public policies, incentives and partnerships for development of health products

Public Policies, Incentives and Partnerships for Development of Health Products

Dr K. SatyanarayanaIntellectual Property Rights UnitIndian Council of Medical ResearchDepartment of Health Research, New Delhi

The agenda

◙ Public health priorities of poor countries

◙ Epidemiological transition◙ Access to health products◙ Strategies to promote innovation◙ Push-Pull incentives ◙ The way ahead

International Conference on Equity and Access to Medicines:Role of innovations and Institutions, New Delhi May 12-13, 2011

What is access to health products?

◙ Available - in sufficient quantities everywhere

◙ Acceptable – usability, appropriateness◙ Effective – of good quality and standard◙ Affordable - lowest possible cost


Concerns on access

◙ About 50% global population lack access to essential medicines.

◙ In India about 35% cannot afford even the essential medicines.

◙ Increasing privatization of health care system◙ Market-driven research – IP rights◙ No new health products -10/90 gap◙ IPRs becoming a barrier?


Disease burden - India

◙ Deaths - 10.3 million per year (2005)◙ 36% due to CDs, perinatal mortality etc.◙ 29% cardiovascular diseases◙ 11% Injuries◙ 7% Cancer◙ 7% chronic respiratory diseases◙ 2% diabetes◙ 7% other chronic diseases

Reddy et al The Lancet October 5, 2005


Disease prevention tools

TUBERCULOSIS ◙ BCG vaccine - 1930s◙ Streptomycin - 1944◙ Isoniazid - 1952 ◙ Pyrazinamide - 1952 ◙ Rifampicin - 1970

MALARIA ◙ Quinine two centuries old ◙ Chloroquin - 1943 ◙ Mefloquin - 1963◙ Only artemicin in the horizonEmerging drug resistanceHIV/AIDS – drugs/vaccineNew emerging diseases

H1N1



Disease Deaths Drugs/tools Outlook

TB 1.75 mill No new drug or vaccine since decades

Multi-drug resistance and HIV-TB

HIV/AIDS 3.1 mill No cure - vaccine or drug

On the rise

Malaria 1- 3 mill Old drugs ineffective

40% world population at risk

Measles 0.50 mill Expensive vaccine Common in poor countries

Influenza 0.25

mill

Vaccine available. Wily virus

Millions at risk all over the world

Emerging infections – H1N1

- Diagnostics, drugs, vaccines?

IPR issues

Sum up challenges in CDs (infections)

Epidemiological transition in India


Proportion of disability adjusted life years (DALYs) lost by disease group (% total days)


Cause HIC LIC DCs S. Asia Africa

CDs 5.6 53.5 11.10 39.30 71.70

NCDs 85.7 35.0 71.50 47.10 19.20

Injuries 8.7 11.5 17.40 13.60 9.10

HIC- High income countries; LIC - Low income countriesCDs - Communicable diseases; NCDs - Non-communicable diseasesSource: CIPIH (2006)

Innovation gap

Global R&D spend and 10/90 gap

Global health R&D budget

Total 105.9

Pvt 59.3

Public 46.6

Public 2.5

Pvt 1.8

Data for 2001; US$ billion

Rich Poor

R&D budget

USA 330

Japan 130

European Union

230

China 94

India 5.0

Data for 2005-06;

US$ billion


R&D and Technological capability

◙ Low and middle income countries account for just 21% of world GDP but less than 10% of world-wide R&D expenditure (9% BASIC)

◙ OECD countries spent on R&D (US $ 553 billion) > than total national income of India (US $ 440 billion)

◙ About 60% people live in countries with some technological capability (BASIC etc.)

◙ About 25% people (Sub-Saharan Africa) live in climate of little or no technological capability.

◙ Industrialized countries hold 97% of all patents, (MNCs - 90% of all IP in health)


PCT PatentsCountry Patents filed (%)

USA 41,813 (30.97)

Japan 24,809 (18.37)

Germany 15,986 (11.84)

France 5,714 (4.23)

UK 5,100 (3.77)

Korea 4,679 (3.42)

India 677 (0.5)

All others 5,206 (3.86)

Total 135,000Source: World Patent Report (2006), WIPO, Geneva


Few new health products developed for neglected diseases

Tropical diseases: 13

Tuberculosis: 3

Approx. 1-2% of global drug R&D targets neglected diseases

10/90 gap in health research spending

1975-1999: 1,393 new chemical entities marketed68·7% registered products presented little or no therapeutic gain

1%


Source: DND

Challenges - HIV/AIDS and access

◙ Total present infected over 40 million.◙ Over 5 million being added every year.◙ 25 million died since 1981 - 2 million in 2008; 20% < 5yr ◙ No therapeutic available.◙ Available ARVs out of reach for many due to cost◙ Even at - US$ 10,000 to US$ 87 ppp (generics).◙ Universal access (MDG-6, 2010) still remains a dream. ◙ Of 9.5 million needing drugs only 4.5 million have

access.◙ 95% children and 75% pregnant women.◙ Second generation ARVs?


