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A Watershed on Transparency and International Collaboration in Drug Pricing?


The World Health Assembly's new resolution on transparency in the market for health-related products is weaker than the original draft but still contains measures that could have a substantial impact on market access around the world, writes Neil Grubert.

On May 28, 2019, the 72nd World Health Assembly (WHA) in Geneva adopted a significant resolution on transparency in the market for health-related products. Dr. Tedros Adhanom Gheyebresus, the Director-General of the World Health Organization (WHO), hailed the resolution as a “landmark agreement.” The final resolution is considerably weaker than the original draft but still contains some measures that could have a substantial impact on market access around the world. Moreover, the WHA discussions started a process that has the potential to expand significantly and take on a life of its own.

The original resolution, proposed by Italy’s Minister of Health, Giulia Grillo, in February, sought to promote greater transparency in four areas: pricing, R&D costs, clinical trial data, and patent information. Several other governments, as well as numerous non-governmental organizations, were quick to embrace Italy’s proposals.

Disclosure of clinical trial costs-a major stumbling block

The draft resolution presented to WHA delegates on May 20 urged member states to “undertake measures to publicly share information on prices and reimbursement cost of medicines, vaccines, cell and gene-based therapies and other health technologies.” The final resolution referred to publicly sharing information on “net prices.”

In its original draft, the resolution would “require the dissemination of results and costs from human subject clinical trials regardless of outcome or whether the results will support an application for marketing approval.” The final version of the resolution changed the language substantially, calling on member states to “take the necessary steps, as appropriate, to support dissemination of and enhanced availability of and access to aggregated results data and, if already publicly-available or voluntarily-provided, costs from human subject clinical trials regardless of outcomes or whether the results will support an application for marketing approval.” What would have been a “requirement” to disclose the results and costs of all trials instead became a recommendation to share aggregated results. Furthermore, data on the costs of clinical trials would be disseminated only if they were already in the public domain or provided voluntarily by manufacturers-an unlikely eventuality.

Similarly, the original draft of the resolution would have required the publication of annual reports on sales revenue, prices, units sold, and marketing costs for individual products, as well as details of the costs of each trial used to support a marketing authorization application and information on financial support from public sources used in the development of a drug. The final resolution merely calls on member states to “work collaboratively to improve the reporting of information by suppliers on registered health products, such as reports on sales revenues, prices, units sold, marketing costs, and subsidies and incentives.”

The draft resolution called on the WHO Director-General to “propose a model/concept for the possible creation of a web-based tool for national governments to share information, where appropriate, on medicines prices, revenues, units sold, patent landscapes, R&D costs, the public sector investments and subsidies for R&D, marketing costs, and other related information, on a voluntary basis.” This recommendation was diluted considerably in the final resolution, which referred only to “assessing the feasibility and potential value of establishing a web-based tool to share information relevant to the transparency of markets for health products, including investments, incentives, and subsidies.”

The draft resolution proposed the creation of a forum to “develop suitable options for alternative incentive frameworks to patent or regulatory monopolies for new medicines and vaccines” that would both promote universal health coverage and adequately reward innovation. This proposal was omitted from the final resolution.

Several other relatively uncontentious measures survived largely intact from the original draft, including recommendations on sharing patent information, improving national capacities to develop and produce drugs (especially in developing and low- and middle-income nations) and holding a biennial Fair Pricing Forum to discuss affordability and the transparency of prices and costs related to health products.

Fascinating international politics

What may actually be more significant than the measures included in the resolution is the politics of the negotiation process. The draft of May 20 was sponsored by Italy, Greece, Malaysia, Portugal, Serbia, Slovenia, South Africa, Spain, Turkey, and Uganda. By May 28, Algeria, Andorra, Botswana, Brazil, Egypt, Eswatini, India, Indonesia, Kenya, Luxembourg, Malta, Russia, Sri Lanka, and Uruguay had joined the original sponsors, though Turkey had dropped out (a move that some observers attributed to objections raised by Germany). The diversity of the countries backing the resolution clearly shows the widespread desire for greater transparency in the global pharmaceutical market.

Even before the WHA convened, Germany, Denmark, Sweden, and the United Kingdom reportedly tried to block the resolution. Once the meeting began, regular reports from attendees indicated that Germany and the United Kingdom, along with France, the United States, Switzerland, Denmark, Canada, and Japan, led opposition to various aspects of the resolution.

As the WHA progressed, France apparently softened its opposition to disclosure of information regarding the cost of clinical trials, while Switzerland and the United States expressed support for greater openness with regard to drug pricing. Garrett Grigsby, a US negotiator, went so far as to say that “the United States enthusiastically welcomes the resolution’s focus on improving price transparency for health technologies and encourages other governments around the world to take steps to improve their healthcare systems and promote competition by publishing prices of medicines and other health products.”

