IPR, Innovation, Human Rights and Access to Drugs - An Annotated Bibliography - Health Economics and Drugs Series No. 014
(2003; 82 pages) View the PDF document
Table of Contents
View the documentAcknowledgements
View the documentAbbreviations and acronyms
View the documentIntroduction
View the document1. General articles
Open this folder and view contents2. Country studies by region
Close this folder3. TRIPS, drugs and human rights
View the document3. 1 TRIPS and patents
View the document3.2 Research and development
View the document3.3 Human rights and access to drugs.
Open this folder and view contents4. Electronic information
View the documentOther documents in the EDM Health Economics and Drugs Series
View the documentBack cover

3.2 Research and development

Batson A, Ainsworth M. Private investment in AIDS vaccine development: obstacles and solutions. Bulletin of the World Health Organization: International Journal of Public Health, 2001, 79(8): 721-727.

The development of vaccines for the prevention of AIDS, malaria, tuberculosis, and other diseases requires both public and private investment. Private investment, however, has been far lower than might have been hoped, given the massive human toll of these diseases, particularly in the poorest countries. With a view to understanding this situation and exploring potential solutions, the World Bank AIDS Vaccine Task Force commissioned a study on the perspectives of the biotechnology, vaccine and pharmaceutical industries regarding investment in R&D work on an AIDS vaccine. It was found that different obstacles to the development of an AIDS vaccine arose during the product development cycle. During the earlier phases, before obtaining proof of product, the principal barriers were scientific. The lack of consensus on which approach was likely to be effective increased uncertainty and the risks associated with investing in expensive clinical trials. The later phases, which involved adapting, testing, and scaling up production for different populations, were most influenced by market considerations. In order to raise the levels of private R&D on an AIDS vaccine, there will probably have to be a combination of push strategies, which reduce the cost and scientific risk of investment, and pull strategies, which guarantee a market.

Global Alliance for TB Drug Development. The economics of TB drug development. Global Alliance for TB Drug Development, October 2001.

This report summarizes the work and projects of the Global Alliance for TB Drug Development, a partnership gathering private companies, international agencies, NGOs and others with the common goal of developing a new, more effective anti-TB drug which would greatly facilitate the treatment and control of the TB epidemic. TB, Malaria and HIV/AIDS are major infectious diseases threatening global health today. TB was reported to affect 8.4 million people in 1999, with 10.2 million cases expected by 2005. This report is divided into five parts. Firstly, it examines TB's epidemiology, stressing how, in countries with high HIV/AIDS infection rates, TB patients are also on the rise. The second part is devoted to the potential market of anti-TB drugs, a global market whose value the report quantifies between 412.5 and 470.5 million dollars per year and this is expected to increase to 670 million dollars in 2010. The report identifies two different kinds of market: a public/tender market composed of government and international donor purchases; and a private one made up of traditional pharmacy and hospital sales. The third part of the report focuses on the possible costs of a new anti-TB drug. It recalls how no new anti-TB drugs have been developed in over 30 years and considers that between 76 and 115 million dollars will be required in order to achieve Phase III clinical trials and regulatory approval. The report stresses the need for greater collaboration between private companies, NGOs and international aid agencies in gathering funds. The fourth part of the report looks into the potential return on investment. From the financial point of view, the internal rate of return of a new anti-TB drug would be between 15 and 32%, depending on a number of factors (most notably the pace of development, the conduction of clinical trials and revenue size); the social benefits of a new anti-TB drug would be represented by a substantial reduction in the per patient treatment costs, improved compliance and a reduction in resistance, transmission, morbidity and mortality. The final part of the report focuses on the options available for conducting and funding a new anti-TB drug. The report explores new partnerships between public and private actors in order to share and balance risks and investment related to the development of any new drug and concludes by recalling that all necessary factors for the development of a new anti-TB drug are, or soon will be, in place.

