TWN Info Service on Intellectual Property Issues (Apr12/01)
16 April 2012
Third World Network

Binding agreement on South's technology needs recommended
Published in SUNS #7350 dated 16 April 2012

New Delhi, 13 Apr (K. M. Gopakumar) -- A World Health Organisation experts' group has recommended a new binding agreement for financing and coordination mechanisms to meet the health technology needs of developing countries.

The Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) stated in its report that the focus of the proposed agreement is the development of health technologies for Type II and Type III diseases as well as the specific needs of developing countries related to Type I diseases.

The CEWG was appointed by the 63rd session of the World Health Assembly (WHA) in 2010 in response to concerns that insufficient resources were being devoted globally to research and development (R&D) to address diseases that principally affected developing countries.

This followed agreement in 2008 on the global strategy and plan of action on public health, innovation and intellectual property (GSPA-PHI) which aimed "... inter alia, at securing an enhanced and sustainable basis for needs-driven, essential health research and development relevant to diseases that disproportionately affect developing countries."

This was a follow up to the report of the Expert Working Group on Research and Development: Coordination and Financing (EWG) that was appointed by the WHO Director-General based on a decision of the WHA in 2008.

The CEWG was tasked with the following terms of reference: (a) take forward the work of the EWG; (b) deepen the analysis of the proposals in the EWG report, and in particular: (i) examine the practical details of the four innovative sources of financing proposed by the EWG in its report, (ii) review the five promising proposals identified by the EWG in its report, and (iii) further explore the six proposals that did not meet the criteria applied by the EWG; (c) consider additional submissions and proposals from WHO Member States, any regional and subregional consultations, and from other stakeholders; (d) in carrying out the actions in subparagraphs (b) and (c) above, examine the appropriateness of different research and development financing approaches and the feasibility of implementation of these approaches in each of the six WHO regions, with subregional analysis, as appropriate; (e) observe scientific integrity and be free from conflict of interest in its work.

[A decision of the 2008 WHA requested the WHO Director-General "to establish urgently a results-oriented and time-limited expert working group to examine current financing and coordination of research and development, as well as proposals for new and innovative sources of funding to stimulate research and development related to Type II and Type III diseases and the specific research and development needs of developing countries in relation to Type I diseases, and open to consideration of proposals from Member States, and to submit a progress report to the 62nd WHA and the final report to the 63rd WHA through the Executive Board. However, Member States were not satisfied with the report of EWG and thus constituted the CEWG.

[Type I diseases are incident in both rich and poor countries, with large numbers of vulnerable populations in each. Type II diseases are incident in both rich and poor countries, but with a substantial proportion of the cases in poor countries. Type III diseases are those that are overwhelmingly or exclusively incident in developing countries.]

The CEWG recommends that negotiations on the binding agreement should take place under Article 19 of the WHO Constitution, whereby the Health Assembly shall have the authority to adopt conventions or agreements with respect to any matter within the competence of the organization. A two-thirds vote of the Health Assembly shall be required for the adoption of such conventions or agreements, which shall come into force for each Member when accepted by it in accordance with its constitutional process.

The CEWG lists elements of the binding agreement in order to provide a framework for the negotiation process, viz. objectives, financing and coordination.

The elements of Objectives are as follows: Implementing states' obligations and commitments arising under applicable international human rights instruments with provisions relevant to health; Promoting R&D for developing new health technologies addressing the global challenges constituted by the health needs of developing countries by means which secure access and affordability through de-linking R&D costs and the prices of the products; Securing sustainable funding to address identified R&D priorities in developing countries; Improving the coordination of public and private R&D; Enhancing the innovative capacity in developing countries and technology transfer to these countries; Generating R&D outcomes as public goods, freely available for further research and production; Improving priority-setting based on the public health needs of developing countries and decision-making relying on governance structures which are transparent and give developing countries a strong voice; Core elements under the convention should focus on development of health technologies for Type II and Type III diseases as well as the specific needs of developing countries related to Type I diseases.

The elements on Finance are as follows:

* All countries should aim to achieve specified levels of public funding on health R&D relevant to the needs of developing countries;

* Countries could fulfil their financial commitment through contributions to a financing mechanism established under the convention, in combination with domestic spending on R&D undertaken to attain the convention's objectives, or through development assistance where applicable;

* A financing mechanism should be established on the basis of contributions by governments. The convention may determine a level of contribution, taking account of countries' own investments in relevant R&D, either domestically or in other countries. We (CEWG) have suggested a contribution of 20-50% of their total funding obligation to a pooled funding mechanism;

* Such financing may be generated from existing taxpayer resources, from new national revenue-raising measures, or by channelling a portion of the resources raised from any new international mechanism to this purpose. Voluntary additional public, private and philanthropic contributions to a pooled funding mechanism can also be envisaged;

* The convention and its financing mechanisms for the more defined objectives of R&D need to be supportive to the broader context of overall allocation of public financing to health research and the sustainability of financing in other areas of health research;

* The convention should define which research entities in the public and private sectors, in public-private partnerships, and in developed or developing countries, should be eligible for funding;

* Funding should be directed so as to promote cost-effective R&D in ways that will also promote subsequent access to technologies in developing countries, in particular using the tools identified in our (CEWG) report which best meet these criteria, such as open knowledge innovation;

* Funding should also be directed in ways that promote capacity building and technology transfer to the public and private sectors in developing countries.

