Many low and middle-income countries (LMICs) are still struggling to finance indigenous R&D, and several are failing to meet continental declarations of intent such as the African Union target of 1% of GDP on R&D. In the next two years, LMICs may make significant strides in pushing their own R&D models, but it is clear that a radical re-think of how to fund, and how to incentivise R&D is needed if they are to get drug development for diseases of poverty resourced. A bold new strategy requires perspectives including the voice of NGOs and civil society, if progress in R&D is to result in greater access and health equity. This is why LMICs should take the lead and not rely on external aid nor wait for international treaties to arrange what they can start and fund at home
Financing Research for Health: Why the Multilateral Process Paused, and What Action Governments Should Take rather than Wait
by
Priya Shetty Global Health Consultant, Brighton, UK
Danny Edwards Council on Health Research for Development (COHRED*), Geneva, Switzerland
Carel IJsselmuiden COHRED, University of KwaZulu-Natal, Pietermaritzburg, South Africa
There are some problems in global health that seem so intractable as to defy solution: one of these is the flawed model of research and development (R&D). Developing new drugs and vaccines is so expensive that a market-based system simply cannot support the millions of dollars needed in investment when these medicines are being developed for people who cannot afford costly drugs and are without health insurance.
For a while in 2012, it seemed as if the world would see a much-awaited R&D treaty that would revolutionise funding of global health research. This time, it also looked like the pharmaceutical industry was on board, a major coup considering that the business goals of industry are often not in alignment with ensuring that the world’s poorest have access to cheap medicines. But hopes were dashed when the idea was once again placed on the backburner until 2016, a decision reached in May 2013 at the 66th World Health Assembly in response to the report of the Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG).
Many in global health saw this as enormously disappointing news, and with good reason. The restrictions of intellectual property laws still limit the production of generic medicines, and gains in access to generic drugs are under constant threat of reversal, particularly for the most costly drugs. Despite the launch of ventures such as the Drugs for Neglected Diseases Initiative (DNDi), neglected diseases such as trachoma and Buruli ulcer still garner pitiful amounts of attention, and even less funding. Last year, with the exception of the USA, high-income country governments cut their funding for neglected diseases by an average of 20%.
Under pressure to take some action after the multilateral process stalled, governments agreed to create a Global R&D Observatory to improve monitoring and evaluation of health research financing, and to identify “demonstration projects“to test mechanisms for boosting global R&D financing. These projects should help us understand better what sort of incentives - such as an R&D prize fund - could entice researchers to target particular R&D goals.
However, the eight demonstration projects that were chosen a year later, last December, left many, especially civil society and NGOs such as MSF underwhelmed. The criteria for selecting the projects were revealed so close to the meeting as to leave no time for critique or input, and while the projects seem entirely robust scientifically, they did not yet prioritize testing price-delinkage mechanisms - yet the fact that the high cost of R&D is linked to the price of the final product is central to the reason that the current system is broken. Demonstration projects that fall closely in line with the existing system will only prove a circular argument – that if a project is designed to work within the current system, it will succeed. Yet this is far from what is needed. These considerations are without prejudice to a just approved resolution by the 67th WHA that allows WHO to establish a pooled fund for sustainable R&D for developing countries, based upon delinking drug prices from the cost of the R&D.
Worryingly, it seems there is a real possibility that, in 2016, we will be no closer to understanding how to devise a global R&D treaty, and that the demonstration projects will have revealed very little about radical and innovative ways to fund global R&D, especially for health problems faced by those with fewest resources. Other commentators have variously described the process as a ‘non-event’, that is ‘based on flawed logic’, and will ‘waste time and money’.
The multilateral process to develop an R&D treaty failed for many reasons. A key explanation is that two of the biggest global R&D funders, the USA and the European Union, were opposed to the financial reform aspects of the treaty, which would demand fixed contributions of GDP towards R&D from member states and would ensure that 20% of this funding is channeled through a pooled funding mechanism. Other major criticisms centered on the absence of any serious engagement with civil society or NGOs, and more critically, on the heavy-handed involvement of the pharmaceutical industry and its attempt to co-opt the R&D agenda, although it is perhaps not surprising that the pharmaceutical companies would not wholeheartedly support a treaty that proposed radical reform in how it does business.
All of this suggests that it is time for the global health community to be bolder in how it deals with this issue. WHO member states are understandably conservative when it comes to international agreements, and agreeing on a treaty that is acceptable to all is not an easy task. But the world has proven that when it wants to, such as in enforcing stricter tobacco control, it can be both co-operative and innovative.
Despite the somewhat dispiriting lack of action at the international level, there are significant actions that low and middle-income countries (LMICs) themselves can take – and indeed are already taking – to push for a better R&D system.
For instance, several new financing mechanisms, with control firmly in the hands of LMICs, are being floated. Recently, a BRICS Bank was created which would fund infrastructure and sustainable development in LMICs. Now, BRICS countries have agreed to fund the bank with $100 billion, which could weaken the dominance of funding agencies such as the World Bank in global aid. BRICS partnerships and South-South partnerships are starting to flourish too, with India and Israel setting up a joint US$40 million fund for technology ventures, with each country investing US$20 million over 5 years.
Many LMICs are still struggling to finance indigenous R&D, however, and several are failing to meet continental declarations of intent such as the African Union target of 1% of GDP on R&D. Relying on external aid, however, means that countries risk loss of autonomy in setting their research agenda. At COHRED’s 2013 Colloquium in Geneva, participants suggested that LMICs set up dedicated national research funds (NRFs) as a way of ensuring that research funding is disbursed in accordance with explicitly linked local priorities. South Africa set up such a fund in 1998. Indonesia, currently in the midst of radical science and technology reform, is planning to set up a NRF, as are many African countries such as Burkina Faso, Burundi, Ghana and Kenya.
The possible benefits of such an approach are numerous. It can fund systematically, ensuring that research funds do not dry up halfway through a project: a perennial issue in low-income countries. It can raise research quality by instituting a competitive process based on merit, meaning that funding does not go to only the well connected. It can fund institutional and management capacity, areas less popular with international funders. It can be aligned with national research agendas, ensuring funded research accords to country need as is the case in most high-income countries. Even though allocating a percentage of a low national budget will not immediately replace the need for global health research funding, it directly supports LMIC autonomy in setting their own priorities and setting the tone and direction of their own research and innovation systems.
For the least-developed countries, other events also indicate that the time is right to build R&D infrastructure. On 11-12 June last year, the World Trade Organization (WTO) Council on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), agreed that least-developed countries do not have to comply with the global intellectual property rights framework for a further eight years beyond 2013. This provides them greater freedom to build up their technological base (as India did before WTO accession in 2005) and the policy space to experiment with alternative models for incentivising R&D.
In the next two years, LMICs may make significant strides in pushing their own R&D models, but it is clear that a radical re-think of how we fund, and how we incentivise R&D is needed if we are to get drug development for diseases of poverty resourced. It is evident that processes run entirely by member states are too often mired in politics as to be actionable. A bold new strategy requires new perspectives, especially from those outside of the system, including the voice of NGOs and civil society – if progress in R&D is to result in greater access and health equity. This is why LMICs should take the lead and not wait for international treaties to arrange what they can start and fund at home.
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*COHRED, the Council on Health Research for Development, is a global, non-profit organisation whose singular goal is to maximize the potential of research and innovation to deliver sustainable solutions to the health and development problems of people living in low and middle-income countries