Lives on the Edge

Everyone wants a long and healthy life, free from pain and sickness.
A life that allows them to work and to flourish with their families and in the communities where they live.
We, as medical professionals, are totally committed to this vision — our mission is to bring medical humanitarian aid to those most in need. But we often don't have the tests, the medicines or the vaccines that could make this a reality.

Everyone wants a long and healthy life, free from pain and sickness. A life that allows them to work and to flourish with their families and in the communities where they live.

We, as medical professionals, are totally committed to this vision — our mission is to bring medical humanitarian aid to those most in need. But we often don't have the tests, the medicines or the vaccines that could make this a reality. Unfortunately, patient needs are not driving medical research and development, and the result is millions of lives on the edge.

Our in-depth report, Lives on the Edge, shines a light on the lives damaged by the way pharmaceutical research and development is conducted, and the failure of governments to fix the problem. In many cases,drug corporations have successfully lobbied governments to block reforms or even make things worse.

How could we change things to work better and help ensure everyone can live better, healthier lives?

Part of the answer is found in the story of one remarkable young woman: Phumeza Tisile.

In her own words, Phumeza's testimony shows the incredible odds that patients face when fighting diseases that pharmaceutical corporations have shunned.

PHUMEZA'S FIGHT:
One woman's struggle shows what's wrong with drug development today. And what she did about it.

Photo by: Samantha Reinders/MSF

September 2011
My name is Phumeza , I am 20 years old from Khayelitsha outside Cape Town, South Africa. I was diagnosed with tuberculosis in 2010. The ordinary drugs did not work so then I had to start with the multi-drug resistant tuberculosis drugs. And worst of all, the most painful part is that it got me DEAF!

The Lord sent some angels from Médecins Sans Frontières to give me 2 very expensive drugs, namely linezolid and clofazimine.

January 2012
I have been to hell and back and now that I am strong and I have gained some weight, things are going out badly again. Whether the medication makes you sick and vomit, you just have to live with that. To hell with that. I’m going to beat this thing.

August 2013
It seems impossible until it’s done. Many fellow patients have passed on, but as scary as it was seeing people die I decided to fight through. LOOK AT ME TODAY, I AM CURED!!! No more li’l bastards going down my throat and having a li’l party in my stomach, making me feel horrible.

February 2014
The drug that cured me was called Linezolid [made by Pfizer US ]. A box of 10 tablets cost close to $780, then multiply that by 2 years while taking treatment. It is Luxury!!

Well the drug is not easily available because it is too expensive, here in South Africa it is under patent laws. So those who need the drug the most can’t have access to it, that means lives are being lost. It must not be PROFITS BEFORE PATIENTS like they do with the Patent Laws. These must be fixed so that everyone can have access to life saving drugs easily.

May 2014

I did a manifesto so that we could get a word out there on the things that we as patients demand from the people responsible for giving treatment to whose affected and infected with TB. We talked about the urgent need to reduce the medication, 20+ tablets, medications which makes you even more sick than you already are. Side effects you go through: hallucinations - seeing and hearing things that are not there - psychosis, skin problems, the list goes on.

12 December 2014
Going deaf was a big deal, no matter how much I try to convince myself that it wasn’t. So now I am in the process of trying to get cochlear implants. Hearing again would mean that life is back on "play" again.

I will continue advocating for change. I will keep on letting people, the government and world health leaders know that the current treatment is a nightmare until things change.

As part of her ongoing activism, Phumeza participated in MSF's demand for an affordable generic version of linezolid, one of the drugs that was key to her cure. Thanks in part to her efforts, MSF succeeded in gaining access to generics that cost just $8 a pill instead of Pfizer’s price of $65 per pill. But this one victory only points to the greater need for global, system-wide reforms.

PART 1: DIAGNOSING THE PROBLEM:
Why Big Pharma doesn’t address the needs of poor people and other vulnerable groups

IMAGE: 3-month-old Estelle Mbotkoisse Ngaibena, who is being treated for malaria and pneumonia, receives a health check from MSF's Maria Overbeck. Kare Sponberg/MSF

Low priorities

The pharmaceutical industry judges its own success by how much money it can earn for its shareholders, not how well it addresses people’s health needs. Pharmaceutical corporations prioritise what they will invest in research and development projects based on how much money they will make back, and they charge the highest price possible for their products to maximise their profits. Our governments created this system, and they have the power to fix it.

This money-driven system means that there is no investment in diseases that affect the world’s poorest people, because they cannot afford to pay and do not represent a lucrative market.

And when medicines are produced that could also benefit poor people, high prices often stop them from getting hold of the medicines they need.

 

Fatal Imbalance

The phrase ‘10/90 gap’ was coined more than 25 years ago. It describes the imbalance between what is spent on medical research for health needs of people in developing countries (10% of global funding) and the percentage of preventable deaths occurring in those countries (90%).

