Policy & Global Development

Biomedical R&D and Innovation: How Can We Protect the Public Interest After COVID-19?

Series | COVID-19 & response strategy #30

05/03/2021

[This is document is part of a series of discussion notes addressing fundamental questions about the COVID-19 crisis and response strategies. These documents are based on the best scientific information available and may be updated as new information comes to light.]

Written by Adrián Alonso, Marina Espriu, Joan Bigorra, Gonzalo Fanjul and Rafael Vilasanjuan (ISGlobal), this document addresses the current model of biomedical research and development (R&D) and innovation that the COVID-19 pandemic has highlighted.

 

Since before the pandemic was officially declared one year ago, the international community has been hard at work on research and development (R&D) and innovation efforts against COVID-19. According to data compiled by the global health think tank Policy Cures Research, as of 1 October 2020, at least $9.18 billion had been invested in basic research and the development of diagnostics, therapeutics and vaccines against SARS-CoV-2.

The scale of these efforts is unprecedented. Investment in R&D against COVID-19 over the past several months is four times the combined annual expenditure against HIV/AIDS, malaria and tuberculosis between 2007 and 2018. Moreover, this figure likely underestimates the actual amount that has been invested. The lack of transparency surrounding many contracts between the public sector and private companies makes it difficult to accurately estimate total spending. Also not included in this estimate are the sums invested by China and Russia, as well as other investments made by private companies.

These investments paid off quickly. By late 2020, the international scientific community had opened up lines of research for the development of 1,052 products related to COVID-19: 469 diagnostics, 362 therapeutics and 221 vaccines (six out of every ten dollars invested went to vaccine research) . Current figures may be even higher. Most of these projects are being led by developed countries: the United States (460), Canada (49), the European Union (149, including 13 in Spain) and the United Kingdom (34); however, a significant number of research projects are also underway in China (168), South Korea (47) and India (31).

According to information compiled by Policy Cures Research, nearly all (92%) of the resources invested in these efforts came from the public funds of the United States (48% of the total amount), Germany (12%), the United Kingdom (8%), Canada (7%) and the European Commission (4%), among other countries. The only private donor in the top ten is the Bill & Melinda Gates Foundation, accounting for just under 3% of the total funds invested. These figures do not account for the public funds invested in basic research on messenger RNA (mRNA) biology and its potential applications in immunology over the past few decades at centres of excellence such as the University of Pennsylvania, the University of Oxford and the Salk Institute in San Diego, or the billions invested in advance purchases of vaccines and the expansion of industrial production.

In other words, if not for this earlier publicly funded basic research, the rapid response to COVID-19 would not have been possible.

Access to Essential Medicines: Dilemmas and Responses

The conventional model of biomedical innovation has for years been the subject of intense debate regarding its implications for equity and access to essential medicines and treatments for all people. The four key elements of this critique are as follows:

  1. Unequal distribution of the risks and benefits of the process.
  2. Patents as the main driver of innovation.
  3. Lack of a health-oriented vision.
  4. Lack of transparency.

 

To circumvent these difficulties, public and private funders of global health have developed a number of mechanisms and incentives to promote innovation and facilitate access to medicines. These include “push” incentives, i.e. investments or in-kind contributions that cover part of an R&D and innovation investment. The idea is to nudge the research programmes of the company or centre in a particular direction, accepting the risk that these efforts ultimately may not bear any fruits.

Another category is known as “pull” incentives. These incentives reward research results: removal of administrative hurdles (for example, fast-track approval procedures), rewards for the development of certain products, and advance market commitments (AMCs).

Finally, pooling mechanisms bring together data, patents, designs and other types of value related to a particular disease or therapy for the purpose of sharing these resources and averting the barriers created by secrecy. The pooling of assets protected by intellectual property rights enables researchers and manufacturers to contribute to the R&D and innovation process, thereby increasing production capacity and reducing prices through generic versions of the product. Pooling reduces innovation costs, creates viable markets and facilitates competition, leading to lower prices.

Recommendations

The COVID-19 pandemic is forcing us to reconsider some of the economic, political and social fundamentals that we have long taken for granted. The model of innovation and access to essential medicines is one such area requiring re-examination. The international community has undertaken extraordinary efforts in recent months. However, the impressive results of these efforts could be undermined by the imperfections of the system and its inability to adapt to the needs of the new context. From a public-interest standpoint, the coronavirus pandemic is of a piece with the Ebola virus outbreak, the antimicrobial resistance crisis of tomorrow and the HIV/AIDS epidemic of years past. There is an urgent need to align the system with people’s real needs.

The public sector is not just any player in this debate. Given the scale of its investments and its status as the main recipient of biomedical innovations, the public sector must play a leading role in defining the new model. This role must be translated into rules and principles that optimise value for the public interest.

ISGlobal encourages national and international stakeholders to consider the following measures:

On transparency:

  • Public, corporate and non-profit entities involved in the research, development or marketing of medicines must provide reliable data on their investments, profit margins and any public funds to which they have access.
  • Negotiations between governments and pharmaceutical companies for the purchase of medicines with public funds must be conducted within a framework of absolute transparency. Countries should provide a prior analysis of cost-effectiveness and health technology to determine whether to include each drug in their national health system and these results should be made publicly available.
  • During trade agreement negotiations, it is essential to guarantee access to negotiating drafts and public consultations prior to their approval.

On the regulation of intellectual property:

  • Countries that are signatories to WTO agreements and other regional and bilateral trade agreements must guarantee consistency between trade rules and access to essential medicines. The first step is to introduce flexibility and exceptions to intellectual property rules, but it is equally important that existing rules be enforced without being systematically blocked by one party.
  • The EU and its member states should facilitate this process whenever necessary, especially when it comes to neglected diseases or when there is a market failure that prevents access to essential medicines for price-related reasons.
  • The amount of public funds received should have an impact on the level of intellectual property protection, or at least on the distribution of commercial benefits associated with the final product. Public investors should also have a say in setting the final price of the product. In return, preferred suppliers should have access to higher aggregate demand from public institutions.

On preferred suppliers:

  • The public sector should reinforce the public interest in health by using its position to set conditions for suppliers with regard to investment, access and affordability of essential medicines. The institutions responsible for setting these conditions should engage in a process of reflection and public consultation to determine how best to implement this idea in practice.
  • Funders, investors and shareholders in the pharmaceutical industry have an opportunity to become agents of new social enterprise models. Their active participation can shift the balance of power in this debate and contribute to the engagement of the pharmaceutical sector.