United Nations Conference on Trade and Development

Transcription

1 United Nations Conference on Trade and Development Ad Hoc Expert Group Meeting New Investment Models in Health-related R&D the Case of Antibiotic Resistance 1. Executive Summary Thursday, 5 October 2017 Room XXVII, Palais des Nations Geneva, Switzerland Report In response to its mandate to work on the development implications of intellectual property within the broader context of investment, UNCTAD s Intellectual Property (IP) Unit organized an ad hoc expert group meeting on the topic of New Investment Models in Health-related R&D the Case of Antibiotic Resistance on 5 October 2017 at the Palais des Nations in Geneva. The key outcome of the discussion was that more public and private investment is required to promote research and development (R&D) in the creation of new classes of antibiotic drugs. While a variety of proposals exist on how to delink the costs of R&D from the sales volume and drugs prices, governments have for the time being not committed sufficient amounts of funding to ensure a systemic shift of the R&D system from the volume-oriented business model to effective market entry rewards (MERs). Another important outcome related to the insight that due to unattractive market conditions, there is a serious risk of shortages in older, existing antibiotics. Similarly to the situation of new classes of antibiotic drugs, innovative pull mechanisms are needed to incentivize the continued production of existing antibiotics under conditions that avoid overuse and the development of resistance (stewardship). Finally, most of the participating experts agreed that the most promising way to design new investment models would be a flexible, small-step and case-by-case approach, while not losing sight of the larger vision of a global regime.

2 2. The Expert Discussion Opening and introduction The ad hoc expert group meeting operated under Chatham House rules to encourage experts to openly share their views without being quoted. This generated a lively and frank discussion. The meeting was opened by Mr. James Zhan, Director of the Division on Investment and Enterprise, UNCTAD. In his opening remarks, Mr. Zhan stated that the question of incentivizing investment for the development of new classes of antibiotics is not only an urgent problem, considering the projected costs of antibiotic resistance on human health, farming and the global economy, but also an issue that involves multiple challenges from both the supply and demand size. The supply side suffers from a lack of R&D. The main question would be what governments, WHO and UNCTAD can do to develop innovative ways and means for encouraging the development of new products. From the demand side, the question would be how to make new antibiotics affordable and accessible in accordance with Sustainable Development Goal 3 (to ensure healthy lives and promote well-being for all at all ages). In this process, UNCTAD could add value from the investment angle. UNCTAD is the de facto secretariat within the United Nations on the international investment regime, which consists of over 3000 bilateral and regional investment treaties. As an intergovernmental agency, UNCTAD can convene member states to informally build consensus and to seek solutions to the problem of investment into new antibiotics and support governments efforts in other fora. The discussion was opened for experts from international organizations, national government health agencies and intellectual property offices, academia, civil society and Geneva-based diplomatic representatives. The expert discussion covered various aspects of antibiotics resistance, including potential models and the means of incentivizing R&D, national level measures to combat antibiotic resistance, and the related question of how to incentivize the continuous availability of existing generic antibiotic treatments. Innovative investment models for the development of new antibiotics At the outset, the participants reviewed the current state of play of existing projects and proposals on innovative investment models for antibiotics. While concrete projects exist that provide push incentives (i.e. up-front funding) to promote pre-clinical research (e.g. the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, CARB-X) and clinical trials (e.g. the Global Antibiotic Research and Development Partnership, GARDP), ideas on how to foster post-registration product surveillance and patient care (stewardship) to avoid overuse of antibiotics are largely untested, in part due to a limited public commitment to provide necessary amounts of funding. Participants highlighted where public funding of R&D in universities can lead to the establishment of university spin-offs that could raise funds from the market. Since the R&D path is not limited to developing a new product under public funding, it is also possible for publicly funded projects to in-license products developed by private firms. A good example of in-licensing is the partnership of GARDP with a private firm for phase III clinical trials and other non-clinical studies for a novel molecule against drugresistant gonorrhea. From the access side, the arrangement is that, upon marketing approval, GARDP will have a license with sublicensing rights in most low- and middleincome countries and the right to commercialize the product in high-income 2

