1 st Meeting of the CEWG 5-7 April, 2011 WHO, Geneva Consultative Expert Working Group R&D: Financing and Coordination Background & Context

Underlying Public Health Context  Problems in access to medicines and other health technologies in developing countries are well known.  Since 1995 higher levels of intellectual property protection and HIV/AIDS epidemic have brought access debate in a sharp focus.  Since late 90s the effectiveness of IPP to encourage R&D for products needed for diseases predominantly prevalent in developing countries is debated.

Evolution of debate in WHO  Since 1995 there have been constant debates in WHO about these issues. At least 15 WHA resolutions.  At the WHA in 2003: “...a significant proportion of the world’s population, especially in countries, has yet to derive much benefit from innovations that are commonplace elsewhere. The reasons range from weak supply systems to unaffordable prices. The factors that drive innovation are often biased against conditions that disproportionately affect the populations of developing countries.... Innovation to address conditions primarily affecting poor people is held back by a combination of market failure and underinvestment by the public sector. The process of bringing a new product to the market is both expensive and lengthy. Because of the resource implications and the uncertainties involved, creating an environment conducive to successful innovation is essential.”

Evolution of debate in WHO  Establishment of Commission on Intellectual Property Rights, Innovation and Public Health in  Moral imperative  Innovation cycle (discovery – development – delivery)  “(IPP) can do little to stimulate innovation in the absence of a profitable market”  60 recommendations.  “the need is to develop a Global Plan of Action which would provide a medium term framework for action”

Global Strategy and Plan of Action on Public Health, Innovation & Intellectual Property Prioritizing research and development needs. 2. Promoting research and development. 3. Building and improving innovative capacity. 4. Transfer of technology. 5. Application and Management of intellectual property to contribute to innovation and promote public health. 6. Improving delivery and access. 7. Promoting sustainable financing mechanisms for needs driven R&D. 8. Establishing monitoring and reporting systems

Expert Working Group (WHA 61.21) ( )  “To establish urgently a results-oriented and time bound Expert Working Group to examine current financing and coordination of research and development as well as proposals for new and innovative sources of funding to stimulate research and development related to Type II and Type III diseases and the specific research and development needs of developing countries in relation to Type I diseases and open to consideration of proposals from Member States and to submit a progress report to the 62nd WHA and the final report to the 63rd WHA through the Executive Board

Antecedents of Consultative Expert Working Group Resolution WHA56.27Resolution WHA59.24Resolution WHA61.21Resolution WHA63.28 Intellectual property rights, innovation and public health Public Health, innovation, essential health research and intellectual property rights: towards a global strategy and plan of action Global strategy and plan of action on public health, innovation and intellectual property Establishment of a consultative expert working group on research and development: financing and coordination Commission on Public Health, Innovation and Intellectual Property Rights Intergovernmental Working Group Expert Working GroupConsultative Expert Working Group Collect data and proposals from the different actors…produce an analysis of intellectual property rights, innovation and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries. Draw up a global strategy and plan of action in order to provide a medium-term framework based on the recommendations of the Commission; such strategy and plan of action would aim, inter alia, at securing an enhanced and sustainable basis for needs- driven, essential health research and development relevant to diseases that disproportionately affect developing countries, proposing clear objectives and priorities for research and development and estimating funding needs in this area. Examine current financing and coordination of research and development, as well as proposals for new and innovative sources of funding to stimulate research and development related to Type II and Type III diseases and the specific research and development needs of developing countries in relation to Type I diseases. (a) take forward the work of the Expert Working Group; (b) deepen the analysis of the proposals in the Expert Working Group’s report, and in particular: (i) examine the … four innovative sources of financing proposed (ii) review the five promising proposals …; and (iii) further explore the six proposals that did not meet the criteria … (c) consider additional submissions and proposals

Location of CEWG IGWG GSPoAWHA Prioritizing R&D needs 2. Promoting R&D 3. Building and improving innovative capacity 4. Transfer of technology 5. IP to contribute to innovation and promote public health 6. Improving delivery and access 7. Promoting sustainable financing mechanisms 8. Establishing monitoring and reporting systems Report of the CIPIH WHA EWG CEWG

 24 Members from 21 countries  Selected by Director-General of WHO  3 face to face meetings and virtual meetings  Solicitation of proposals-12 govt. 13 public  Review and analysis of 94 Proposals  2 Web-based public hearings  Preparation of background Working Papers  Analysis of draft and preparation of final report Expert Working Group EWG

