Fix The Patent Laws

Tuberculosis innovation approaches in South Africa and strategies to secure public returns

Posted on | April 24, 2019 | No Comments

Today, Fix the Patent Laws is launching a report of findings from an analysis of tuberculosis research and development (R&D) underway in South Africa. The analysis was conducted to gain greater insight into the TB innovation landscape in South Africa, the role of public financing in driving and supporting innovation, as well as expectations of public returns (I.e. affordable, user friendly health technologies) from R&D efforts and expenditure, and strategies employed to promote public returns. The analysis also sought to gain greater insight into opportunities and challenges to employing alternative innovation models in South Africa that do not result in access inhibiting patent monopolies. Data included in the analysis was collected through reviewing relevant academic and grey literature, surveying TB research groups in South Africa, and conducting in-depth interviews with biomedical researchers, technology transfer officers and policy makers.

The analysis was undertaken by Fix the Patent Laws steering committee members, Catherine Tomlinson and Marcus Low, with financial support from Open Society Foundations. The authors provide recommendations informed by the analysis to improve TB R&D financing and strengthen public interest safeguards as a condition of public R&D financing in South Africa. The authors also note South Africa’s leadership in promoting greater use of alternative innovation models that delink R&D financing from medicine prices and call for ongoing leadership and diplomacy to overcome financing challenges facing these models (see section 9 of the report for a full set of recommendations.)

Executive summary

Background

TB is the leading reported cause of death in South Africa[i], and the leading cause of death by a single infectious agent globally[ii]. While South Africa has experienced significant declines in TB incidence over the past decade largely due to the broad roll-out of antiretroviral therapy, new TB cases and TB mortality remain extremely high. South Africa is one of only five countries globally that experiences over 500 TB cases per 100 000 people.[iii] According to the World Health Organisation’s best estimates, South Africa had 322 000 new TB cases in 2017 alone. In that year, 15 986 and 747 patients were diagnosed with multi-drug resistant and extremely drug resistant TB respectively.[iv] These patients have fewer treatment options with longer treatment durations, more severe treatment side effects and lower treatment success and survival rates.

South Africa’s public sector provides diagnostic and treatment services for TB with no out-of-pocket costs. However, health facility access barriers including transport costs, health systems challenges and inadequate diagnostics often impede the diagnosis of TB and initiation of treatment. The World Health Organisation estimates that only around 68% of people with TB in South Africa are diagnosed and initiated on treatment.  Among these patients, it is estimated that 82% of drug susceptible patients, 55% of multi-drug resistant patients and 48% of extremely drug resistant patients are successfully treated.[v]

While inadequate investment has significantly impeded the development of new diagnostics and treatments for TB, South Africa has spearheaded the use of the few new important health technologies that have entered the market in recent years. South Africa was one of the first countries to implement the GeneXpert TB diagnostic following recommendations by the WHO.[vi] GeneXpert significantly reduced the turn-around times for diagnosing both drug-susceptible TB and rifampicin resistant TB. South Africa has also spearheaded the use of bedaquiline, announcing that the drug will be used as part of standard MDR TB treatment regimens in the country and expanding the use of this medicine beyond what is currently recommended by the WHO. Bedaquiline has replaced painful injectables with severe side-effects and low treatment success rates.[vii]

In addition to pioneering new health technologies, South Africa has demonstrated significant political will and leadership in pushing for global action and investment to address TB. South Africa’s President Cyril Ramaphosa was the only head of state from a BRICS country to attend the 2018 UN High-Level Meeting on TB during which he called for greater TB R&D investment, affordable drugs and the adoption of intellectual property laws that promote public health.[viii] South Africa’s Minister of Health Dr Aaron Motsoaledi chairs the Stop TB Partnership and the country’s Director General for Health Precious Matsoso chairs the Life Prize steering committee. South Africa has also demonstrated political will by significantly increasing domestic investment in TB R&D in recent years (see table 2), becoming the largest funder of TB R&D as a percentage of government expenditure on R&D.[ix] In 2016, South Africa committed more to TB R&D as a percentage of GDP than any other country.[x] Despite this, South Africa’s share of global TB research investment remains much lower than its share of the global TB burden and South African funding for TB research pales in comparison to countries with far greater GDPs such as the United States.[xi]

Recognising the urgent need for new health technologies to address TB in South Africa and the strong political will to address TB needs in this country, we undertook this analysis to gain greater understanding of the TB innovation landscape in South Africa. We also sought to understand whether adequate safeguards are in place to ensure that public financing for TB R&D serves public interest – for example by ensuring that health technologies developed with public financing are affordable and accessible. We conducted an online survey and various in-depth, in-person interviews with researchers, policy makers and technology transfer officers in South Africa between June and December 2018. Interviewees included officials from the Department of Science and Technology, the Department of Health, the South African Medical Research Council, two university technology transfer offices, and researchers from various South African universities and research organisations. We also consulted various reports and other relevant policy documents and publications. Below is a summary of our findings.