IFPMA. Encouraging pharmaceutical R&D in developing countries. Geneva, International Federation of Pharmaceutical Manufacturers Associations, February 2003.

This report of the IFPMA addresses the issue of innovative pharmaceutical R&D capacities in developing countries. The goal of the report is to identify and analyse those factors that would encourage future development of private sector R&D within a country. It also names those obstacles that would prevent a greater contribution of developing countries in the global R&D effort. The author acknowledges the opportunity and need for more R&D on drugs and vaccines, stating that an increased participation of developing countries in such endeavour would be beneficial not only for those countries but also for the private sector and patients worldwide. The heavy investments needed for pharmaceutical and biotechnological R&D can only be afforded by multinational companies from the private sector, the author considering that alternative approaches would be unlikely to contribute to the innovation of medicines. According to the report, recent developments in science make it extremely difficult for an individual actor or company to cover all areas of research. Fragmentation and the outsourcing of individual components of R&D are seen as critical factors of modern and efficient R&D. This specialisation (product- or illness-based research) could be used by developing countries to foster their own R&D industry. For a national R&D industry to be developed there are several conditions that should be met such as a certain level of structure and resources. The report identifies 23 factors which are of utmost importance for the development of a domestic R&D-based industry; among them the author highlights government support, IPR protection and the existence of public research institutions. As it looks into national initiatives that could contribute to strengthening the domestic R&D-based industry, the report acknowledges the great power of governments to create a pro-innovative business environment by acknowledging (through regulation for example) the essential symbiosis between players involved in the global and domestic R&D effort. Countries such as Brazil, India and the People's Republic of China are considered to be in a position to foster their national pharmaceutical R&D-based industry.

IFPMA - R&D-based Pharmaceutical Association in China. Accelerating innovative pharmaceutical research and development in China: a case study. Geneva, International Federation of Pharmaceutical Manufacturers Associations, April 2003.

This report constitutes a case study of a set of factors, which had been outlined in another IFPMA publication (Encouraging pharmaceutical R&D in developing countries), applied to the situation in the People's Republic of China. The author analyses the current situation of the pharmaceutical and biotechnological R&D-based industry in China and its prospects for further development. Five essential components for the development of an R&D-based national industry were identified: government prioritization of R&D, particularly in connection with the modernisation of the generics and traditional Chinese medicine sectors; the existence of public research institutions, which partly compensate the quasi absence of biopharmaceutical research currently undertaken by the small private sector; the establishment of an IPP framework, particularly after the reform of patent laws in 1993 and the accession of China to the WTO in 2002; the already existing industry in China, especially with regard to generics and traditional Chinese medicine; and the important human resource potential offered by the large number of Chinese science and medicine graduates once brain drain dynamics are reversed. While acknowledging some of the positive conditions that China currently offers for developing a national R&D-based industry, the report expresses some reservations. While critical factors seem to be in place, there is a range of problems and difficulties to which the Chinese authorities should respond in order to develop a national R&D-based industry. As regards public research institutions, the report notes the weak market orientation of their research and, in connection with IPR, the Chinese government is required to reward investment and innovation in biopharmaceutical R&D by effectively enforcing patent laws. The author concludes that the Chinese model of industrial R&D is substantially different from the Western one, where companies are deemed responsible for the entire process of finding and bringing products to the market. Under the Western model, the patent system is precisely the device used to finance company investment in R&D and to bring products to the market. The report considers that the dominant role of the State in China might slow the development of a national R&D-based industry in the country, adding that reforms are necessary, particularly in connection with pricing incentives which, according to the report, should be determined by the market and not the cost of the product.

Kang M. Trade policy mix under the WTO: protection of TRIPS and R&D subsidies. Korea Institute for International Economic Policy, 2000.

