Press release |

Statement on the WTO / WHO on Differential Pricing & Financing of Essential Drugs

Høsbjør, 11 April 2001 — Representatives of the five non-governmental organizations (NGOs) who participated in the three day WHO / WTO Workshop on Differential Pricing & Financing of Essential Drugs issued the following joint statement on the goals, proceedings, and outcome of the workshop.

The WHO/WTO workshop provided a new forum for health and trade experts to come together to work on eliminating trade barriers to long-term, affordable drug access. However NGOs expressed disappointment about the fact that no real progress was made to bring drug prices for essential drugs in developing countries down.

NGOs present at the meeting stressed that one proven effective way to bring prices down is to increase competition by encouraging generic competition.

In June following an initiative of a group of African countries a special session of the WTO TRIPS Council will be devoted to health. For the first time countries will discuss how the requirements of the TRIPS Agreement can be reconciled with health needs in developing countries. NGOs will work together to ensure that their proposals voiced at this workshop in Norway are addressed at the upcoming WTO TRIPS Council meeting in June 2001 in Geneva. These proposals include a call on the TRIPS Council to extend the deadline for the least developed countries to comply with the TRIPS Agreement and to design mechanisms ensure R&D for neglected diseases in developing countries. Comments on the Meeting – Progress & Frustration

  • A diverse group of stakeholders including rich and poor country governments, multilateral UN agencies, multinational pharmaceutical companies and generic drug companies, and NGO representatives gathered to discuss whether differential pricing of essential drugs could be used as a tool to expand access in developing countries while preserving incentives for future drug development.
  • The meeting focused on differential pricing, which the NGOs feel can be a crucial tool to help broaden access to affordable medicines in developing countries. But differential pricing mechanisms cannot come with onerous conditions attached, such as forcing poor countries to surrender their rights guaranteed under the TRIPS agreement.
  • Besides differential pricing, other tools -— such as voluntary licensing, compulsory licensing, and parallel importing – are available to help broaden access to affordable medicines.
  • After 2 ½ days of discussion not a single company disclosed plans to actually implement differential pricing for their drugs. Current offers for AIDS drugs are ad hoc, inadequate, and still far below the prices that can be obtained from generic manufacturers. CPT’s Jamie Love said, “It’s ironic that in a meeting organized to help the poor, the main drug company proposals were to increase intellectual property protection and ask for the elimination of national price controls. At one point, Oxfam actually offered to give the industry a grant, since they were pleading poverty.

The Way Forward -- Global Access to Essential Medicines

The NGOs issued a series of recommendations to enhance research and development (R&D) and to ensure that intellectual property (IP) protection, serves public health needs rather than the reverse.

The NGOs stressed that there is no single solution; rather, a mix of mutually supportive strategies will be required to assure dramatically reduced drug prices in developing countries. Policies to achieve this goal should:

  • be sustainable and not be solely based on charity or donations
  • strengthen developing countries’ autonomy
  • attract donor funding, and
  • include all essential medicines and should not be limited to drugs for HIV/AIDS and related conditions only.

Greater Competitiveness Helps Lower Drug Prices     

MSF’s Ellen ‘t Hoen made the following proposals at the meeting:

  • Equity pricing strategies should not depend solely on voluntary offers by the multinational drug firms. Hitherto, most drug companies have preferred low-volume-high price strategies. Equity or differential pricing should be combined with mechanisms to increase competition and encourage sustainable approaches. For example, it should not have a negative effect on the development of a generic industry in the South.
  • One proven effective way to decrease drugs prices is to increase competitiveness:
    • In Brazil, antiretroviral prices for certain anti-HIV drugs came down by 82% within five years after Brazil initiated local production and provided universal free HIV treatment to Brazilians who needed it.
    • Recent offers from generic producers have sparked a price war for antiretrovirals and have brought the annual price for triple therapy down from $10,000 to $350 in a single year.
  • The need for competitive markets will require flexibility in implementation and a pro public health interpretation of the TRIPS agreement. The NGOs welcome a special TRIPS Council meeting as proposed by a group of African countries and which will take place in June 2001.
  • Global procurement strategies and funding should include measures to increase and upgrade generic production in the south.
  • Voluntary licensing and compulsory licensing can help increase the number of generic producers in the market.
  • Voluntary licensing agreements have the added advantage that they would effectively deal with the companies’ fear that low-priced drugs in developing countries might flow back into high income country markets.

Research & Development

  • The NGOs called for a new global Convention on research & development, designed to strengthen both public- and private-sector research. At every gathering to discuss access to medicines, the big pharma companies raise the specter that any effort to help the poor will harm R&D. Some claim proposals to lower drug prices in developing countries, including the use of compulsory licensing of patents on essential medicines, may lower their profits. The idea of the Convention is to create new mechanism to boost global R&D funding in ways consistent with access to medicines and health needs by encouraging research on neglected diseases. Country support for R&D funding could take a variety of forms, including publicly funded R&D, mandatory R&D requirements for companies, or the big pharma solution, which is high levels of patent protection and high prices.
  • The NGOs will ask the World Health Assembly in May to request the WHO to convene the negotiations by the end of the year.
  • The NGOs noted with interest the proposal by Jeffrey Sachs of Harvard University, who addressed the workshop by video uplink, for a global infectious disease prevention and treatment fund which would pool resources from rich countries to provide access to low-cost drugs for HIV/AIDS, tuberculosis, and malaria. However, they opposed any effort to link the endowment of such a fund to conditions such as the surrender by developing countries of their rights under TRIPS to utilize compulsory licensing, parallel imports, and other mechanisms to assure sustainable access to low priced, high quality essential medicines.
  • The NGOs will continue working to support the development of an effective, long-term, sustainable, global strategy and a drug procurement and distribution system to provide affordable drugs for people with HIV/AIDS in developing countries.