Creating Global Markets for Orphan Drugs and Vaccines:
A Challenge for Public/Private Partnership

PRELIMINARY
CONSENSUS PAPER

global health forum I
 

Quail Lodge

Carmel Valley, California

18 – 21 February 2000

PRESENTED BY:

GLOBAL FORUM FOR HEALTH RESEARCH

INSTITUTE FOR GLOBAL HEALTH

WITH SUPPORT FROM:

MEDICINES FOR MALARIA VENTURE

THE WORLD BANK

WORLD HEALTH ORGANIZATION

Preliminary Consensus Paper

Global Health Forum I:

Creating Global Markets for Orphan Drugs and Vaccines

Key Points


Preliminary Consensus Paper

Global Health Forum I:

Creating Global Markets for Orphan Drugs and Vaccines

Forty-five leaders from private industry, government, representatives of multi-lateral and bilateral organizations, and health policy researchers came together February 18 – 21, 2000, at Quail Lodge in Carmel Valley, California to discuss mechanisms to accelerate the development and delivery of vaccines and therapeutics desperately needed in the developing world.

Participants (listed in Appendix 1) included representatives from the World Health Organization, World Bank and World Trade Organization, executives from biopharmaceutical companies including Aventis Pasteur, Cadila Pharmaceuticals, Chiron, Glaxo-Wellcome, Hong Kong Institute of Biotechnology and SmithKline Beecham, health officials and corporate leaders from Canada, China, France, India, Indonesia, South Africa, and the United Kingdom, staff from the White House and the US Congress, and academics with expertise in global health.

The first Global Health Forum was organized by the Geneva-based Global Forum for Health Research and the Institute for Global Health of the University of California, San Francisco and UC Berkeley, with support from the Medicines for Malaria Venture, the World Bank and the World Health Organization.

Infectious Disease Killing Millions and Undermining Economic Development

The past three decades have seen great advances in immunization and health care in many low- and middle-income countries (LMICs). Approximately 3 million lives are saved each year, and 750,000 children avoid becoming disabled, because of immunization. This year, 74% of children in the world will receive the standard immunizations recommended by the World Health Organization. Even people at war have recognized the primacy of fighting disease. In some areas, when polio eradication teams arrived with batches of vaccine, fighting halted so communities could be immunized.

Yet for all this progress, the health divide between the "haves" and "have nots" in the world is steadily growing. Three million children perish each year -- six children every minute -- from diseases that can be prevented with existing vaccines. The vaccine for hepatitis B, licensed in the United States in the early 1980s, could save 900,000 lives per year if widely used. The cost would be under $20 for each year of healthy life saved.

Other major diseases of the developing world, including malaria, TB, and HIV/AIDS, are potentially vaccine preventable in the longer term and treatable with new medicines in the medium term. In fact, widely available vaccines for these three killers could save more than five million people each year. However, scientific obstacles, economic disincentives, and failed leadership have resulted in under-investment in medical research for new vaccines and medicines targeted at these diseases.

Industry and governments worldwide must work together to meet the health needs of LMICs, thereby employing the ever expanding pool of scientific and technical knowledge to narrow the health quality gap between the rich and poor in the world. Unfortunately, current practices are moving in the opposite direction: less than 10% of all public and private health research and development investments are devoted to addressing the primary health problems of 90% of the world’s population.

Investing in improved health is essential for global economic development. Today, diseases of poorer countries undermine efforts to improve life expectancy, educate populations, expand infrastructure, and build economies. The HIV/AIDS epidemic has already set back development in some African countries by three decades. The fact is, even modest progress on health could lead to significant economic advances. Every year of increase in the national average life expectancy is significantly correlated with a 1% increase in GDP 15 years later. Better delivery of existing vaccines and the development of new ones would increase life expectancy and improve childhood development and labor productivity.

