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Should governments be developing their own drugs, rather than relying on the pharmaceutical industry?

In ‘Hunting the silent killer’, Professor Mike Houghton, a virologist at the University of Alberta, argues for a new model of drug development. Using hepatitis C as an example, he suggests that governments could use novel drugs developed by pharmaceutical companies as a starting-point to develop similar drugs themselves, rather than having to pay the costs for the original drugs set by the pharmaceutical industry.

We asked Dr Anne Roemer-Mahler, Lecturer in International Relations at the Centre for Global Health Policy at the University of Sussex, for her thoughts.

What do you think of a model where governments pool money to make a drug, rather than buying it?

It’s an interesting one. There are two main problems in the current system of pharmaceutical production. One has to do with the development of new medicines and the other has to do with access to existing drugs.

One problem with this suggestion is how would such an international body get around the patent protection for Sovaldi [a new drug for hepatitis C, developed by Gilead]? 

One suggestion is to develop a drug that is very similar but not exactly the same…

It’s essentially a very similar idea, that we need to globally pool financial resources that can be used to develop drugs for which there is no commercial incentive to produce – which would not be the case for hepatitis C – or, as Dr Houghton suggests, to produce drugs that are, through the commercial system, too expensive.

We need more public investment in drug development – we cannot leave it entirely to the private profit system because the system just will not produce drugs that are not profitable.

Is it better for governments to develop the drugs themselves first?

Given that public resources are finite I would probably suggest that they are used to develop drugs and vaccines for which there is no commercial market. And leave drugs and vaccines for which there is to the private sector.

I would think it would be easier to loosen the patent protection and let generic companies develop competing products and therefore lower the price. Generic companies could come up with similar drugs that wouldn’t require public investment. 

What would the relaxation of patents mean?

Gilead is a good example. Mostly the debate around patent protection is in the context of poor people in poor countries and drugs being too expensive. Sovaldi is an example showing we have the same problem in wealthy countries. But Gilead has shown a really good way of introducing generic competition because they have given voluntary licences to seven Indian companies.

And it is important they license not only to one generic producer but to seven – otherwise the generic would have the same ability to dictate the price.

A similar model could be introduced into some kind of legal framework: that companies have to give voluntary licences to generic producers. They can ask for big royalty fees… but they have to grant licences, say, two years after the drug is introduced. 

It seems a good model: big pharma doing the development and then licensing other companies to make generics.

The licensing in lower-income countries is very good but it doesn’t solve the problem for the UK or for other high-income countries where the health systems are stretched. That’s why I think there are ways to relax the temporary monopoly situation – by enforcing voluntary licences, and reversing the current trend of tightening intellectual property protection.

Another way forward could be the Indian patent law – they have introduced a provision into their patent law that makes it a bit more difficult to get a patent by saying a drug has to be not only new but also more effective than existing drugs. Although that wouldn’t have applied to Sovaldi because it is a genuinely revolutionary treatment. 

In January 2015, a patent application for sofosbuvir (the generic name for Sovaldi) made by Gilead was rejected by Indian authorities. Gilead is appealing against that decision.

 

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