Howard Sharman argues that there are commercial solutions for pharma companies to develop brands that only help the poorest
In this column I’d like to talk about innovation and risk. Both are such a central part of the commercial world, but have a very different and much more ambivalent role when it comes to the world of development and particularly to the world of public health.
In January 2012, the international development committee of the House of Commons published its report on private foundations.
For me, one of the standout quotes in the report was from Jeff Raikes, chief executive of the Bill and Melinda Gates Foundation. Speaking about the development of a malaria vaccination, he told the committee that GSK, the foundation’s partner in this research, “did not really see a real market opportunity for a malaria vaccine, because it largely affects poor populations that cannot afford it. But with our stepping in and helping to underwrite the R&D, we now have not just the first phase 3 malaria vaccine candidate but the first phase 3 vaccine candidate trial results.”
So the Gates Foundation in effect covered GSK’s risk by underwriting its research and development costs.
This little example – which luckily looks likely to have a hugely beneficial outcome – raises a number of important questions about the differing roles of private companies, foundations and governments when it comes to development in general and public health in particular.
Who pays?
Malaria, a disease the World Health Organisation (WHO) says had 216 million cases and 655,000 deaths worldwide in 2010 was apparently not worth GSK risking time and money on is own to develop a vaccine because it affects poor people: people who would not be able to afford the treatment themselves and live in countries that have no developed public health system.
GSK, it should be noted, is offering “preferential pricing” for anti-malarials in least developed countries and sub-Saharan Africa.
Malaria is essentially an African disease. WHO says: “An estimated 81% of [malaria] cases and 91% of deaths occurred in the WHO African Region. Globally, 86% of the victims were children under five years of age … The mortality figures are disconcertingly high for a disease that is entirely preventable and treatable.”
Sub-Saharan African countries occupy 36 of the bottom 45 places in the latest Human Development Index – these 45 places being allocated to countries classified as Low Human Development.
At one level GSK’s attitude is completely understandable, since the company is in business to make a profit for its shareholders and must develop drugs that are going to maximise the return on its scientists’ endeavours.
On the other hand, there is a wide range of diseases that “largely affect poor populations that cannot afford [the treatment] for them”. Where therefore do GSK and its shareholders draw the line? And what level of risk should companies like GSK be taking on?
Risk burden
Another question – shouldn’t WHO, as an international organisation, have been the one to shoulder the risk of seeking a vaccination for a disease that affects so many and kills predominantly under fives? After all, WHO has successfully led the fight to eradicate polio – albeit using vaccines that had already been commercially developed.
It is a truism that where public health is privately funded by insurance (eg in the US), or publicly funded by general taxation (eg in the UK’s National Health Service) there is considerable market incentive for pharmaceutical companies to invest in – or risk money on – research into drugs that will be bought. And sometimes this will involve research into, for example, obesity-reducing drugs, or other treatments of what might be considered social rather than medical diseases.
And yet other, real, diseases are cutting swathes across the African continent with no private companies prepared to take on the “risk” of finding a cure because the market opportunity is not sufficient in the absence of either government or private money to pay for the drugs that might be developed.
Every day companies have to make choices. Choices about whether to invest, or not, in the development of new products and treatments, and similar choices are being made by foundations like Gates who also have to decide where to focus their efforts, and by governments who have to decide what is good value for money.
Companies are, ultimately, judged on the success of their risk-taking by their shareholders but, despite the assertions of the House of Commons international development committee, very little of the foundation or government decision-making on risk comes under any sort of real democratic scrutiny.
The committee made a distinction between the accountability of DFID and that of private foundations: “Foundations differ from official development agencies in that, instead of being accountable to the taxpaying public, they answer to their boards and/or to their benefactor(s) … This comes with advantages – notably that it can enable them to take more risks. Yet at the same time this weakened accountability poses a challenge.”
Accountability issues
It is certainly “weakened accountability” relative to a public company – and very similar to that of a privately owned company – but it is not at all clear to me how democratically accountable DFID is for individual decisions that it makes, be they decisions made by politicians or civil servants. We, the taxpaying public, are not consulted on any of these, cannot vote DFID out of existence, cannot deprive any civil servants of their jobs for making rash judgements – whether these are commitments to spend, or for declining to take on risks that they really should be taking.
Even the UK development secretary of state, Andrew Mitchell, himself is only answerable every four or five years to the electors of Sutton Coldfield. They are hardly likely to judge him as their MP on whether or not he supported research into, say, river blindness.
Although, funnily enough, river blindness, which affects half as many people as malaria, was the subject of a $50m funding initiative from the World Bank and Merck & Company in 2007. This is another disease that affects the poor in Africa, but in this case a pharmaceutical company had considered it worth its while, some years ago, to come up with a treatment and then distribute that treatment for free.
The World Bank and WHO have been working on eliminating river blindness for more than thirty years, so this is a public private partnership that has worked. Richard T Clark, Merck’s chairman, president and CEO commented in 2007: “We are pleased to provide this pledge of funds, which augments our unwavering commitment to donate Mectizan to all who need it for the treatment of river blindness until the disease is eliminated as a public health problem.”
Merck has been donating Mectizan since 1987. And clearly at some point prior to 1987 a decision was taken that this disease merited scientific investigation by the company and a “risk” was taken, the risk being that this investment of time and money would neither produce a treatment nor one that would necessarily result in a profit for the company.
So this is a complex area. And, in the narrow area examined here, it is further complicated if we look at the Mectizan Donation Program. This has taken the drug beyond river blindness into the treatment of another disease caused by parasites – lymphatic filariasis (LF) – that affects people both in Africa and in Yemen. In the campaign against LF, Merck is working in partnership with GSK.
This partnership has been running since 1998 and donated Mectizan is administered alongside albendazole, a drug that is donated to the programme by GSK.
As the Mectizan Donation Program website puts it: “The donation and distribution of Mectizan and albendazole involves a large, global public-private partnership of UN agencies, bilateral donors, multilateral development agencies, governmental and nongovernmental organizations, local communities, and the private sector.”
So it can be done. But does this mean that public-private partnerships are the answer? Clearly there are cases where the pure drive of the market is not going to work and so we, as a global community, have to find another answer. But I am not convinced that we really have the mechanisms to make the right decisions about what risks we take, who takes (or underwrites) those risks, which diseases deserve full intervention.
All views on this would be gratefully received.
Howard Sharman is a senior consultant with Advance Aid.