This article addresses the apparent contradiction between domestic attempts to limit the protection of IPR and the acceptance of R&D subsidies by national authorities. To better understand what could initially be seen as a breach of the basic WTO principle of fair competition, the author links such strategic trade policy tools as R&D and IPR. According to the author, a less strict enforcement of IPR at the national level would have a negative impact on future R&D capabilities. This would not be the case if the trade structure reflected an optimal balance where the burdens and costs would be shared between exporting and importing countries. According to this article, the TRIPS Agreement would disproportionately benefit Northern exporting countries to the detriment of Southern importing countries with a smaller R&D capability.

Kettler H, Towse A. Public-private partnerships for research and development: medicines and vaccines for diseases of poverty. London, Office of Health Economics, 2002.

This report examines the potential of PPP to encourage the development of therapeutics for those infectious diseases responsible for most deaths in developing countries. The authors looked at four case studies: the Medicines for Malaria Venture, the International AIDS Vaccine Initiative, the Malaria Vaccine Initiative and The Global Alliance for TB Drug Development. The report examines firstly the challenges to which PPP are bound to respond, notably the lack of R&D investment for neglected diseases. Secondly, the authors look closely at the major trends which are transforming the traditional model of pharmaceutical R&D, stressing the necessary collaboration between parties and the increasing presence of biotechnology and specialist genomic technology companies. Thirdly, the authors analyse the PPP models set as case examples, concluding that substantial progress has been made in all areas except one, namely the ability to create a viable financial model that addresses the R&D funding gap. While the authors consider PPP as a valuable part of a total solution to the necessity of making available new drugs, vaccines and diagnostics to meet the health needs of the populations of less developed countries, they suggest that further international support is needed as, even if PPP are seen as a viable model, they can not achieve their goals in isolation.

MSF/DND. Fatal imbalance. The crisis in research and development for drugs for neglected diseases. Geneva, Médecins sans Frontières, September 2001.

In 1999, MSF convened an international body of health experts to study the current state of drug R&D for diseases that affect people in the developing world. This independent body, the Drugs for Neglected Diseases (DND) Working Group, has since undertaken an analysis and made some recommendations for moving forward. When treatment options do not exist or are inadequate, a disease can be considered "neglected", or even "most neglected" in some cases. The neglect is a result of market and public policy failure. Strategies must be developed to specifically address neglected and most neglected diseases. Recent initiatives and policies seeking to redress the R&D imbalance are outlined. Recommendations for moving forward are presented, among them: that a well-defined and needs-driven research agenda be established at the global level; that governments fulfill their responsibility to become directly and proactively involved in searching for solutions; that funding be increased for research into neglected and most neglected diseases; and that a new not-for-profit enterprise be explored as one way to address the shortage of R&D for the most neglected diseases.

Scherer FM. The pharmaceutical industry and world intellectual property standards. Vanderbilt Law Review, November 2000, 53(6): 2245-2254.

This article focuses on the possible link between the enforcement of IPR and the possibilities for private pharmaceutical companies to invent and produce new drugs. One of the declared goals of the IPR framework is to protect companies that have heavily invested in the development of new products. Granting these companies with exclusivity rights for a fixed period of time would allow them to recover previous investment and at the same time provide a stimulus to keep on innovating. This is one of the main arguments justifying the TRIPS Agreement in relation to pharmaceutical products. Developed countries are not only home to all major international pharmaceutical companies, but also represent the biggest market for pharmaceutical products. This market, considered to be secure, has been driving the R&D efforts of pharmaceutical companies, leaving behind the needs of a majority of the population who, living in developing countries, do not represent an interesting market.

Trouiller P, Olliaro P, Torreele E, Orbinski J, Laing R, Ford N. Drug development for neglected diseases: a deficient market and a public-health policy failure. The Lancet, June 2002, 359(9324): 2188-2194.

