Speaking at an inter-agency symposium on innovation and access to medical technologies in middle-income countries, held at WTO headquarters in Geneva, participants from the three organizations underlined the importance of balancing the need to ensure access to affordable treatment with the need to foster an environment conducive to innovation.
The purpose of this year’s symposium was to review trends regarding innovation in middle-income countries, to understand their strategies and challenges for access to medical technologies, and to consider ways the agencies could strengthen their cooperation and adapt their technical assistance programmes so as to improve the capacity of governments to develop and apply needed policies in the critical areas of intersection between public health, intellectual property and trade.
The meeting was the fourth in a series of WHO-WIPO-WTO trilateral symposia addressing developments in the field of health, trade and intellectual property.
WTO Deputy Director-General Xiaozhun Yi said, in opening the symposium, that the Ebola crisis “is a reminder, yet again, that a public health crisis in one part of the world is inherently a concern for us all, one that imposes a firm obligation on the international community to work together towards sustained and effective solutions”.
The senior officials paid tribute to the trilateral cooperation that has developed over the years. “We hope very much that this example will find resonance elsewhere, both in the international system and at the national level — since attaining public health outcomes ultimately requires the effective collaboration between government agencies responsible for health, trade and intellectual property,” DDG Yi noted.
Addressing the theme of this year’s symposium, DDG Yi said that middle-income countries “stand at a critical juncture — increasingly significant in the production and innovation of medical technologies, middle-income countries are an important and growing source of medicines and other technologies for other countries, particularly developing countries, thanks to a rising trend in exports of finished products and of technologies”. Yet, while they are catching up in the area of biomedical innovation and industrial development, they “continue to confront challenges for access for significant portions of their own populations,” he added.
Dr Marie-Paule Kieny, the WHO’s Assistant Director-General for Health Systems and Innovation, stressed that access to medical technologies is inextricably linked to innovation (full text available here).
“Let us be clear, without innovation there will be none of these new products,” Dr Kieny said. “But if there are new effective essential health products, we also have to ensure that they are affordable and accessible to those who need them — otherwise innovation remains an empty promise,” Dr Kieny added. She noted that the Ebola outbreak “reminded us that we have diseases where the current patent system does not deliver the innovation we need. The lack of expected return on investment was one of the major reasons why today we have to test the Canadian Ebola vaccine in a few months while this could have been done many years ago,” she added. “We hope that this reminder will trigger more long-term financial commitments by governments, including those of middle-income countries to finance the needed research and development.”
Addressing the issue of intellectual property, Dr Johannes Christian Wichard, WIPO’s Deputy Director General for Global Issues Sector, noted that “the intellectual property system, and more specifically the patent system, is an important element in the access equation. But it is not the only one”. According to him, effective health systems, regulatory frameworks, sustainable financing and creative access strategies such as differential pricing and licensing policies all play an important role in ensuring access to medical technologies. “The situation is complex, but it is also dynamic. Middle-income countries are facing enormous challenges. It is our responsibility as international organizations, collectively (trilaterally) as well as individually, to help develop viable approaches,” he added.
Presentations and discussions
In her presentation on the global response to the Ebola outbreak and the efforts made to accelerate testing and licensing of vaccines, Dr Kieny provided an overview on the accelerated testing of two of the candidate vaccines and on the state of play with respect to experimental therapies.
Other speakers discussed the impact on health of graduation from low-income to middle-income country. Graduation can prove particularly challenging, they noted. Not only may graduating countries find it difficult to make up for the cuts in external funding for health received through international initiatives that usually accompany graduation, but they may also be subject to pressure to adopt stricter intellectual property rules and be excluded from access strategies designed for low-income countries.
The role of trade in fostering innovation and access by enabling economies of scale, increased competition and technological spill-over was also discussed. High-quality institutions and frameworks for competition and exchange are considered essential to promote innovation and research and development (R&D).
One speaker noted that while middle-income countries face challenges in ensuring access to medical technologies, the “fragmentation of innovation” that comes with the increased specialization of innovation and technological trade and the growing internationalization of R&D also represents new opportunities for middle-income countries.