Time is running out. Failure to tackle the problem of under-investment in priority vaccines and therapeutic drugs will come at great social and economic cost. Malaria may soon become untreatable as a consequence of pervasive resistance to existing drugs. The number of cases of multi-drug resistant tuberculosis is growing alarmingly. The AIDS pandemic will soon cause the same level of devastation in Asia as it already has in Africa. A growing number of drug-resistant microbes are leaving health care workers with few tools to fight established, formidable and common bacteria.

Drug and vaccine donation programs of pharmaceutical companies have made important contributions to public health in less developed countries and have provided lessons for strengthening delivery systems. But donations of drugs and vaccines are not a solution to the fundamental problem of under-investment in research and delivery of needed health care technology. Donations should only be one part of a comprehensive package of measures.

Achieving more equitable distribution of health technology is well within the reach of the international community. It has been estimated that delivery of approved vaccines to children in the world would cost $3 billion to $5 billion annually. Developing a new vaccine for one of the major infectious disease killers would cost $500 million to $1 billion. According to the Global Alliance for Vaccines and Immunizations, "even if the cost of a routine immunization program incorporating new vaccines were US $2 billion per year to reach out to all children in low income countries, that would still represent only about US $0.35 for every person on earth and less than 0.1% of what the world spends on health."

A Challenge to Governments and Industry Around the World

Participants at the Global Health Forum challenged leaders in government, industry, international organizations, and affected communities to harness the potential of vaccines and therapeutics to fight disease and save millions of lives.

Neither the public sector nor the private sector can achieve this vision alone. They must work in partnership, recognizing their particular strengths. The private sector has a legitimate expectation to recoup its investments and make a reasonable profit, and a responsibility to work with the public sector to address health problems of global concern. The public sector has a responsibility to provide the funding and incentives to ensure the development and more equitable distribution of lifesaving vaccines and drugs.

A global approach must be taken. There are no "first world solutions" to "third world problems." OECD countries and LMICs have a shared responsibility to ensure improved development and delivery of health care technology. LMICs must be at the table as international initiatives are planned.

The current lack of patent protection in several countries is an important problem that requires leadership and consensus. In part, concerns over the loss of intellectual property rights are responsible for industry reluctance to invest in products that would chiefly be used in the developingworld. New treaties promise to standardize patent law and provide industry with assurances that its products will not be stolen. But these agreements are not sufficient for meeting the challenges of neglected diseases and are only sustainable if there is a system in place to assure access of lower income country populations to needed drugs and vaccines. Patents confer property rights. With those rights also come responsibilities.

Unique Opportunity for Progress

As we enter the "age of biology," there is a growing opportunity to prevent and treat infectious diseases that take the lives of millions of people annually. Rapidly expanding scientific capacity means policy changes can leverage significant results for international public health. Growing international awareness of the personal, social and economic costs of disease in LMICs, and of the rapid global spread of new and more virulent infections, is leading to increased public support for efforts to expand the fight against diseases of less developed countries.

International economics has changed as well as science. Countries in the world can no longer be easily divided between rich and poor, developed and developing. Middle income countries are establishing markets that can demand neglected vaccines and drugs and these countries are developing pharmaceutical research and development capabilities that are increasingly directed at priority local diseases. The pharmaceutical and biotech industries are changing too, with much innovation in the biotech sector and big pharma increasingly relying on the biotechs for research and innovation.

Very significantly, there is also a building political momentum. A short list of current national and international efforts to accelerate development and delivery of priority drugs and vaccines for poorer countries includes:

Multiple Interventions – and Structural Change – Are Needed

Interventions are needed all along the product development and delivery pipeline. No single model or incentive can solve the problem of under-investment in diseases of the poor. Many tools will be needed – and some of these tools will need to be individually targeted at specific diseases. The gaps in research and development efforts must be identified for each of the most needed products, and public and private sectors must work in concert to fill these gaps. Simply increasing foreign aid budgets will not rectify the structural problems with under- investment in diseases of less developed countries.

In planning policy incentives and interventions, it is important to take several factors into consideration:

Four Primary Tools

A combination of "push," and "pull" interventions, PPPs, and development of functioning markets is needed to address under-investment in priority vaccines and drugs. The key challenge is to identify a combination of incentives and programs that governments will enact and to which industry will respond.

