Revising Current Incentives and Regulation for New Health Technologies
Panel
Panel 8: Innovation in Pharmaceutical R&D
Moderator
Brett Taylor, Assistant Professor, University of the Pacific, Gladys L. Benerd School of Education
Description
Regardless of the significant medical advancements and efforts in harmonizing intellectual property rights standards of protection, innovation and incentive mechanisms are needed more than ever to address new health threats and drug resistant -antimicrobial resistance (AMR). Recent outbreaks denoted the lack of preparedness countries face when dealing with health emergencies. Developing a vaccine for e.g. Zika and the access to this, points out the other factors related to access, e.g. affordability –price; and incentives for R&D. While patents are said to provide sufficient incentive to prompt R&D of new medicines or health technologies, this system has also been highlighted as the reason jeopardizing access to top of the line medicines due to high prices.
This presentation reviews two important models currently use to prompt and finance R&D in the pharmaceutical sector - e.g. public private partnerships (PPP), and the EU Orphan Drug scheme. By revisiting these two particular trends it is expected to draw a few conclusions on the limits posed by regulatory incentives and the challenges to overcome by a new side system of incentives. The current model is failing for several reasons, among them because relying on patents and regulatory exclusivity is associated to pricing power (Abbott, 2018), which translates in unaffordable medicines. Thus, PPP come into the spotlight as a model to review in terms of incentives for R&D, and benefits to society.
In terms of the EU Orphan Drug Scheme,1 its success in achieving innovation within the EU is based on the regularity incentives portrayed by it. Achieving Orphan Drug status represents an additional set of benefits for the pharma company developing the drug. For instance, 10 years of market exclusivity,2 speeder procedure to obtain the MA, additional aid to support drug development, and exemption of fees related to protocol among others. This designation, is not exempt from abuses, allegedly the pharmaceutical industry has used orphan drug designations strategically to gain position in the market both in the EU and US. (Nakov, et. al 2016, and Prescrire 2015), nevertheless, its regulation has allowed the pharmaceutical industry to foster innovation in a field where only a very low percent of the population is treated.
Affordability, has been at the top of the discourse questioning the patent system (Cadillo, 2016, and HLP Report, 2016). The cost of R&D, and overall needed innovative medicines has been largely discussed in both in the USA and the EU. In 2018 the EU Expert Panel on Effective Ways of Investing in Health, prompts delinking R&D from sales and stressed the importance in finding alternative models to finance R&D for actually needed3 medicines and not the so call me-too drugs. Similarly, the Council of Economic Advisers from the United States, in a report revisited and questioned the correlation high prices vs innovation. Thereafter, concluding that “reducing American prices and stimulating innovation4” needed to be achieved. Clearly, delinking costs associated to R&D from the end price needs to be done. Thus, this presentation is a first step within a larger project (INHEALTH)5 to find alternatives that translate in plausible effective solutions to contribute with the current narrative.
Location
Pacific McGeorge School of Law, Lecture Hall, 3200 Fifth Ave., Sacramento, CA
Revising Current Incentives and Regulation for New Health Technologies
Pacific McGeorge School of Law, Lecture Hall, 3200 Fifth Ave., Sacramento, CA
Regardless of the significant medical advancements and efforts in harmonizing intellectual property rights standards of protection, innovation and incentive mechanisms are needed more than ever to address new health threats and drug resistant -antimicrobial resistance (AMR). Recent outbreaks denoted the lack of preparedness countries face when dealing with health emergencies. Developing a vaccine for e.g. Zika and the access to this, points out the other factors related to access, e.g. affordability –price; and incentives for R&D. While patents are said to provide sufficient incentive to prompt R&D of new medicines or health technologies, this system has also been highlighted as the reason jeopardizing access to top of the line medicines due to high prices.
This presentation reviews two important models currently use to prompt and finance R&D in the pharmaceutical sector - e.g. public private partnerships (PPP), and the EU Orphan Drug scheme. By revisiting these two particular trends it is expected to draw a few conclusions on the limits posed by regulatory incentives and the challenges to overcome by a new side system of incentives. The current model is failing for several reasons, among them because relying on patents and regulatory exclusivity is associated to pricing power (Abbott, 2018), which translates in unaffordable medicines. Thus, PPP come into the spotlight as a model to review in terms of incentives for R&D, and benefits to society.
In terms of the EU Orphan Drug Scheme,1 its success in achieving innovation within the EU is based on the regularity incentives portrayed by it. Achieving Orphan Drug status represents an additional set of benefits for the pharma company developing the drug. For instance, 10 years of market exclusivity,2 speeder procedure to obtain the MA, additional aid to support drug development, and exemption of fees related to protocol among others. This designation, is not exempt from abuses, allegedly the pharmaceutical industry has used orphan drug designations strategically to gain position in the market both in the EU and US. (Nakov, et. al 2016, and Prescrire 2015), nevertheless, its regulation has allowed the pharmaceutical industry to foster innovation in a field where only a very low percent of the population is treated.
Affordability, has been at the top of the discourse questioning the patent system (Cadillo, 2016, and HLP Report, 2016). The cost of R&D, and overall needed innovative medicines has been largely discussed in both in the USA and the EU. In 2018 the EU Expert Panel on Effective Ways of Investing in Health, prompts delinking R&D from sales and stressed the importance in finding alternative models to finance R&D for actually needed3 medicines and not the so call me-too drugs. Similarly, the Council of Economic Advisers from the United States, in a report revisited and questioned the correlation high prices vs innovation. Thereafter, concluding that “reducing American prices and stimulating innovation4” needed to be achieved. Clearly, delinking costs associated to R&D from the end price needs to be done. Thus, this presentation is a first step within a larger project (INHEALTH)5 to find alternatives that translate in plausible effective solutions to contribute with the current narrative.
Speaker Bio
Ph.D, Dhanay María Cadillo Chandler is a Post-Doctoral Researcher at the Turku Institute of Advanced Studies (TIAS), and a Post- Doctoral Researcher at the Faculty of Law. She collaborates with the Academy of Finland funded Project Constitutional Hedges of Intellectual Property (CONST-IP) http://const-ip.utu.fi/. She is a lawyer graduated from MonteÁvila University (Venezuela). Additionally she obtained a Master Degree in Foreign Trade from Universidad Carlos III de Madrid (Spain), and her Ph.D in 2014 from Hanken School of Economics (Finland).
In her current position, Cadillo Chandler, addresses the need to re-evaluate the current incentives to prompt pharmaceutical innovation while at the same time regulating new health technologies. During her time at the CONST-IP project, her research has focused on the intersection and overlap of patents and other regulatory incentives hedging intellectual property rights. Cadillo Chandler’s research interests include human rights, corporate social responsibility, intellectual property rights, international trade, traditional knowledge. All areas of expertise where she has published taught in several Universities in Finland and abroad.