A discussion piece by Katie Kirk and Marcus Low
The Fix the Patent Laws campaign is aimed at promoting the public interest through reform of South Africa’s intellectual property laws. It is focused on better utilising flexibilities in the existing international intellectual property landscape – and not on rethinking the patent model itself.
Yet, even though we have made a strategic choice to focus on flexibilities that we can write into our national legislation, this does not rule out the need to question the international intellectual property system as a whole. This system has clearly failed to develop the kind of medicines innovation needed in most of the developing world. Indeed, research has found that only $1 out of every $100,000 spent worldwide on biomedical R&D and product development is directed at neglected tropical diseases, and for tuberculosis, which in more modern times has mainly afflicted the developing world, no new drugs have been brought to market since the 1960s.
We attribute these failures to the nature of the incentives generated by the patents model, whereby (1) research and development (R&D) tends to be allocated according to expected financial return, rather than health impact; and (2) where products are developed, patent protection usually mean that they will be priced out of reach for poor patients.
Of course exceptions to this predicament do exist – for example through philanthropic and public ventures – but these are piecemeal, insufficient, and not necessarily sustainable.
Various alternative funding mechanisms and incentive models have been suggested in recent years. One specific idea is gaining traction internationally. It is that traction, together with the potential that the idea presents for the health needs of developing countries, which has prompted us to post this discussion piece.
A treaty for health R&D
A treaty to address gaps in health R&D is an idea which is gaining momentum amongst governments, civil society, academic and even some industry groups. Such a treaty would provide a way to develop new drugs, without relying on patents to act as incentives and rewards. It would provide a framework to collaboratively prioritise the most pressing health issues, and then link those priorities to a greater and more reliable source of funding for such R&D.
It could work roughly as follows:
– Countries contribute a small percentage of GDP to the fund.
– This money is used to fund R&D into medicines for specific diseases that are not sufficiently well-served by the patent system.
– The medicines developed in this way are licensed at no cost to as wide a range of pharmaceutical manufacturers as possible.
The idea for a R&D treaty has been around for about a decade, but it was in April this year that it was given fresh energy, when a group of World Health Organisation (WHO) experts singled it out, recommending that “the time has come for (WHO) Member States to begin a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries.”
Many details about what such a treaty would look like are still up for negotiation – and we are conscious that the political will of governments to constructively participate in negotiation of these details will be crucial to the ultimate success or failure of the idea.
One of the key issues identified as an obstacle to such a treaty is that, in its current form, it offers only limited incentives for rich countries like the United States and European countries to get involved. Given the drop we’ve seen in funding to aid mechanisms such as the Global Fund for HIV, TB and malaria, it is doubtful whether these countries would agree to contributing significant funds to an R&D mechanism aimed mainly at meeting developing country needs.
We think the following suggestions are worth considering to ensure that rich countries also sign up. (Note, however, that we are merely putting these forward as possibilities to consider and that we don’t currently favour either proposal).
Should the money be used for a wider range of diseases?
So far the discussions have been around funding research on Type II (diseases with a high enough incidence in developed countries to induce some, but not sufficient R&D) and Type III diseases (for which patients live almost exclusively in developing countries and for which there is negligible incentive to undertake R&D).
We acknowledge that including Type I diseases (those with roughly the same prevalence in both developed and developing countries) could make the idea more palatable to rich countries, which might otherwise be reluctant to negotiate a treaty appearing only to benefit developing countries.
Whereas we feel rich countries have a moral obligation to help fight disease in poor countries, we think it is worth considering the limited inclusion of Type I diseases – providing these diseases apply significantly to developing countries and providing the new technologies are licensed openly.
Who gets to make the medicines?
The ideal scenario is to have all UN Member countries sign up to the treaty and contributing funds. Intellectual property resulting from research done through the treaty would then be licensed openly and without royalties to anyone who is interested in producing the medicines.
However, one option worth considering is that rich countries who do not sign on to the treaty and do not contribute their fair share should be excluded from licensing arrangements, or be forced to pay royalties on medicines produced using the intellectual property developed through the treaty. Poor or middle-income countries should not be penalised in the same way.
It seems likely that including some type I diseases combined with this alternative licensing proposal would significantly increase the incentive for rich countries to get involved.
Binding or not?
An important factor yet to be decided is whether financial and other contributions towards the goals of the treaty will be binding. Some countries are reluctant to commit to make binding commitments, or anything that might be construed as a globally collected tax on rich countries, to the benefit of poor countries.
For reliability reasons, it seems clear that a binding treaty would be far superior to a non-binding treaty – however, as we have indicated, getting rich countries to sign on to such a binding treaty is likely to be difficult, so we are willing to explore the possibility that ‘softer’ commitments might be used as a stepping stone to a fully-binding treaty.
Towards a treaty
So, even as we campaign for law reform in South Africa, it is important not to lose track of the potential for positive change being created through other initiatives like the R&D treaty. Our colleagues at MSF and other organisations have been more closely involved with the treaty and we know that it has been raised with high-level officials in the South African Department of Health. This post outlines some of our thinking to take the idea forward. But the treaty as a whole remains very much a ‘work in progress’, so we would welcome public views and ideas.
It is important that our own and other developing country governments take this treaty seriously and help turn it into something that helps lift the strain on our stretched health systems.
 Oxfam briefing paper, ‘Ending the R&D Crisis in Public Health: Promoting pro-poor medical innovation’ (2008) http://www.oxfam.org/sites/www.oxfam.org/files/bp122-randd-crisis-public-health.pdf
 See WHO Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) report, ‘Research and development to meet health needs in developing countries: strengthening global financing and coordination’, pg 220, available at http://www.who.int/phi/news/cewg_2011/en/