E-DRUG: WTO Press Release on Norway Meeting
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[http://www.wto.org/english/news_e/pres01_e/pr220_e.htm\]
11 April 2001
Experts: affordable medicines for poor countries are feasible
WHO/WTO workshop on pricing and financing of essential drugs
H�SBJ�R, NORWAY � Making life-saving medicines more affordable for poor
countries is vital for improving public health. More importantly, it is
realistic, experts said in a three-day workshop that ended today (11
April 2001).
In particular, �differential pricing� � companies charging different
prices in different markets according to purchasing power � is a
feasible means of achieving this, provided certain conditions are met.
That was a widely held view among a diverse group of 80 experts from 21
countries and a wide range of professional backgrounds, participating in
a workshop organized jointly by the World Health Organization, World
Trade Organization, Norwegian Foreign Ministry and Global Health
Council, a broad-based US organization in the healthcare field.
The workshop examined in detail ways to reduce pharmaceutical prices in
low-income countries and how to increase financing so that the world�s
poorest people can obtain necessary medicines and healthcare. HIV/AIDS,
malaria and tuberculosis featured prominently, but a wide range of other
diseases that affect poor people were also discussed.
WHO Director-General Gro Harlem Brundtland said the meeting had been
constructive and helpful.
�It is clear that the price of medicines does matter � especially for
people in poor countries,� she said.
�We heard from the experts that much lower prices can be achieved for
the poorest countries. Equally important is strengthening health
systems, and, for the poorest countries, securing additional
international financing,� Dr Brundtland said.
Participants attended as experts in their own right. They came from:
developed and developing country governments; international
research-based companies; generic pharmaceutical companies from Asia,
Africa and Latin America; non-governmental organizations; consumer and
treatment groups; universities; and international organizations.
�Although participants clearly approached the issues from different
points of view, there was broad recognition that differential pricing
could play an important role in ensuring access to existing drugs at
affordable prices, particularly in the poorest countries, while the
patent system would be allowed to continue to play its role in providing
incentives for research and development into new drugs,� said Adrian
Otten, director of the WTO�s Intellectual Property Division.
Two of the organizers, the WHO and WTO, will each report on the outcome
to forthcoming meetings in their organizations to be held in the next
few months. In May, the WHO holds its World Health Assembly, and in June
the WTO�s Council on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) will hold a special discussion on intellectual property
and access to drugs.
All participants will be able draw on the ideas and experiences
exchanged in the workshop, for use in their own work, together or
separately.
Differential pricing has already been achieved for commodities such as
vaccines, contraceptives and condoms through a combination of
high-volume purchasing, reliable and adequate financing, advocacy,
corporate responsibility and market forces.
The challenge is to find ways to expand this to life-saving medicines.
The participants accepted that there is no single formula to achieve
this. A wide mix of options is needed, they said.
�Intellectual property rights stimulate development of new medicines,
but must be implemented in an impartial way that safeguards public
health. We also need to ensure that there are additional incentives for
the development of the drugs needed to address the health problems of
people in poor countries,� Dr Brundtland said.
Among the ideas emerging from the meeting were:
Differential prices
Differential pricing would allow companies that make patented drugs to
recover most of the costs of research and development in richer markets
and at the same time to sell or license production at lower prices in
lower-income countries. Advocates said this could be a win-win solution
if consumers in richer countries do not face higher prices as a result.
Critical to the success of this would be methods of preventing lower
priced drugs from finding their way into rich country markets. A number
of speakers were also concerned that lower prices in development
countries should not be used as reference points for price controls in
industrialized countries.
Options for appropriate strategies suggested in the workshop included:
creating the right conditions so that the market determines differential
pricing; discounts negotiated bilaterally between companies and
purchasers (which could include bulk purchasing on behalf of many
customers); licences agreed voluntarily between patent owners and
generic manufacturers; and global procurement and distribution systems.
Competition and generic drugs
Several speakers also felt that generic drug manufacturers play an
important role in bringing competition to pharmaceutical markets and
improving production efficiency, which would reduce prices further.
Intellectual property and TRIPS safeguards
Participants acknowledged that intellectual property protection is an
important incentive for research and development into new drugs. Some
said there are also other ways to encourage research and development.
At the same time, countries need to be able to make use of the public
health safeguards built into the TRIPS Agreement � including compulsory
licensing (governments allowing others to produce a patented invention
without the patent owner�s permission) and �parallel� imports (i.e.
imports of products supplied by the patent owner or a licensee at a
lower price in another country).
Financing
When drug prices fall � and many low priced essential drugs are already
available � there is still no guarantee that poor communities can afford
them. This is particularly true for HIV/AIDS drugs. Even with costs
coming down to $500 per patient per year, this is well beyond the reach
of the many countries whose total health expenditure is less than $10 to
$20 per year. In these cases, significant amounts of external financing
is needed.
Many of the participants also said financing for drugs should not be
considered in isolation. They called for massive increases in finance to
develop effective healthcare systems in general, including training,
education and delivery, as well as for buying the drugs.
For more information:
Background papers for the conference are available on the WHO and WTO
websites. For the WHO (www.who.int/medicines) look for �documents�.
For more information on TRIPS and pharmaceuticals, see a WTO fact sheet,
downloadable from the TRIPS news page.
A report of the workshop�s proceedings and the presentations will
shortly be available on these websites
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