Findings

There was wide agreement among interviewees that TB research is underfunded in South Africa. South African government investment in medical research increased significantly from 2012 to 2014, after which it stagnated and then declined from the 2016/2017 to the 2017/2018 fiscal year. However, funding specifically for TB research increased significantly in 2016 and 2017, suggesting increased prioritisation of TB research in this period. Even though South Africa invests more than most countries in TB research measured as a percentage of GDP or GERD, absolute investment is low compared to wealthy countries such as the United States. Arguably, South African government investment in TB research is insufficient given the country’s severe TB burden.

Government funding for TB research is channelled through several government entities, including the South African Medical Research Council (SAMRC), the Department of Science and Technology (DST), the National Research Foundation (NRF) and the Technology Innovation Agency (TIA). These various entities have differing mandates and differing funding priorities. The Strategic Health Innovation Partnerships (SHIP) within the MRC is the key entity tasked with funding TB innovation in South Africa.

Much TB research in South Africa is funded or co-funded by foreign donors such as the United States National Institutes for Health (NIH) or the Bill and Melinda Gates Foundation (BMGF). Almost half of the MRC’s budget is derived from foreign donors. The high level of dependence on these foreign donors is a key feature of the TB research landscape in South Africa.

A wide variety of TB research is conducted in South Africa. The country has substantial clinical trial capacity and trials of TB drugs or TB vaccines receive significant funding from foreign donors. There is also significant basic TB research being conducted in the country, particularly in relation to identifying better diagnostic and prognostic biomarkers or sets of biomarkers. Work on TB diagnostics has led to three diagnostic products being spun-off into companies – with one diagnostic product used to calibrate Gene Xpert machines already in wide use. There is some drug discovery work being done – both as part of the TB Drug Accelerator (an international project) and independently. There is also substantial investment in operational or implementation TB research in South Africa. 

Decision-making regarding what research to fund appears generally to be made in a relatively open and consultative manner. SHIP, the key grant-making entity for TB innovation, has a steering committee with wide representation from different government departments and donors. The work of SHIP is supplemented by the TB Think Tank, a Department of Health initiated, and BMGF funded group, with wide participation from researchers and policy makers. Interviewees report that research priorities are relatively well-aligned with those of foreign donors and that foreign donors tend to consult with local experts when setting research priorities.

There are multiple examples of South African researchers participating in international networks or projects. One such example is RePORT, a project that aims to standardise sample collection and data capturing across clinical trial sites in multiple countries to allow for better pooled analysis and better comparisons between clinical trials. Participation in RePORT is symptomatic of a wider trend toward greater data sharing and data standardisation in South Africa. In line with ambitions set out in the recently published draft White Paper on Science, Technology and Innovation, the South African government is investing in improving domestic data collection and management capacity. In building new TB data repositories government is drawing on expertise and capacity developed on the Square Kilometre Array – a major international astronomy project with a large footprint in South Africa. 

A key focus of our research was ownership of intellectual property generated from publicly funded research and access conditions placed on products resulting from publicly funded research. While funders and research entities in South Africa have some flexibility to negotiate terms on a case-by-case basis, these negotiations take place within parameters set by predominantly the Intellectual Property from Publicly Financed Research and Development Act (IPR Act), but also other key documents depending on the specific donor – examples include the SAMRC’s Socially Responsible licensing guidelines and the Grand Challenges Canada Global Access Policy. Between these various laws, policies and guidelines, and considering the nature of the TB market, most interviewees are satisfied that products resulting from publicly funded TB research in South Africa will be affordable and available in the areas where it is most needed – put another way, the perception is that there is no incentive for companies to develop TB products that are unaffordable. However, while funding agreements typically include provisions on access and affordability, these provisions are not always clear and may turn out to be hard to enforce should the need arise given the ambiguity around key terms and limited capacity for oversight of industry behaviour across low- and middle-income countries (LMICs).

South Africa’s Bayh-Dole-style IPR Act seeks to ensure that IP falling under the Act is identified, protected, utilised and commercialised for ‘the benefit of the people of the Republic’. It does not include any specific guidance on how to deliver or measure public benefit when commercialising technologies, nor on how to ensure that technologies are affordable and accessible. The Act recommends that IP holders use non-exclusive licensing approaches but does not require them. The Act also provides walk-in rights to government to address the state’s health, security and emergency needs. The only research excluded from the IPR Act is research that is funded in full by non-public sources – with full-cost including all direct and indirect costs incurred during the research, including staff and overhead costs at institutions. The Act is currently under review.

