Examination of Witnesses (Questions 680
- 699)
MONDAY 21 APRIL 2008
Dr Jorge Bermudez and Dr Philippe Duneton
Q680 Lord Desai:
My next question is related. You mentioned running out of drugs
in one or two situations and also the strategic rotating stockpiles.
Can you say a little bit more about that so we understand.
Dr Bermudez: When we were discussing with Stop
TB and the Global Drug Facility, there was a problem last year
that 18 countries in Africa had been granted Global Fund grants
but they would be receiving funds for those grants in two or three
years. Most of them were being covered by the Global Drug Facility
and Stop TB but were running the risk of stock-out because of
the gap between the end of the financing they had for those medicines
and the time they needed to receive the Global Fund funds to be
able to continue. We took to our Board a strategic decision: "This
is an emergency, it is not our current business but we have been
requested by WHO, UNICEF, the Global Drug Facility and the Global
Fund to see if we can work together on a rotating stockpile of
medicines—a transitional programme, because we will not
maintain that for the rest of the years—to avoid stock-outs
and the emergence of resistance and people who will not receive
their medicines". The Board understood that it was an exceptional
measure that should be approved and supported, but not a normal
activity that we would undertake. That was helped by creating
a stockpile that was managed between the countries as necessary
and was administered by the Global Drug Facility.
Q681 Lord Jay of Ewelme:
I would just like to go back one stage, because I want to be quite
certain I understand what you do. I understand that, if there
is a drug which exists and has received pre-qualification and
is acceptable, then it is comparatively straightforward; you would
identify a need, you would talk to UNICEF or whoever, you would
order it and deliver it as soon as you could to the deliverer,
as it were. That seems clear. Where I am slightly less clear is
that you said earlier on you only purchase drugs for which there
is WHO pre-qualification. But do you act rather like advance market
commitments in the sense that, because people know you are there
and you may put in a big order for something, that encourages
research, encourages development, encourages companies to go for
pre-qualification, so you are acting as a spur to the research
and development of drugs as well as purchasing them?
Dr Bermudez: Yes.
Q682 Lord Jay of Ewelme:
Could you just give an example of a drug that was not quite there
yet until you came along, if you see what I mean?
Dr Bermudez: I will mention two points. First
of all, when we began to discuss the paediatric ARV programme,
there were 40,000 children on treatment in the world. We discussed
this with the Clinton Foundation and decided to introduce 100,000
new treatments per year during three years, so in 2007 we introduced
100,000 and then we had 140,000; in 2008 we will have another
100,000, so 240,000; and in 2009 it will be 340,000. The needs
that are estimated in the world are around 500,000 to 600,000,
so we will be responsible for most of the paediatric treatments
in the world. That led an Indian manufacturer, Cipla—
Q683 Lord Jay of Ewelme:
At that stage there was no drug?
Dr Bermudez: There were adult drugs that were
used by children.
Q684 Lord Jay of Ewelme:
There were no drugs specifically-designed for children?
Dr Bermudez: No. There was no fixed-dose combination,
three drugs in one pill for the children.
Q685 Lord Jay of Ewelme:
So you were identifying the need with the Clinton Foundation for
a product that did not exist?
Dr Bermudez: Yes. The three products existed
individually but nobody had put them together. Cipla did that
for the first time. That was pre-approved by the US Food and Drug
Administration and the WHO recognised it, so now the product is
being used not only by us and the Clinton Foundation but by other
organisations in other African countries. When we support the
WHO pre-qualification scheme, WHO in its report of 2007 on pre-qualification
stated, "Thanks to UNITAID funding, 31 new products were
pre-qualified in 2007". We have 31 new products that would
not have existed pre-qualified for the three diseases. Most of
them are for HIV/AIDS because the market for HIV/AIDS is larger.
We are trying to move faster to Malaria and TB as well. Last year
we had 31 new products pre-qualified by WHO related to UNITAID
funding.
Q686 Lord Jay of Ewelme:
You are value-added, therefore? First of all, you have got the
money because the money is coming from the 27 countries?
Dr Bermudez: Yes.
Q687 Lord Jay of Ewelme:
Secondly, you are developing relationships with a whole series
of manufacturers, is that right? What you bring to the Clinton
Foundation or UNICEF or some other donor is the ability to go
and talk straight away to the manufacturer and say, "This
is what we want and what we would like you to develop".
Dr Bermudez: This is what will happen in the
next two or three years.
Q688 Chairman:
If you would like to come in on this—I see you nodding,
Dr Duneton—please do.
