PHA-Exchange> Orphan drugs

[Claudio]

From: "Chan Chee Khoon" <ckchan at usm.my>
>
 Philanthropic, Globalised  Keynesianism?
>
> At a recently concluded conference in Penang (February 6-7,
> 2004) organized by Medecins Sans Frontieres (MSF) and the Drugs for
> Neglected Diseases Initiative (DNDi), John Sulston, the Nobel laureate in
> medicine or physiology (2002) declared that the problem of neglected
> diseases was not so much a market failure as the absence of a market which
> could bring into existence the required medical armamentarium.
>
> This was more than a semantic quibble, indeed it captured quite succinctly
> the two strategic postures which lay dormant throughout much of the
> conference (in truth, a continuum rather than two polar opposites), but
> occasionally erupted in robust exchanges between such personalities as
> US-based James Love (Consumer Project on Technology) and representatives
> of big Pharma (most notably Novartis).
>
> The tension of course was between non-market approaches vs. reforms to
> "make the market work better".
>
> Alex Matter, founding director of the Novartis Institute for Tropical
> Diseases in Singapore (est. 2002) revealed that Novartis had committed an
> establishment and operational budget of US$122 million for the first five
> years to carry out research on neglected tropical diseases, and that "in
> those developing countries where these diseases are endemic, Novartis AG
> intends to make treatments readily available and without
> profit" (Novartis ITD website).
>
> After some inconclusive discussion on the meaning of "non-profit" in
> relation to the accounting details of variable and fixed costs (most
> importantly, R&D) in the product development and marketing of drugs, some
> participants were left wondering as to whether this was an expensive PR
> exercise for Novartis.
>
> The less cynical however drew attention to the potential markets which
> could be created by the Global Fund for Aids, TB and Malaria (GFATM), the
> Bill & Melinda Gates Foundation, UK-DFID, and Advance Purchase Commitments
> (APC).  The latter is an incentive mechanism for drug or vaccine R&D where
> success is uncertain and effective demand does not otherwise exist.
>
> This APC approach, which guarantees a purchase at specified price and
> volume in the event that an acceptable product emerges, is currently much
> in vogue at the World Bank, UK-DFID and other international development
> and academic circles.  It was also the subject of a lengthy paper and
> critique by Oxford economist Andrew Farlow at another session.
>
> In the earlier panel, Ee Chee Ren, deputy director of the Genome Institute
> of Singapore (GIS) described a joint-venture between GIS and Roche
> Pharmaceuticals in developing a diagnostic test that could detect the SARS
> coronavirus before the onset of symptoms and furthermore could provide
> results within one hour.  Dr Ren however declined to provide details on
> the benefit sharing agreement between the GIS and Roche, although he did
> allow that the diagnostic kit to be marketed by Roche would be priced at
> about USD20 per kit.
>
> Suerie Moon (MSF) quite correctly pointed out that SARS would not count as
> a "neglected disease".  With 10% of Singapore's GDP at stake (tourism) not
> to mention the more distal economic effects extending as well to China and
> other SARS-sensitive East Asian economies, the market for SARS diagnostic
> kits, vaccines, and therapies is assured in East Asia.  (In Malaysia, the
> tourism sector accounts for 7% of GDP and foreign exchange earnings second
> only to manufactured exports).
>
> This is in contrast to the neglected diseases highlighted by MSF:  of the
> 1,393 new drugs approved between 1975 and 1999, only 16 (or just over 1
> percent) were specifically developed for tropical diseases (such as
> malaria, sleeping sickness, Chagas' disease, kala azar) and tuberculosis,
> diseases that account for 11.4 percent of the global disease burden.
>
> For 13 out of those 16 drugs, two were modifications of existing
> medicines, two were produced for the US military, and five came from
> veterinary research.  Only 4 were developed by commercial pharmaceutical
> companies specifically for tropical diseases in humans.
>
> These neglected diseases of course mainly affect poorer communities in
> countries of the South, which do not constitute a valuable enough market
> to stimulate adequate R&D by the multinational pharmaceutical companies.
>
> In the event that "philanthropic" Keynesianism doesn't deliver adequate
> returns to the multinational pharmaceutical companies, we can anticipate
> that companies like Novartis will turn to more marketable R&D in its
> tropical diseases research agenda, much along the lines of the
> publicly-funded, market-oriented Genome Institute of Singapore, which
> currently focuses on SARS, and perhaps avian flu and Nipah among its
> tropical disease research priorities.
>
> In short, we would be back to an intractable, fundamental dilemma:  need
> vs. demand, in its neglected diseases and orphan drugs incarnation.
>
> Chan Chee Khoon
> Citizens' Health Initiative