3 markets. Participants noted that there is a growing ecosystem of entities engaged in antibiotics R&D, including venture capital, startups, and publicly funded projects. It was also observed that public-private partnerships (PPPs) have become a validated push mechanism. GARDP has developed a network of experts including academics, biologists, chemists, clinicians, and researchers. Other examples were mentioned, such as university spin offs that could trigger the involvement of the private sector. Experts agreed on the important, unprecedented amount of funding that would be needed to design effective post-registration incentives in the form of MERs. It was stated that despite recent achievements, governments have not yet shown firm commitment to longer term funding but prefer short funding cycles. Opinions diverged on the question whether it would be preferable to seek governments commitment to fully fund a new global R&D system, or whether it would make sense to commence with a selected group of committed governments, under a step-by-step approach. By contrast, participants agreed that the current policy debate should not be limited to the untested issue of postregistration incentives, but also consider required improvements in pre-clinical and clinical trials funding. In addition, some expressed the view that post-registration pull incentives (i.e. rewards for successful product development, e.g. MERs) would come too late for small and medium-sized enterprises (SMEs) that are engaged in important R&D work. Push incentives such as upfront grants and public-private product development partnerships such as GARDP were referred to as modest, but more concrete projects. GARDP, which recently received significant amounts of public funding to pursue selectively prioritized objectives was expressly characterized as an experiment that could potentially inform broader projects in the future. National level initiatives in advanced countries covering vaccines, diagnostics and therapeutics to combat antibacterial resistance include recommendations for developing new economic models (pull incentives) to support the currently available push incentives. De-linkage is considered as an incentive to separate profitability from volume. The reward can be based on the fixed value of the desired characteristics of the drug. It should enable the product developer to renounce profits based on volume of sales and active marketing of the product. In this regard, some underlined the importance of fully delinking R&D costs from both sales volume and product price, without which in their view it would be difficult to ensure access and enforce good stewardship. A cautionary remark was made by experts on the experience of the U.S. Orphan Drug Act, where funding of significant shares of the cost of R&D was shown to have little impact on pricing. Participants recognized that the size of push funding influences the optimal size of the pull incentives, and vice versa. With greater subsidies for clinical trials, MERs can be smaller, and vice versa. While experts considered different types of arrangements with respect to IP rights, including full by-outs by the public sector, joint management or full control by the originator of any IP in new antibiotics, some of them felt that the possibility of losing control over IP rights could be a significant disincentive. In this regard, some experts noted that although the emphasis is to address the lack of incentives and the role of new models of innovation, there is a need to reflect on market based incentives and the challenges of innovation, other than financial issues. They alluded to serious scientific problems concerning antibacterial research, namely, finding subjects for clinical trials, conducting the clinical trials and, once approved, managing the complexity of antibiotics manufacturing while reducing the environmental impact. When it comes to R&D incentives, the industry would require viable incentive models, e.g. push models for early stages of development, and market-based models to ensure 3

4 rewards for success. The industry prefers a menu of options based on the litmus test of fostering innovation. Based on such analysis some participants argued against de-linkage. Other experts underscored that the market size for antibiotics is sufficiently large to incentivize insurances and healthcare providers to contribute to the development of new molecules. In sum, this discussion showed the need for any new R&D model to sufficiently incentivize the development of antibiotics along the entire product life cycle, no matter whether the main responsibility lies with the private or the public sector. Investing in preventive mechanism and infrastructure for surveillance on antibiotic resistance Experts alerted to the practical challenges of developing new antibacterial treatments in the developing country context. Accordingly, this could require a commitment of over a decade, while the life span of new molecules could be limited to around 3 years before a resistant strain emerges. Hence, incentivizing R&D for the development of new antibiotics is not the only area for action. In line with WHO s 2015 Global Action Plan on Antimicrobial Resistance (GAP - AMR), countries are developing and implementing national AMR action plans, considering human health, agricultural practices and the environment in an integrated manner. For some, global cooperation should not only focus on R&D and investment but should be in synchronization with the five priorities of the WHO GAP (awareness, surveillance, preventive care, optimizing use and sustainable investment for R&D). In this regard, laboratories and infrastructure for monitoring, surveillance and capacity for enforcement of AMR measures are vital. Countries are investing in the entire system of production, prescription, standards of treatment and use of antibiotics, and on preventive health care. The existence of a path of microbial infections along the farm-communities-hospitals lines and the development of bacteria with resistant genes inform governments that the required intervention is broader than merely investing in new antibacterial molecules. Some propose to consider the feasibility of labelling requirements for antibiotic use in farm products and taxation to prove transparency and finance R&D. One of the main challenges is changing human behavior (doctors, pharmacists, producers and patients) against irrational use, irregular use, under-use and unnecessary use. Enforcement would also remain a critical challenge for many developing countries. While countries are implementing national programs on anti-bacterial resistance, they must deal with questions of incentives for key players, such as how to reward hospitals for accomplishing a set of objectives concerning reducing healthcare-associated infections, how to raise awareness and reduce consumption, and improve feedback and reporting as well as surveillance and monitoring mechanism. In the context of developing countries, a critical question remains whether the discussion should be limited to antibacterial treatment or broadly cover antimicrobials, considering the situation with tuberculosis and neglected tropical infectious diseases. Investing in existing generic antibiotics for optimal use An important part of the discussion concerned a so far under-researched area, i.e. the problem of stock outs of older off-patent antibiotic drugs given their low profit margins. It was mentioned that governments would need to create more attractive conditions to prevent drug over-sales under a high volume, low price business model. Instead, we should consider pull mechanisms that reimburse the service of keeping important antibiotics in the market, rather than paying the sale of the individual drug. Such a 4