Subsequent presentations focused on the growing role of innovative activities in emerging countries in the field of biotechnology. Changing innovation models in this sector showed that developed countries were no longer the exclusive centre of innovation; rather, innovative activities are spread across hubs located in developed and developing countries. One speaker noted the apparent disconnect between academia, industry and society and called upon governments to stimulate innovation players. This was echoed by another speaker who provided examples of strong government influence on the development of medical technologies.
Regarding the challenges of bringing medical technologies to patients in middle-income countries, the need to take advantage of patent expiries to foster the local generic industry was put forward as one policy option at the disposal of middle-income countries. But it was also noted that competent agencies tended to look at issues in silos and that additional efforts were needed to ensure inter-agency collaboration at the national level. Similarly, better empirical data are required as the basis for sound policy decisions. A participant questioned whether increased efforts in support of local production and export of medicines in a number of middle-income countries were sustainable and cost effective.
Participants stressed the need to tailor strategies to a country’s individual needs and called for collaboration between middle-income countries, serious investment in public health as well as the broadening of quality production. Some pointed out that international organizations can help but that success ultimately lies in the hands of national governments.
The way forward
During the closing session, it was noted that while the trilateral process among the three agencies was successful, public policy choices to be made at the national level still had a long way to go. Economic growth would not necessarily lead to increased access to health care for the poorest. While middle-income country markets offer huge opportunities, the question was whether needs-based innovation is taking place in these countries and why there is an apparent disconnect between medicines exported in large quantities while the local population only had limited access to them.
Representatives from the three agencies that co-organized the symposium emphasized the need to continue and further expand their collaboration. The past four years’ cooperation under the trilateral initiative had seen the progressive development of a sure foundation for informed and inclusive policy discussions and capacity building for health policymakers. It was becoming increasingly apparent that solutions to global health challenges could not be secured through working in any one policy domain in isolation — hence the strong emphasis on understanding the intersections and linkages between different areas of law and policy under the general theme of health, innovation and trade.
For instance, access to medicines — recognized as an element of the right to health — was in part a function of international trade and the operation of competition policy. Equally, the symposium had illustrated the multiple dimensions of successful innovation policy in areas as diverse as vaccine production and diagnostics. One fertile field for further collaboration (one which the 2013 trilateral study had set in train) was the development of integrated information tools, which would systematically draw together data from diverse sources — for instance, health needs, price and access data, patenting trends, and trade data — so as to provide clearer insights for future health policy discussions.
Opening remarks by DDG Yi
Let me wish you all a very warm welcome to the World Trade Organization. I am also delighted to welcome my colleagues, Marie-Paule Kieny, Assistant Director General of the World Health Organization, and Johannes Christian Wichard, Deputy Director General of the World Intellectual Property Organization, two of our most valued partners in the multilateral system. They will be sharing the opening session with me.
The strong personal commitment by the Director Generals of the three collaborating agencies, Dr Margaret Chan from the WHO, Francis Gurry from WIPO and Roberto Azevêdo from the WTO, to building a relationship of dialogue and cooperation is borne out by the fact that this is the fourth in the series of trilateral policy symposia; the four years of trilateral cooperation have also seen the production of a pathbreaking trilateral study as a shared foundation for our continuing work together and for our outreach to many other partners.
The indispensable importance of continued collaboration within the international system on public health issues is underscored yet again today as we witness the emergence of the Ebola crisis, an international challenge that our WHO colleagues are addressing with remarkable dedication and commitment. It is a reminder, yet again, that a public health crisis in one part of the world is inherently a concern for us all, one that imposes a firm obligation on the international community to work together towards sustained and effective solutions.
But it is also the latest developments in this international health crisis that made it impossible at the very last minute to hold the personal dialogue between the Directors General of WHO, WIPO and the WTO today; in particular, Dr Chan has been unavoidably called away from Geneva in the context of the WHO's response to the crisis. This dialogue between the three Directors General will therefore have to be rescheduled to take place at the next trilateral event, tentatively foreseen for mid-2015. In the meantime, today's symposium will nonetheless take place as scheduled, in order to maintain the momentum of trilateral cooperation.