There is a lack of effective, safe and affordable pharmaceuticals to control infectious diseases that cause high mortality and morbidity in the developing world. The authors analysed outcomes of pharmaceutical R&D over the past 25 years, and reviewed current public and private initiatives aimed at correcting the imbalance in R&D that leaves diseases that occur predominantly in the developing world largely unaddressed. They compiled data by searches of Medline and databases of the US FDA and the European Agency for the Evaluation of Medicinal Products, and reviewed current public and private initiatives through an analysis of recently published studies. The authors found that, of 1 393 new chemical entities marketed between 1975 and 1999, only 16 were for tropical diseases and tuberculosis. There is a 13-fold greater chance of a drug being brought to market for central nervous system disorders or cancer than for a neglected disease. The pharmaceutical industry argues that R&D is too costly and risky to invest in low-return neglected diseases, and public and private initiatives have tried to overcome this market limitation through incentive packages and PPP. The lack of drug R&D for "non-profitable" infectious diseases will require new strategies. No sustainable solution will result for diseases that predominantly affect poor people in the South without the establishment of an international pharmaceutical policy for all neglected diseases. Private sector research obligations should be explored, and a public sector not-for-profit R&D capacity promoted.

UNDP/WORLD BANK/WHO Special Programme for Research and Training in Tropical Diseases. Research capacity strengthening: strategy (2002-2005). Geneva, WHO, 2002.

The Special Programme for Research and Training in Tropical Diseases (TDR) is an independent global programme of scientific collaboration, which over the years has funded about 400 research groups in 80 disease endemic countries, contributing to the formation of a new generation of public health leaders. TDR activities and projects are confronted with the fact that most of the R&D work in neglected diseases is still concentrated in developed countries, while scientists in disease endemic countries are closer to the problems and possible solutions in the field. This document summarizes the TDR strategy for 2002-2005 and identifies the direct involvement of researches from disease endemic countries as being the best way to achieve the development and future incorporation of new tools and interventions into policy and practice. This new strategy transforms the research capacity strengthening approach in order to adapt itself to the rapidly evolving environment for communicable disease research, due to advances reported in the fields of biotechnology and information and the expanding interaction between private and public partners. This new strategy has two interrelated goals: to increase the involvement of scientists from developing disease endemic countries in all stages of R&D and to optimize the development of more relevant and affordable intervention tools, strategies and policies for disease control. The document sets out the main components of TDR's strategy, notably the expansion and integration of all research capacity strengthening activities within TDR areas and the planning and design of capacity strengthening activities around expected results (with special emphasis on partnerships, leaderships and sustainability), focusing on least developed countries and fostering greater collaboration and coordination with bilateral and multilateral capacity building and mainstream health system and disease control efforts, such as UN agencies and international NGOs.

Webber D, Kremer M. Perspectives on stimulating industrial research and development for neglected infectious diseases. Bulletin of the World Health Organization: International Journal of Public Health, 2001, 79(8): 735-741.

This paper summarizes recent thinking on stimulating industrial R&D for neglected infectious diseases and argues that it is critical to enlarge the value of the market for medicines and vaccines through, for example, global purchase funds. The most important economic barriers to R&D are small commercial markets and severely limited individual purchasing power, even though the number of patients may be very large. Since R&D costs for all diseases are high, returns will not cover investment. Various mechanisms have been proposed to address this economic imbalance (accepting that other barriers will also need to be considered). Economic devices which reduce the cost of R&D - push factors - are useful, but this review suggests that high costs do not explain the shortfall in R&D. Economic devices which address the lack of viable markets have been termed pull factors and are designed to create or secure a market, thereby improving the likelihood of a return on investment. The authors identify as a useful pull mechanism the commitment in advance to purchase a product that meets specified criteria, if invented. The purchase pre-commitment approach has a number of attractive features. For example, it only rewards successful outputs rather than supporting research that may not succeed. Pull programmes effectively mimic the market and lead companies to favour lines of attack that they believe will lead to marketable products. Overall, a combination of push and pull mechanisms is likely to represent an attractive approach. This could combine, for example, increased funding for public laboratories, PPP in R&D, purchases of under-utilised existing products, and a pre-commitment to purchase new drugs and vaccines when developed.

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