Dr Duneton: No, thank you, I do not have much
to say on that. We had the chance and the opportunity to demonstrate
what was initially in our constitution. The example chosen by
Jorge about the FDC/ARV paediatrics is also the same in TB because
it was a question put by GDF. When we started discussions with
GDF, they had a project they had had for three years to have a
specific combination for paediatrics, but they did not have any
money to do that. In one year we provided the first combination
for TB in partnership with GDF. By the way, it was a surprise
that we had a good quality product and with the same money we
could treat four times more children than we expected. It has
a market dynamic impact. The important word is "dynamic,"
because when you change to move something it has some positive
consequences.
Lord Jay of Ewelme: If I could just make
a comment. It seems to me that the speed with which this has got
off the ground and is operating, given the speed at which UN organisations
normally operate, is actually pretty remarkable. It was only three
years ago that this was thought up and you are now sitting here
saying to us, "We have already had these discussions, we
have ordered the drugs and they have been used". It is quite
remarkable.
Q689 Lord Howarth of Newport:
You mentioned that among your ambitions is to focus on the procurement
of second-line drugs. These are fantastically expensive—$4,500
per TB treatment, and in the case of ARVs something like ten to
20 times the cost of first-line treatments. While I am extremely
pleased that the UK has made a commitment to support you for 20
years, you also talk in your evidence of a "dearth of predictable
long-term funding". More and more patients are going to need
these second-line drugs and that may bring the unit cost down,
but how confident are you that you are going to be able to see
this through and afford the cost of this programme?
Dr Bermudez: Your issue is relevant because
it really is very expensive as we increase. When we look back
to the past and see where HIV/AIDS was 20 years ago, nobody expected
us to be able to fund HIV/AIDS. Everybody said it would be unfundable
because of the cost, but the cost has been brought down for first-line
medicines and they cannot go lower, because they are at the lowest
price and we have more than one million people in treatment with
first-line. On second-line drugs, as Philippe said, we treat three
children now where before we treated one. It is not so easy in
TB, because the market is more difficult and active principle
manufacturers are not so well-known. We know less of the market
on the TB drugs than we know of the ARV or HIV/AIDS products.
We are analysing all the global market manufacturers on active
principles of the final products to see how we can link one with
the other to make sure that we will have stable manufacturing
throughout the years. If prices are not brought down, we will
reach a point where we will not be able to fund more. In TB we
also have an additional problem in that for second-line TB we
have to invest in diagnostics, because in many cases we do not
know where they are and the countries do not know. If we want
to advance, one of the things we have discovered is we need to
invest in diagnosis. We will not be able to fund MDR-TB alone
but we are one of the major funders. We are treating 5,000 MDR-TB
patients and have committed to a project with a global representative
of the Green Light Committee to expand as much as we can. I agree
with you that it is a very difficult problem, and it is unpredictable
as to whether we can fund in the long-term, but we will do our
best to continue and lower prices now.
Q690 Lord Howarth of Newport:
Your business model has already, through the use of your purchasing
power, demonstrably been able to bring down the costs of certain
drugs, but where the drugs do not exist there is another set of
problems, is there not? You were speaking of TB, and I think you
mentioned in your written evidence that paediatric TB is a neglected
field. Presumably, that is a consequence of market failure, whereby
the drug companies are interested in producing new products to
meet the needs of the affluent West but not of the developing
world—you cite appalling statistics: less developed countries
84 per cent of the world's population, 93 per cent of disease,
11 per cent of global health expenditure. This is market failure
on a colossal sale. Do you see your organisation having the purchasing
power and the firepower in the marketplace to be able to commission
new research so that new products are produced to meet the needs
of the developing world that are not being financed on the present
market model?
Dr Bermudez: Yes. In partnership, of course.
As we have mentioned, we do not work alone and we will not be
able to fund research.
Q691 Lord Howarth of Newport:
No, it is very expensive.
Dr Bermudez: But we have other Partners we are
working with. For example, I can mention TDR, Tropical Diseases
Research, in WHO and the Drugs for Neglected Diseases Initiative
and various trans-national companies and foundations that are
dealing with research and working with, let us say, DNDI, (the
Drugs for Neglected Diseases Initiative) in developing new products
for neglected diseases, and I think TB would be considered in
that. At this moment we are not committed to fund research because
others are doing that.
Q692 Lord Howarth of Newport:
Is that because the costs of it are simply too great for you to
contemplate? Or because it is a task that others will perform?
Dr Bermudez: It is both. It would need too much
funding and others are dealing with it. What we can do in partnership
with those is to try to forecast what the future market will be.