5 mechanism would reimburse firms for providing health security. Others mentioned the opportunity for developing countries to use local production facilities in this context. 3. Panel Discussion The panel discussion noted that there is a good deal of increased awareness, and a lot of good will, both on the sides of governments and industry, and to that extent it is an issue that can move forward in a manner that addresses the challenges. Three questions were posed to the panelists: In respect of new molecules, there is general agreement that the current R&D system is not generating enough new antibacterial treatment. The questions would be what kind of changes need to be made, how to scale up the financing of R&D, and what kind of incentives are optimal; What to do about the old antibiotics, and the related incentives? Is there a role for local manufacturing in lower-middle or middle income countries? Where can we start, at both the national and international levels? With respect to generating new antibiotics, the consensus has been that whatever model is adopted it cannot be done without the private sector. PPP is the most important model and can involve a range of options. In this context, panelists noted the need to involve the BRIC countries. Innovation in the field of antibiotics is not comparable with other pharmaceutical fields. Panelists agreed on the need to reward innovation, but had divergent views on whether the reward system should move away from typical market drivers. Some emphasized that the challenge is not only a long term financial commitment, but also the science itself, where the success rate for generating new molecules is far lower in antibiotics than other fields. For some it is difficult to imagine breakthrough without a major change on the mindset of governments. Citing John H. Rex, an operating partner at Advent Life Sciences in London, one argued that we do not install or acquire a fire extinguisher when a fire occurs, as it will be too late. Instead, we pay in advance for it to be instantly ready before there is a fire. In that sense, a collaborative model is proposed for the industry to undertake R&D. Although contested by some panelists, other panelists held the view that the market size and insurance schemes in advanced countries could generate the necessary funds for new antibiotics: the money is there but what is lacking is imagination. Accordingly, the task is primarily to identify short term steps to arrive at the long-term goal. Panelists noted that currently the main question with respect to generic antibacterial products is how they are distributed and used. There must be a correct way of producing, distributing and using antibiotics. Some consider older antibiotics need to be a priority, including revisiting their mode of administration and dosage forms. A question remains why, unlike antiretroviral and TB treatment, there is no standard of treatment allowing or considering the benefit of a combination treatment of antibiotics to overcome or limit the possibility of resistance. There is therefore a need to research on combinations of antibiotics. A panelist cautioned not to treat IP licensing in the context of new antibiotics for generic manufacturing in the same way as other pharmaceutical products. Instead the whole system of licensing should be revisited with respect to antibiotics, as volume and stewardship are central to the supply model. The assumption on how the generic 5

6 companies can take part should be revisited. The current licensing model implemented, among others, by the Medicines Patent Pool (MPP), would not directly accommodate the nature of licensing in the context of new antibiotics that enter the market with a delinkage model. The panel referred to a recommendation in the current policy debate that the MPP could consider the potential of managing a global MER regime, where IP licensing would play a role in monitoring licensees adherence to stewardship programs. 4. The Way Forward In conclusion, key players, including the industry are ready to cooperate on the mechanisms to generate new antibiotics. Yet the industry appears to be critical of delinkage models in the absence of a comprehensive government commitment. Projects like GARDP are promising and should be promoted. These experiments could inform the design of larger, more ambitious regimes. Finally, the global discourse should also fully consider the status and use of existing antibiotics, the need to redesign the current generic business model that relies on a low revenue / high volumes approach, and support national level AMR action plans and their enforcement. UNCTAD is prepared to host informal follow-up dialogues on investment and AMR in the future. 6

7 Annex: Concept Note and Program Ad Hoc Expert Group Meeting New Investment Models in Health-related R&D the Case of Antibiotic Resistance Thursday, 5 October 2017 Room XXVII, Palais des Nations Geneva, Switzerland Antibiotic resistance poses a serious challenge to public health, but also raises the important question about much-needed research and development (R&D), and the limitations of traditional models of investment and intellectual property (IP) rights. The reasons for antibiotic resistance are diverse, and its effects are felt by developed and developing countries alike. From the investment perspective, the main problem is a lack of incentives for the private sector to develop new classes of antibiotics. Today, the development of antibiotics is mainly limited to the modification of existing classes; very few new innovative treatments are in the clinical pipeline. From a health angle, the use of antibiotics should be limited to the greatest possible extent to avoid resistance. It also requires extensive stewardship programs to ensure the appropriate use of medicines. Simultaneously, in lower middle income countries lack of access to effective antibiotics is as serious a problem as resistance, thus requiring interventions to be carefully balanced between the public health goals of ensuring both access and conservation through appropriate use. At the same time, health-related regulatory hurdles affect the incentive for private sector engagement in R&D for new antibiotics. Thus, how to attract investment for the development of new antibiotics becomes the key question that requires an urgent and multisectoral response. The 2016 Report of the UN Secretary-General s High-Level Panel on Access to Medicines, to which UNCTAD contributed its expertise on IP and investment, calls upon UN member States and the private sector to increase investment in this area and to develop new and additional models for financing related R&D. 1 This recommendation builds on the 2015 WHO global action plan on antimicrobial resistance 2 and is also a 1 See at 2 See 7