1. Push Interventions

Push interventions reduce the costs or risks of research and development. Such interventions are particularly important to biotech companies that are generally less well capitalized, more likely to rely on venture capital for financing, and more motivated to do innovative product development.

Priorities for push interventions identified by Forum participants include:

2. Pull Interventions

"Pull" interventions provide support on the product delivery side, guarantee markets for products, or subsidize sales. These interventions are particularly important for larger pharmaceuticals, but may also incentivise activity at biotechs.

Priorities for pull interventions identified by Forum participants include:

3. Public Private Partnerships (PPPs)

PPPs can create "win-win" situations for the public and private sectors by combining resources from each to develop or deliver needed products. PPPs generally attempt to guarantee some intellectual property or other rights for the non-profit sponsor, and allow private sector partners to seek a return on their investment. Examples of currently operating PPPs include:

Commercial pharmaceutical companies have also joined with the public sector internationally and at the country level to combat some of the major diseases of the poor, such as onchocerciasis (River Blindness), leprosy, trachoma, drug-resistant malaria, and lymphatic filariasis (elephantiasis) through donations of drugs and by supporting the development of delivery systems.

Forum participants discussed several issues relevant to design and management of PPPs. It was agreed that these partnerships work best when there is a common and highly focussed goal among participants, clearly defined leadership, accountability, trust between partners, and common management of day to day operations.

Forum participants felt these partnerships present political challenges and are not the answer to all under-investment issues. Participants concluded that creation of PPPs should remain on a disease-by-disease or product-by-product basis and that an overarching or "umbrella" PPP organization is not appropriate.

LMICs can play a role in PPPs by helping to select priority products (and the strains to be targeted by a product), and collaborating on ethical, scientific, regulatory and epidemiological issues, as well as clinical trials. Several Forum participants emphasized the importance of involving members of civil society in the design and management of PPP research and clinical trials in LMICs.

4. Creating Functioning Markets

Participants at the Forum noted that if both public and private demand in large low income and middle income countries was adequately expressed, a substantial new market incentive would be created. For example, if the governments of China, India and Indonesia took perfectly rational and well-informed decisions about public purchase of high priority drugs and vaccines for the poorer segments of their populations (in total at least 1.5 billion people), a substantial demand would be created. Similarly, the large and growing middle class in these countries could exert a substantial private demand if new products were available and their benefits widely known. In addition, in many middle income countries a sizable proportion of the population is covered by social insurance or private insurance. The policies of the insurers, and the benefit packages purchased by employers, have a large impact on demand for children’s vaccines and other products. Policy reform, better information, and improved performance of health care systems are necessary before these markets will become globally significant and play a major role in industry investment decisions.

Areas for Further Discussion

Participants identified a number of specific areas that require further discussion:

Recommendations

1. Make Markets for Orphan Drugs and Vaccines a Top International Priority

2. Support Existing Proposals

Forum participants were united in their belief that several specific proposals hold great promise and deserve widespread support.

Promising proposals include:

Forum participants also emphasized that no one of these proposals will solve the problem on their own. As noted in the "push" and "pull" sections above, Forum participants raised several questions about the specifics of various proposals. As each effort is advanced, it should be analyzed and refined with a view to ensuring its political and economic feasibility and optimizing its impact on R & D investment in the private sector.

Also needed is an assessment of the gaps in existing proposals to help future discussions devise more comprehensive plans. Needed incentives and interventions for specific diseases and products should be developed.

3. Support Public Private Partnerships (PPPs)

Several PPPs have already established their ability to bring public and private resources together on drug and vaccine development, and existing partnerships deserve increased international support. Public and private sector advocates should look for new opportunities to build successful partnerships to develop and deliver products.

