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The Biomedical Industrys

Commitmentto Diseases of the

Developing World

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The Biomedical Industry Advisory Group

(BIAG) was ormed to help the World Health

Organizations Commission on Intellectual

Property Rights, Innovation and Public Health

(CIPIH) better understand the role the biomedical

industry plays in combating Diseases o the

Developing World (DDW). BIAG includes

representatives rom pharmaceutical,

biotechnology, medical devices,

vaccines and diagnostic industries.

Since its ormation, BIAG has

provided its expertise, insights

and relevant supporting data on

the impact o intellectual property

rights on research and development

or disease disproportionately

aecting the developing world.

In May 2005, BIAG provided its submission toCIPIH, which can be ound at www.biag.org.

This is a summary o BIAGs submission.

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INNOVATION IS KEY TOTREATING DISEASES OFTHE DEVELOPING WORLD

Since only a ew diseases lack eective treatment

options, why is it that less than a third o those aicted

are eectively treated?

Failure to adequately treat Diseases o the Developing

World (DDW) results rom multiple actors that are

described in this booklet.

Biomedical companies through their research and

development organizations can help address the need

or improved therapies through a series o initiatives. To

achieve this and other sustainable solutions will requirepublic policy incentives that support innovation. Given

the high cost o research and development (R&D) and

the sophisticated technical skills required to eectively

treat DDW, encouraging innovation is the key to the

solution, and intellectual property rights uel innovation.

The biomedical industry is committed to strengthening

its already substantial role in discovering, developing

and delivering new treatments to save and improve lives

around the world. While much has been done, the

biomedical industry is committed to working in

partnership with all interested parties to help ease

the burden o disease in the developing world.

Todays eective therapeutics typically o patent

products exist or almost all DDW, yet less than a third

o the people aicted receive eective treatment. Most o

the DDW either have eective therapies that are not

reaching patients in need due in part to lack o medical

inrastructure and/or there are multiple therapies in active

R&D programs with biomedical companies, or togetherwith companies in Public-Private Partnerships (PPPs).

The Biomedical Industrys

Commitment to Diseases of

the Developing World

GE Med Systems

GlaxoSmithKline

International Federationo PharmaceuticalManuacturers &

Associations

Interpharma

Merck & Co. Inc.

Nicholas PiramalIndia Limited

Novartis International AG

Pfzer Inc

Sankyo Co. Ltd

sanof-aventis

Serono International S.A.

Tuts University Schoolo Medicine

Wyeth Pharmaceuticals

BIAG drew on the expertise of individalsfro the following instittions:

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ADDRESSING THEBuRDEN OF DISEASE

O-Patent Therapeutics are Available

But Not Deployed

Many treatments are simply not reaching the dis-

ease populations in need. Why? Poor or non-existent

medical inrastructure, a lack o health proessionals

in resource-poor areas, under-diagnosis, insufcient

education and inadequate delivery methods in local

markets are the core issues.

O-Patent or At Cost Therapeutics Exist

But Are Not Procured

Even o-patent or at-cost treatment oten oered at justpennies per regimen are beyond the means o many

developing countries. Moreover, there is inadequate support

to purchase or set aside sufcient quantities o workable treat-

ments or populations in need.

R&D Hurdles or Existing Pipelines

While eorts are underway to discover and develop new

treatments or the ew diseases where no treatment currently

exists or where increasing resistance has diminished the

efcacy o current therapies, there are potential hurdlesthat could slow progress. They range rom inadequate local

inrastructure or late stage clinical trials to cumbersome

regulatory processes in the developing world.

Incentives or Innovation Are Essential

Creating any new treatment is a lengthy, costly and risky

endeavor. Existing incentives and measures to protect

investments including intellectual property rights are

necessary to ensure the risk-reward balance or innovation.

It is worth noting that incentives in the orm o eective IP

rights protection are oten lacking in developing countries.

32

Insufcient Political Will and Lack o Sustained Funding

All sectors must make a frm and ongoing commitment

to provide unding that will spur new solutions. Even

Public-Private Partnerships (PPPs) ace the prospects o

having to cut programs because o a lack o unding. In

act, fve o the largest PPPs Global Alliance or TB

Drug Development, Medicines or Malaria Ventures,

Drugs or Neglected Disease Initiative, International

Partnership or Microbicides, International AIDS

Vaccine Initiative ace a shortall o 75% o their

cumulative budgets between now and 2007.