This 'fatal imbalance' of how research is targeted remains true today.

Several major pharmaceutical corporations have withdrawn entirely from research into diseases that aren’t considered profitable — these decisions hit people in developing countries hardest.

  • In 2012, Pfizer ended its entire R&D programme into drugs that fight infections.
  • In 2014, AstraZeneca closed its facility in Bangalore ending all early-stage research for tuberculosis, malaria and neglected tropical diseases, before announcing a further withdrawal from anti-infection research in 2015.
  • In 2014, Novartis withdrew from tuberculosis research as part of a corporate restructuring.
  • In 2015, Bristol-Myers Squibb announced that it was closing its anti-viral research operations.

This severe lack of investment into drugs, diagnostic tests and vaccines to meet the needs of people who are primarily affected can’t afford to pay high prices, or who aren’t considered to be a lucrative enough market means that we see many people in our care who are suffering because of this neglect.

This video takes a closer look at the drug industry's 'Fatal Neglect' of our most vulnerable patients.

 

Ebola: Decades of Neglect

Ebola was neglected by drug corporations as long as it only affected poor people in sub-Saharan Africa. One of the world’s most deadly diseases, it is a highly infectious viral haemorrhagic fever that can kill up to 90% of the people who catch it, causing terror among infected communities.

The following timeline tracks the decades from the early 'discovery' research of Ebola to having effective vaccines that could have saved many more lives if this research had been a higher priority.

1976

Ebola is first discovered.
Research and development efforts remain extremely limited for the following decades because the disease is perceived as affecting only poor people in Central Africa.

1990s

Western governments become interested in developing an Ebola vaccine after a defector claims Russia has plans to weaponize a similar virus for use in warheads.

2001

Concern about bioterrorism intensifies after the September 11 terrorist attacks and anthrax mailings.

There’s never been a big market for Ebola vaccines, so big pharma, who are they going to sell it to? It takes a crisis sometimes to get people talking. ‘O.K. We’ve got to do something here.

Thomas W. Geisbert, Ebola expert at the University of Texas

2002

Scientists at the Canadian Public Health Agency’s National Microbiology Laboratory in Winnipeg, Manitoba, develop a promising experimental Ebola vaccine.

2003

The Canadian Public Health Agency applies for a patent on the vaccine.

2005

Canadian Public Health Agency scientists publish the results of successful animal testing of the vaccine.

2010

The Canadian government licenses further development of the vaccine to a small US company, NewLink Genetics, for approximately US$200,000.

Progress stalls as NewLink begins, but then fails to complete, basic safety trials in humans.

Ebola emerged nearly 40 years ago. Why are clinicians still empty-handed, with no vaccines and no cure? Answer: because Ebola has been, historically, geographically confined to poor African nations. The R&D incentive is virtually nonexistent. A profit driven industry does not invest in products for markets that cannot pay.

Dr Margaret Chan, World Health Organization Director-General

2013

The largest-ever Ebola outbreak begins in West Africa.

The vaccine’s safety in humans is still unknown and only a limited supply available.

Front-line doctors are severely hampered by the lack of diagnostics, treatments and vaccines.

We’re all sorry. We’re sorry that we don’t have a medicine proven safe and effective to kill the Ebola virus. We’re sorry that we don’t have a vaccine. We’re sorry that we’ve failed to stop the epidemic… We’re fighting a forest fire with spray bottles.

Ella Watson-Stryker, MSF health worker, Sierra Leone (2014)

2014

October: NewLink and the US National Institutes of Health finally begin clinical trials on healthy human subjects to identify side effects and determine dosage.

November: NewLink sells its licensing rights to the vaccine to Merck for $50 million—25 times what it paid the Canadian government for its license.

2015

March: Clinical trials of the Ebola vaccine in frontline health workers and high-risk individuals begin in Guinea.

July: An interim review reports that the vaccine is highly effective.

2016

January: The Gavi Alliance, a public-private global vaccination initiative, agrees to give pharmaceutical firm Merck $5 million to support further development and manufacture of the vaccine.
March: The outbreak is declared officially over, having claimed more than 11,300 lives in Guinea, Liberia, Mali, Nigeria, Senegal and Sierra Leone.

Ebola vaccine: the upshot

Canadian taxpayer dollars funded the development of the vaccine, which was sold at a bargain price to NewLink, a commercial firm that then allowed the vaccine’s further development to stall for several years. Newlink then profited handsomely in selling the undeveloped vaccine to Merck, and further public subsidies have since been used to support the continued development and future manufacture of this potentially lifesaving vaccine.

NewLink reaped significant profits by selling the vaccine rights to Merck, and will continue to receive royalty payments when the vaccine is approved in the US. Had NewLink (or others) conducted basic clinical trials earlier, the vaccine might have been used at the onset of the West Africa outbreak and could potentially have changed the course of the epidemic.

