OXFAM TECHNICAL BRIEFING 14 SEPTEMBER 2016

REPORT OF THE UN SECRETARY-GENERALS

HIGH-LEVEL PANEL ON HUMAN RIGHTS AND
MEDICINES
Oxfams response

In December 2015, the UN Secretary-General set up a High-Level Panel on

Access to Medicines to recommend solutions for remedying the policy
incoherence between the justifiable rights of inventors, international human
rights law, trade rules and public health in the context of health technologies.
Oxfam International Executive Director Winnie Byanyima is one of the 16 HLP
members.

As the HLP issues its report, we commend the UN Development Programme

secretariat, whose staff worked tirelessly to support the Panels work. Oxfam
calls on the UN Secretary-General and all governments to start implementing the
HLPs recommendations without delay, and to ensure that gaps not fully
addressed by the HLP should be discussed further.

www.oxfam.org
BACKGROUND
In December 2015, the UN Secretary-General (SG) set up a High-Level Panel (HLP) on Access
to Medicines to recommend solutions for remedying the policy incoherence between the
justifiable rights of inventors, international human rights law, trade rules and public health in the
context of health technologies. Oxfam International Executive Director Winnie Byanyima is one
of the 16 HLP members. As the HLP issues its report today, we commend the UN Development
Programme secretariat, whose staff worked tirelessly to support the HLPs work. Oxfam calls on
the UN SG and all governments to start implementing the HLPs recommendations without
delay, and ensure that gaps not fully addressed by the HLP should be discussed further.

WHY THE HLP AND ITS REPORT ARE IMPORTANT

The starting point for the HLP was the pledge by all world leaders, through the UN-led
Sustainable Development Goals, to leave no one behind. This pledge includes the recognition
that human rights, including the right to life and health, are universal irrespective of where a
person is born whether in a rich or poor country. Thus, the HLPs mandate was to address the
needs of all people in all countries to access health technologies, including treatment for
communicable and non-communicable diseases, neglected tropical diseases and rare diseases.
This is important given the lack of research and development (R&D) for many health conditions,
and the increasingly unaffordable price of medicines for diseases such as cancer and hepatitis
C in all countries.

Over the last 10 years, the World Health Organization (WHO) has sought to address the joint
challenges of R&D, intellectual property (IP) and access to medicines, focusing on developing
countries. For the following reasons, the HLP is a unique venture, intended to make significant
recommendations to amend a failing R&D and access system:

1. It is an initiative convened directly at the highest level of the UN system by the

Secretary-General. It could be seen as a legacy for Ban Ki-moon.

2. Its mandate recognizes and aims to remedy the incoherence between human rights and
IP rules. It is a unique forum to propose a new global R&D system founded on human
rights principles.

3. Its mandate to address all diseases for all people in the world requires systemic
solutions, instead of narrowly focusing on neglected diseases in developing countries.
The lack of R&D for therapies needed for public health and the high price of new
medicines are problems that affect all healthcare payers (public and private) for all
diseases, in both rich and poor countries.

4. The HLP report and its recommendations are to be launched at the time of the UN
General Assembly, thus attracting the attention of world leaders.

WHY HAS THE GLOBAL SYSTEM FAILED?

The global system has failed for two reasons:

1. The R&D agenda is dictated by commercial interest, not public health.

2. Products are priced as high as the market can bear, making new medicines
unaffordable.

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R&D agenda dictated by commercial interest
The situation is well illustrated by the fact that only 10% of R&D spending is directed to the
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health problems that account for 90% of the global disease burden the so-called 10/90 Gap.
Despite progress on treatments for diseases like cancer and hepatitis C, there are still general
innovation gaps in health technologies, including diagnostics, vaccines and medicines.

WHO has declared tuberculosis (TB) a global emergency, yet its total R&D funding
(mainly public) was $674m, leaving a gap of $1.3bn against the $2bn annual investment
estimated in the global plan to Stop TB.

There has been a lack of diagnostics for diseases such as Ebola that are suitable for
poor settings.

No new classes of antibiotics have been brought onto the market in 40 years, despite
the rise in antimicrobial resistance. Most pharmaceutical companies withdraw from
antibiotics research.

There is no cure or satisfactory treatment for many diseases such as multiple sclerosis.

