Memorandum by UNITAID
UNITAID is pleased to answer the UK Parliamentary
Inquiry into the "Control of Infectious Diseases" by
the House of Lords, Ad Hoc Committee on Intergovernmental Organisations.
Taking into account UNITAID specific missions, we are only in
a position to answer the questions that are relevant to UNITAID
activities (questions 5, 6, 9, 14, 19). Additionally, it is relevant
to clarify that UNITAID has no specific activities related to
Avian or Human Pandemic Influenza.
5. What do you consider to be the
principal blockages to achieving progress in the prevention or
control of the four diseases? And how might these blockages be
removed by more, or better-targeted or better-coordinated inter-
governmental action?
Despite progress made in the recent years in the
fight against HIV/AIDS, tuberculosis and malaria, the mechanisms
currently in place are still outweighed by the challenge that
the major pandemic diseases pose.
UNITAID, an intergovernmental initiative hosted
by the World Health Organization, was created in response to some
of the remaining challenges:
— The drug market is typically structured
around solvent demand in the North and therefore does not provide
the quantity of drugs required at a price that developing country
patients can afford. If the goal of universal access to treatment
for the three target diseases by 2010 is to be achieved, global
production must increase tenfold in the next five years. This
massive increase poses many practical problems both for brand
name drug producers and generics manufacturers.
— Prices are still too high, both for
drugs (especially second-line antiretrovirals—ARVs, which
currently cost 10 to 20 times more than first-line treatments
and anti-malarial drugs that are effective against new resistant
strains) and for tests, diagnostic kits and patient monitoring
tools.
— Many treatments require adaptation
(special formulas for children, combined set doses) in order to
ensure the most appropriate treatment and optimum patient comfort,
which play a role in patients' adherence to treatment. For example,
ready-made formulations, appropriate for children are not available
for these diseases, as there is no market for specific paediatric
ARV in the North where preventive treatment have almost eradicated
transmission from mother to child; therefore incorrect dosages
are more likely as a result.
— Insufficient funding, as well as
a dearth of predictable long-term funding so as to ensure a sustainable
supply of treatments, remains a problem.
UNITAID fills a critical gap in the global health
financing landscape. By guaranteeing sustainable predictable revenues
for the purchase of drugs, UNITAID plays an important role in
influencing manufacturers to drive price reductions and increase
drug quality by:
— Broadening the funding supply and
help centre it on recurrent and sustainable revenue.
— Improving the security and the solvency
of demand in the medium-term using its financial resources. With
stable financial resources provided, developing countries are
able to obtain drugs and other healthcare products on the basis
of purchasing programmes that are guaranteed in the medium- to
long-term.
— Increasing production capacity, which
is currently limited by poor visibility on long-term solvent demand.
— Encouraging price reductions and
diversification of supply through greater market efficiency.
— Fostering a more diverse and competitive
supply for all the products poorly served by the market, such
as second-line HIV drugs or the new artemisinin-based malaria
treatments, by promoting the participation of new suppliers.
— Ensuring the quality of drugs and
diagnostic products.
6. What role does your organisation play in
combating the four diseases? Do you believe that it is correctly
configured and adequately resourced to do the job? With which
other organisations do you collaborate? How would you assess the
degree of synergy?
MEDICINES ARE
IN THE
NORTH, PATIENTS
IN THE
SOUTH
We live in an unequal world. The less developed
countries represent 84% of the world population and suffer more
than 93% of disease, and yet benefit from less than 11% of global
health expenditure.
Each year nearly 11 million children die worldwide
from the three big killers: HIV/AIDS, malaria and tuberculosis.
More than half of these deaths are avoidable if we can just scale
up access to the care, medicines and vaccines that already exist.
UNITAID has been created to take action to help save those lives.
We are dedicated to providing better ways of identifying HIV/AIDS,
malaria and tuberculosis in poor and vulnerable populations, and
providing access to the drugs and treatments that can help give
those people back their health.