Turning to the topic of today’s symposium, we are continuing the underlying motif that has sustained this series of policy symposia — the need to learn practical lessons about how policy choices made at the international, national and institutional level can contribute to public health outcomes, with a particular focus on innovation and access to medical technologies. This time, we turn to the experience of the middle income countries. Why? It is the remarkable dynamism and yet the diversity of these countries in the public health field that make them such an important focus for policymakers today. They stand at a critical juncture — increasingly significant in the production and innovation of medical technologies, middle income countries are an important and growing source of medicines and other technologies for other countries, particularly developing countries, thanks to a rising trend in exports of finished products and of technologies. Yet many such countries continue to confront challenges for access for significant portions of their own populations. They are contending in diverse ways with the policy balance of promoting innovation and the implementation of new technologies, while facilitating access on the part of those most in need.
The symposium therefore aims to review developments in these countries, and to learn from their diverse experiences. It is a timely opportunity to review trends in innovation in those countries, to understand various strategies and challenges for access to medical technologies, and to consider how to work together to inform our continuing programs of technical assistance so as to strengthen the capacity of Member governments to develop and apply needed policies in the critical areas of intersection between public health, intellectual property and trade.
INNOVATION AND ACCESS TO MEDICINE — WTO'S CONTRIBUTION
These issues have been fundamentally important to the WTO and its Member governments. An early landmark for the WTO was the Doha Declaration on the TRIPS Agreement and Public Health: this provided a blueprint for a coherent way of addressing public health objectives within the framework of the multilateral trade system. The world’s trade ministers voiced a common concern about the global burden of diseases, and the need for the TRIPS to be part of the wider national and international action to address health problems.
In identifying ways in which TRIPS rules can support public health outcomes, the Doha Declaration also reinforced the basis for multilateral cooperation on issues on the intersection of public health, trade, and intellectual property. It became abundantly clear that the goals of the Doha Declaration couldn’t be achieved in isolation but required an integrated, cross disciplinary approach, combining the expertise and experience of all sectors concerned. This is why the WTO has built a partnership with other agencies into the core of its work on trade, IP and public health issues.
Doha was also a clear reminder that adherence with WTO rules is not and should not be a constraint on effective public policy choices, including and indeed especially in the critical area of public health. It led to the first agreement among Members on an amendment to the whole body of WTO trade law, and this purely to open up work on a new pathway for access to medicines by the most vulnerable countries. It also helped to clarify that Members can pursue a wide range of policy options and flexibilities enabling them to tailor an IP laws and policies that are responsive to their particular domestic policy objectives. One clear example is the regulatory review exception under patent law, confirmed by WTO dispute settlement and now present in some form in a wide cross section of WTO Members’ laws, as a specific tool for reconciling appropriate patent protection with the smooth operation of necessary drug regulation and the policy goal of encouraging effective generic competition after a patent expires.
Our work has also highlighted many other areas where the right kind of trade policy settings have a positive impact on public health. Above all, no country is or can hope to be entirely self sufficient in medicines and medical technologies. The trading system creates a broader base for access, and facilitates the kind of competition that drives innovation and cuts prices.
Import tariffs on finished pharmaceuticals are imposed at a relatively early stage in the distribution of a product, and later markups and taxes therefore magnify their effect on the ultimate price and thus affordability of a medicine. And tariffs on ingredients and inputs to medicines push up costs for domestic producers and thus affect their sustainability. A number of WTO Members agreed, in the context of the Uruguay Round, on a Pharmaceutical Tariff Elimination Agreement (so-called ‘Zero for Zero’) on certain pharmaceutical products, including active ingredients and intermediate products. Currently, the trend in other countries is towards lower tariffs in this domain. This is a reminder that what is ostensibly a trade policy goal has broader systemic impact. Another example is the area of trade facilitation. I will not dwell on the procedural question we are confronted with on this matter. It is nonetheless worth bearing in mind that the significance of trade facilitation for an improved flow of trade, a reduction of costs, needless paperwork and delays at the border, and thus its impact on access to medicines traded across borders.
