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JOINT Statement of Consumer Project on Technology (CPT),
Health Action International (HAI), M�decins sans Fronti�res (MSF),
Oxfam and Treatment Action Group (TAG) on the WTO / WHO on
Differential Pricing & Financing of Essential Drugs
H�SBJ�R, Norway - Representatives of the five non-governmental
organizations (NGOs) who participated in the three day WHO /
WTO Workshop on Differential Pricing & Financing of Essential
Drugs issued the following joint statement on the goals,
proceedings, and outcome of the workshop.
The WHO/WTO workshop provided a new forum for health and
trade experts to come together to work on eliminating trade barriers
to long-term, affordable drug access. However NGOs expressed
disappointment about the fact that no real progress was made to
bring drug prices for essential drugs in developing countries down.
NGOs present at the meeting stressed that one proven effective
way to bring prices down is to increase competition by
encouraging generic competition.
In June following an initiative of a group of African countries a
special session of the WTO TRIPS Council will be devoted to
health. For the first time countries will discuss how the
requirements of the TRIPS Agreement can be reconciled with
health needs in developing countries. NGOs will work together to
ensure that their proposals voiced at this workshop in Norway are
addressed at the upcoming WTO TRIPS Council meeting in June
2001 in Geneva. These proposals include a call on the TRIPS
Council to extend the deadline for the least developed countries to
comply with the TRIPS Agreement and to design mechanisms
ensure R&D for neglected diseases in developing countries.
Comments on the Meeting - Progress & Frustration
A diverse group of stakeholders including rich and poor country
governments, multilateral UN agencies, multinational
pharmaceutical companies and generic drug companies, and NGO
representatives gathered to discuss whether differential pricing of
essential drugs could be used as a tool to expand access in
developing countries while preserving incentives for future drug
development.
The meeting focused on differential pricing, which the NGOs feel
can be a crucial tool to help broaden access to affordable
medicines in developing countries. But differential pricing
mechanisms cannot come with onerous conditions attached, such
as forcing poor countries to surrender their rights guaranteed under
the TRIPS agreement.
Besides differential pricing, other tools -- such as voluntary
licensing, compulsory licensing, and parallel importing - are
available to help broaden access to affordable medicines.
After 2 � days of discussion not a single company disclosed plans
to actually implement differential pricing for their drugs. Current
offers for AIDS drugs are ad hoc, inadequate, and still far below the
prices that can be obtained from generic manufacturers. CPT's
Jamie Love said, "It's ironic that in a meeting organized to help the
poor, the main drug company proposals were to increase
intellectual property protection and ask for the elimination of
national price controls. At one point, Oxfam actually offered to
give the industry a grant, since they were pleading poverty."
The Way Forward -- Global Access to Essential Medicines
The NGOs issued a series of recommendations to enhance
research and development (R&D) and to ensure that intellectual
property (IP) protection, serves public health needs rather than the
reverse. The NGOs stressed that there is no single solution; rather,
a mix of mutually supportive strategies will be required to assure
dramatically reduced drug prices in developing countries. Policies
to achieve this goal should:
-- be sustainable and not be solely based on charity or donations
-- strengthen developing countries' autonomy
-- attract donor funding
-- include all essential medicines and should not be limited to drugs for
HIV/AIDS and related conditions only.
Greater Competitiveness Helps Lower Drug Prices
MSF's Ellen 't Hoen made the following proposals at the meeting:
Equity pricing strategies should not depend solely on voluntary
offers by the multinational drug firms. Hitherto, most drug
companies have preferred low-volume-high price strategies. Equity
or differential pricing should be combined with mechanisms to
increase competition and encourage sustainable approaches. For
example, it should not have a negative effect on the development of
a generic industry in the South.
One proven effective way to decrease drugs prices is to increase
competitiveness:
-- In Brazil, antiretroviral prices for certain anti-HIV drugs came
down by 82% within five years after Brazil initiated local production
and provided universal free HIV treatment to Brazilians who needed
it.
-- Recent offers from generic producers have sparked a price war
for antiretrovirals and have brought the annual price for triple
therapy down from $10,000 to $350 in a single year.
The need for competitive markets will require flexibility in
implementation and a pro public health interpretation of the TRIPS
agreement. The NGOs welcome a special TRIPS Council meeting
as proposed by a group of African countries and which will take
place in June 2001.
Global procurement strategies and funding should include
measures to increase and upgrade generic production in the south.
Voluntary licensing and compulsory licensing can help increase
the number of generic producers in the market.
Voluntary licensing agreements have the added advantage that
they would effectively deal with the companies' fear that low-priced
drugs in developing countries might flow back into high income
country markets.
Research & Development
The NGOs called for a new global Convention on research &
development, designed to strengthen both public- and private-
sector research. At every gathering to discuss access to
medicines, the big pharma companies raise the specter that any
effort to help the poor will harm R&D. Some claim proposals to
lower drug prices in developing countries, including the use of
compulsory licensing of patents on essential medicines, may lower
their profits. The idea of the Convention is to create new
mechanism to boost global R&D funding in ways consistent with
access to medicines and health needs by encouraging research on
neglected diseases. Country support for R&D funding could take a
variety of forms, including publicly funded R&D, mandatory R&D
requirements for companies, or the big pharma solution, which is
high levels of patent protection and high prices.
The NGOs will ask the World Health Assembly in May to request
the WHO to convene the negotiations by the end of the year.
The NGOs noted with interest the proposal by Jeffrey Sachs of
Harvard University, who addressed the workshop by video uplink,
for a global infectious disease prevention and treatment fund which
would pool resources from rich countries to provide access to low-
cost drugs for HIV/AIDS, tuberculosis, and malaria. However, they
opposed any effort to link the endowment of such a fund to
conditions such as the surrender by developing countries of their
rights under TRIPS to utilize compulsory licensing, parallel imports,
and other mechanisms to assure sustainable access to low priced,
high quality essential medicines.
The NGOs will continue working to support the development of an
effective, long-term, sustainable, global strategy and a drug
procurement and distribution system to provide affordable drugs for
people with HIV/AIDS in developing countries.