The challenge of combating the world's three
major pandemics—HIV/AIDS, malaria and tuberculosis—is
enormous. With the mandate UNITAID is part of the global response
to meet the challenge of the three big pandemics. Everyone affected
by HIV/AIDS, malaria and tuberculosis no matter where they live
on the planet should have access to the drugs and treatments,
which can mean the difference between life and death. UNITAID's
mission is to provide lower-cost life saving medicines for HIV/AIDS,
tuberculosis and malaria for people in developing countries.
UNITAID was established in September 2006, during
the World Assembly of the U.N. in New York, by 5 founder countries:
Brazil, France, the United Kingdom, Chile and Norway. It counts
now 27 participating countries plus the Bill and Melinda Gates
foundation. After its first year of existence, UNITAID funds programmes
for the three diseases in more than 80 countries.
UNITAID eligibility criteria mandate that 85%
of UNITAID funds must be allocated to low-income countries.
AN ORIGINAL
FUNDING: THE
SOLIDARITY CONTRIBUTION
ON AIRLINE
TICKETS
One of the most innovative proposals designed
to bring fresh funding for the achievement of the Millennium Development
Goals was the implementation of a solidarity contribution on airline
tickets, more commonly called "air ticket tax". This
was chosen as an economically neutral tool, easy to implement
at the national level and well-suited to mobilizing predictable
resources to provide sustainable access to medicines. Each country
decides freely what rate to introduce and what it will apply to,
for example all flights or only international flights; all classes
or only business class etc. Countries are invited to confirm their
intention to allocate the proceeds of the levy to UNITAID. Chile,
France, Guinea, Mauritius, Niger and the Republic of Korea have
implemented such a contribution, and other countries are preparing
its implementation in 2008. Norway affects part of its existing
tax on kerosene (CO2) to UNITAID. When countries don't want to
raise a tax, they can contribute through long-term commitments
to UNITAID, in order to ensure a sustainable funding, such as
the United Kingdom, which has accepted a 20 years budget commitment.
The solidarity contribution on airline tickets
is a simple and effective mechanism that has no negative economic
impact. For example, in spite of the implementation of a tax on
air tickets in France on the 1st July 2006, Air France passenger's
traffic has increased in 2006 and 2007 by more than 5%, as stated
in the latest budget report from the French Parliament.
The contribution of African countries deserves
a special recognition, since it demonstrates that UNITAID can
bring together countries from the North and the South and overcome
the obsolete notions of "donor" and "beneficiary"
countries.
For 2006-07[3],
UNITAID's budget was US$383.2 million.
UNITAID ADDED VALUE
UNITAID uses its funding to make a difference
in four specific ways:
— To reduce prices which means more
drugs can be made available for the same budget.
— To have drugs manufactured that are
better adapted to patient needs—for example fixed dose combinations.
— To contribute to the manufacture
of better quality drugs through the drug pre-qualification programme
which encourages manufacturers to invest.
— To rapidly deliver drugs to places
where they are needed most.
UNITAID is also committed to evaluating other
innovative solutions that may emerge that can overcome limitations
to market diversification in developing countries; these options
will also be pursued.
UNITAID UNIQUE BUSINESS
MODEL
Currently, international drugs procurement is
fragmented and large differences in price may occur for a given
drug between regions in the world. The UNITAID intention rests
on the following assumptions: the existence of large transaction
and marketing costs that can be reduced by centrally pooled purchasing;
the use of monopolistic buying power removes excessive rents earned
by pharmaceutical companies; and increased overall demand leads
to decreased prices.
UNITAID uses its purchasing power and understanding
of market dynamics to help generate a steady demand for drugs
and diagnostics and significantly impact market dynamics through
innovative activities. UNITAID concentrates its efforts on markets
where the reduction in the cost of drugs and improvement in supply
of high-quality products will have most impact.
For each target market UNITAID conducts continuous
analysis of market dynamics in order to identify and address key
market bottlenecks. Based on such analysis, by using purchasing
power and an understanding of the market, we can drive long-term
reductions in the price of medicines and diagnostics. As these
lower prices become available to all our stakeholders, they will
also expand access to quality products globally. As well as the
wide range of tools we use to help us meet our objectives, our
core concept of working in partnership to supply poor countries
with lower-cost life-saving medicines has now been solidly established.
