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James Love The Drugs for Neglected Diseases (DND) Working Group Rio de Janerio, Brazil 3 December 2002. Benefits of a treaty on R&D Session on alternative frameworks to finance R&D. How do we fund R&D?. Public and Donor Funds Direct Indirect Research Mandates Intellectual Property Rights

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James love the drugs for neglected diseases dnd working group rio de janerio brazil 3 december 2002

James Love

The Drugs for Neglected Diseases (DND) Working Group

Rio de Janerio, Brazil

3 December 2002

Benefits of a treaty on R&DSession on alternative frameworks to finance R&D


How do we fund r d
How do we fund R&D?

  • Public and Donor Funds

    • Direct

    • Indirect

  • Research Mandates

  • Intellectual Property Rights

    • Patents

    • other exclusive marketing rights


Trips is limited and problematic framework for addressing global r d
TRIPS is limited and problematic framework for addressing global R&D

  • TRIPS does not address the problem of free riding for the creation of global public goods, such as research that enters the public domain.

  • Small return for non-profit and educational institutions

  • There are insufficient private incentives to invest in many important R&D projects.

  • Exclusive rights on R&D may not be the most efficient mechanism to finance R&D.

    • Patent can be barriers to conducting research

    • Private benefits are not equal to social benefits

    • Excessive investment in drugs with incremental benefits, insufficient investments in many areas.

  • Strong IPR protection can and does lead to access problems

    • HIV, Glivec/Leukaemia, Singulair/Asthma


Tim hubbard s demand curve problem

+ Marketing global R&D

+ R&D

Cost + Profit

Free

Tim Hubbard’s demand curve problem

Cost

People treated



Global brainstorming on intellectual property

Open Source/GPL models for software development global R&D

Peer to peer technologies and social organization models

UK Commission on Intellectual Property Rights

TACD IP agenda

Royal Society brainstorming on IPR

OECD IPR studies

US National Academies of Science

US Federal Trade Commission / Department of Justice hearings on competition and intellectual property.

MSF Working groups on IPR/DND

IETF working group on IPR

UNDP Human Development Report 2001

Blur/Banff discussions on music

Rockefeller Bellagio meetings / collective management of intellectual property rights

World Business Council for Sustainable Development Project on Intellectual Property Rights

Aventis Radical IPR scenarios

Ransom / Matching Funds model

WIPO access to genetic resources / traditional knowledge and folklore

WHO/Harare proposal

Global brainstorming on intellectual property


What are the benefits of initiating discussions on an r d treaty
What are the benefits of initiating discussions on an R&D treaty?

  • Shift in responsibility from Trade and Industry ministers to health and finance ministers.

  • Multilateral framework (compare to G8 or World Bank)

  • Overcome sense of powerlessness on R&D issues.

  • Creates a mechanism to offset reduced incentives from weaker IPR regimes.

  • Stimulate critical thinking

    • Motivates proactive thinking for policymaking on health care R&D.

    • Provides explicit framework for technology transfer

    • Transparency

    • Research priorities


Models for r d treaties
Models for R&D treaties treaty?

  • The Treaty of Europe: R&D as a development tool

  • Landmine treaty: Humanitarian de-mining technologies

  • Koyto Climate Treaty: Energy efficient technologies

  • G8: Negotiations over funding vaccines and drugs for neglected diseases

  • John Barton: Vaccines, public domain, technology transfer

  • Discussions on access to scientific journals

  • Human Genome Project: Clinton/Blair Agreement




Decentralized decision making on r d
Decentralized decision making on R&D treaty?

  • Treaty requires minimum national contribution to R&D, and transparency of investment flows

  • Countries free to fund R&D in a variety of ways.

  • Range of options allowed

    • Strong IPR, high prices

    • Research mandates

    • Weak IPR regimes (non-exclusive rights liability models)

    • Public Funding

    • No IPR open source development regimes, marginal cost pricing

  • Each country’s system is without prejudice to claiming IP in other countries regimes, subject to non-discrimination


  • Aventis radical ipr scenario 1
    Aventis Radical IPR Scenario #1 treaty?

    • No intellectual property rights

    • Every product is marketed as a generic drug.

      • $178 billion in US market falls to $45 billion or less, freeing up $134 billion in resources

    • A portion of the $134 billon in savings is transferred to R&D funds, replacing and expanding the $27 billion in private sector investments


    Use intermediators to invest in projects
    Use Intermediators to invest in projects treaty?

    • Version 1.0.

      • Create several competing intermediators, that spend money, but don’t do R&D directly

      • evaluate performance, and

      • New allocations based upon performance

    • Version 2.0

      • Intermediators compete to raise funds from employers or persons managing funds on behalf of groups of patients


    Benefits of aventis radical scenario 1
    Benefits of Aventis Radical Scenario # 1 treaty?

    • Fewer resources spent on lawyers

    • Reduces incentives for expensive and harmful marketing practices

    • Marginal cost pricing or products

    • No need to address parallel trade or create complex tiered pricing schemes

    • Consistent with decentralized decision making and economic incentives

    • Enables open source development models

    • Probably far cheaper way to fund R&D


    Challenges with this scenario
    Challenges with this scenario treaty?

    • Need to prevent countries from eliminating budgets for innovation

    • Need to create management structures that are decentralized and which avoid wasteful spending and have accountability, while taking risks.


    Less radical incremental approaches
    Less radical, incremental approaches treaty?

    • Address research gaps

      • DND

      • Vaccines

      • Funding of public goods

    • Research mandates

    • Agreement on transparency of investment flows

    • Transfer of technology

      • Good practices for licensing government funded inventions

      • Affirmative allocations of funds in developing countries


    Strategy to get to a treaty
    Strategy to get to a treaty treaty?

    • Think radical scenarios for long run.

      • Big ideas sometimes easier to attract attention.

    • But start with incremental approaches, and build confidence in mechanisms

    • Learn to walk before trying to run the marathon


    Parallel trade and pricing issues
    Parallel trade and pricing issues treaty?

    • Parallel trade

      • TRIPS rules on exhaustion of patent rights need to be changed to allow selective exhaustion based upon country income or level of development

    • Pricing as an R&D issue

      • Reference pricing

        • World Health Organization or other non-WTO body for treaty or resolution on restrictions on the use of reference pricing.

      • US/Korea agreement on pricing

        • Korea must use average of G7 Prices


    Wto type issues for r d treaty
    WTO type issues for R&D treaty treaty?

    • Subsidies

    • National Treatment

    • Performance Requirements

    • Market Access

    • Investment


    Strategies to move the debate forward
    Strategies to move the debate forward treaty?

    • Get R&D Treaty on agenda of NGO and Academic meetings on IPR, access to medicine or drugs for neglected diseases.

    • Organize meetings that exclusively deal with the structure of an R&D treaty.

    • Find an official fora of have discussions about an R&D Treaty


    How fast could things move
    How fast could things move? treaty?

    • Minimalist resolution at World Health Assembly Executive Board meeting on January 26, 2003, to be approved by full WHA in May.


    For more information
    For more information treaty?

    Consumer Project on Technology

    http://www.cptech.org

    Subscribe to ip-health


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