TWN Info Service on Health Issues (Apr19/05)
22 April 2019
Third World Network

WHO: No “Fair Price” without access and transparency, say CSOs

Geneva, 19 April (TWN): A joint statement signed by 64 civil society organizations (CSOs) stated that there cannot be fair prices of medicines without affordable access and transparency of research and development (R&D) outlays, manufacturing costs, and pricing decisions.

The statement was issued on 10 April on the occasion of the World health Organization’s second Fair Pricing Forum (11-13 April) in Johannesburg, South Africa. The event was organized in cooperation with the Government of South Africa.

According to the WHO, the Forum “aimed to provide a global platform for frank discussion among all stakeholders – including governments, civil society organizations and the pharmaceutical industry – in order to identify strategies to reduce medicine prices and expand access for all.” The First Fair Pricing Forum was held in the Netherlands in 2017.

“A medicine price cannot be considered fair if people or the government cannot afford it,” declares the CSO statement. It further states that the lack of affordability “would compromise human rights including the right to life, the right to enjoy the benefits of scientific progress and its applications, and the right to health.”

Further, the statement also stresses: “Transparency is required throughout the R&D process from the start of basic research to the final delivery of medical products to patients. Some governments and most pharmaceutical corporations try to justify high prices by citing the need to recoup R&D outlays. Yet, pharmaceutical companies refuse to provide details of these R&D outlays and of related support from the public and charitable entities.”

The statement also points out that “some governments and pharmaceutical companies are actively opposing various efforts at enforcing greater transparency (as per various bills in the United States and a transparency proposal from the Italian government to be considered at the upcoming May 2019 World Health Assembly).”

[Italy has proposed a draft resolution for the consideration of the World Health Assembly. Among other things, the draft resolution urges that WHO Member States: “Requires as a condition of registration for drugs and vaccines annual reports on (a) sales revenues; (b) prices and quantities, outlays on marketing; (c) R&D costs including enrolment and outlays on each clinical trials separately; (d) grants, tax credits, grants or any other public sector subsidies and incentives relating to the development of the product”.

It also requests the Director-General of WHO, among other things, “to collect and analyse data on health technologies of public health importance including but not limited to (a) actual cots on R&D of specific drugs and vaccines including the enrolment and cost of individual clinical trials; (b) actual manufacturing cost of specific drugs and vaccines; (c) manufacturing know-how; (d) the landscape of patents, including information about disputes about the validity and/or relevance of asserted patents”.]

CSOs rejected WHO’s definition of Fair Price used in the Roadmap for Access to Medicines, vaccines and other health products (EB 144/17)”. The WHO definition states that a “Fair price is one that is affordable for health systems and patients and that at the same time provides sufficient market incentive for industry to invest in innovation.”

According to the statement, this definition has the following major drawbacks:

  • It does not require transparency of R&D costs and price setting decisions. This means that the public will still have to trust pharmaceutical companies’ price setting;
  • It does not account for the substantial role of the public sector in funding R&D. This must be considered in defining fair prices to ensure the public does not pay twice, and receives a public return on public investments;
  • It pre-supposes that R&D is always to be paid for through end prices of medicines. The definition thus excludes development models based on the principles of de-linkage, in which R&D would be incentivized through grants, subsidies and innovation inducement prizes, rather than monopoly-based high prices.

The WHO statement issued at the conclusion of the second fair pricing forum quoted Dr Mariângela Simão, WHO Assistant Director-General for Medicines and Health Products: “Medical innovation has little social value if most people cannot access its benefits … This is a global human rights issue – everyone has a right to access quality healthcare.”

According to the WHO statement, “The affordability of medicines has long been a concern for developing countries, but today it is also a global one. Each year, 100 million people fall into poverty because they have to pay for medicines out-of-pocket”. It states that the high-income countries are also facing the problem of access to medicines due to high prices and forced “to ration medicines for cancer, hepatitis C and rare diseases”.

A WHO press release stated that the organization would launch an online consultation in the coming week to collect views and suggestions for a definition of what actually constitutes a ‘fair price’ from relevant stakeholders.+