This market-specific orientation is unique to
UNITAID and we anticipate that the resulting price reduction will
benefit other funding organizations, and in turn, dramatically
scale up access to treatment. When sufficient price reductions
will be achieved within a particular market, UNITAID will phase
out of drug niches and identify new markets where its resources
may be better utilized.
UNITAID relies largely on existing organisations
who become collaborative partners (organisations that have experience
in procurement, price negotiation, shipment and handling), rather
than be involved directly in procurement activities themselves.
For each programme, UNITAID sets up an ad hoc partnership with
recognized partner organizations, such as the Clinton Foundation,
the Global Fund, UNICEF, WHO, the Global Drug Facility. UNITAID
funded projects are implemented through these collaborative partnerships.
UNITAID funds are restricted exclusively to
financing the purchase and supply of high quality drugs, diagnostics
and related commodities, not to finance operating costs or administrative
expenses. UNITAID eligibility criteria mandate that 85% of UNITAID
funds must be allocated to low-income countries.
UNITAID OUTCOMES
In the first year of UNITAID existence, there
have been many successes of which just a few are outlined: increased
supply of drugs and treatments, lower prices, better quality drugs
and faster delivery to where they are needed.
Making drugs more affordable
One of the biggest areas where UNITAID has made
an impact in its first year is in making more drugs available
for the same budget. We have achieved a reduction in the price
of anti-retroviral (ARV) drugs used to combat HIV/AIDS in children
by an average of 40%. Our efforts have also lead to a price reduction
of second line ARVs, used against HIV/AIDS, of between 25% and
50% when measured by the income level of the country concerned.
With the financial support of UNITAID, the Global
Drug Facility (GDF) has been able to use bulk orders and streamlined
purchasing procedures to generate significant price reductions
for anti-tuberculosis drugs for children. By offering this financial
support UNITAID has contributed to the expansion of supply of
anti-TB drugs to approximately 600,000 children in an estimated
40 countries over a three years period.
Making medicines better adapted for patients
UNITAID has in its first year been at the forefront
of the manufacture of medicines better adapted to patient needs,
such as fixed dose combinations of ARV for children, where 3 pills
a day now replace 16 daily doses of syrup. Such formulations did
not exist as there was not solvent demand for them before. This
will make sure more treatments are completed and limit the development
of resistance to first line treatments.
UNITAID also provided financial support to the
Global Drug Facility (GDF) of the Stop TB Partnership to provide
appropriate-strength drugs for children under the age of 15, and
to ensure the development of new child-friendly formulations for
infants under five years old. A total supply of 180,000 anti-Tuberculosis
treatments for children in 20 countries was provided.
Better quality medicines
One of the key areas for UNITAID is to improve
the quality of drugs and diagnostics through supporting the World
Health Organization's (WHO) drug Prequalification Programme. UNITAID
is a major funder of the WHO Prequalification Programme; this
resulted in 21 new prequalified drugs in 2007 and maintenance
of the current list of 180 prequalified products.
The Prequalification Programme increases access
to medicines that meet unified standards of acceptable quality,
safety and efficacy for HIV/AIDS, malaria and tuberculosis. Manufacturers
wishing their products to be included in the WHO list must present
extensive information and open their manufacturing sites to an
inspection team that assesses working procedures for compliance
with WHO Good Manufacturing Practices (GMP).
Delivering medicines when and where they are needed
When illness strikes a community speed of reaction
is often critical. UNITAID has provided financial support for
its partners to prevent stocks of key drugs running out, and through
the development of Strategic Rotating Stockpile(s), lead times
for delivering drugs when they are needed have been reduced and
the emergency cost of providing those drugs has been cut.
UNITAID now delivers medicines and diagnoses
in over 80 countries worldwide.