We had the introduction of paediatric TB drugs after we began
to work with Stop TB. That will be a predictable market if we
foresee that in the years to come we will have an increasing demand
and it may be attractive for industry. We may have the support
of industry from other organisations, such as those I mentioned
a few moments ago, and you need to work with other organisations
that may support manufacturing.
Q693 Lord Howarth of Newport:
Meanwhile, to overcome the problems that there are with intellectual
property rights you are focusing on your scheme for patent pools.
Will you tell us more about that and expand on that proposal—how
you see that working and who would be your Partners in terms of
getting things to happen?
Dr Bermudez: It is a very incipient activity,
or non-activity, but it is a discussion within UNITAID. We and
the French Government received a request from NGOs, especially
Médicins Sans Frontie"res, to try to work on
the concept of patent pools and how that exists in other areas—in
aviation, music—but has never been applied to medicines
in the pharmaceutical setting. We were asked if UNITAID would
be able to move ahead on establishing potential patent pools that
would enhance success for medicines, especially fixed-dose combinations.
We opened a tender, commissioned a report with IPDS from McGill
University in Canada and that delivered a first report. I just
want to go back some years and say we strongly think this is a
continuation, initially of the UK CIPR (Commission on Intellectual
Property Rights) that delivered a report four or five years ago.
Then the Commission on Intellectual Property Rights, Innovation
and Public Health in WHO delivered a second report, the CIPIH,
and now the Intergovernmental Working Group continues to discuss
how to move. These are three sequential movements in three products
that have been brought forward and we are following very closely.
Based on McGill University's report that says that patent pools
are feasible, legally and administratively—of course, it
is a sensitive area because it deals with intellectual property
and the right to health—it would be feasible and we need
to move to see what would be geographic coverage, coverage of
medicines, which products, how to deal with voluntary licensing
in a patent pool and, if it is an issue, to deal with compulsory
licensing in a patent pool, how would that deal with other stakeholders.
Based on that report we had an initial meeting of a small group
of people, which included people from academia, NGOs—not
from governments, because we did not put the countries in because
the countries have to approve or not of what we are doing. We
moved to try to figure out what are the steps that would be necessary
and submitted that to our Board two weeks ago. Our Board said
they see a great advantage and they asked us to continue. We will
still be working on what will be the potential of a patent pool,
starting on the principle that initially it will be a voluntary
licensing patent pool. It is for countries to apply compulsory
licence requests from a patent pool, but it is not an idea that
will begin as a compulsory licensing patent pool, because we need
to bring the pharmaceutical industry and innovative engineers
in to discuss that with us and we will address it then—what
will be the governance structure for that, the constituency for
that and the initial needs and steps to be taken. That will remain
as an issue to be discussed with our Board, and our Board will
take the final decision, not at the next Board meeting but in
two or three Board meetings' time. We understand that is an issue
that will continue with some months of discussions because it
is not an easy discussion. On the other hand, UNITAID has been
called as a concerned entity in the Intergovernmental Working
Group, so we are following that closely.
Q694 Lord Howarth of Newport:
Do you anticipate that you will have the endorsement and practical
collaboration that you will need from some of the other organisations
that obviously have an interest—the World Trade Organisation,
WIPO and also the World Health Organisation? Are they likely to
be on board?
Dr Bermudez: Yes. We invited all of them to
the discussion and it included the World Health Organisation and
WIPO. The WTO was not able to come, but they will be on board
and we will continue to discuss this with them, of course.
Q695 Chairman:
Why was it not possible for the World Trade Organisation to come?
Dr Bermudez: It was just one meeting.
Q696 Chairman:
You have no problems in discussions with the WTO?
Dr Bermudez: No.
Q697 Chairman:
You would not do that through government, you would do it directly
as UNITAID?
Dr Bermudez: As UNITAID, we want to have an
independent group that will have a proposal that can be taken
to our Board. We have followed very closely the IGWG discussions
and sometimes there are some impasses and tense situations. We
do not want that to be brought to a group that is discussing how
to move. Of course, when we sit with the governments, they have
their points of view, and we understand that clearly, but we do
not want that to be an intergovernmental discussion between two
governments, we want to have impartial information to take to
our Board, and then our Board will discuss that. Our Board has
the UK, Norway, Brazil, Chile, France, the Asian countries, African
Union, NGOs and WHO to discuss that.
Q698 Chairman:
You obviously have discussions with the pharmaceutical companies
about pricing directly and so on for things you might buy, but
what about their overall policy. Would you discuss that with them
or not?
Dr Bermudez: For a patent pool?
Q699 Chairman:
Yes.
Dr Bermudez: We will discuss with them but we
want to have a clearer idea of what are the different options
before having that discussion with the pharmaceutical industry.
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