A significant proportion of our work in other areas, too, such as on health-related measures under the TBT and SPS Agreements, concern establishing an effective, positive sum linkage between trade policy and the kind of measures that are vital for ensuring public health. Access to medicines and other medical technologies is also, in large part, an exercise in government procurement, where transparent and competitive procurement strategies — in line with the WTO Agreement on Government Procurement — can deliver greater impact for scarce public monies in this area. The GPA — in the past seen as largely a developed country agreement — is now attracting increasing interest among a number of middle income countries; it generally covers a wide scope of medical procurement by the public sector.
MIDDLE INCOME COUNTRIES — IP STRATEGIES AND CHALLENGES
In exploring the significant role of middle-income countries, we should avoid getting tied up in definitions and boundaries. The key point is that there is a growing number of countries with the resources, the capacity and the knowhow to make a major impact in the innovation and dissemination of much needed medical technologies. Their growing domestic markets support growth in the medical technology sector, a ramping up of capacity and a diversification of supply that has important spillovers for access to these technologies in foreign markets as well.
I hesitate to refer to patent statistics in front of my considerably better qualified colleague from WIPO. However, even for a lay person, it is instructive to track the rise in innovative capacity that is illustrated by the rise in patenting activity in the medical technology field emerging from middle income countries. Under the WIPO PCT system, the rate of middle income applicants filing patent applications in the pharmaceutical and medical technology fields rose sevenfold between 1995 and 2012; this tripled their global share of activity in this area from 9% to 27% — an incomplete, but nonetheless telling indicator of the shifting centre of gravity of innovative endeavour.
This growing patent portfolio in the middle income countries — shared between the public and private sectors in different proportions — underlines the growing significance paid to the strategies regarding IP rights and business models pursued by the pharmaceutical sector in these countries, as well as policies relating to public sector patents. This is a key issue that will be explored today — one question is who is taking out patents in this area, but another, perhaps more interesting but more challenging question concerns how they are managing and exercising those patents, with a view to promoting the introduction to the public of new medical technologies.
The statistics also offer insights into the growing significance of middle income countries when it comes to exports of pharmaceuticals. Taking three middle income countries alone, Brazil, China and India — admittedly among the most significant in this sector — their reported pharmaceutical exports rose almost twentyfold in the life of the WTO, from around USD 1 billion in 1994 to 19.5 billion last year. Last year, these three countries exported medicines respectively to 145, 194 and 202 separate trading partners.
Given their increasing status as producers, adaptors and innovators of medical technologies, middle income countries are also playing an important role not only as suppliers of affordable products but as a source of appropriate production technologies transferred to LDCs. Thus, Director General Azevêdo, during a recent visit to Uganda, visited a production facility for triple therapy antiretroviral drugs, much needed to combat HIV AIDS in the East African region. Its production technology is transferred from a leading Indian producer. Another example is a Brazilian initiative to build ARV packaging and production capacity in Mozambique.
Trade, and the framework the international trading system provides for the flow of products and the transfer and dissemination of technology, form one part of the overall system of policy, legal and regulatory settings that governments need to deploy to put medical technologies to work in the service of public health. This is a clear message of the trilateral study, and the central theme of our trilateral cooperation: appropriate trade and balanced IP settings are an essential prerequisite, but not sufficient in themselves, to facilitate a measured and sustainable response to the challenges of innovation and dissemination of medical technologies for improved public health outcomes. Cooperation with our multilateral partners and Member governments are vital, and learning from their areas of competence and experience is essential. Within this collaborative framework, I believe that the WTO can make a distinctive and valuable contribution, and certainly we wish to bolster this work in dialogue with our partners. Our contributions include:
- More tailored, better coordinated capacity building: we have made considerable efforts to develop and tailor our technical cooperation programs in this area to respond to the emerging needs of WTO Members. This includes taking a more holistic approach, looking at individual components of the policy mix within their full practical context. Next month we convene the WTO’s annual Geneva workshop on public health — over the years this has evolved from a relatively technical focus, to a much broader review of the IP and trade policy. The trilateral initiative itself stems from our technical assistance work, and now provides a sure basis for a comprehensive, holistic approach that is better tailored to the practical needs of policymakers. This work also involves exploring emerging issues — for instance, we find growing demand for technical cooperation dealing with competition policy questions.
