Japan Claims There Is No Evidence That “Delinkage” Improves Medicines Access

Japan said on Friday that it disagrees with aspects of an already-adopted Human Rights Council (HRC) resolution on access to medicines, claiming that there is no evidence that “delinkage” between the cost of research & development (R&D) and the price of medicines improves access to medicines. Japan also disagreed with pursuing alternative frameworks for R&D incentives, which it said disregards existing R&D frameworks.

These and other provisions had been previously criticised by other developed countries during the informal consultations on the resolution as treading too far out of the Human Rights Council domain and into the technical ground of other UN agencies such as the World Health Organization, the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO), where such debates are already taking place.

During Friday’s closing session of the HRC, Switzerland, on behalf of Australia, Canada, the Czech Republic, France, Liechtenstein, Slovakia and the United Kingdom, said: “While the Human Rights Council can consider the right to the enjoyment of the highest attainable standard of health, it lacks the necessary technical expertise and competence to address the full complexity thereof.”

Debates abound regarding the best way to create incentives for research and development of new medicines and vaccines while ensuring that the resulting products are widely affordable. Some member states in the HRC see this as a technical matter, while others see it as a human rights imperative.

Delinkage is one model that, according to its proponents, can help to ease the tension between drug innovation and accessible pricing. It refers to delinking R&D incentives from the expectation of receiving exclusive patent rights for the final product, which critics say create monopolies that drive up prices. Delinkage, rather, offers alternative financial incentives to invest in the research and development of new medicines and vaccines. Such incentives may include cash rewards for new innovations that emerge from the drug pipeline, as well as upfront funding in the form of public subsidies, grants, research contracts, or offers of tax credits.

Human Rights Council – Photo: Reuters/Denis Balibouse

Knowledge Ecology International (KEI), a leading NGO promoting access to medicines, describes delinkage as “the idea that temporary monopolies and the associated high drug prices should not be used to fund pharmaceutical research and development.”

The day before Japan’s and Switzerland’s comments, on 11 July, the Human Rights Council passed the resolution on “Access to medicines and vaccines in the context of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health,” which was sponsored by the “core group” of Brazil, China, Egypt, India, Indonesia, Senegal, South Africa and Thailand, and cosponsored by 45 other countries.

Japan explained during Friday’s session of the HRC that it joined the consensus of member states to adopt the resolution “given the importance of access to medicines and vaccines,” but it raised concern that the resolution does not accurately reflect the opinions expressed during the informal consultations with member states, and that it does not appropriately take into account relevant technical discussions occurring at the WHO, the WTO and WIPO.

In the statement, Japan expressed disagreement with paragraph OP5 on delinkage, claiming that “there has been no evidence found to prove that delinkage between the cost of R&D and the price of medicines will improve access to medicines.”

Japan further disagreed with paragraph OP8 on alternative frameworks to reward innovation because “it disregards existing frameworks,” and because a “common understanding on an alternative framework does not exist.”

Japan’s comments regarding delinkage and alternative R&D frameworks follow intense debate among member states at the recent World Health Assembly in May, over a resolution on the transparency of medicines markets. This landmark resolution primarily focused on enhancing the transparency of medicines prices, and due to the intense negotiations, included only watered-down provisions on R&D cost transparency, which emphasised the voluntary nature of such disclosures.

KEI Says Monopolies Cause High Prices, Calls For Delinkage From Monopolies

James Love, Director of Knowledge Ecology International (KEI), a leading NGO promoting models for delinkage, responded to Japan’s statement at the HRC, saying that monopolies cause high prices, and high prices limit access.

“There is certainly plenty of evidence that temporary legal monopolies, such as patents, pediatric, orphan drug or test data exclusivity, lead to high prices,” Love told Health Policy Watch.

There is also “plenty of evidence that when monopolies end, prices fall, dramatically, more than 95 percent for small molecules in the United States, and access expands. Anything that delinks the incentives from the monopoly and high prices is going to expand access, in some cases very dramatically,” he said.

Regarding the definition of delinkage, Love clarified that there is “of course, not much of a direct link between R&D costs and prices, but that is not the point. The monopoly is the primary incentive to invest in R&D, and that incentive is very clearly and very strongly linked to higher prices.”

“As regards evidence, Japan was one of a handful of countries that is seeking to block transparency of R&D costs, so complaining about the lack of evidence is not a good look for Japan, as long as they oppose transparency of R&D costs.”

“The real issues for delinkage,” Love explained, “are (1) how would alternatives be designed, (2) what would they cost, (3) what would be the progressive transition from the status quo, (4) how would they be evaluated, for example, in a feasibility study?”

Love noted that KEI and others including economist Joseph Stiglitz and US Members of Congress are calling for a balanced delinkage regime – one that “includes expanded government funding and subsidies for research, and new market entry rewards to replace the monopoly as the incentive mechanism.” In such a balanced regime, “[d]ifferent governments could embrace different approaches on delinkage, just as they do on pricing and intellectual property policies today.”

“To move the delinkage debate forward,” he said, “there needs to be more transparency, an issue that the World Health Assembly has advanced and other UN bodies are debating, on the entire value chain for medical innovations, including R&D costs, prices, revenues, access and outcomes. There also needs to be clear specifications of the alternatives, including the transitions from the status quo.”

“What you see in these UN debates are efforts to block any questioning of monopolies, and even feasibility studies of alternatives. If Industry did not think alternatives would work, and work better for the public, they would not oppose the feasibility studies.”

Japan detailing concerns on 12 July regarding aspects of the adopted Human Right Council resolution on access to medicines and vaccines. Photo: UN Web TV

Japan Narrowly Interprets Intellectual Property Flexibilities, Disagrees Over HRC Intersessional Seminar

In addition to its concerns over delinkage and alternative frameworks to reward innovation, Japan also disagreed with paragraph PP24 in the preamble, which affirms the rights of states to flexibly apply intellectual property rules. These intellectual property “flexibilities,” enshrined in the WTO TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement and its amendments, allow states to override patents and legally manufacture affordable generic versions of patented drugs for the purposes of protecting public health.

Japan described the resolution paragraph affirming the use of these flexibilities by states as “misleading,” and that intellectual property flexibilities such as compulsory licensing of patented drugs “is possible only under certain conditions.”

Lastly, Japan disagreed on the final paragraph OP14 to hold a full-day HRC intersessional seminar “on good practices, key challenges and new developments relevant to access to medicines and vaccines,” because a similar discussion is already being led by the WHO; relevant technical organisations such as the WTO are not being included; and such a seminar has “program budget implications.”

Despite Japan’s complaint about the intersessional seminar, it will proceed as planned and as outlined in the resolution, according to sources.

Image Credits: Reuters/Denis Balibouse, UN Web TV.

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