PATENTS PLAY AN

ESSENTIAL ROLE IN THEBIOmEDIcAL INDuSTRY

Patent laws lay down exacting requirements or

approval o a patent. A patented drug must be

proven to have a chemical structure sufciently

dierent rom others in its class, or it must provide

new or unexpected therapeutic eects or benefts.

In the long journey rom idea to laboratory to patient,

biomedical companies must prove the new medicine

is stable, that medicinal content doesnt degrade in theenvironment, that it can be saely stored and that it can

be uniormly manuactured in acceptable quantities.

At the same time, a patent covering an improvement to

an existing patented product does not prohibit generic

competition against the existing product ater the

patents protecting the original product have expired.

With this calibrated system o protections, products

must prove that they are legitimately innovative, yet

allow generic competitors to enter the market oncepatents expire.

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R&D FOR TRuLYNEGLEcTED DISEASES

Therapeutic progress on Diseases o the Developing

World (DDW) will require a global coordinated eortto overcome the many hurdles aced. Only by ocusing

on the underlying issues can we expect to make steady

and long-lasting progress. The key elements are:

Funding: Increased fnancial resources are needed

in a sustainable way to create and maintain a strong

pipeline o drug candidates, and to ensure that these

therapies will reach patients in need. Despite the

generosity o donors and the ongoing involvement

o the pharmaceutical industry, more unds need to

be made available within the global public health

community to secure, accelerate and sustain impor-

tant R&D eorts that are showing promise.

Basic research: Fundamental research on new

biologic mechanisms is needed to orm the basis or

new therapeutics. Substantial additional research is

needed to gather detailed epidemiological inorma-

tion to help shape research and development eorts.

Drug development infrastructure: Capacity

building in developing countries to acilitate early

and late stage clinical trials, swit product registrationand post approval evaluation o medicines, including

systems or assessment o adverse events.

Drug delivery infrastructure:The global health com-

munity needs to make sure that new medicines are

actually delivered to patients in need, such as building

on successul disease control programs.

Without implementing these steps, discovering and

developing new therapeutics will be a utile exercise

to overcome the challenges o diseases aecting

developing countries.

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CURRENT STATUS OF DRUGS

FOR NEGLECTED DISEASES

DiseaseExistingMedicines

Limitations

o CurrentMedicines

Need or

SpecifcUses

Aricantrypanosomiasis

Yes Efcacy andsaety

Dosage orm(injectable)

Cost

Potential drugresistance

No

Chagas disease Yes Activity only inacute stage odisease

Saety

No

Leishmaniasis Yes Saety

Dosage orm(injectable)

Cost

Potential drugresistance

No

Dengue ever No N.A. HIV co-inection

Malaria Yes Compliance Cost

Partially sae

Drug resistance

Pregnantwomen

Paediatricormula-tions

Tuberculosis Yes 6-9 monthcourse o treat-ment

Compliance

Drug resistance

HIV co-inection

Source: UNICEF/UNDP/World Bank/WHO Special Programme for Researchand Training in Tropical Disease (TDR)

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76

SUCCESSFUL DISEASES CONTROL PROGRAMS

Disease/Program

Pharmaceutical Industrys

Contributions Impact on Society

Onchocerciasis

Mectizan Donation Program

Merck donates Mectizan (ivermectin)to all who need it and as long asnecessary. To date, the company hasdonated over one billion tablets, withmore than 350 million cumulativetreatments distributed.

In West Arica alone, approximately 18 million children havebeen protected against onchocerciasis, and 600,000 peoplehave been saved rom blindness. Some 62 million acres opreviously inested areas has been resettled and is now beingcultivated through Mectizan treatment and vector control.Currently, Mectizan treatments are preventing 40,000 caseso blindness annually in Arica.

Leprosy

Global Alliance toEliminate Leprosy

Novartis donates $37 million in multi-drug treatment or leprosy, and workswith WHO and other partners to improvedelivery and care.

Over 14 million people have been cured o leprosy and theprevalence rate has dropped by over 90 percent since 1985, andthe number o countries considered endemic has been reducedrom 122 to 15.

Lymphatic Filariasis

Global Alliance to EliminateLymphatic Filariasis

GlaxoSmithKline donates albendazole,and Merck donates ivermectin(Mectizan). To date 250 milliontreatments o albendazole and 20million treatments o Mectizan havebeen donated.