Prices of drugs for CancersCompany Drug (Chemical) Price per injection Dosage

Genentech & Roche

Herceptin (Trastuzumab)

Rs 1.3 lakh 10-15

RocheMabthera (Rituximab) Rs 1 lakh 10-12

GenentechRituxan (Rituximab) Rs 1 lakh 10-12

AmgenNeupogen (Filgrastim) Rs 3,200 No limit

Imclone Erbitux (Cetuximab) Rs 17,584 4-5 in 1 cycle

OSI Pharma & Roche

Tarceva (Erlotinib) Rs 4,800 per tablet

Not known

AstrazenecaZoladex (Goserelin acetate)

Rs 8,910 Not known

GSK Hycamtin (Topotecan) Not known Not known

NovartisGlivec (Imatinib mesylate)

Rs 1.2 lakh Not known


Incentives for Pharma R&D

◙ Govt of India introduced several incentives to promote pharma industry

◙ Recognition by Department of Scientific & Industrial Research (DSIR)

◙ In-house R&D units recognised by DSIR only are only eligible for these fiscal incentives/grants/loans from government departments viz., DST, DBT, CSIR, ICMR, ICAR, TDB etc.

◙ This is the only scheme in the entire government system for benchmarking the industrial R&D.


Fiscal incentives- Direct taxes

◙ 100% write off of revenue expenditure on R&D; ◙ 100% write off of capital expenditure on R&D in the year

the expenditure is incurred◙ Weighted tax deduction @175% (to the sponsor) for

payments made to approved national laboratories etc. for R&D

◙ Weighted tax deduction @200% on expenditure (other than land & buildings) incurred on approved in-house R&D*

◙ Accelerated depreciation allowance for investment on plant and machinery, made on the basis of indigenous technology

◙ *Includes bio-technology, clinical trials, obtaining approvals from any regulatory authority and filing an application for a patents


Fiscal incentives- Indirect taxes◙ Customs duty exemption for capital equipment and

consumables needed for R&D◙ Central excise duty exemption for capital equipment and

consumables needed for R&D.◙ Central excise duty waiver for 3 years on goods

designed and developed by a wholly owned Indian company and patented in any two countries out of: India, USA, Japan and any one country of European Union

◙ Exemption from customs duty on imports made for R&D projects funded by Government in industry.

◙ Duty free import of goods specified in List-28 (comprising of analytical and specialty equipment) for use in pharmaceutical and biotechnology sector


Push-Pull incentives to promote drug development

◙ Push incentives - funding policies that aim to incentivize industry via reducing industry’s costs during the research and development stages

◙ Pull incentives - mechanisms create incentives for private sector engagement by creating viable market demand

◙ Push mechanisms essentially pay for “effort” on the part of researchers, by underwriting the cost of that effort, while pull mechanisms pay for “results”


Push Incentives for drug development

◙ Direct public spending◙ R&D tax credits◙ R&D grants to private sector◙ Public-private partnerships (PPPs)

◙ public support (such as direct public spending, R&D grants, tax credits etc.)

Very strong support in India

Pull incentives for drug development

◙ Transferable market exclusivity◙ Advance purchase commitments◙ Tax credit on sales◙ Patent buyouts◙ Prizes/other rewards

◙ Prize Fund◙ Health Impact Fund

◙ Fast track regulatory approvals

Some major schemes for drug development in India - Push

◙ Technology Development Board (DST)◙ The New Millennium Indian Technology Leadership

Initiative (CSIR)◙ Drugs and Pharmaceuticals Research Program - DST◙ Technology Development and Innovation Program –

DSIR◙ Technology-mission programs - DBT◙ Small Business Innovation Research Initiative - DBT◙ Biotechnology Industry Research & Development

Assistance Programme BIRAP – (DBT)◙ Open Drug Discovery Initiative (CSIR) ◙ Extramural support from all R&D agencies


The way ahead◙ Diseases of the poor still a concern ◙ Epidemiological transition: Dual disease

burden ◙ No new health products◙ Privatization of health care, costs going up,

especially price of medicines◙ Access to health products still a concern –

more focus on ‘affordable’ ◙ Efficacy of Push and Pull mechanisms for

R&D for drugs of ongoing schemes◙ Indigenous efforts – South-led (BASIC)◙ South-South collaboration: India-China HIF?


Thank you

public policies, incentives and partnerships for development of health products

Documents

new delhi

role of innovations

essential medicines

millno new drug

global population lack

health productsstrategies

millno cure vaccine

decadesmultidrug resistance