Examination of Witnesses (Questions 753
- 759)
TUESDAY 22 APRIL 2008
Dr Harvey Bale Jr, Mr Guy Willis, Dr Stefanie Meredith,
Dr Ryoko Krause and Dr Eric Noehrenberg
Q753 Chairman:
First of all, thank you very much for your time. As you know,
we are a Select Committee on Intergovernmental Organisations and
our particular interest is the contagious disease question at
the moment. Let me say, first of all, that the comments here will
be noted by our shorthand writer. That will be produced in our
report and sent to you in transcript form for you to correct any
factual inaccuracies. I would also very much welcome it if, during
the course of the questions, all or any of you feel you want to
say something, please do so. If we do not cover some of the things
that you think we ought to cover, then please say so and, indeed,
when we finish this session feel free to write to the Clerk at
the House of Lords and make any further points that you wish.
Perhaps I could start by simply asking if you could introduce
yourselves as to your jobs, so we know who does what. That would
be helpful. Then I would like to ask a little about the organisation
itself.
Dr Bale: Thank you. Perhaps I should start.
I have been here for 11 years as Director General of the IFPMA.
I will save the comments about what IFPMA is and more specificity
until a little bit later. I am Harvey Bale. I am originally from
Philadelphia but have lived in Switzerland for 15 years. I have
done two stints in Switzerland. Eric, why do you not start at
your end?
Dr Noehrenberg: I am Eric Noehrenberg. I am
Director of Public Health Advocacy and Director of International
Trade and Market Policy at IFPMA. I have been here almost nine
years, very much involved in the whole question of patents and
access to medicines. My primary responsibilities are discussions
with the World Trade Organisation, World Intellectual Property
Organisation and also the World Health Organisation in respect
to patents and access to medicines primarily.
Dr Krause: My name is Ryoko Krause. I am Director
of the Biologicals and Vaccines. I have been at IFPMA for eight
years now and deal with all the technical, scientific and regulatory
issues related to the biologicals and vaccines. Most of the work
that I do is with WHO, and right now with all the vaccine initiatives
with GAVI and UNICEF.
Dr Bale: I would emphasise her coordination
of our Influenza Vaccine Supply Taskforce, given that you have
avian influenza on your agenda.
Dr Meredith: I am Stefanie Meredith. I think
I am the newest person at IFPMA, I have been here for a year and
a half. I am the Director of Public Health Partnerships. I have
come to IFPMA to work with the industry in developing partnerships,
collaborative partnerships, with the aim of improving healthcare
outcomes, access to healthcare. I came to this from a background
working in major public-private partnerships, the Mectizan Donation
Program, that you may know of, the Lymphatic Filariasis Donation
Program, and a background in tropical medicine.
Mr Willis: Good morning. I am Guy Willis, Director
for Communications at IFPMA. I have been with the organisation
for nearly three years. One of my responsibilities is documenting
the partnerships that the industry is involved in for the developing
world.
Q754 Chairman:
Thank you. My next question is just to get a clearer view of who
the IFPMA represents. Is it all the companies? Can you just say
a little bit about that, if you would not mind?
Dr Bale: In fact, up until 2005 we represented
only associations. We had 55 member associations around the world
from China, Russia, India to the US, Europe, Japan. We have membership
now, which began in 2005, of 25 research-based pharmaceutical
companies. Historically, this industry has been concentrated in
Europe, North America and Japan. We also received our first Indian
company, Nicholas Piramal, in 2007. It shows you that pharmaceutical
industries are growing internationally with regard to the research
capacity. We are a hybrid of company members and associations.
From the UK we have both AstraZeneca and GSK. We have a number
of the US companies, four Japanese, and we will add another Japanese
company in the next few months, and we are hoping to get more
companies in the future from developing countries.
Q755 Chairman:
Are there any of the large players, the large drug companies,
outside your organisation?
Dr Bale: Only one or two. One for example, like
Johnson & Johnson, which is a very diversified company into
hospital products, diagnostics and a number of different areas,
is a member through the (national) associations. In fact, more
than one because they are in a large number of national associations.
Nova Nordisk, a Danish company, is also not a (direct) member
of IFPMA (but is indirectly, through a number of national associations).
If you think of all the rest of them, Sanofi-Aventis, GSK, Pfizer,
Merck, Lilly, etc, Takeda from Japan, the largest Japanese company,
they are all members.
Q756 Chairman:
Do you see the IFPMA as being the organisation that gives a voice
to the whole industry and serves as the organisation that negotiates
with the various health bodies around the world? Is that how you
see yourself?
Dr Bale: Yes, although we will mainly negotiate,
advise, inform or consult with or be asked by the international
agencies. Our main interfaces are with the World Health Organisation,
number one. We also interface a lot with the World Intellectual
Property Organisation, the World Trade Organisation, UNAIDS and
GAVI. We were very much at the founding of GAVI and Medicines
for Malaria Venture. All of the international disease-related
or health-related organisations, in some way or another, we have
interaction with. At the national level, for the health agencies,
for example the Department of Health in the UK, our member in
the UK, the ABPI—the Association of British Pharmaceutical
Industry—would be the interlocutor there. For example, we
assist on global issues. I was in London last week talking to
the DFID people about a project that they are launching next month
called MeTA—Medicines Transparency Alliance—and Alexander
will be there and his team and, together with a number of NGOs
and governments, we will be launching the whole question of how
do we bring greater transparency into the pharmaceutical supply
chain. That is why we are here, in fact. When I first came 11
years ago I was advised by Script magazine that I should
take IFPMA away from Geneva and put it somewhere else. But, when
you ask the question where else would we be, the only other location
would be, perhaps, Washington or New York, but that would still
be far too parochial in the sense that most of the international
agencies are based here. UNESCO is in Paris, the World Bank is
in Washington, but the bulk of them are here.
