By Líbhan Collins, Key Correspondent for the Irish Forum for Global Health
US-based Health Economist James Love delivered the keynote address at the Access to Medicines Ireland (AMI) 3rd annual conference on April 16, 2019. As Director of Knowledge Ecology International (KEI), a for-profit NGO, he advises UN agencies and governments about KEI-based research centred largely on public interest advocacy.
An area of great interest for Love, for several years, has been the staggering cost of drugs, and the large percentage of the global population who lack access to treatments they need, such as those with HIV, cystic fibrosis or melanoma.
Illustrating the extent of the crisis, Love presented to delegates a sample invoice for breast cancer treatment in the US. The cost amounted for a single year of treatment to $470,427. Even though this can be subsidised or partially reimbursed, it does not take away from the exorbitant costs facing those who are presented with a life or death ultimatum by nature of their condition. High prices, of course, mean that there is inequality of access to medicines facing many patients.
Taking a very realistic and pragmatic approach, Love examined how treatment plans could play out, if rather than using a patient’s coverage as the hostage, the patent monopoly was held hostage in negotiations related to drug prices between governments and industry.
Monopolies, by their nature, demonstrate disproportionately high control in the marketplace and this is offered to them, in part, by virtue of the investments by industry in Research and Development. Love emphasised that high prices and limited access were not the only option. Monopolies, he said, were not efficient, with outcomes from Research and Development often matching previous drugs, but not improving upon them. They are also unfair, unnecessary and at odds with overall policy coherence.
It is easy to accuse industry practices of being unfair and inefficient, but what sets Love’s ideas apart is the realisation that these monopolies are not necessary in quality drug production. Issuing compulsory licencing on patents is one thing that has the potential to make a difference, but reform of the system over time is what will have the greatest long-term impact, said Love.
Similar to the telecommunications industry—which has moved from a model of widespread charges to now fixed rates for unlimited access to a network—drugs can be made subject to high prices for initial development, but once we know what works, the manufacture of those drugs does not have to be as costly as it is made out to be.
The invoice given to patients for treatment is also financing innovation, and Love does not see this as a sustainable process: “any compromise between innovation and fairness leads to a bad place.”
It is not feasible or in any way sustainable to continue under the current model.
Governments often fund and offer subsidies for research and yet, for example, can pay anything up to €100,000 for a drug that only costs €100 to manufacture. Often this price is not related to the science or innovation behind it, or even the therapeutic value of the product. Delinkage is the way forward, meaning that the cost of the product and the cost of Research and Development (R&D) are separated. Love maintains that incentives for research and innovation should be also be de-linked from the cost of the drug. Throwing money at innovation is not efficient.
The goal of progressive de-linking is to implement reforms over time that sequentially and progressively move prices closer to affordable generic prices. Incentives to innovation can be altered in a way that rapid developments in drug design are not compromised. One such incentive is a market entry reward which gives payouts based on evidence of efficacy of a treatment benchmarked against existing treatments. Through this system, drugs with significant improvements in quality and orphan drugs will get funded rather than drugs which are on par with existing treatments. Love calls on governments to become better negotiators. Greater transparency on the costs of production internationally will allow governments to work together, both to lower costs and to put the pressure back on companies.
In recognising that de-linking is a process easier said than done—particularly in the Irish context where big pharma and biotech companies are large employers—existing barriers were not cause for ending the quest for affordable drugs. Love challenged how governments can move past the current stranglehold that has them stuck on this point, concluding that through the use of a transition strategy – which he outlined in detail to delegates, governments can, over a period of years work their way to a healthier relationship with drugs access. The strategy begins with capping exclusive rights at 15 years, with some use of compulsory licensing and the introduction of a market entry rewards fund. On year two of this strategy, exclusive rights to a product are to be capped at 14 years with market entry rewards increased. Carrying on in this fashion of shrinking monopolies progressively over a 15-year period would eventually allow only market entry rewards.
Drug access, currently, is a bad business model where patients bear the brunt of the costs and are held hostage by big pharma. Love made a strong argument for a new way forward, where those who need drugs, get drugs. De-linking medicinal drugs from high costs and implementing a transition strategy to incentivise R&D has huge potential to indeed hold up that promise.