By the end o 2004 almost 250 million people in 39 countries hadreceived treatment or lymphatic flariasis. This is a marked increasecompared to the year 2000 when only 25 million people at riskwere covered.

Guinea Worm

Guinea Worm EradicationProgram

Johnson&Johnson has donatedenough medical supplies such asTylenol, oceps and gauze, to treatmore than 5,000 villages in the endemiccountries.

The number o people suering rom guinea worm has droppedrom 3.5 million in 1986 to 16,026 in 2004. Globally, over 150countries and territories have been certifed ree o parasitetransmission.

Blinding Trachoma

International TrachomaInitiative

Pfzer has donated more than$225 million in product donations(Zithromax) and health educationalgrants.

Over 9.5 million people have been rid o active trachomainection through antibiotic treatment and more than 85,000cases o blindness have been prevented through surgeries.

Arican trypanosomiasis

WHO Program to EliminateSleeping Sickness

Sanof-Aventis has supplied some1.2 million drug ampoules o threemedicines used in treatment, as well asfnancially supported the work o mobilemedical teams and research activitieso WHO on a new ormulation o a drugor Arican trypanosomiasis.

During the past three years, more than 60,000 people havebenefted rom this initiative, receiving medical counsel, screeningand treatment.

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THE cOST TO DEVELOPA NEW THERAPEuTIc

In a given year, only about 30 new therapeutics make

it through an increasingly expensive, complex andlengthy process beore fnally reaching patients, though

thousands o compounds exist at various stages o

research and development. R&D costs vary, but various

studies cite costs over $800 million to more than

$1.7 billion. Those costs represent the sum o the costs

involved at each stage o discovery (excluding basic

research) and development, including what is spent on

candidates that ail. The mean cost or both discovering

and developing a new therapeutic is $881 million.

Such a costly process presents sizeable fnancial risks.

In the late 1990s, or instance, 240 products were

launched with $230 billion spent on all R&D by the

top 25 biopharmaceutical companies. That works out

to $900 million per drug.

While the industrys R&D investments continue

to grow, the process to bring a compound to

market is becoming more difcult, largely because

o increased complexity in science and expanded

regulatory requirements. In addition, attrition duringdevelopment due to lack o efcacy or concerns

regarding saety continues to climb. Also, technical

advances in the discovery phase have not been

sufciently transerred into clinical development.

The cost o R&D is staggering and growing as attrition

rates increase. Only by supporting current incentives

or R&D can industry innovation help reverse and

treat the DDW.

98

EXAMPLES OF PRODUCT DEVELOPMENT

PUbLIC-PRIVATE PARTNERShIPS

FOR NEGLECTED DISEASES

Malaria Medicines or Malaria Venture (MMV)Malaria Vaccine Initiative (MVI)

European Malaria Vaccine Initiative (MMV)

Japanese Pharmaceutical, Ministry o Health,WHO Malaria Drug Partnership (JPMW)

Lapdap Antimalarial Product Development(Lapdap)

Tuberculosis Global Alliance or TB Drug Development(TB Alliance)

Global TB Vaccine Foundation (Aeras)

Foundation or Innovative New Diagnostics(FIND)

Aricantrypanosomiasis

Leishmaniasis

Chagas disease

Drugs or Neglected Diseases Initiative(DNDi)

Gates Foundation/University o CarolinaPartnership (GFUNC)

Inectious Disease Research Institute (IDRI)

Institute or One World Health (IOWH)

CRITICAL GAPS IN DRUG R&D

FOR NEGLECTED DISEASES

Research &Discovery

Preclinicaldevelopment

Phase I Phase II Phase III

RegistrationLaunch

Utilisation

New DrugTargets

NewCompounds

Good AnimalModels to

Assess Safety& Efficacy

GoodEvaluation

Tools

Clinical TrialsCapacity inDevelopingCountries

Capacity forUptake of New

Medicines

Capacity forPost-Approval

Processes

GAP I GAP II GAP III GAP IV

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A GLOBAL FRAmEWORK FORINTELLEcTuAL PROPERTY RIGHTS

Many consumer activists and representatives o inter-

national organizations allege that provisions withinnational patent laws and bilateral ree trade agreements

impose so called TRIPS-Plus obligations that extend

beyond those expressly outlined in the World Trade

Organization Agreement on Trade-Related Aspects

o Intellectual Property Rights (TRIPS). In act, the

TRIPS agreement provides a minimum standard o

intellectual property protection, and serves as a general

ramework to allow countries signifcant exibility in

setting IP protection.

