WHO members and observers have currently gathered (Nov 26-28th) at WHO headquarters to discuss and try to implement an R&D treaty which would de-link R&D costs from drug prices. In simple terms, this means that if implemented, it would lead to a huge jump in affordability of medicines around the world, by diverting the massive costs from the consumers to a large global fund, externally managed. (presumably governments chip in). As to why they costs should be diverted... The simple one to me is that people do not (consciously) choose to be sick; so there is no reason for rich people to have cures while poor people can only watch. Of course, there needs to be a practical, 'fair' way to do this. That's what this current treaty is looking into.
[I said 'consciously' in the above line, because it is true that issues of general health, hygiene, educated choices, etc all play a part in people falling sick; as does simple bad luck. While it definitely requires inter-disciplinary attention, I believe trying to solve health and education issues as primary ones is the most sensible approach]
This treaty has been under negotiation for more than 2 years now and that in itself is a big step as, if implemented if would mark a big change in approach towards the current market based pharmaceutical innovation system. Why is this important? Because the current system comes with several problems that are caused directly by this linkage between R&D costs and drug prices. Let me lay some out:
1. Drugs are not like other market goods where the market tells you which drugs are most appreciated. Rather, drugs are taken for combination of the following reasons: Disease + doctor's advice + insurance considerations. Thus the usual 'free market' considerations do not take place here. Diseases are something no one values; doctor's advice is somewhat trustworthy, but still not the person's own judgment; and insurance, when present, quite often determines what drugs people eventually go in for, if anything at all.
2. Having innovation dependent on the market causes innovations to be directed towards the market. Simple basic logic. This means that drugs are not made for diseases or afflictions which affect poor people more than rich people. This is highlighted in the case of developing country diseases, which rarely, if at all, affect developed countries (i.e., Richer markets). With much of the current capital present in the developed countries, this leaves the poorer countries at the mercy of the pharmaceuticals present in the richer countries.
3. Following on from the above point, if/when drugs are made for diseases that are present in poorer countries, they are generally priced at a very high rate as compared to the Purchasing Power Parity (PPP) of those in poorer countries. A lot of public backlash regarding pricing strategies have fortunately led to some drugs being differentially priced in different countries in recent times. There is still much to be done though. Similarly, even poor people in richer countries are priced out of these drugs. In fact, in some cases (insurance-less for instance), access to these medicines may be much harder for them as compared to people in poorer countries due to inflated insurance based prices.
4. Aside from the above mentioned circumstances, having a health system where the incentives for pharmaceuticals are laid out based on purchasing rather than treating/curing, is somewhat counterintuitive. For instance, it may not make any good business sense for a pharmaceutical company to find a vaccine for a disease, since that would mean eating into their future customer base. Similarly, it also makes more business sense for pharma companies to find palliatives rather than actually curing a disease in a person, as it would mean they need to constantly buy more medicines. I have no idea about pharmaceutical processes, but I find it amazing that the common cold has not been cured, while baldness creams of all sorts have reached the market, not to mention that man has landed machinery on Mars.
And the reasons go on.. But I think these are the main ones.
So, while WHO members meet to discuss and try to come up with a treaty that would solve these issues... There is one notable organization that is protesting it - The Wellcome Trust.
It is essential to engage with industry effectively. We are concerned that the report's emphasis on the delinkage of R&D costs from the pricing of end-products may hamper this. The pharma industry are important partners and should be galvanised to develop business models that address the needs of the poorest consumers.
For an organization that has a statement of "Our funding supports the brightest minds in biomedical research and the medical humanities, with the aim of improving human and animal health." as the first line on their website ... This surely is a stupid way of telling the world that they care more about the welfare of existing institutional players, than the reason that those players and institutes exist - i.e., than for 'improving human and animal health'. Not to mention, that this treaty doesn't ask pharmaceuticals to do charity work, but wants to change the flow of funding as coming from a global fund, rather than the patients.
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