On the issue of Coordination, the CEWG concludes that a coordination mechanism will be needed which would help to promote, in particular, the objective of "improving Cooperation, participation and coordination of health and biomedical research and development" in Element 2.3 of the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property adopted in 2009.

Further, the coordination mechanism would need to improve the measurement of the volume, type and distribution of relevant R&D and the evaluation of R&D outcomes, particularly so that progress against commitments and compliance could be measured. This will depend in part on data and reports provided by parties to the convention.

Regarding the compliance mechanism, the CEWG states that this needs to be devised, including through cooperation between the Parties to the convention.

As a follow-up to its report, the CEWG makes three recommendations to the Member States to be considered at the upcoming WHA in Geneva.

First, the CEWG proposes two ideas to carry out the preparatory work of the convention: (i) the establishment of a working group or technical committee to undertake the preparatory work on the elements of a draft agreement. This group is to solicit inputs from other Member States, relevant intergovernmental organizations, funders, researchers, private sector, civil society and academics; (ii) the establishment of an open-ended inter-governmental working group with appropriate technical support as in the case of the WHO Framework Convention on Tobacco Control.

Further, the CEWG proposes the establishment of an inter-governmental negotiating body open to all Member States under Rule 40 of WHA's rules and procedures to draft and negotiate the proposed R&D Agreement following on from the report of the working group.

The CEWG also recommends the allocation of sufficient resources to support the working group or technical committee.

Regarding the approaches to R&D, the CEWG recommends "open knowledge innovation and define this research and innovation that generate knowledge which is free to use without legal or contractual restrictions". In this regard, it recommends specifically open approaches to R&D, which includes pre-competitive research and development platforms, open source and open access schemes and milestone prizes.

Regarding the financing of health R&D, the CEWG examined four recommendations of the earlier EWG viz. new indirect tax, voluntary contributions from business and consumers, taxation of repatriated pharmaceutical industry profits and new donor funds. The CEWG concluded that, "some form of taxation is the most fruitful avenue to explore in the search of new and sustainable sources of funding".

Considering the various development needs in mind, the CEWG does not think "one specific new source would or should be devoted to the particular field of health R&D relevance to the developing countries". Instead, it argues that a specific portion of the new source of funding should be devoted to fund both the improvement of health and currently underfunded R&D areas.

The CEWG did not specify any specific form of tax to fund R&D. It states that "countries should first consider at national level what tax options might be appropriate to them as a means of raising revenue to devote to health and R&D". However, the CEWG highlights two possible taxes viz. Financial Transactions Tax and the Tobacco Solidarity Contribution, as a potential new source of funding that could be channelled through international mechanisms to supplement national resources.

The CEWG proposes a new approach to set targets in countries' R&D spending to its GDP. It recommends that "all countries should commit to spend at least 0.01% of GDP on government funded R&D devoted to meeting the health needs of developing countries in relation to the types of R&D defined in our mandate"
i. e. Type II and Type III diseases and the specific research and development needs of developing countries in relation to Type I diseases.

Further, the CEWG makes two more specific recommendations in this regard. First, developing countries with a potential research capacity should aim to commit 0.05-0.1% of GDP to government-funded health research of all kinds. Secondly, developed countries should aim to commit 0.15-0.2% of GDP to government funded health research of all kinds.

On strengthening of the global coordination in health R&D, the CEWG examined current mechanisms and suggests a way forward for better coordination. Towards this end, it proposes a global Health R&D Observatory and advisory mechanisms. The observatory would collect and analyse data regarding the financial flows to R&D, R&D pipeline and learning lessons. The advisory mechanism established by the WHO Member States, should contain the following elements viz. a network of research institutions and funders, and an advisory committee.

The CEWG reviewed 22 proposals mentioned in the EWG report as well as another 22 proposals received as a result of the CEWG call for submissions using a set of criteria. These are: public health impact, efficiency/cost effectiveness, technical feasibility, financial feasibility, intellectual property management issues, de-linking of R&D costs and price of the product, access, governance and accountability and capacity-building.

The CEWG concludes that six proposals meet the criteria. These proposals fall into the following category viz. global framework on R&D, open approaches to R&D and innovation, pooled funds, direct grants to companies, milestone prizes and end prizes, and patent pools.

Some experts view that the novelty of the CEWG report is that unlike the earlier EWG report, the CEWG report clearly lays down a roadmap for a legally binding instrument to address the R&D needs of developing countries in Type II and Type III diseases and the specific research and development needs of developing countries in relation to Type I diseases.

According to observers, the upcoming WHA is expected to lay down the mechanism and a process to take forward the recommendations of the CEWG.