National governments are within their sovereign right to

enhance intellectual protections within this ramework.

Characterizing provisions in national laws or bilateral ree

trade agreements as TRIPS-Plus is inaccurate, as these

provisions are completely compliant within the established

TRIPS ramework.

10

PHARmAcOEVOLuTION:ADVANTAGES OF INcREmENTALINNOVATION

Drugs based on incremental improvements almost alwaysbring signifcant advances in saety, efcacy, and/or dos-

ing refnements that can improve patient compliance.

The result: reduced hospital stays, ewer physician visits

and increased worker (patient) productivity.

The act is that people respond dierently to dierent ver-

sions o a particular class o medicine, in ways that oten are

not predictable. Thereore, multiple versions beneft more

people than a single product. Newer versions also assure sup-

ply o needed medications i or any reason, the lead drug

in a certain class is removed rom the market or oten never

makes it to market due to saety and/or efcacy issues.

Whats more, expanding drugs within a class spark price

competition, with new drugs entering existing classes

oten priced at a discount rom the frst-in-class product.

THE EcONOmIcS OFFOLLOW-ON DRuG R&D

Despite prevalent misconceptions, ollow-on or me-

too drugs are, in act, needed therapeutic options. Overthe past 30 years, or instance, market exclusivity or

breakthrough drugs (i.e., only drug in a class) has allen

dramatically: rom an average o 10.2 years in the 1970s

to only 1.2 years in the 1990s.

As the idea-to-market development cycle usually runs rom

10 to 15 years, the vast majority o the ollow-on drugs

created in the last decade were already in clinical develop-

ment beore the class breakthrough or innovator drug

was approved. Accordingly, it must be understood that

new drug discovery and development tends to be a race

between candidates, rather than a quick imitation.

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13

A cALL FOR A HOLISTIcAPPROAcH

Any solution must include steadast political will and

unding. Governments rom both industrialized anddeveloping countries must recognize the colossal cost

o inaction and thereore join with industry, academia

and Non-Governmental Organizations to fnd and

implement practical solutions.

In the end, relieving the burden o developing

world disease requires contributions rom every

stakeholder, strengthened by avorable public policy

and harmonized regulatory policies. To achieve a

sustainable solution, a successul approach must be

holistic, rom R&D incentives to building a better

health care inrastructure throughout the developing

world. A cross-sector approach drawing on the

inherent strengthens o each is the most promising

solution to meet the critical needs o patients suering

rom the burden o disease in the developing world.

TRULy NEGLECTED DDWS

While most o the diseases o the developingworld have eective therapies that are not

reaching patients, the ollowing our diseases

still require signifcant R&D:

Human Arican Trypanosomiasis

Chagas Disease

Dengue Fever

Leishmaniasis

In each case research eorts are now underway

to help fnd new therapies.

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PROPOSALS TO INcREASE R&DFOR NEGLEcTED DISEASES

Additional incentives or initiatives could signifcantly

improve the R&D pipeline environment or neglecteddiseases. But as a crucial frst step, political leaders must

set a public health agenda that addresses the underlying

core issues. With these in place, biomedical companies

through their individual R&D organizations can

help address the need or improved therapies through a

series o initiatives:

Product Development Public-Private Partner-

ships (PPPs): These independent organizations

can attract public and private unding to fnance

applied research, development and delivery o new

medicines or neglected diseases.

Advanced Purchasing Commitments (APC)/

Advanced Market Commitments (AMC): Such

agreements compensate or inadequate market size

by speciying price and volume requirements or

the development o a certain drug.

Global Fund for Tropical Diseases: Such a und

makes necessary fnances available to countries and

communities, so they can purchase new and exist-

ing drugs or neglected diseases.Tropical Diseases Drug Act: Similar to the Orphan

Drug Act, this legislative package would provide

incentives to increase R&D or neglected diseases.

Key eatures would include a combination o push/

pull mechanisms such as R&D tax credits, grants,

reduced regulatory ees, ast track regulatory approval,

combined with advanced purchasing commitments

to provide a market where none exists. Likewise,

much better therapies are required or TB and

malaria. These are being actively pursued in manybiomedical research companies and with PPPs.

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