9. Tuberculosis is potentially curable by
long-term antimicrobial therapies. Yet the numbers of reported
cases worldwide seem to be rising. Are the necessary medicines
not getting through to patients? What are the barriers to effective
long-term therapy? Are we now seeing infections which stem from
other conditions—eg HIV/AIDS? Or are there other reasons
why a treatable disease should be spreading? How might intergovernmental
action help to deal with this situation?
9 Million people develop active tuberculosis
(TB) each year. Regarding tuberculosis, several concerns can be
mentioned:
— The number of multi-drug resistant
tuberculosis (MDR-TB) is increasing, due to resistance to first
line treatments. It is estimated that at least 450,000 individuals
worldwide have contracted a multi drug resistant form of tuberculosis
(MDR-TB). A very small percentage receives appropriate treatment,
the cost of which is very high (approximately $4,000 at the high
end of the range). There is also a shortage of quality-certified
suppliers in this market.
— Although it is estimated that about
10% of TB cases are in children, paediatric TB has been largely
neglected, with little focus on the specific treatment needs of
children. As a result, no paediatric tuberculosis products are
currently pre-qualified. Nor have child-friendly formulations
yet been approved. These needs were not being funded by other
existing programmes.
— In terms of quality, there is a lack
of prequalified drugs.
UNITAID funds anti-tuberculosis drugs, which
are procured through the Global drug Facility (GDF) and the Global
Fund:
— First line treatments against tuberculosis
UNITAID has made a commitment to the Stop TB
Partnership's Global Drug Facility (GDF) to:
— finance the purchase of 866,000 first-line
anti-TB treatments for 19 low and low middle income countries
(these countries being at risk of no or interrupted treatment
without UNITAID intervention); and
— fund the creation of a strategic
rotating stockpile of first line anti-TB drugs.
These actions will have a strong impact in helping
to achieve cost containment of anti-TB drugs in the short-term,
achieve price stabilization and potential price reductions in
the medium term, minimize the risk of stock-outs and therefore
drug resistance, improve delivery lead times and reduce overall
treatment costs for drug deliveries.
— Pediatric formulations against tuberculosis
UNITAID is funding pediatric therapies for approximately
180,000 children in 30 countries at a cost of $5.6 million. UNITAID
plans to continue to finance this program until 2010 with the
aim of providing treatment to the 900,000 children who need it.
The long-term funding provided by UNITAID will
help encourage manufacturers to develop fixed-dose combination
formulations that are pre-qualified and suitable for children,
especially those under five years of age. In addition, UNITAID's
large procurement volumes will enable price reductions to be obtained
for more pediatric drugs. Prices already secured will allow treating
more children until 2010 within the allocated budget. By July,
180,000 treatments had been approved. Their delivery started in
September 2007.
— Treatment against multidrug-resistant
tuberculosis
UNITAID made a commitment of $20.8 m to finance
the purchase of 4700 second-line MDR-TB treatments for 17 countries
from 2007—2011. The finances will also be used to establish
a strategic rotating stockpile of priority second-line drugs.
This commitment means that UNITAID will be able to play a role
as catalyst for manufacturers, enabling them to increase their
production capacity and develop pre-qualified products. Price
reductions of the order of 20% for second-line drugs are expected
during the course of the commitment. Deliveries of second-line
drugs will begin in 2008. In addition, UNITAID is providing funding
of $7.3 million to combat MDR-TB through the Global Fund (Round
6).
14. Are there any difficulties with regard
to patents or intellectual property which are impeding the flow
of medicines or other control methods to those infected? Is intergovernmental
action needed to improve the situation?
Despite the Doha declaration in 2001 and the
possibility for developing countries to make use of the TRIPS
Agreement flexibilities and especially to be able to issue compulsory
licensing, its use has been very limited so far. Bilateral or
Regional free trade agreements are superseding Global Agreements
in many countries.
In term of patents for essential drugs, where
a drug would need the use of several patents, for example for
ARV, there are many issues including blocking patents, where a
large number of companies can block or limit the use of the technology.