 

Even antibiotics are overlooked

People in developing countries aren’t the only ones who suffer the negative consequences of decisions that are guided primarily by the pursuit of profits. These decisions have tragic consequences on people across the world.

Drug-resistant infections - in which the current antibiotics for treating bacterial infections become less and less effective - are responsible for an estimated 700,000 deaths globally every year. And we are already hearing of cases where antibiotics are no longer able to successfully treat pneumonia or urinary tract infections.

This is a crisis that affects all of us, no matter where we live.

As this video shows, MSF teams are now experiencing difficulties treating patients in a number of projects around the world because of drug-resistant infections, also known as antibiotic or antimicrobial resistance.

Yet in spite of the urgent need for new antibiotics, only 6 of the 50 largest drug corporations have active antibiotic drug development programmes, only 5 of which have compounds in clinical development.

Unlike for chronic diseases such as heart disease, where medicines must be taken over long periods, selling antibiotics is not very lucrative; people usually take a course of the medicines for one or two weeks only.

Stopping the problem of drug-resistant infections requires conserving the use of antibiotics for when they are really needed. New antibiotics must be used as a last resort when older drugs are known not to work, but this limits potential sales volumes of the newest drugs.

The market for a new antibiotic is very small, the rewards are not there and so the capital is not flowing. In cancer, people pay $30,000, $50,000 or $80,000 for a drug, but for an antibiotic it is likely to be only a few hundred dollars.

Dr Paul Stoffels, Chief Scientific Officer, Johnson & Johnson (2013).

 

Meanwhile, Billions for Baldness

We've seen where drug corporations don't invest their money. So where do they invest it?

Every year, $2 billion is spent worldwide on male baldness treatments alone. That's four times the amount spent on research for malaria in 2010, a disease that caused half a million deaths in 2015, with 214 million new cases reported, according to the World Health Organization.

[M]ale baldness or some other things that you would not think of as necessarily important, because of the voice in the marketplace... was getting an order of magnitude more research than something like malaria.

Bill Gates (2013)

So-called lifestyle drugs make up a massively disproportionate segment of medical research and development while the life and death needs of people around the world are ignored.

HIGH PRICES

Healthy profits are needed to sustain companies, no matter what industry. But the high prices charged by drug some corporations have reached the level of profiteering, and many people can’t afford the life-saving medicines they need. More worryingly, many governments do not step in to ensure affordable pricing, either because they lack the political will or because they have traded away their right to do so.

There is a difference between earning a profit and profiteering. The [US] Administration should use every tool it has to rein in the practice of pricing a drug at whatever the sick, suffering, or dying will pay.

US Congressman Lloyd Doggett (2016).

Drug corporations - one of the most profitable business sectors in the world - are generating profit by charging the highest prices possible. This doesn't just hurt people in developing countries. People in wealthy nations - even those with good insurance or national healthcare systems - are finding it increasingly difficult to get the medicines they need.

Source links: Forbes, BBC 

Source links: ForbesBBC 

In 2012, a group of eminent doctors from the Memorial Sloan-Kettering Cancer Center in New York wrote in The New York Times of their decision not to give patients a 'phenomenally expensive' new cancer drug produced by Sanofi because of its $11,063 average monthly price. In 2015, Bristol-Myers Squibb announced a new treatment for skin cancer costing $250,000 for the first year of treatment.

In France, in December 2015, the Ligue contre le Cancer, the largest French non-governmental funder of cancer research - condemned cancer drug prices as ‘exorbitant, unfair and unbearable’ and warned that rising prices for new drugs posed a direct threat to the French medical system.

 

Gilead’s gold

One of the most shocking examples of high drug prices concerns the hepatitis C drug sofosbuvir. It was developed by a small biotech company, Pharmasset, with support from the US government. Gilead acquired the drug by buying Pharmasset for $11.2 billion. Pharmasset had already planned to sell the drug at a profit for $36,000 per treatment course. Although Gilead only supported late-stage trials, the company more than doubled the price, launching sofosbuvir at $84,000 per treatment course — or $1000 per pill. Researchers have estimated the actual cost of producing sofosbuvir at $62 per 12-week treatment course — or less than $1 per pill — a fraction of the price charged by Gilead.

With these prices, it would be less expensive for the US Government to treat everyone in the US affected by hepatitis C by simply buying out Gilead based on its stock price, instead of paying the high prices Gilead is charging for sofosbuvir treatment.

The BMJ reportsthat by the first quarter of 2016, Gilead had taken in more than $35 billion in global revenue from their hepatitis C medicines since launching sofosbuvir in December 2013. That amount is more than three times what they paid to buy out Pharmasset, and about 40 times what Gilead reported both companies spent on development of four sofosbuvir-related compounds.