 Four background working papers were commissioned by the EWG 1. Comparative review of innovative financing proposals for health R&D 2. Coordinating arrangements for R&D 3. Financing for Health R&D that Addresses Challenges of the Poor: Context, Analytical Framework, and Initial Compilation of Options 4. Global R&D Financing for Communicable and Non- Communicable Diseases Background Working Papers EWG

 Financing of R&D  Estimations of global R&D spending based on publicly available data from donor countries and industry  Coordination of R&D  Qualitative research methods to review existing coordinating arrangements  Innovative Financing ideas  Comparative analysis of 94 proposals based on agreed criteria Methodological Approach EWG

 Public Sector  USA, Japan, UK, Germany, France  Industry  Top ten pharmaceutical companies based on their 2008 revenues  Private not-for-profit  Reviews of donor funding of health R&D Estimations: current financing of R&D EWG

Total sector investments in health research and development by disease category (international UD dollars, 2008) Disease category Public sectorPrivate sector Not-for-profit organizations Total USD million % of Total USD million % of Total USD million % of Total USD million % of Total Non communicable Communicable Total

 Fragmentation  There is no overall coordinating mechanism of R&D for diseases generally and less so for Types II and III  Justification for creating a global and or regional coordinating arrangements is strong EWG Coordination of R&D

 Health R&D for the diseases of the poor is deficient because the current incentives for innovations are inadequate  The key purpose of the analysis was to explore where incentives could stimulate R&D and access in the light of market and policy failures EWG Current Financing of R&D

 Triple R&D funding for Type II and III diseases (to est. $7.5 bill per year)  Cover ALL Type II and III diseases and products  Cover ALL R&D stages from basic research through to procurement  Cover ALL types of developers (large and small companies, DC and Western, PDPs, academic and public)  Identification of gaps  NO proposals to address IP issues for Type I diseases  Very few proposals took into account building DC R&D capacity Overall Results – recommendations EWG

Resolution WHA on the establishment of a Consultative Expert Working Group on R&D financing and coordination requests the Director-General under operative paragraph 2 (2) to establish a Consultative Expert Working Group that shall: (a) take forward the work of the Expert Working Group; (b) deepen the analysis of the proposals in the Expert Working Group’s report, and in particular: (c) consider additional submissions and proposals from Member States, any regional and sub-regional consultations, and from other stakeholders; Establishment of CEWG 2010

 take forward the work of the EWG;  deepen the analysis of the proposals in the Expert Working Group’s report, and in particular:  4 Innovative Financing Sources 1. A new indirect tax 2. Voluntary contributions from businesses and consumers 3. Taxation of repatriated pharmaceutical industry profits 4. New donor funds for health research and development  5 Promising Proposals 1. Open source 2. Patent pools 3. Health impact fund 4. Priority review voucher 5. Orphan product legislation Short-listed proposals CEWG shall … EWG ▼ CEWG  6 Further Proposals 1. Transferable intellectual property rights 2. Green intellectual property 3. Removal of data exclusivity 4. Biomedical R&D treaty 5. Large end-stage prizes 6. Neglected disease tax breaks for companies.

Short-listed proposals Other proposals in the report of the EWG EWG  5 Proposals Relating to Funding Allocation  Product development partnerships (PDPs)  Direct grants to small companies and for trials in developing countries  ‘Milestone’ prizes  ‘End’ prizes (cash)  Purchase or procurement agreements  2 Proposals to Improve Efficiency  Regulatory harmonization  Precompetitive research and development platforms

Criticisms of EWG report & process EWG  Proposals were rejected without enough explanation  Insufficient attention was paid to the need to de-link the costs of research and development from the price of health products  The criteria used to evaluate proposals did not take proper account of the relevant aspects of intellectual property rights  The proposals for innovative financing mechanisms were common to those made for financing health and development  Proposals to improve limitations in current coordination mechanisms were absent.  Lack of transparency; lack of broader participation; conflict of interest

Process guidance from WHA  2.2.e: CEWG shall…observe scientific integrity and be free from conflict of interest in its work;  5: to put particular emphasis on the transparent management of potential conflicts of interest by ensuring full compliance with the mechanisms established by the Director-General for that  6: to ensure full transparency for Member States by providing the Consultative Expert Working Group’s regular updates on the implementation of its work-plan, and by making available all the documentation used by the Consultative Expert Working Group at the conclusion of the process;  7: to submit the work-plan and inception report of the Consultative Expert Working Group to the Executive Board at its 129th session and a progress report to the Executive Board at its 130th session with a view to submitting the final report to the Sixty-fifth World Health Assembly.