- Putting statistics to work, to provide a stronger empirical foundation for policy discussions: the WHO is used to working with a range of trade and trade policy information that is part of understanding the international framework for medical innovation and access. Combining this information in an accessible, systematic way with date on health and on the IP system managed by our trilateral partners offers remarkable possibilities for deep insights into the environment for innovation and access.
- Transparency is a core principle of the WTO: the notifications made by WTO members provide a unique, wideranging overview of the legislative and regulatory measures adopted by WTO Members, many with considerable significance for public health policy. We are finding new ways of accessing and analysing this body of information, and again this will help illuminate the complex environment of public health policy.
- Policy debate: the WTO provides a forum for a thorough, searching exchange of views among Members regarding their legislative and policy choices
- And of course in the event that a matter does end up as a dispute between trading partners, we offer a unique forum for resolving disputes — the experience to date has demonstrated a clear and appropriate scope for public health measures
The essential ingredient for the successful program of trilateral cooperation is above all a spirit of mutual respect and collegiality — the three organizations contribute their respective areas of knowledge and competence in a mutually supportive way. We hope very much that this example will find resonance elsewhere, both in the international system and at the national level — since attaining public health outcomes ultimately requires the effective collaboration between government agencies responsible for health, trade and intellectual property.
We remain committed to joint policy dialogue and capacity building with the aim of providing the factual and technical information that is needed by policymakers to take well-informed decisions, and at building dialogue between specialists and policymakers from different fields of expertise and responsibility. I trust that today’s symposium will provide a major step forward in this direction. We are delighted that you have joined us here at the WTO to resume one of Geneva’s most important conversations — and I wish you a productive and stimulating day of discussion and mutual learning.
Opening remarks by Dr Marie-Paule Kieny
Dear Xiaozhun YI, Dear Christian Wichard, distinguished experts, ladies and gentlemen,
Let me first convey our Director-General Margaret Chan’s apologies for her absence today, due to urgent commitments to the Ebola response efforts. She very much regrets to miss this traditional coming together from the three organizations to discuss the linkages between public health, trade and intellectual property.
We are here today to discuss the specific challenges of middle-income countries with respect to innovation and access to health products.
Innovation and access have been prominent on the public health agenda for a long time. Access to essential medicines is one of the six leadership priorities of WHO. Universal health coverage, which is our guiding principle, is not possible without innovation and sustainable supply of affordable medicines and health technologies. But what are the benefits of innovation if the people who need the new medicines cannot access them?
Ladies and Gentlemen, before we can discuss access to health products, these new medicines, vaccines, and health technologies of course need to be developed and their safety, efficacy and quality assessed. The list of new products needed to improve the health of patients is long. Let me give you five examples: The world needs
- New antibiotics and medicines to treat multi-drug resistant tuberculosis;
- fixed-dose combinations to improve treatment compliance;
- paediatric formulations for a range of childhood conditions;
- medical devices and assistive health technology for aging populations, which is a demographic trend rapidly emerging in middle-income economies;
- new and more effective vaccines.
Let us be clear, without innovation there will be none of these new products. But if there are new effective essential health products, we also have to ensure that they are affordable and accessible to those who need them — otherwise innovation remains an empty promise!
In this context, middle-income countries are facing particular challenges. The pharmaceutical industry considers many of these countries as important markets where they want to grow. The unequal distribution of gross national income in many of these countries however means that even a high GDP does not mean that the majority of people in these countries are well off. In reality, they are home to the largest numbers of poor people globally and the absence of widespread health insurance systems means that many have to pay for medical expenditures out-of-pocket.