Sofosbuvir shortens the length of treatment, eliminates heavy side effects, is easier to use and radically improves cure rates when used with other drugs. If it was affordable and available to everyone who needs it, hepatitis C could cease to be a worldwide public health problem. In developed countries with significant barriers to competition from low-priced generic versions of sofosbuvir, a high-volume, low-price strategy would ensure the widest possible access and save millions of lives, while also curbing the virus’ spread. But today, 80 to 100 million people are infected with chronic hepatitis C and 700,000 die from it each year.

The price of this hepatitis C treatment is already forcing medical practitioners in France to choose between patients, as to who will get to receive it. ... the price can’t be justified either by the cost of production, or by investment into research and development.

Dr. Mego Terzian, MSF France, President (2014).

 

Vaccines: The human cost of high prices

Vaccines offer another prime examples of how high prices put lives at risk. Each year, MSF vaccinates millions of people through both emergency response and routine immunisation programmes. But MSF has struggled to introduce new vaccines in part due to their high prices.

Instead of carrying vaccines to children who need them, I am carrying the bodies of children who died.

Kim Clausen, MSF logistics supervisor, South Sudan (2014).

MSF is working to scale up pneumonia immunisation in children since it is the leading killer of children under the age of five worldwide. But we are struggling to obtain long-term, affordable access to the pneumonia vaccine.

In 2001, the world’s poorest countries paid $0.67 to buy the full package of vaccines needed to protect a child’s life. But by 2014, the price had risen 68-fold to more than $45 per child, with three new vaccines – against rotavirus, pneumococcal disease and human papillomavirus – responsible for 86% of the new pricetag.

Photo: A child receives a vaccination against measles during an MSF campaign in Katanga, Democratic Republic of Congo, 2015. Juan Carlos Tomasi/MSF.

 

How drug monopolies work (or don't...)

Sustained high prices on needed medicines are only possible because of government-granted monopolies on new drugs and the failure of governments to overcome monopoly-based high prices.

These monopolies, based on patents and other forms of intellectual property rights granted by governments and lasting for 20 years, prevent competitors from producing affordable generic versions of new drugs that could drive prices down. Without this price-busting competition, corporations can and often do charge the highest price that the market will bear for desperately needed drugs.

This monopoly-based system for medical research and development has been imposed and reinforced on a global scale through international trade agreements. Part of World Trade Organization law, the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) set the minimum standards of intellectual property protection including those concerning medicines. Since then, due to drug industry lobbying in the negotiation of new trade agreements, direct pressure on governments or law suits led by drug companies, many countries have been forced to adopt stricter monopoly rules which extend the period of exclusivity and block competition from low-priced generic drugs.

Prior to the introduction of TRIPS, countries could define their national patent rules according to their own assessment of the balance between creating incentives for innovation against the domestic social and public health needs to provide access to health care. India, for example, did not allow product patents on medicines at all before introducing TRIPS, and this allowed the country to develop a world class generic medicines industry, with multiple companies competing to produce and supply affordable medicines.

Generic competition saves lives

When India had to implement the TRIPS rules for pharmaceutical patents, it deliberately put in place as many pro-public health safeguards as the agreement allows, and the country continues to be a leading producer of affordable generic medicines. But currently, India is coming under intense pressure from pharmaceutical corporations, foreign governments and even some domestic interests to increase intellectual property protections — a threat to the market competition that helps push prices down.

Thanks to the competition generated by the Indian generic medicines industry, the price of antiretroviral drug treatment for people with HIV/AIDS has dropped by 99% since 2000. This has opened the way for millions of people with HIV in the developing world to get hold of life-saving and affordable medicines. MSF continues to rely heavily on generic medicines from India to carry out its own work with people living with HIV; 97% of the antiretroviral drugs we use are produced in India by generic companies.

Challenging the high price imperative

Drug corporations claim that the patent-based monopoly system is the only way to develop ground-breaking new products, and that they need to charge high prices to cover their research costs and invest in the development of new drugs.
But there are at least three major flaws in that argument:

1. Patents can discourage the discovery of real breakthroughs

Dependence on patents can actually hold up the development of new drugs by slowing down research.Because corporations rely on exclusivity for their products, their teams work in secrecy and isolation from one another in order to gain first-to-market advantage. So, instead of learning from others’ mistakes, dead ends are followed simultaneously by multiple companies.

What's more, these results are never shared, preventing other scientists from pursuing potential fresh new research angles.

An analysis by the Massachusetts Institute of Technology and the National Bureau of Economic Research found that patent barriers had 'persistent negative effects on subsequent innovation.' In one company's case, this led to 'reductions in scientific research and product development on the order of 20 to 30 percent'.

In other words, patents can actually slow down innovative scientific research, which relies on the free exchange of information to spark new ideas and discoveries.