Products are priced high and are unaffordable

The high price of medicines has long been seen as a problem only for developing countries.
Now it is recognized that all countries and all payers (public or private) are suffering from the
problems of high prices.

I was diagnosed with breast cancer in 2013. My insurance refused to cover my Herceptin
treatment because of the high price. Now the cancer has spread all over my body. I need
Herceptin so that I can live and bring up my two boys.

These were Tobeka Dakis words to the audience at the International AIDS Conference in
Durban in 2016. Tobeka is deprived of the medicine that can save her life because Herceptin
costs half a million rand ($35,049) per patient per year in South Africa. Meanwhile, Roche, the
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company that produces Herceptin, is celebrating strong financial results for June 2016:

In the UK, NICE recommended that the NHS does not pay for Kadcyla, a new medicine for
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breast cancer, because of its cost. The medicine costs 102,405 roughly 3.9 times the UKs
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2014 per capita income of 26,350.

The cost of new medicines such as those for treating cancer has escalated rapidly all over the
world. Eli Lillys new lung cancer drug, Portrazza, costs about $11,430 a month in the US six
times the $1,870 price that leading oncologists said would reflect the medicines benefit
compared with older therapies. Pfizer set the list price for Ibrance, to treat a form of advanced
breast cancer, at $9,850 a month. This is high even after the 20% discount demanded by
insurers.

A study of 115 medicines for diseases such as cancer, rheumatoid arthritis and multiple
sclerosis illustrates that prices have now exceeded the median household income in the US. In
2013, the average annual retail price for a single medicine was $53,384, which is more than the
median US household income, double the median income of Medicare beneficiaries, and more
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than three times as much as the average Social Security benefit in the same year.
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Of the 12 medicines approved in the US in 2012, 11 cost more than US $100,000 per year.
The average price for Bayers kidney cancer medicine, Sorafenib, is $96,000 per year. It needs
to be taken for five years. However, after issuing a compulsory licence, the price of the generic
equivalent in India is around $175; a 97 percent price cut compared with Bayers price of $5,551
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for one months course.

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Imatinib (Glivec) is an effective medicine to treat chronic myeloid leukaemia. The drugs
originator, Novartis, challenged an Indian law which refused the patenting of the medicine.
However, the Indian High Court upheld the governments decision. The price of the Indian
generic equivalent of imatinib is $170 per month, compared with Novartiss price of $2,200 per
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month. Thailand issued a compulsory licence to allow the import of the Indian generic version
of imatinib, at $1.59$2.23 for a 100mg tablet compared to Novartiss price of $29.30. A
government assessment of the effect of the compulsory licence concluded that by 2009, the
availability of imatinib in the Thai health care system had led to 2,435 quality-adjusted life years
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(QALYs) gained.

High drug prices also affect communicable diseases, as illustrated by the pricing of the latest
medicines for the treatment of hepatitis C. At $1,000 per day, all payers are affected. The
Netherlands governments submission to the HLP highlighted the problem facing the public
purse for the treatment, which costs 48,000-96,000:

We have an estimated 20,000 patients with this disease. Such costs make our healthcare
unaffordable. If we continue in this way, it will become nearly impossible to reimburse patients
for these medications.

In France, it was calculated that providing medicine to treat all people with hepatitis C would
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exceed the annual budget of the public hospitals in Paris. In Romania, a woman with hepatitis
C considered selling her house to buy the 50,000 drug that could cure her. In the UK and
Sweden, the governments provided the medication only to patients with a particular degree of
liver disease.

Linezolid is a treatment for drug-resistant TB. South Africa is considered one of the 22 high
burden countries for TB. At $67 per pill, Linezolid was unaffordable. When the patents expired,
the government was able to provide the generic equivalent at $6.86.

Pharmaceutical companies are also hiking prices of old medicines. Last year, Turing
Pharmaceuticals created a scandal when it increased the price of a 62-year-old drug to treat a
devastating parasitic infection from $13.50 to $750 per pill.

The pharmaceutical company Mylan has been steadily increasing the price of EpiPen, an auto-
injector that delivers a life-saving epinephrine to patients suffering from severe allergy. Since
2007, the price has risen from $56.64 to $317.82, a 461% increase. During the same period, the
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salary of Mylans CEO rose by $2,453,456 to $18,931,068 a 671% increase.