For essential drugs, as ARV for example, it is necessary to combine
3 or 4 different drugs to have an efficient result on the virus.
UNITAID Constitution states in Section 1 (Mission,
objectives and principle of UNITAID), textually: "...
Where intellectual property barriers hamper competition and price
reductions, it will support the use by countries of compulsory
licensing or other flexibilities under the framework of the Doha
Declaration on the Trade-Related Aspects of Intellectual Property
Rights (TRIPS) Agreement and Public Health, when applicable".
Following a memo submitted to the consideration
of the French Ministry of Foreign Affairs and UNITAID Board by
Médecins sans Frontie"res in June 2006, UNITAID Secretariat
conducted a feasibility study with McGill University on the implications
of setting a patent pool for medicines and which would potentially
be UNITAID's involvement in such. A preliminary report on the
legal aspects of patent pools considered feasible the establishment
of patent pools, under international laws. Its organization would
require special arrangements and several issues still need to
be cleared and will be discussed by UNITAID Board. The use of
patent pools could also contribute to price reductions, as fees
for new manufacturers would be reduced. In intellectual property
laws, a patent pool is a consortium of companies agreeing to cross-license
patents relating to a particular technology. The creation of a
patent pool can save patentees and licensees time and money, and,
in case of blocking patents, it may also be the only reasonable
method for making the invention available to the public.
UNITAID also works on this issue jointly with
the WHO Intergovernmental Working Group on Public Health, Innovation
and Intellectual Property.
19. What resources (subscriptions, staff,
training, medicines etc) does the UK Government commit to intergovernmental
bodies to help in the fight against the four diseases listed?
The UK is one of the five founding countries
of UNITAID. The UK has committed €20m to UNITAID for 2007,
and has agreed that, subject to the outcome of a joint assessment
of the performance of UNITAID, the UK commitment will gradually
rise to €60 million per year by 2010 up to 2027.[4]
DFID's continued support to UNITAID is based
on regular assessments of UNITAID's performance. Targets and key
performance indicators have been developed and approved by the
UNITAID Executive Board in advance of each three year period of
funding and UNITAID's performance assessed against them.
UK is a member of the Board of UNITAID. DFID
has been consulted from an early stage of this initiative.
DFID will decide on its 2008-10 commitments
in the light of an assessment made at the end of 2007 that, inter
alia, will derive new targets through to 2010. It will undertake
a similar process in 2010 for the following three years period,
and so on for the duration of its 20 year commitment. Thus DFID
funding for the next four years, subject to the results of the
joint assessments, will provisionally be as follows:
|
| Calendar year | 2007
| 2008 | 2009
| 2010 |
| DFID Financial year | 2006-07
| 2007-08 | 2008-09
| 2009-10 | 2010-11
|
|
| Amount (£) | 15
| nil | 20
| 35 | 45
|
| Amount(€) | 20
| n/a | 30
| 40 | 60
|
|
A table setting out the relative position of donors is below
(indicative—figures need to be refined)
Contributions to UNITAID in € millions
Estimated future contributions in italics
|
| 2006
| 2007 | 2008
| 2009 | 2010
|
|
| Brazil | 5 |
12 | 12
| 12 | 12
|
| Chile | 2 |
5 | 5
| 5 | 5
|
| Cyprus | 0 |
1 | 1
| 1 | 1
|
| France | 45 |
230 | 230
| 230 | 230
|
| Norway | | 20
| 20 | 20
| 20 |
| Spain | | 15
| 15 | 15
| 15 |
| UK | | 20
| 30 | 40
| 60 |
| Mauritius | | tba
| — | —
| — |
| South Korea | | —
| 5 | tba
| tba |
| Gates Foundation | | 10
| 10 | 10
| 10 |
| Others | | 2
| 2 | 2
| 2 |
|
| 12 February 2008
|
3
Period November 2006-December 2007. Back
4
For its part, la France fully supports IFFIm (International Finance
Facility for Immunization), the initiative for vaccines development,
with a contribution of 1,3 billion € on 20 years, (25% of
the total). Back
| 