4. Build Capacity in Developing Countries

5. Establish Indicators of Performance

Such a comprehensive and bold set of actions must be carefully monitored. A strong independent group is needed to measure the effectiveness of each of the proposed interventions. Criteria will focus on the proximal stimulation of product development and delivery as well as distal measures of health status improvement and economic benefit.

Ongoing Commitment of Forum Participants


Appendix I:

Participant List

Creating Global Markets for Orphan Drugs & Vaccines:

A Challenge for Public/Private Partnership

Quail Lodge, Carmel Valley, California

February 18 - 21, 2000

Invited Participants

Dr. Dyna Arhin-Tenkorang
Lecturer in Health Economics and Finance
Health Policy Unit
London School of Hygiene and Tropical Medicine
Keppel Street
London WC1E 7HT
United Kingdom
Tel: +44 171 927 2176
dyarhin{at}yahoo.com

Dr. Luis Barreto
Vice President, Public Policy Canada
Director, International Public Health Affairs
Aventis Pasteur
1755 Steeles Avenue West
Toronto, Ontario
M2R 3T4
Canada
Tel: +1 (416) 667-2738
Fax: +1 (416) 667-2865
Luis.Barreto{at}aventis.com

Dr. Seth Berkley
President
International AIDS Vaccine Initiative
810 Seventh Avenue
New York, NY 10019-5818
USA
Tel: +1 (212) 655-0201
Fax: +1 (212) 843-0480
Sberkeley{at}iavi.org

Dr. Kenneth W. Bernard
Special Advisor, International Health Affairs
National Security Council
Old Executive Office Building
17th Street and Pennsylvania Avenue, NW
Washington, DC 20504
USA
Tel: +1 (202) 456-9394
Fax: +1 (202) 456-9390
Kbernard{at}NSC.eop.gov

Dr. Sunil Chacko
Senior Pharma/Biotech Industry Analyst
New Info Solutions Llc.
1642 Besley Road
Vienna, VA 22182
USA
Tel: +1 (703) 585-3234
Fax: +1 (703) 255-3234
schacko{at}erols.com

Dr. Albert Y. Chang
Managing Director (Retired)
Hong Kong Institute of Biotechnology, Ltd.
380 Urbano Drive
San Francisco, CA 94127
USA
Tel: +1 (415) 337-2176
Fax: +1 (415) 337-2075
alberty_chang{at}yahoo.com

Dr. Joseph Cook
Executive Director
International Trachoma Initiative
6 East 45th Street
New York, NY 10017-2414
USA
Tel: +1 (212) 490-6460
Fax: +1 (212) 490-6461
jcook{at}trachoma.org

Professor Dean Jamison
Director, Economic Advisory Service
World Health Organization
Room 3074
CH-1211 Geneva 27
Switzerland
Tel: +41 22 791 3922
Fax: +41 22 791 3111
Jamisond{at}who.ch
Alternate Tel (UCLA): +1 (310) 206-0223
djamison{at}isop.ucla.edu

Mr. Jim Jones
Office of Senator John Kerry
United States Senate
304 Russell Building
Washington, DC 20510-2102
USA
Tel: +1 202-224-2742
Fax: +1 202-224-8525
Jim.jones{at}Kerry.senate.gov

Dr. Hannah E. Kettler
Office of Health Economics
12 Whitehall
London SW1 A2DY
UK
Tel: +44 20 7930 9203 ext. 1464
Fax: +44 20 7747 1419
hkettler{at}abpi.org.uk

Dr. Gerald Keusch
Director, Fogarty International Center
National Institutes of Health
Building 31, Room B2C02
31 Center Drive
Bethesda, MD 20892
USA
Tel: +1 (301) 496-1415
Fax: +1 (301) 402-2173
keuschg{at}nih.gov

Professor Michael Kremer
Harvard University
Department of Economics
Littauer Center 207
Cambridge, MA 02138
USA
Tel: +1 (617) 495-9145
Fax: +1 (617) 495-7730
mkremer{at}fas.harvard.edu

Mr. Sean P. Lance
Chairman and CEO
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608-2916
USA
Tel: +1 (510) 655-3100
Fax: +1 (510) 655-9910
sean_lance{at}cc.chiron.com