Orphan drugs (medicines developed to treat rare diseases that affect a few thousand patients)
have become a lucrative business for pharmaceutical companies. The US and EU provide
particular incentives for pharmaceutical companies to invest in R&D for orphan drugs, on top of
governments own investment. For example, the annual cost of Soliris, a treatment of the rare
disease paroxysmal nocturnal hemoglobinuria, is $488,000 per patient. Last year its net sale
was $2.59bn. The worldwide sale of Rituxan, an orphan cancer drug, was more than $7bn last
12 13
year. The treatment of the rare Fabry disease costs $49m in the Netherlands.

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KEY STRENGTHS OF THE HLP REPORT
The HLP report provides recommendations that address the failures in the current R&D system
to respond to the human rights imperatives on access to health technologies. It has several key
strengths:

1. It is founded on human rights principles. The very nature of fundamental human

rights requires that these rights outweigh private interests under national law. Human
rights are individual, inalienable, universal entitlements acquired by virtue of birth while
IP rules are policy tools, among many, to encourage innovation. Other strengths of the
report are:

2. It recommends remedies for R&D that can enhance the availability and
affordability of health technologies:

SG to convene a process for governments to negotiate a global agreement on a new

R&D system, based on delinking the cost of R&D from the price of resulting products,
including for neglected diseases and antimicrobial resistance (AMR).

Greater and more sustainable financing for R&D from public and private sources.

Encouraging open source innovation.

Publicly funded research to prioritise R&D for public health needs rather than
commercial interests.

3. It emphasizes the right of countries to use TRIPS flexibilities, including compulsory

licensing and pro-health patentability criteria. It recommends that WTO members log
the commercial and political pressure that they face when intending to use these
flexibilities, and that WTO implements punitive measures for the offending countries.
This is significant because of the huge impact of such pressure on inhibiting countries
from fulfilling their human rights obligations to public health.

4. It acknowledges that FTAs include TRIPS plus provisions that increase IP

protection and enforcement, thus severely restricting governments ability to use laws
and policies to fulfil their human rights obligations. The report recommends that
governments entering FTA negotiations should not adopt measures that impede the
realization of human rights, and should perform impact assessments of the proposed
FTA measures on access to health technologies. The UN and multilateral organizations
should support governments to negotiate FTAs based on human rights principles.

5. It calls on governments to implement legislation to enable a quick, fair, implementable

and predictable process for compulsory licensing, especially for essential medicines
(but falls short of recommending automatic compulsory licensing for essential
medicines).

6. It acknowledges the negative impact of a lack of transparency and accountability in

the field of health technology. To remedy this, it recommends:

Ensuring transparency with regard to the cost of R&D, including information on other
costs such as marketing and public financing.

Expansion of the WHO price monitoring mechanism (currently focused on technologies

for specific diseases).

Making information on clinical trials publicly available, irrespective of the results of the
trial (positive, negative, failed, abandoned, neutral). WHO has already set up a website

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 for this purpose, but it has no records. The recommendation requires companies to
share the trials information that is published on the WHO website as well as in peer-
reviewed journals.

Making patent information available. The report acknowledged that the lack of
information on patents in different countries has a chilling effect on generic entry to the
market. Multiple patents (patent thickets) make it difficult to negotiate with patent
holders for licences, whether for further research or to manufacture a generic
equivalent. For example, Ritonavir (for HIV treatment) has 805 patents. The report
recommends that companies make detailed information available and that the World
Intellectual Property Organization (WIPO) should keep a public database on patents.

7. It calls on governments to play their role in promoting R&D and enabling access,
including through financing R&D and using TRIPS flexibilities. The report also
recognizes the role of civil society in promoting access to medicines and calls for
support to enhance that role.

8. It recommends three mechanisms for follow-up on implementation of the

recommendations, as well as for monitoring progress on access to health
technologies:

An independent review body established by the SG.

A special session of the UNGA in 2018 to discuss progress in access to health

technologies, encouraging and financially supporting reports from civil society.

An inter-organizational coordination mechanism between relevant UN agencies to

harmonize their country support based on human rights.