Fake Breakthroughs: Me-too drugs and evergreening

Over the last two decades, drug corporations have increasingly focused on so-called ‘me-too’ drugs – medicines that have only small advantages over existing drugs and so cannot be considered new. One analysis found that up to 90% of new products approved over the last four decades have provided only limited improvements over existing drugs.

Companies focus on these kinds of drugs because there are large markets to sell into. As an existing treatment for these conditions nears the end of its patent life, many competitors scramble to bring out a newer treatment that can be patented, promoted and priced for big profits as they fight to gain market share. The fact that a ‘new’ drug is fairly similar to other products on the market and has limited medical improvements doesn't mean it won’t sell. On the contrary, corporations make huge investments in sales and marketing to gain any edge possible over their rivals. For more information, read ProPublica’s exposé on the promotion efforts corporations undertake to persuade prescribers to offer their treatments over older, therapeutically equivalent generic treatments.

Another common practice is to make a minor tweak to an existing product in order to get a new 20-year patent monopoly. This video explains how this practice, known as 'evergreening' is a way for corporations to extend their monopoly rights on a product, pushing the production of affordable generic versions ever further into the future.

2. Profits are not poured back in to research
Unfortunately, proceeds from patent-based profit are not being invested in new research. We are paying much more for our medicines than what is needed to recoup development costs.

In 2010, the US corporate lobby group Pharmaceutical Research Manufacturers of America (PhRMA) reported that spending by pharmaceutical corporations globally on research and development amounted to less than 8% of total of global sales.

Big pharmaceutical corporations spend almost twice as much on sales and marketing as they do on research and development. Only one spends (slightly) more on research.

2013 data

2013 data

Drug corporations are also spending vast sums of money on schemes to inflate share prices, instead of using those funds for medical research. Share buybacks, for example, are when a company buys back its own shares from the marketplace in order to boost the value of the remaining stock still held by shareholders. (For a more detailed explanation, watch this video.) While these financial maneuvers may be complicated, the bottom line is that massive spending on shareholder rewards like buybacks or dividend payments takes money that could have been used for research.

3. High drug prices are not based on research costs but on what the market can bear

Drug corporations’ claim that they need to charge high prices to cover research costs has little basis in reality. They charge high prices to make big profits.

In 2015, Martin Shkreli, then CEO of Turing Pharmaceuticals, sparked outrage by buying the rights to a more than 60-year old drug needed for HIV-related infections and raising the price 5,500% overnight.

Drug industry leaders tried to cast Shkreli as a bad apple, but many other drug firms routinely follow the same strategy of raising prices as high as possible, regardless of the actual cost of research or production.

I probably would have raised the price higher… I could have made more profits for my shareholders, which is my primary duty. My investors expect me to maximise profits, not to minimise them, or go half or go 70%, but to go 100% of the profit curve.

Martin Shkreli, then-CEO of Turing Pharmaceuticals (2015).

Making money out of old drugs:

 

  • Novartis has raised the price of Gleevec (imatinib) for leukaemia three-fold in the past decade.
  • Biogen raised the price of a multiple sclerosis treatment an average of 16% a year in the ten years since 2005, with 21 separate price hikes.
  • In February 2015, Valeant Pharmaceuticals bought the rights to two heart disease medicines, and as the sole supplier, promptly hiked the price up by 525% and 212%.
  • In September 2015, Rodelis Therapeutic bumped up the price of cycloserine, a drug developed in the 1950s used to treat multidrug-resistant tuberculosis, from $15 per pill to $360 – a 2,000% increase.
  • In 2016, Pfizer raised US prices on more than 100 of its drugs, some by as much as 20 percent.

Companies frequently buy the rights to drugs they haven’t developed, and then charge outrageous prices for them. One study found that some drug makers were earning more than 70% of their sales from products developed by other companies. Pfizer’s business model is based on buying out smaller firms that have produced proven bestsellers such as Prevnar (pneumococcal vaccine developed by Wyeth), Lipitor (anticholesterol drug developed by Warner-Lambert), and Botox (known most widely for its cosmetic anti-wrinkle applications and manufactured by Allergan).

 

‘Value-based pricing’

As the argument that high prices are needed to fund research is challenged more and more, drug corporations have introduced a new line of argument, that high prices are justified by the ‘value’ a drug provides to the entire medical system.

For example, in the face of outrage over the high price of its hepatitis C drug sofosbuvir, Gilead claims its $84,000 price tag is justified by costs avoided for patients who would otherwise require costly liver transplants.

Following that logic, critics point out, all antibiotics have been vastly under-priced since the introduction of penicillin some 70 years ago.

Pierre Chirac, vice president of the organization that publishes French medical journal Prescrire, asks why this generous pricing strategy shouldn’t be repeated across the healthcare system. For example, shouldn’t midwives demand payment based on the cash value of how long a newborn can expect to live, thanks to their intervention?

