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Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination

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Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination April 2012 WHO Library Cataloguing-in-Publication Data Research and development to meet health needs in developing countries: strengthening global financing and coordination: report of the consultative expert working group on research and development: financing and coordination. 1.Research – economics. 2.Research support. 3.Development. 4.Financing, Health. 5.Developing countries. I.World Health Organization. ISBN 978 92 4 150345 7 (NLM classification: QW 520) © World Health Organization 2012 All rights reserved. Publications of the World Health Organization are available on the WHO web site (www.who.int) or can be purchased from WHO Press, World Health Organization, 20 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: +41 22 791 3264; fax: +41 22 791 4857; e-mail: [email protected]). Requests for permission to reproduce or translate WHO publications – whether for sale or for noncommercial distribution – should be addressed to WHO Press through the WHO web site (http:// www.who.int/about/licensing/copyright_form/en/index.html). The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of specific companies or of certain manufacturers’ products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use. Design by Inís Communication – www.iniscommunication.com Printed in Italy Strengthening Global Financing and Coordination i Contents Preface. 1 Members of the CEWG . .3 . Terms of reference . 5 Executive summary . 8 . Chapter 1: Introduction . .17 . Origins . .17 . Our approach . 19 Outline of the report. 22 Chapter 2: Setting the scene: the issues . 24. The need for action . 24. Trends in R&D in the pharmaceutical industry . 27. Research and development relevant to developing countries. 32 Expenditure Estimates and Sources of Funding 32 Research Outcomes 35 Research and development and access . .37 . Research and development financing . 38. Research and development coordination . 41 . Chapter 3: Review of proposals . .48 . Criteria and method of assessment . 48 Mechanisms assessed . 49 Summary of assessments. 52 ii Research and Development to Meet Health Needs in Developing Countries: Global framework on research and development 53 Removal of data exclusivity 54 Direct grants to companies 54 Green intellectual property 55 Health Impact Fund 55 Orphan drug legislation 56 Patent pools 57 Pooled funds 57 Open approaches to research and development and innovation 58 Milestone prizes and end prizes 58 Purchase or procurement agreements 59 Priority review voucher 60 Regulatory harmonization 60 Tax breaks for companies 60 Transferable intellectual property rights 61 Regional perspectives. 62 Conclusions . .62 . Chapter 4: Strengthening global financing of health research and development . 64. Introduction. 64 Sources of finance: proposals assessed by the EWG . 64. New donor funds for health research and development 65 Taxation of repatriated pharmaceutical industry profits 66 Voluntary contributions from businesses and consumers 66 A new indirect tax 68 Tax options . .69 . National taxes 71 Taxes for global purposes 72 Conclusion: tax options 75 Global health research and development: goals and targets. 75 Target: 15% of government expenditure to health in Africa 78 Target: 2% of national health expenditure on research and development 79 Target: 5% of development assistance for health to health research 80 Meeting funding needs for R&D 82 Conclusion: health research and development: goals and targets 84 Strengthening Global Financing and Coordination iii Chapter 5: Strengthening global coordination in health research and development . 88. The current landscape of coordination. 88 History of coordination efforts 89 The role of WHO 91 Advisory Committee on Health Research 92 Special Programme for Research and Training in Tropical Diseases (TDR) 93 WHO International Clinical Trials Registry 95 WHO research strategy 95 Other initiatives 96 Towards better coordination . 97 Objectives of coordination 97 Coordination and funding 98 Conclusions . 101. Chapter 6: Implementation: a binding instrument . 107 Introduction. 107 Proposals assessed by the EWG: sources of finance . 107 . Other proposals assessed by the EWG . .108 . CEWG recommendations . 110 Approaches to research and development 110 Funding mechanisms 110 Pooling resources 111 Strengthening research and development capacity and technology transfer 111 Coordination 112 Implementation: a new way forward. 112 General use of conventions 114 Hard and soft law 118 A binding instrument on health research and development. 120 Relevant WHO provisions 120 Elements of a binding agreement 122 Next steps . .124 . iv Research and Development to Meet Health Needs in Developing Countries: Annex 1: Inception report . 127 Annex 2: Mapping of EWG and CEWG processes. 131 Summary . .131 . The EWG‘s grouping of R&D financing and coordination proposals . .132 . The first step: creation of an inventory of 109 proposals 132 The second step: from 109 proposals to 91 proposals 132 The third step: from 91 to 22 grouped proposals 133 CEWG grouping of R&D financing and coordination proposals . .134 . The inventory of R&D financing and coordination proposals considered by CEWG 134 The new landscape of proposals: 15 assessments and chapters on financing and coordination 138 Annex 3: Assessments of proposals . 142 Global Framework on Research and Development . .142 . Removal of data exclusivity . 152. Direct grants to companies. 155 Green intellectual property. 158 Health Impact Fund . 160. Orphan drug legislation. 165 Patent pools. 169 Pooled funds . .176 . Open approaches to research and development and innovation . 182. Milestone prizes and end prizes . 190 Purchase or procurement agreements . 197 Priority review voucher . 200. Regulatory harmonization . 204 . Tax breaks for companies. 208 Transferable intellectual property rights. 211 ANNEX 4: Regional consultation meetings . 214 Strengthening Global Financing and Coordination 1 Preface The issue we were asked to investigate was identified at least two decades ago. Market mechanisms, and also publicly-funded research, collectively result in far too little investment in research and development on diseases that mainly affect developing countries. This means that poor people suffer and die because there are no effective health technologies like medicines, vaccines or diagnostics. Markets fail because intellectual property rights are not an effective incentive in these circumstances, and public investment is also dominated by the rich world and its own health needs. This is the challenge for the world as a whole which has guided our discussions and deliberations. We have framed our recommendations to indicate that finding solutions is the responsibility of all of us in this interdependent world, in developed and developing countries alike. The search for new, innovative and sustainable sources of funding, and making better use of existing resources for research and development for the specific health needs of developing countries, was an unfinished agenda of the negotiations that led to the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPA-PHI) agreed in 2008. Those negotiations themselves were the response of WHO Member States to the report, published in 2006, of the Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) which was established in 2003. We in turn were asked by Member States to review the work of the Expert Working Group on Research and Development: Coordination and Financing, established on the recommendation of the GSPA-PHI, which reported in 2010. We therefore felt an obligation to produce a solid report, based on empirical evidence, while also ensuring that our processes were as transparent and open as possible. The report from this Consultative Expert Working Group seeks to bring this long- running debate, if not to closure, to a head. We hope our analysis of the current situation of R&D for health needs in developing countries, our assessment of various proposals for better financing and coordination, and our conclusions and
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