AREAS OF THE HLP REPORT THAT OXFAM WANTED

TO BE STRONGER
The report made recommendations to remedy policy incoherence but was not bold enough on a
number of issues. We regret that it lacked the following:

1. An acknowledgment that the current R&D system has intrinsic systemic failure
because it is based on monopoly protection of IP, enshrined in the TRIPS
Agreement and exacerbated by FTAs. The system is not based on human rights or
public health needs, and the report was not bold in recommending systemic changes to
ensure that human rights dictate innovation and access to health technologies for all.
There should be a call for a new IP regime for pharmaceutical products consistent with
international human rights law and public health requirements. This issue should be
pursued in other UN fora.

2. A call for bold punitive actions against governments making threats of retaliation
against other governments use or intention to use TRIPS flexibilities, including
compulsory licensing and pro-health patentability criteria. UN member states should
reaffirm their commitment to the anti-retaliation principle and sovereignty of WTO
members in complying with TRIPS. Unilateral retaliation against countries using or
intending to use TRIPS flexibilities should be deemed a violation of the TRIPS
Agreement. The WTO must take immediate punitive actions against such violations.
The UN Human Rights Council (HRC) should also receive and investigate complaints
(by governments, civil society or other stakeholders and by the HRC on its own accord)
of violation of human rights treaties as a result of retaliation. The HRC should
recommend appropriate actions including through the Universal Periodic Reviews of UN
members. India is a case in point where pharmaceutical companies challenged the part

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 of India's patent law that defines patentability criteria. Although the Indian Supreme
Court upheld the strict application of this law, pressure from other countries continues in
order to change the law. There is also ongoing litigation filed by multinational
pharmaceutical companies against the strict patentability criteria and examination
processes in Argentina and Brazil. Such pressure, and these cases, must immediately
stop.

3. An immediate ban on TRIPS plus measures in FTAs such measures must be

halted, reversed and banned. While the report acknowledges the continuing limitations
of policy space for government action because of TRIPS plus measures in FTAs, it
needed to have bold recommendations to stop these measures from being included in
new FTAs and to delete them from already signed agreements.

4. A mechanism to allow governments to issue effectively automatic compulsory

licences for medicines on national lists, or on the WHO Model List for Essential
Medicines. Ultimately, these medicines should be exempted from IP protection.

5. An extension of LDCs transition periods beyond 2021 and 2033 until an LDC
ceases to be in this category of countries. All LDCs should immediately review their
national and regional IP laws to ensure the full use of transition periods.

6. Greater support for the work of civil society (CS) to ensure access to medicines. CS
work on medicines has been done in the face of massive human and financial resources
limitations. UN agencies and other donors should provide funding to support it.

OPPOSITION TO THE HLP REPORT

As anticipated, both the US government and pharmaceutical companies have shown their
opposition to the HLP and its work, and have attempted to undermine or water down the report.
Their criticism emerges from their strong support of the current system of IP protection, and
their desire to maintain control over decisions on R&D and access. Taking a human rights
approach threatens the industrys monopoly power that relies on the current system of IP
protections. The pharmaceutical industry is likely to attack the reports recommendations, most
likely focusing on the following arguments:
1. The current IP based system works and industry actions (tiered pricing, donations, voluntary
licences, product partnerships) address any issues that arise in relation to access to
medicines. However, this is not accurate because:

High prices (as the examples above illustrate) are not solved by companies individual,
disparate and fragmented solutions. For example, Novartiss donation program of
imatinib in India is approximately three times more costly than the price of the generic
equivalent. Product development partnerships have a role to play for specific neglected
diseases. However, it is not economically or commercially feasible to create a
partnership for each product for each disease.

These initiatives do not address the systemic failure of the current IP-based system to
create R&D pipeline that is dictated by public health and not commercial interests. The
system also encourages pricing at the highest price that the market can bear (see
examples above).
2. New medicines are expensive because R&D into new medicines is expensive and much of
the cost is borne by the pharmaceutical industry. This is not accurate because:

There is a lack of transparency on the real cost of R&D. The industry claims escalating
cost based on studies from Tufts University Centre, which is funded by pharmaceutical

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 companies and which keeps data as commercial secrets. Their latest average cost for
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developing one medicine is $2.6bn.