Dr. Julian Lob-Levyt
Chief Advisor, Health & Population
Department for International Development
94 Victoria Street
London SW1E 5JL
UK
Tel: +44 171 917 0107
Fax: +44 171 917 0174
j-lob-levyt{at}dfid.gov.uk

Dr. Christopher Lovelace
Director, Health, Nutrition & Population
The World Bank
1818 H Street, NW
Room G 3021
Washington, DC 20433
USA
Tel: +1 (202) 458-5520
Fax: +1 (202) 522-3234
clovelace{at}worldbank.org

Dr. Ian W. Marceau
U.S. Advisor to the Minister of State for Research & Technology
BPPT Building 2, 5th Floor
Jl MH Thamrin No. 8
Jakarta 10340
Indonesia
Tel: +62 21 391 2340
Fax: +62 21 316-9720
Usadvid{at}attglobal.net
marsupial{at}erols.com

Dr. Jacques-Francois Martin
Chairman and CEO
PARTEUROP S.A.
36, Quai Fulchiron
F-69005 Lyon
France
Tel: +33 4 78 42 63 71
Fax: +33 4 78 42 34 24
Parteurop{at}aol.com

Mr. Ryan McCormick
Office of Senator John Kerry
304 Russell Senate Office Building
Washington, DC 20510
USA
Tel: +1 (202) 224-2742 or 224-4030
Fax: +1 (202) 224-8525
Ryan_mccormick{at}kerry.senate.gov

Dr. Rajiv Modi
Director
Cadila Pharmaceuticals, Ltd.
IRM House
C.G. Road, Navrangpura
Ahmedabad 380 009
India
Tel: +91 79 656 2615
Fax: +91 79 642 5741
rajivimodi{at}aol.com

Mr. Adrian Otten
Director, Intellectual Property Division
World Trade Organization
154 rue de Lausanne
1211 Geneva 21
Switzerland
Tel: +41 22 739 5115
Fax: +41 22 731 4206
adrian.otten{at}wto.org

Dr. Ariel Pablos-Mendez
Rockefeller Foundation
420 Fifth Avenue
New York, NY 10018
USA
Tel: +1 (212) 852-8348
Fax: +1 (212) 852-8279
Ap39{at}columbia.edu
apablos-mendez{at}rockfound.org

Ms. Stefani Pashman
White House Office of Management and Budget
Room 7001
725 17th Street, NW
Washington, DC 20503
Tel: +1 (202) 395-4929
Fax: +1 (202) 395-3910
Stefani_J._Pashman{at}omb.eop.gov

Dr. Walter Prozesky
Coordinator, South African AIDS Vaccine Initiative
Medical Research Council
Box 19070
Tygerberg 7505
South Africa
Tel: +27 21-938-0211
Fax: +27 21-938-0201
walter.prozesky{at}mrc.ac.za

Dr. Regina Rabinovich
Director, Malaria Vaccine Initiative
6290 Montrose Road
Rockville, MD
USA
Tel: +1 (301) 770-5377
Fax: +1 (301) 770-5322
rrabinovich{at}path-dc.org

Dr. Robert Ridley
Director, Medicines for Malaria Venture
c/o World Health Organization
20, Avenue Appia
1211 Geneva 27
Switzerland
Tel: +41 22 791 3715
Fax: +41 22 791 4854
ridleyr{at}who.ch

Dr. Jose Roesma
Vice-Chairman, BPPT
BPPT Building 2, 5th Floor
Jl MH Thamrin No. 8
Jakarta 10340
Indonesia
Tel: +62 21 316-9706
Fax: +62 21 316-9720
Usadvid{at}attglobal.net

Dr. Michael Scholtz
Executive Director
Health Technology and Pharmaceuticals
World Health Organization
20, Avenue Appia
CH-1211 Geneva 27
Switzerland
Tel: +41 22 791 4798
Fax: +41 22 791 4889
Scholtzm{at}who.ch