Up until the 80s and early 90s, the whole approach in pharmaceutical companies was ‘we need to be doing good research, we need good products, good people, and good projects and that takes time’. But then companies started saying ‘we’re not getting enough return on investment here’; people at the top were keen on making money, and the science and the patients somehow got lost.

Prof. Michael J. Parnham, Fraunhofer Institute for Molecular Biology and Applied Ecology IME (2015)

PART 2: TREATING THE PROBLEM:
What can be done?

Four demands for a different system

It is clear that the way drugs are being developed is failing all of us — especially people who are the lowest priority because they cannot pay the drug industry's high prices for life-saving medicines. Even though MSF and others have been demanding change for many years, government leaders still lack the courage to radically reform a system based on profit motive and patent monopolies.

We have no model which would meet the need for new drugs in a sustainable way… You can’t expect for-profit organisations to do this on a large scale. If you want to establish a system where companies systematically invest in this kind of area, you need a different system.

Daniel Vasella, CEO Novartis

Here are our four key demands in the struggle to ensure medical research and development meets the health needs of patients in MSF programmes and beyond.

 

1. Demand disclosure of actual drug development costs

Of course, medical research has a cost and that must be paid. But how much does it actually cost to develop a drug?

Industry-sponsored studies have claimed that it costs as much as $2.6 billion to develop a drug. The media and policymakers should challenge and scrutinise this figure.

But there is a lot of controversy about what actually goes into these figures, given the overall lack of transparency about development costs.

What's clear is that this price tag for developing a drug includes a lot of other costs that might surprise you- like legal expenses for acquiring and defending intellectual property, and promotional activities targeted to doctors. This video exposes the 'Naked Truth' about the cost of drug research.

 

The Naked Truth

The Naked Truth is also available in several languages

Drug corporations include the so-called 'cost of failures' in R&D costs — the money a company spends on developing drugs that don't succeed in making it to market, whether because they were ineffective, unsafe, or were otherwise determined to be unsuitable for further development.

Of course some failures are to be expected, but quantifying failure is challenging: How much failure should we reasonably expect — or reward?

‘It is often correctly pointed out that nine out of ten experimental medicines that enter clinical trials fail. This fact is used to justify the high price of a new drug,’ writes one commentator in Forbes. ‘Why should it be expected that payers and patients pay for the failures of an industry? Using this rationale, you would expect that a company with a lot of failures would be justified to charge a higher price for a drug than a company with a better success rate.’

The high price of failure claimed by the industry 'says more about the failures and inefficiencies of the drug giants’ in-house laboratories,' according to The Economist, 'than it does about how much it should cost to bring a new treatment to market now.'

Second, and even more controversial, the $2.6 billion price tag includes the cost of lost investment opportunities as the ‘cost of capital’ — the money a company could have made if it had invested it elsewhere, instead of spending it on medical research. This figure includes an extremely generous estimated return of more than 10% on such hypothetical investments, not the very low interest rates ordinary savers are getting on their money in the bank. The creeping financialisation of the industry means that today drug corporations are increasingly acting more like investment banks using their funds for money-making schemes instead of for researching and developing new medicines.

The actual cost of developing a drug should not include how much money a drug corporation could have made if it had invested the money elsewhere.

Without being able to accurately assess these costs because of the industry's unclear and exaggerated estimates, it is challenging to start looking for ways to improve the process and bring costs down.

Lifting the veil on the actual cost of research would help us to have an open discussion on the high prices of medicines and their consequences. Secrecy over true costs means we can't have that debate or hold drug corporations to account.

Reveal the results - not just costs - of research

The lack of transparency also applies to clinical research data. Disclosing research data to the scientific community - of both positive and negative results - would avoid wasteful duplication of trials (hence unnecessary costs) and help boost the potential for real breakthrough discoveries; unfortunately at the moment this is rarely done.

In recent years, limited progress has been made in the US and EU to require the release of clinical study data. Yet disclosure is still patchy and incomplete due to resistance from drug corporations.

 

2. Demand our money's worth for taxpayer funding of research

It’s not always clear what is counted in drug corporations’ research costs, but it is clear what is not counted: taxpayer-funding through government grants, subsidies and tax credits. By some accounts, more than 80% of all funds for early research leading to the discovery of new drugs and vaccines comes from public sources. Each year, an estimated $240 billion is invested in all health research and development, and in high-income countries, 30% of this comes from the taxpayer. For research into neglected diseases, the proportion is even greater.

One example of this trend is the new tuberculosis drug bedaquiline. The public funding for this drug’s development was nearly twice as much as what Johnson & Johnson (the corporation that developed the drug and holds the patent) invested.

This means the taxpaying public often end up paying twice: first through taxes that fund research, and a second time through the high prices charged by the industry on the end product.