Andrew Witty, CEO of GlaxoSmithKline, called this high cost of drug development one
15
of the great myths of the industry.

Industry figures include marketing and other management and administration costs.
Industry does not make public disaggregated figures available to judge the real cost of
R&D.

An analysis of pharmaceutical R&D expenditure concluded that the median R&D cost
16
for a company was around $56m per drug.

The cost of developing imatinib is estimated to be $38$96m. The sales for Novartiss
17
version of the drug in 2012 were $4.675bn, or $390m per month.

A study by the Liverpool School of Medicine concluded that a price of $100$250 could
be sufficient to meet the manufacturing costs of a 12-week course of anti-viral hepatitis
18
C treatment.

Public funding contributes to the cost of R&D, including clinical trials. According to some
estimates, public funding (especially from the US government) contributes 40% to
general medicine development and 60% to the development of treatment for neglected
19
diseases.
3. Other organizations such as WHO are already dealing with issues relating to IP and
medicines, so there is no need for a new initiative. It is true that other organizations are
trying to address the problems, however:

Other organizations have focused on specific diseases in developing countries and do

not take a global view of the systemic problems in all countries.

So far, other organizations have not made a great deal of progress.

The particular mandate for sorting out the incoherence between human rights and IP
rules has not been negotiated by any of the other organizations.

IN CONCLUSION
The HLP report on Access to Medicines provides positive recommendations to address the
incoherence between human rights and IP protection, in order to ensure access to affordable
medicines for all. The UN SG and member states must start implementing the
recommendations without delay. Other key issues which have not been fully addressed by the
HLP should be discussed further.

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NOTES
1 http://apps.who.int/medicinedocs/documents/s18767en/s18767en.pdf
2 http://www.globalhealthcheck.org/?cat=37
3 http://cancerunion.org/files/Jeremy-Hunt-1October2015-CoalitionforAffordable-TDM1-CL.pdf
4http://cancerunion.org/files/Jeremy-Hunt-1October2015-CoalitionforAffordable-TDM1-CL.pdf
5 https://www.washingtonpost.com/news/wonk/wp/2015/11/20/specialty-drugs-now-cost-more-than-
most-household-incomes/
6 http://www.thespec.com/news-story/6367581-new-cancer-drugs-cost-more-than-10-000-each-month/
7 https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/rr-access-cancer-treatment-
inequality-040215-en.pdf
8 ibid
9 https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/rr-access-cancer-treatment-
inequality-040215-en.pdf
10 http://www.politico.eu/pro/high-drug-prices-romania-changes-patents-hepatitis/
11 https://www.theguardian.com/business/2016/aug/30/epipen-mylan-price-increase-senators-letter-
warren-sanders
12 https://www.washingtonpost.com/business/economy/high-prices-make-once-neglected-orphan-drugs-
a-booming-business/2016/08/04/539d0968-1e10-11e6-9c81-4be1c14fb8c8_story.html
13 http://www.nrc.nl/nieuws/2012/07/29/cvz-dure-medicijnen-voor-drie-zeldzame-aandoeningen-
uitbasispakket/
14 http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study
15 http://www.reuters.com/article/us-glaxosmithkline-prices-idUSBRE92D0RM20130314
16 https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/rr-access-cancer-treatment-
inequality-040215-en.pdf
http://www.pharmamyths.net/files/Biosocieties_2011_Myths_of_High_Drug_Research_Costs.pdf
17 http://keionline.org/node/1697
18 http://cid.oxfordjournals.org/content/early/2014/01/06/cid.ciu012.abstract
19 Report of the United Nations Secretary-Generals High-Level Panel On Access To Medicines

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 Oxfam International September 2016

This paper was written by Mohga Kamal-Yanni. It is part of a series of papers written to inform public
debate on development and humanitarian policy issues.

For further information on the issues raised in this paper please e-mail [email protected]

This publication is copyright but the text may be used free of charge for the purposes of advocacy,
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holder requests that all such use be registered with them for impact assessment purposes. For copying in
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must be secured and a fee may be charged. E-mail [email protected].

The information in this publication is correct at the time of going to press.

Published by Oxfam GB for Oxfam International.

Oxfam GB, Oxfam House, John Smith Drive, Cowley, Oxford, OX4 2JY, UK.

OXFAM
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