Mr. William Schuerch
Deputy Assistant Secretary for International Development, Debt and Environment
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
USA
Tel: +1 202-622-5300
Fax: +1 202 622-2536
William.Schuerch{at}do.treas.gov

Dr. Richard Smith
Editor, British Medical Journal
BMJ House
Tavistock Square
London WC1J 9JR
UK
Fax: +44 171 383 6418
Rsmith{at}bmj.com

Dr. Sally Stansfield
Program Officer
The Bill and Melinda Gates Foundation
1551 Eastlake Avenue East, Suite 100
Seattle, WA 98102
USA
Tel: +1 (206) 709-3100
Fax: +1 (206) 709-3180
sally{at}gatesfoundation.org

Professor Joseph E. Stiglitz
Senior Vice President and Chief Economist
The World Bank
1818 H Street, NW Room MC4-315
Washington, DC 20433
USA
Tel: +1 (202) 473-3774
Fax: +1 (202) 522-1158
jstiglitz{at}worldbank.org

Mr. Walter Vandersmissen
Director, Government Affairs
SmithKline Beecham Biologicals
Rue de l’Institut 89
1330 Rixensart
Belgium
Tel: +32 2 656 83 70
Fax: +32 2 656 81 45
walter.vandersmissen{at}sbbio.be

Dr. David Webber
Senior Public Policy Manager
GlaxoWellcome plc
Glaxo Wellcome House
Berkeley Avenue
Greenford
Middlesex UB6 ONN
UK
Tel: +44 (0) 208 966 8257
Fax: +44 (0) 208 966 5981
dw30539{at}glaxowellcome.co.uk

Dr. Humphrey Zokufa
Ministry of Health
Government of South Africa
Civitas Building
Room 2027
cor Andries and Struben Streets
Pretoria 0002
South Africa
Tel: +27 12 328 4773
Fax: +27 12 325 5526
Zokufa{at}hltrsa.pwv.gov.za
 

Secretariat

Ms. Ann Carollo-Taylor
Associate Director
Corporate and Foundation Relations, UCSF
44 Montgomery Street, Suite 2200
San Francisco, CA 94104
USA
Tel: +1 (415) 502-2404
Fax: +1 (415) 476-1590
acarollo{at}dismail.ucsf.edu

Mr. Christopher Collins
Consultant, Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 647-5585
Fax: +1 (415) 647-5027
ChrisCSF{at}aol.com

Mr. Louis J. Currat
Executive Secretary
Global Forum for Health Research
c/o World Health Organization
20, Avenue Appia
1211 Geneva 27
Switzerland
Tel: +41 22 791 4260
Fax: +41 22 791 4394
curratl{at}who.ch

Dr. Richard Feachem
Director, Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8200
Fax: +1 (415) 597-8299
rfeachem{at}psg.ucsf.edu

Ms. Marsha Mathews
Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8208
Fax: +1 (415) 597-8299
Mmathews{at}psg.ucsf.edu

Dr. John Peabody
Deputy Director, Health Policy
Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8202
Fax: +1 (415) 597-8299
Jpeabody{at}psg.ucsf.edu

Ms. Suzanne Scheele
Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8210
Fax: +1 (415) 597-8299
Sscheele{at}psg.ucsf.edu

Ms. Elizabeth Stoller
Deputy Director, Administration
Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8203
Fax: +1 (415) 597-8299
estoller{at}psg.ucsf.edu

Dr. Julia Walsh
Acting Head, Vaccinology & Immunization
Institute for Global Health
74 New Montgomery Street, Suite 508
San Francisco, CA 94105
USA
Tel: +1 (415) 597-8200
Fax: +1 (415) 597-8299
jwalsh{at}socrates.berkeley.edu

Dr. Roy Widdus
World Health Organization
20, Avenue Appia
CH-1211 Geneva 27
Switzerland
Tel: +41 22 791 4369 (or +41 22 791 4791)
Fax: +41 22 791 3111
Widdusr{at}who.ch