Governments need to call industry out on this. They need to make sure that the public can access the products of research that were paid for with taxpayer funds. Government incentives should be designed to ensure access and affordability of any product developed through publicly-funded support. This could be achieved through terms and conditions that limit patent and monopoly rights, set price ceilings, or allow generic competition to bring down prices.

At present, many taxpayer-funded incentives do not achieve these goals, and have simply become poorly designed giveaways that corporations exploit without furthering neglected disease research. The US government’s Priority Review Voucher programme is a clear example of this: a good initiative in need of reform.

 

3.Demand 'de-linkage': break the link that ties medical research to high prices

Having demonstrated that high prices are not linked to the cost of research, we urgently need new laws and ways of promoting much-needed medical research that break the link between the cost of medical research and development and the expectation of high prices backed by monopoly rights.

 

Better Ways to Make New Medicines

MSF has been involved with several initiatives to develop and deliver desperately needed medical products. Based on the idea of 'de-linkage' - breaking apart or separating the costs of the research from the price charged for the final product - these hopeful examples demonstrate the feasibility of new ideas for targeting essential public health needs around the world. In this section, we also examine prize funds, an incentive mechanism with a long history of delivering innovation.

 

Drugs for Neglected Diseases Initiative

In 2003, MSF co-founded the Drugs for Neglected Diseases initiative (DNDi), together with five public health research institutes and the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases. The not-for-profit initiative was established to develop treatments for neglected populations, and its business model has successfully carried out medical research using an approach that de-links the cost of research from the price of the final product.

Public and private contributions pay for the cost of research upfront, rather than through sales of the resulting products. This allows DNDi to identify priorities based on public health needs, promote sharing of data and offer medicines at low prices.

Within ten years and a budget of approximately €182.5 million ($205 million), DNDi has delivered six new treatments that are affordable to the patients who need them. The anti-malarial artesunate-amodiaquine (ASAQ), for example, was developed in partnership with Sanofi and others in 2007, and is available for less than $1 per treatment course for adults, and less than $0.50 for children. As of the end of 2015, 400 million treatments have been distributed.

In addition, DNDi has created a robust pipeline for six neglected diseases: there are currently 30 projects in six disease areas. DNDi is demonstrating the value of open models of innovation that speed up scientific research, reduces costs, addresses priority needs and delivers affordable products to neglected patients.

These lessons must now be applied beyond the relatively narrow domain of neglected tropical diseases and the mere adaptation of existing products. For example, DNDi is now helping to launch the Global Antibiotic Research and Development (GARD) Partnership, applying its collaborative model to the problem of drug-resistant infections. Such a partnership can test new incentives that contribute to conservation of and access to new antibiotic treatments. By doing so, it can provide an important alternative to the traditional market-driven approach, focusing on products that drug corporations will likely not develop for lack of profitability.

DNDi has also announced testing in Malaysia and Thailand of a hepatitis C treatment produced by the Egyptian company Pharco Pharmaceuticals for a mere $300 per treatment course. Compare that to the $84,000 charged by Gilead!

Policymakers can use these models to create a more systemic and financially sustainable approach. This will require more ambition, and the introduction of incentive mechanisms that must be scalable, replicable, and broadly applicable.

PHOTO: Anti-malarial artesunate-amodiaquine (ASAQ) adult treatment for malaria developed by DNDi and Sanofi-Aventis.

 

The Meningitis Vaccine Project

The Meningitis Vaccine Project (MVP) is a partnership between PATH, the Serum Institute of India, the US National Institutes of Health (NIH) and WHO, with financing from the Gates Foundation, which resulted in the development of a vaccine against Meningitis A. The MVP is one example of what can be achieved when de-linkage ensures that medical needs and affordability are prioritized from the outset. At the very start of the project it was agreed that the final product would have to be available for a maximum of $0.50 per dose, and the choice of a commercial partner was made with this requirement in mind.

This vaccine, called MenAfriVac, was designed to meet the specific needs of the Meningitis Belt in sub-Saharan Africa, including a technology transfer agreement between the NIH and the Serum Institute that committed the company to a minimum supply and an affordable price. MenAfriVac was rolled out in June 2010, with MSF participation, in countries across the Meningitis Belt, and at an affordable price of $0.40 to $0.50 per dose. As such, it was a low-cost effort to adapt an urgently needed vaccine designed for use in countries with low capacity to pay. With this vaccine, MSF and others have achieved dramatic results in reducing mortality and morbidity from meningitis A in the region.

'Affordability and access through adequate supply was built into the product profile from the outset,' says Dr. Myriam Henkens, MSF International Medical Coordinator. 'Every single step of the development process ensured that these criteria were being met.'

'The take away message from this project is that innovation is a whole process and you can’t just look at one part of the process if you want a project to succeed,' concludes Henkens. 'It also shows what can be achieved if medical need is the top priority and affordability is thought about from the very start.’

