By Werner Raza, ÖFSE – Austrian Foundation for Development Research
The pharmaceutical innovation system’s disregard of “neglected diseases” primarily affecting countries in the Global South should no longer be tolerated. A substantial reform is necessary.
Triggered by SARS-COV-2, Covid-19 belongs to the group of new infectious diseases which until now had mainly occurred in emerging and developing countries. Since the first outbreak of a SARS epidemic in 2002, millions of people have been affected by the family of coronaviruses. But it took a global pandemic with serious impacts on OECD countries’ societies and economic systems, for such a disease to receive the health policy attention that the Global South has been sorely lacking.
The share of pharmaceutical research and development (R&D) funds for diseases primarily affecting the Global South is vanishingly small. This is true for the public sector, but even more so for the pharmaceutical industry. Accordingly, they have become referred to as “neglected diseases”.
Little research and slow progress
Neglected diseases have been a major global health policy issue for decades. In the Global South, they cause hundreds of thousands of deaths and millions of illnesses every year. Often with serious long-term health consequences. Depending on the definition, neglected diseases comprise several dozen diseases, sometimes including the so-called “big three”, HIV/AIDS, malaria, and tuberculosis. But they also include “neglected tropical diseases” as defined by the WHO, such as Chagas, dengue fever and leishmaniasis, as well as other poverty-related diseases.
“It took a global pandemic with serious impacts on OECD countries’ societies and economic systems, for such a disease to receive the health policy attention that the Global South has been sorely lacking.” #DevMattersTweet
As a study published in The Lancet shows, medical progress to treat these diseases has been very slow. From 1975 to 1999, only 1.1% of all globally approved therapeutic products were used to treat neglected diseases. From 2000 to 2011, out of 850 new therapeutic products, only 37 (4%) had indications and only four chemical agents were approved for neglected diseases – three for malaria and one for diarrhoea. This represents 1% of the 336 chemical agents approved. Of 148,445 clinical trials conducted by the end of 2011, neglected diseases accounted for only 2016 (1%).
In total, at around USD 4 billion annually, R&D efforts for neglected diseases account for only about 2% of total R&D spending in the global pharmaceutical sector. And the number has hardly increased in the last decade. Furthermore, it is predominantly the public sector – mainly US funding agencies-, that is involved in neglected disease research. The share of industry funding was only 17% in 2018, while two philanthropic foundations, the Bill and Melinda Gates Foundation and the Wellcome Trust, also accounted for around 17% (see Figure 1).
Figure 1: Funding sources for neglected diseases, 2009 – 2018. (Source: G-FINDER Project 2019, Global Funding of Innovation for Neglected Diseases, Policy Cures Research)
What is more, research funding for neglected tropical diseases (see Figure 2, line “WHO NTDs”) has actually stagnated, with the bulk of funds going into research on the “Big Three”- diseases HIV/AIDS, TB & malaria. Even though industry R&D spending in this area has increased in recent years, it accounted for only 16% of total research funding in 2018. Again, the vast majority of funds comes primarily from US based public institutions, while the EU and its member states lag behind.
Figure 2: R&D funding for ND, by category. (Source: G-FINDER Project 2019, Global Funding of Innovation for Neglected Diseases, Policy Cures Research)
The story of “emerging infectious diseases” is similar. This includes new infectious diseases caused by viral pathogens, including Ebola, Zika, Lassa fever, and coronaviruses, such as MERS and SARS as well as Covid-19. Although R&D expenditure has increased significantly since 2015, it remains modest at around USD 1 billion (2018). With once again public money representing the bulk of funds (85%). The pharmaceutical industry’s commitment declined strongly over this period, amounting to only 8% of total expenditure in 2018. Philanthropic institutions accounted for around 6% (see Figure 3).
Figure 3: R&D expenditures for “emerging infectious diseases”, by funding type 2014 – 2018. (Source: G-FINDER Project 2019, Global Funding of Innovation for Neglected Diseases, Policy Cures Research)
“Charitable activities by companies and foundations will no longer be enough. Legal obligations should be introduced.” #DevMattersTweet
Even though the first SARS outbreaks had already occurred in the early 2000s and although effective therapy was missing, research on coronaviruses continued to be neglected with only 4.6% of R&D spending on emerging infectious diseases. Once again, publicly funded, with no significant research effort by pharmaceutical companies – a momentous omission, as we now know.
In the absence of purchasing power in the Global South, and given the uncertainty surrounding the future development trajectories of emerging infectious diseases, the private pharmaceutical industry’s R&D commitment has been very limited. With exceptions for the “big three” infectious diseases, for which there is a market in industrialised countries, there has been no fundamental progress so far. Seemingly, the global enforcement of high intellectual property rights protection standards since 1995 through the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights has not accelerated pharmaceutical innovation for these diseases.
The COVID-19 crisis calls for reforming the pharmaceutical innovation system
The COVID-19 pandemic shows us that if the political pressure is great enough and on the back of publicly funded knowledge, pharmaceutical innovation can indeed happen quickly and successfully. This suggests that the sluggish pace of medical innovation in neglected diseases as well as emerging infectious diseases could be accelerated, if appropriate research infrastructures are established. Therefore, the current crisis situation should be used to reform the pharmaceutical innovation system and remedy the serious failures of the past decades.
This requires stronger political and financial commitment from OECD countries, which except for the US have not been strong on funding. However, above all, a greater contribution from the pharmaceutical industry is required, which, over the last two decades, has benefited massively from the enforcement of strict intellectual property rights standards in the Global South and has become one of the most profitable industries. Intellectual property rights protection standards should therefore be recognised for what they are: privileges granted by society for which holders have to provide something in return.
Charitable activities by companies and foundations will no longer be enough. Legal obligations should be introduced. First, obligations for research on neglected diseases in exchange for granting intellectual property rights protection to companies. Second, obligations to license technologies relevant to neglected disease treatment by producers in the Global South. Or third, a levy on pharmaceutical companies based on sales of patented drugs. The proceeds could go into initiatives such as the Drugs for Neglected Diseases Initiative (DNDi) dedicated to R&D for neglected diseases, but severely underfunded, or they could be used to set up a special purpose fund administered by the WHO to finance R&D on neglected and infectious diseases. Such measures would at least be first steps towards a pharmaceutical innovation system that is really committed to health as a global public good – in line with SDG 3 of the UN Sustainable Development Goals.