Q757 Chairman:
Thank you for that. Let us start with this general area, if we
may, because obviously we are aware of the needs of drug companies
to make profits and the need to invest in future research. We
are also aware of the desperate need to deal with some very difficult
diseases and the need for vaccines and drugs in that. We are aware
of some of the things you are trying to do, but it would help
us if you talked us through how you see it from your perspective.
We have heard a lot from other organisations about the need for
drugs dealing with these diseases around the world, the need for
vaccines and so on, but we have not heard it from the industry
point of view.
Dr Bale: Thank you for the opportunity to provide
evidence to the Committee. Simplistically, we think of it in terms
of three As. The first is availability, that is to say how do
we get drugs in existence. One of the great failings in the last
couple of years was a project to develop an HIV/AIDS vaccine.
It will not be a complete failure at the end of the day, I hope,
but how do we get products in existence. Availability is the first
one. Secondly, it is accessibility. Once we have these drugs available,
how do we get them from Point A to Point B. This is not a simple
matter because of the problems of logistics and lack of infrastructure
in many developing countries. The third issue is affordability.
If they are available and accessible but not affordable, then,
again, the system has failed. How we approach it is in all three
areas. I will just make a few introductory comments and ask my
colleagues to expand. The question of availability really means
investment in R&D. Today the global pharmaceutical industry
is investing nearly US$60 billion worldwide in new medicines and
vaccines. I would say 85-90 per cent of that R&D is carried
out by companies in developed countries, the OECD, Switzerland,
UK, France, the US and Canada, and the rest in developing countries.
This means we have to have good regulatory systems, good intellectual
property systems, good systems of communicating the innovations
to doctors who prescribe the medicines, since we do not deal directly
with patients, and a good economic financing system. In the UK
you have the NHS and other countries have similar or different
systems. The basic system is one of finance, intellectual property,
regulation and communication. Again, the question then moves to
accessibility, and here we are working with organisations. Stefanie
has a project that we are beginning to work on in the Gambia about
supply-chain security, how we build the supply chain and, on the
other hand, how countries develop the necessary clinical facilities,
the hospitals, keep nurses from moving away from developing countries
and coming here to Europe or the USA. The brain drain from developing
countries is an enormous and aggravating problem these days. That
is the accessibility issue. Affordability: a large number of our
companies, especially in the critical areas, such as Malaria,
Tuberculosis and HIV/AIDS, have differential pricing programmes,
which is to say that, depending on the company, they will take
a no-profit approach or a below cost approach to pricing in the
poorest countries. They will try to make up those losses in the
developed countries, and in the middle-income countries they will
have some differential pricing that varies according to the company.
Tiered pricing, which is what we call it simplistically, is a
very common practice, especially with the critical diseases, the
ones that are global issues. This has been a traditional practice
in the vaccine industry, even going back for a longer period of
time than in the drugs field. Another way is through donations.
Stefanie mentioned the Mectizan Donation Program for onchocerciasis
and we have a donation programme underway for lymphatic filariasis.
Companies are giving away medicines for leprosy, measles vaccines,
et cetera. We have a company in Germany giving away mother-to-child
transmission of HIV/AIDS drugs, a drug called nevirapine which
is given away by Boehringer Ingelheim to some 45 developing countries.
The way we try to facilitate this is first information. As Guy
has indicated, we put together a volume, and I think there is
a copy on the desk here, of the kind of partnerships that we try
to foster. Then we are trying to communicate this as much as we
can to the WHO, as Eric has mentioned before in his work with
them, to make sure that people are aware of this. The kind of
work that Ryoko does in vaccines is working with GAVI, because
with differential pricing you still need funding, because generic
products as well as brand-named products are simply not affordable
to millions and millions of people around the world. It does not
matter whether the product is an originated product or copied
product; if you are going to spend $200 to $300 per year for AIDS
treatment, very few people in Africa or India or the South Asian
continent or many people in Latin America will be able to afford
that level of expenditure on healthcare.
Q758 Chairman:
Or second-line treatment for TB, which is presumably typical?
Dr Bale: Yes. Here is an area where the generic
industry is not very present because many of the second-line drugs
are very difficult to make. We have a partnership programme that
is described in this booklet from Eli Lilly that is engaged in
technology transfer to companies in South Africa, China, Russia,
I think the other one is in Brazil, (in fact India, which has
a much bigger TB problem than Brazil—364,000 TB deaths in
2002 compared to 13,000 in Brazil), around the world to try to
build capacity to develop these very difficult-to-make drugs.
There are two tuberculosis drugs for the multi-drug resistance
issue which, of course, is the reason we have to go to second-line
TB. It is a combination. With that, maybe I could ask Eric, Ryoko,
Stefanie and Guy if they want to expand on that, if that would
be permitted.
Q759 Baroness Whitaker:
Could I just ask for clarification on tier pricing. Is it possible
to avoid somebody buying them in a country where they are cheap
and smuggling them into a country where they cost a lot more?
Do you take measures against that?
Dr Bale: This happened a few years ago with
GSK. It happened because GSK was under a lot of pressure from
countries to get the medicines into Africa. Medicines were shipped,
but what was not done at the beginning, which has since been corrected,
was there was no differentiation in the boxes and packaging and
tablets. Today, what is done typically is that you send the medicines
in—for example, Coartem, an anti-malarial drug, which is
sold in developed countries and sold very cheaply, relatively
cheaply although it is still an expensive product, is sold at
cost in developing countries in a different tablet size, so you
can tell the difference.
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