PHOTO: Nana Salifou, age 4 year, lies in an MSF field hospital while being treated for meningitis, Niamey, Niger, 9 May 2015. Having taken the first dose of antibiotics, she is now out of danger. Sylvain Cherkaoui/MSF

 

3P Project

As Phumeza's story shows, there is an urgent need for new tuberculosis treatments that are safe, simple, and affordable. The most widely available treatments are decades old and have severe side effects.
Today, most medical research done by corporations takes place in secrecy in order to preserve exclusive rights to the final product and its profits. When it comes to tuberculosis, especially the forms that are resistant to the most common treatments, effective research requires an open approach to exploring different combinations of drugs. This means sharing between different sets of research results and non-exclusive licensing of end products.
The ‘3P Project’ that is currently being set up by MSF in collaboration with leading TB organisations proposes to combine funding and incentives in a novel way in order to deliver affordable TB combination treatments faster.
Prize money (‘pull funding’) is awarded for promising new TB drugs at an early stage to ensure that they can easily be studied with other new drugs. Intellectual property and data is ‘pooled’ so that researchers do not have to wait many years for individual drugs to be approved before testing them together. Grants (‘push funding’) pay for trials that combine new drugs, allowing researchers to find shorter, safer and better treatment for all people who have TB, even those whose TB is resistant to current medications.

PHOTO: Natalia, an MSF doctor, shows a lung x-ray to an extensively drug-resistant tuberculosis patient in Kara Suu hospital, Kyrgyzstan, 27 March 2013. Vincent Tremeau/MSF

 

Prize Funds

Prize funds are one incentive mechanism worth exploring. With a history that predates the patent system, prizes involve giving out payments for predetermined results, either at regular milestones or at the end of a project. Unlike grant funding, which is only able to target one potential research group at a time, prizes allow several promising research proposals to move forward at once.

Prizes are particularly interesting incentives that offer an alternative to monopoly rights. They could steer research efforts towards need by specifying upfront what the desired goal is. Monopoly rights are a blunter instrument, that tends to steer discovery and research efforts towards products that will provide a good return on investment, regardless of the social or medical value of the product. They can include contractual conditions to guarantee affordability of end products. And as a condition for receiving tax-funded prize money, the innovator should surrender exclusivity rights, allowing prices to be closer to the actual cost of production, while allowing for necessary profit.

James Love, director of Knowledge Ecology International, explains the potential of prize funds.

A few recent examples demonstrate the viability of prize funds as a mechanism for stimulating medical innovation:

  • The US Department of Health and Human Services launched $20 million prize for the development of a rapid diagnostic test to identify highly-resistant bacterial infections.
  • The European Commission (EC) issued a call for a €1 million ($1.13 million) prize for developing a test to diagnose which upper respiratory tract infections can be managed without antibiotics.
  • The EC also awarded a €2 million ($2.26 million) prize to a German company in 2014 for stabilising technology to protect vaccines against elevated temperatures or accidental freezing.
  • A further £10 million ($14.4 million) prize, Longitude Prize, promotes the development of an affordable, accurate, rapid test kit for bacterial infections.

 

4. Demand action from our governments to make the change we need to see

Public outcry over high prices has created a momentum for change, but protests should not just target high prices, which are only a symptom of the problem, but should also seek to address the underlying causes. Only governments can make these kinds of changes.

The interest in addressing failings in the Ebola and Zika responses shows that global cooperation is possible, and may hold some lessons that could be applied on a more widespread basis to respond to a range of health concerns.

In 2012, the World Health Organization’s Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) supported the launch of negotiations for a global agreement on funding and prioritising medical research and development. While this recommendation was not taken up by Member States, they have taken the first steps of working toward coordination of priorities and financing for a specific set of neglected diseases.

As these global policy processes creep forward, MSF offers the following recommendations to set priorities, coordinate efforts, and ensure sustainable funding:

Governments must:

  • Stop pushing international trade agreement provisions that lock in high prices of medicines (i.e., TRIPS-plus). Instead, promote policies that encourage generic competition and lower prices, making more life-saving medicines available to more people.
  • Launch high-level political negotiations to change from a system solely based on profits and patent monopolies to one that encourages the development of affordable medicines to treat the world's greatest health needs.
For MSF, we will measure ‘success’ by whether the people in our programmes and beyond have access to the medicines they need—regardless of what disease they have, how much they can pay or where they live.

Until we reach that goal, we will continue to bear witness to the failings of the current system, and continue to demand justice and change.

PHOTO: Hauts Plateaux, South Kivu, Democratic Republic of Congo. Stella Evangelidou/MSF

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Learn more about our advocacy work on medical innovation on www.msfaccess.org/our-work/driving-medical-innovation