8 key element of the 2016 Political Declaration of the high-level meeting of the UN General Assembly on antimicrobial resistance 3 as well as the May 2017 Berlin Declaration of the G20 Health Ministers (Together Today for a Healthy Tomorrow). 4 The United Nations Sustainable Development Goals (SDG 3) also call for more efforts to fully eradicate a wide range of diseases and address many different persistent and emerging health issues. Some governments have reiterated the need to develop new investment models to address inter alia antibiotic resistance. 5 This ad hoc expert group meeting will examine possible approaches to increase investment in combatting antibiotic resistance; the way governments and the private sector could cooperate under new R&D funding models, for instance the Global Antibiotic and R&D Partnership (GARDP) 6 ; proposals to delink financing of drug R&D from volume sales and price ( delinkage ); and the role of the IP system and its implications for developing countries. The ad hoc expert group meeting is organized in part to contribute to the implementation of the mandate of UNCTAD received from member States under the Nairobi Maafikiano (July 2016), 7 as well as in response to intergovernmental requests under the WIPO Development Agenda and the World Health Assembly's Resolution on a Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. 3 See N pdf?ua=1 4 See gesundheitsministertreffen_en.html 5 For example at the 2017 Fair Pricing Forum in Amsterdam, The Netherlands. See the Meeting Report at 6 See 7 UNCTAD, 5 September 2016, Nairobi Maafikiano, Fourteenth session Nairobi July 2016, TD/519/Add.2, para 55(s). 8

9 Program Thursday, 5 October :30 Welcome Remarks Mr. James Zhan, Director, Division on Investment and Enterprise, UNCTAD 09:40 Overview: The current challenges for investing in R&D in antibiotics Mr. Christoph Spennemann, Officer-in-Charge, IP Unit, Division on Investment and Enterprise, UNCTAD 09:55 Comments Ms. Helle Aagaard ReAct Action on Antibiotic Resistance, Uppsala University, Sweden 10:10 Questions and Answers / Discussion Facilitated by Mr. Christoph Spennemann, UNCTAD 10:30 Coffee Break 10:45 The current R&D Pipeline for Antimicrobial Treatments and possible Ways to foster Innovation Dr. Peter Beyer, WHO 11:05 Private-Public Partnerships: The WHO/DNDi Global Antibiotic R&D Partnership (GARDP) Mr. Jean-Pierre Paccaud, DNDi 11:25 Questions and Answers / Discussion 12:00 Thailand s Approach to Combating Antibiotic Resistance Dr. Chanwit Tribuddharat, M.D., Vice President, International Collaboration, National Science and Technology Development Agency (NSTDA), Thailand 12:15 Portugal s Approach to Combating Antibiotic Resistance Ms. Ana Silva, Ministry of Health (INFARMED), Portugal 9

10 12:30 Questions and Answers / Discussion 13:15 Lunch Break 15:00 A Civil Society Perspective on R&D and Investment Models for Antibiotic Resistance Mr. James Love, Director, Knowledge Ecology International (KEI) 15:20 Questions and Answers / Discussion 16:00 Coffee Break 16:15 The Industry s Perspective on R&D and Investment Models for Antibiotic Resistance Mr. Thomas Cueni, Director-General, International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) 16:35 Questions and Answers / Discussion 16:50 India s Approach to Combating Antibiotic Resistance H.E. Mr. Virander Paul, Ambassador/Deputy Permanent Representative of India to the UN 17:05 Questions and Answers 17:15 Panel Discussion: The Way Forward Additional panelists: Mr. Greg Perry, Executive Director, Medicines Patent Pool Mr. Denis Broun, Cipla Discussion facilitated by Mr. Kiyoshi Adachi, IP Unit, UNCTAD The discussion will seek to identify common ground between governments, the private sector and civil society to advance the debate on antibiotic resistance, and the concrete steps that could be taken to promote public and private sector investment. The discussions will be guided by the following questions: 1. Considering its urgency and the deficiencies in current incentives for R&D, do you think antibiotic resistance is an area where delinking financing of R&D from volume sales and price can work? 10

11 2. What would be the role of IP in a delinkage model, and how do we ensure investment in R&D? 3. Where do you see the main obstacles for public-private cooperation and how can UNCTAD contribute to facilitate such cooperation? 18:00 Concluding Remarks: Mr. James Zhan, UNCTAD 11