efforts to address public health needs. I think this has changed, notably thanks to new partnerships and new international configurations, which have moved this situation forward.
Where co-operation was possible
The Marrakech Treaty — largely prepared in this very room and adopted last week as an outcome expressly designed to serve the visually impaired — serves as a good reminder that the international system, although clogged up in many ways, can indeed move effectively and humanely in response to a basic human need. So, there’s good news there; not all is clogged up for the moment.
When I look back to this famous Doha Declaration on TRIPS and Public Health I think from where we were at the time, and I remember this vividly, we moved to a good extent to ensure that the international IP system can contribute to delivering solutions — or as it was expressed, “the need for the [...] TRIPS Agreement to be part of the wider national and international action” to address the problems of public health.
This, at the time, gave a signal of necessity for the IP rules to be balanced and supportive of their attempts to achieve public health objectives. The declaration laid down the foundation for a more dynamic interpretation of the TRIPS Agreement, for the now widespread recognition of the flexibilities built into the Agreement, and for more intense co-operation at the multilateral level. What we’ve been doing together in recent years is a spill over of what was decided at a political level with the Doha Declaration on TRIPS and Public Health.
We also expanded the scope of this cooperation from has more recently turned from the traditional and still urgent issues of access to medicines to a wider range of resource mobilization, incentive, and innovation issues, responding to concerns about market failures and the need for new and adapted treatments for neglected diseases.
In many ways the IP system showed a capacity to respond to demands emanating from the health sector, essentially in reaction to public health needs. This has created a more solid architecture between health, IP and trade, but we still have to do more in order to ensure that in this global governance landscape, IP is put on an equal footing with other disciplines — such as competition policy and health regulation, which if you read the piece we published together in February, are also essential ingredients of easier and more affordable access.
As we work towards further developing global health governance, and building synergies between different areas of law, regulation and policy, we have a responsibility to develop ways of actively yoking the IP system into efforts to anticipate and address public health needs.
This is the way for the future, to keep implementing this Doha Declaration, making sure that the IP system forms an integral part of the global solution, and not just a little corner which is limited to technical issues or just addressing a mere, small set of obstacles.
It’s something that has to do with innovation, which takes us back to today’s symposium. As a tool for innovation, IP must itself be used innovatively. I’m convinced this is possible. This is one area where there is optimism for the future, and we don’t have that many for the moment.
From coherence to convergence
And I think also that this product of what we’ve been doing together, fits with a deep conviction which has been reinforced and which will be one of the lessons I will take when I leave at the end of August: that in order to build, to achieve, to attain more efficient global governance, we need more convergence.
And in a way, convergence is much more dependent than coherence. It’s one thing — and we all know we spend quite a lot of time in our own respective organizations — making sure we herd our cats in a coherent direction. That’s for the present generation and it’s a tough one. The next generation is about more than coherence. It is about convergence.
I’m convinced this is the real challenge. What we’ve been doing together to some extent created a few stones in the direction, but I’m convinced and I hope that much more is to come in the future as this planet keeps realizing that there’s no way we can address this kind of issue in clusters. There’s no way we can address these issues with different standards on different continents in different countries, and this is, I think, the main challenge.
That’s why probably more symposiums of this kind, more joint policy actions, fact finding by our three organizations are needed. Good luck for what needs to be done in this field in the future.