Pharma weekly wrap: Will WHA resolution help in fair pricing of medicines?

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The resolution addresses four areas where it expects full transparency or information sharing on research and development (R&D) costs, clinical trial results, patents on medicines, and their real price.

The 72nd World Health Assembly (WHA), a nine-day meet held in Geneva towards the end of last month, has made several important resolutions related to the broad theme of universal health care.

WHA is the supreme decision-making body of the World Health Organisation (WHO), which determines the policies of the organization, appoints the Director-General, supervises financial policies, and reviews and approves the proposed programme budget. Delegations from all WHO member states take part in WHA.

One of the significant resolution adopted by WHA this year was “Improving the transparency of markets for medicines, vaccines, and other health products.”

The resolution addresses four areas where it expects full transparency or information sharing on research and development (R&D) costs, clinical trial results, patents on medicines, and their real price.

The resolution. which was brought by Italy was co-sponsored by 19 countries including India, was adopted after three weeks of intense negotiations.

Germany, Hungary and the UK formally dissociated themselves from the adopted resolution, despite the sponsors of the resolution having made considerable compromises to accommodate their concerns.

The final resolution is a watered-down version of the original. The resolution makes it voluntary if disclosures are related to sensitive information R&D.

Despite these shortcomings WHO Director-General Dr Tedros Adhanom Gheyebresus called the resolution as a “landmark agreement”.

Fair price of medicines, is it possible?

Transparency of drug prices has been a major problem. The pharmaceutical industry claims that the pricing of drugs is calculated by taking into account the high research and development (R&D) costs.

But no one really knows the true nature of these R&D costs except the company. Many times a crucial piece of R&D may have come through public funded research institutions. To recover R&D investments companies are incentivised through intellectual property rights (IPR) regime that provide market monopolies for 20 years.

Studies have shown that the high prices of medicines was due to profiteering, high marketing costs and exorbitant markups in the trade.

The asymmetry of information gives the corporations an edge over the buyer i.e. consumer or government during negotiations.

Medecins Sans Frontieres (MSF), which campaigns for access to drugs in poor countries, welcomed the resolution calling it the result of a historic mobilisation of governments across the world.

But however the non-governmental agency says it falls well short.

“We need to know the mark-ups corporations charge, production costs, the cost of clinical trials, how much investment is really covered by companies, and how much is underwritten by taxpayers and non-profit groups. The resolution passed today lacks strong norms and actions on these critical elements of transparency,” MSF said.

“While earlier drafts of the resolution included clear language to bring more transparency to this opaque area, unfortunately a small group of countries strongly objected and obstructed more concrete advances,” it added.

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