None of the interviewees expressed ideological opposition to non-exclusive licensing, however they raised practical challenges to its implementation. Additionally, they raised concerns that requirements for non-exclusive licensing approaches as a condition for receipt of public financing could impede their efforts to deliver new health technologies. Technology transfer officers and policy makers viewed their IP and ability to make exclusive deals as critical leverage tools for raising research funding and generating commercialisation investment from local and international funders and investors. Interviewees were generally of the view that, in the context of publicly funded TB research in South Africa, exclusive licensing would not lead to excessive pricing or limited access to resulting products. Testing whether this assumption is correct is an important area of future research. Presently it is hard to assess given that very few products have reached the market. Either way, in this regard, the incentive and market dynamics surrounding TB research in South Africa are perceived to be fundamentally different to, for example, the dynamics surrounding cancer research conducted in the United States. In addition, while South African government objectives such as job creation and economic development may at times conflict with public health objectives, most interviewees felt that these various objectives were in fact quite well balanced at present.

Interviewees expressed support for the principles of delinkage as well as for specific examples such as the Life Prize (a delinkage-based TB drug regimen development initiative previously known as the 3P Project). There was however wide scepticism about the likelihood of getting such projects funded. While South Africa’s Director General of Health Precious Matsoso chairs the Life Prize steering committee, no prize funds have yet been funded through the Life Prize mechanism. According to interviewees, the scale of investment required makes it extremely unlikely that the South African government could fund any major delinkage-based projects on its own.

While also supportive in principle, interviewees were generally sceptical about the prospects of international collaboration in funding delinkage-based projects, a R&D convention, or research collaborations such as the BRICS TB Research Network. In negotiations toward such agreements the perception among interviewees is that countries’ short to medium-term national economic interests holds sway over common longer-term interests, including health benefits. In addition, the imperative for economic development in low- or middle-income countries with relatively small budgets, such as South Africa, arguably makes it irrational to enter into such agreements without at least reciprocal commitments from other, hopefully wealthier, countries.

In conclusion, a compelling argument can be made that the South African government must increase its funding for TB and other medical research – something that will have both health and economic benefits.  The existing research infrastructure, funding mechanisms, and the legal and regulatory framework in South Africa appear to function well, although benefit may be derived from increased coordination in some areas and further guidance regarding socially responsible licensing and affordability and access, including through the development of an enforceable access policy for publicly funded research. South Africa has, and should continue to play, an important role in promoting delinkage-based drug-development and to support greater international collaboration on TB research. Such international collaboration will be critical to funding and properly testing alternative innovation models. (See section 9 for a full set of recommendations).

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  • About the Campaign

    fix the patent laws
    Fix the Patent Laws is a campaign co-founded by SECTION27, Treatment Action Campaign (TAC) and Doctors Without Borders (MSF) in 2011. Since then, the coalition has grown to include 38 other organisations fighting together to push South Africa to amend its patent laws to prioritise public health. Through this blog we will highlight how amending South Africa’s Patents Act 57 of 1978 will reduce the cost of medicines, improving the health and saving the lives of millions of South Africans.

    The members of the Fix the Patent Laws Campaign are as follows: Treatment Action Campaign (TAC), Doctors Without Borders (MSF), SECTION27, the South African Non-Communicable Diseases Alliance (SANCD Alliance), DiabetesSA, EpilepsySA, Marie Stopes South Africa, Stop Stock Outs Project (SSP), South African Depression and Anxiety Group (SADAG), Cape Mental Health (CMH), the South African Federation of Mental Health (SAFMH), Schizophrenia and Bipolar Disorders Alliance (SABDA), as well as the following members of the Cancer Alliance and Advocates for Breast Cancer: Breast Course 4 Nurses, Breast Health Foundation, Cancer Association of South Africa (CANSA), Cancer Heroes, Can-Sir, CanSurvive, Care for Cancer Foundation, Childhood Cancer Foundation of South Africa (CHOC), Hospice Palliative Care Association (HPCA), Igazi Foundation, Look Good Feel Better, Love your Nuts, Lymphoedema Association of South Africa (LAOSA), Men’s Foundation, National Council Against Smoking, National Oncology Nursing Association of SA, Pancreatic Cancer Network of SA (PanCan), People Living With Cancer (PLWC), Pink Trees for Pauline, Pink Phoenix Cancer Foundation, Pocket Cancer Support, Project Flamingo, Rainbows and Smiles, Reach for Recovery, South African Oncology Social Work Forum (SAOSWF), The Pink Parasol Project, The Sunflower Fund, Vrede Foundation and Wings of Hope.

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