The increasing disease burden of non-communicable diseases puts an additional strain to the national health budgets of these countries. Our Director-General when addressing this years’ World Health Assembly pointed out that according to the 2014 WHO World Cancer Report the number of new cancer cases has reached an all-time time high and is projected to continue to rise, with around 70% of all cancer deaths occurring in developing countries. In some middle-income countries, diabetes treatment alone is absorbing nearly half of the entire health budget.
Unaffordable prices are not only an issue in developing countries. A recent report described the trend by showing that in the US the median revenue of the Top 100 medicines increased seven fold from $1,260 in 2010 to $9,400 per patient in 2014 while the patient population per specific drug is shrinking because of narrower medical indications. More and more treatments cost more than US$100,000 per patient per year. The new hepatitis C treatments are a prominent example for this trend. Many developed countries struggle to keep health expenditures under control while providing access for those who need the new treatments. It is obvious: if not controlled, prices will continue to rise. It also obvious that no country will be able to treat its way out of cancer, diabetes or hepatitis: Therefore we must focus even more on prevention, reducing risk factors and improve infection control.
The new treatments for hepatitis C are a good example to illustrate what WHO can contribute:
More than 185 million people are infected with the hepatitis C virus worldwide, which kills up to 500,000 people each year. HCV infection can be cured using pegylated interferon and ribavirin, but treatment duration is long, it involves weekly injections, and side effects are considerable. The new directly acting antiviral treatments are expected to reach cure rates of more than 90 % with fewer side effects and a shorter treatment duration. This is a tremendous achievement and we are thankful to those scientists who developed the medicines. These treatments can change the world of hepatitis, but only if those who need treatment can actually access it. Given that the burden of hepatitis C is concentrated in middle-income countries, achieving affordable prices for these countries is a matter of urgency.
WHO is advising a number of Member States on establishing comprehensive national hepatitis programmes covering prevention, diagnosis and how to access treatment in line with the new WHO treatment guidelines for the screening, care and treatment of persons with hepatitis C infection. To allow countries to identify their options, WHO has published an analysis of the patent situation for seven of the new hepatitis treatments. Concurrently, the WHO prequalification programme, which assesses the quality and safety of priority medicines, vaccines, diagnostics, and active pharmaceutical ingredients, has issued the first call for expressions of interest for hepatitis C and B treatments. This is an important step to stimulate generic competition, while ensuring that generic versions of these new antivirals are compliant with quality and safety standards.
In this debate, we also have to remain objective: Unaffordable prices are by far not the only challenges for accessing medical treatment. Most of the essential medicines and treatments for heart disease, diabetes, and chronic lung diseases are available as cheap generic version and still these treatments are not available in many health facilities. Ensuring access to essential products is the primary responsibility of national governments. They must focus on building national health systems that can provide quality essential health services and products at a cost that everyone can afford.
The Ebola crisis again has showed the world that only strong health systems can prevent this kind of catastrophes. Strong health systems do not come for free. Economic growth can leverage people out of poverty and enhance living conditions, but to what extent this happens depends a lot on how the fruits of economic growth are distributed. Increase in GDP must go hand in hand with greater investment in health infrastructure, an educated and adequately remunerated health workforce and universal health coverage schemes. Governments have to make health a priority and invest accordingly in stronger health systems, of which supply of essential medicines is an important element.
Ebola has also reminded us that we have diseases where the current patent system does not deliver the innovation we need: The lack of expected return on investment was one of the major reasons why today we have to test the Canadian Ebola vaccine in a few months while this could have been done many years ago! We have been discussing this failure of the market driven R&D system for a long time. We hope that this reminder will trigger more long term financial commitments by governments, including those of middle-income countries to finance the needed research and development.
I will conclude by emphasizing that WHO will continue to play an important role at the interface of public health and intellectual property. For this however we need the expertise of other organizations: Dear Xiaozhun YI, Dear Christian Wichard, I would like to thank you and your colleagues of the WIPO and WTO Secretariat for your continued support and engagement. This trilateral cooperation is a prime example of the need for cooperation between different sectors in order to leverage opportunities and promote better, more equitable and universal access to healthcare.