Notwithstanding the support for the resolution from many countries, Germany and the United Kingdom remained concerned that the resolution was being rushed and could have unintended consequences, particularly for differential pricing in less-affluent countries. The delegate from Botswana responded that the “African group is in full support of the adoption of the resolution, seeing it as a key to achieving universal health coverage.” In the end, Germany and the United Kingdom, along with Hungary, chose to dissociate themselves from the resolution, a highly unusual step at WHA meetings.

A mixed response to the final resolution

Following the conclusion of the WHA, the Italian Minister of Health said that “today is a historic date: the whole world has believed in our proposal for a resolution that represents a challenge for greater equity in access to care and now the [member] states are committed to adopting the principles we have carried out to remove barriers to the right to health.” Grillo believes the “taboo” over questioning drug pricing criteria has been overturned.  She expressed optimism that “the WHO's decision opens a new path in drug price negotiations, setting a principle of transparency from which there is no turning back.”

Other observers of the WHA were more measured in their assessment of the resolution’s likely impact. James Love, Director of Knowledge Ecology International, tweeted that “the resolution is, as expected, weaker overall than the version from May 20 sponsors text, but represents an impressive statement on price transparency, at time when non-disclosure agreements have become increasingly common.”

Gaelle Krikorian, Head of Policy at Médecins Sans Frontières’ Access Campaign, described the resolution as “a welcome first step to correct the power imbalance that exists today during negotiations between the buyers and sellers of medicines.” However, she sees a need for far more information on the real costs of bringing a new drug to market.

A representative of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), warned governments to “carefully consider potential risks to patients, particularly in less developed countries, of sharing outcomes of confidential price negotiations across countries.” The implication is that prices in less-affluent countries could rise if wealthier nations used international transparency to demand lower prices for their markets.

Balancing cost containment with support for the pharmaceutical industry

At first glance, one of the most startling developments at the WHA was the decision of the United States-traditionally, a staunch defender of the research-based pharmaceutical industry-to support the resolution, albeit after pressing for numerous changes to the text. On reflection, however, this outcome is not so surprising. President Trump has pledged repeatedly to lower pharmaceutical prices in the United States and is expected to issue an executive order in June that would require pricing transparency across the pharmaceutical supply chain. Access to information on net prices in other countries could intensify pressure from the Trump administration to narrow the sizeable gap between prices in the United States and other affluent nations-by reducing US prices and raising prices in other markets, which the President has accused of “freeloading.” Needless to say, other governments would be unwilling to increase their prices to oblige the US President.

It is interesting that disclosure of net prices proved less contentious than R&D costs, though it is perhaps telling that Germany and the United Kingdom refused to endorse the final agreement. Both countries cited concerns about potential unintended repercussions of a hasty resolution as a fundamental objection. More-cynical observers point out that Germany and the United Kingdom both rely heavily on negotiating confidential rebates or discounts on list prices of new medicines. Furthermore, critics note that opposition to the more-aggressive original draft of the resolution came largely from countries that are home to sizeable research-based pharmaceutical industries-the United States, Germany, the United Kingdom, France, Switzerland, and Japan.

Emergence of new multi-country alliances

It is instructive to compare the countries that are in the opposing camp-notably the sponsors of the WHA resolution. Italy is clearly the driving force behind this initiative and appears determined to continue to pursue the agenda of greater transparency in the global pharmaceutical market. Not surprisingly, it received backing from many less-affluent nations around the world, including Algeria, Botswana, Brazil, Egypt, Eswatini, India, Indonesia, Kenya, Russia, South Africa, Sri Lanka, Turkey, Uganda, and Uruguay. However, a substantial number of European countries also decided to sponsor the transparency resolution, while others voiced their support at the WHA.

Significantly, several of the sponsors of the WHA resolution-Italy, Greece, Malta, Portugal, Slovenia, and Spain-are also members of the so-called Valletta Declaration group, formed in May 2017 to collaborate on the assessment and procurement of new medicines. This alliance is just one of nine cross-border market access partnerships involving 29 European countries. Their objectives range from cooperation on horizon scanning and health technology assessment, through sharing pricing data, to joint negotiation of prices. It is noteworthy that Germany and the United Kingdom are not among the countries that participate these multi-country alliances.

In addition, the EU has plans to develop its EURIPID international pricing project. Launched in 2010, it currently manages a database that contains the official prices of more than ten million products in 27 European countries (Germany is a notable omission). The project has already published a guide to external reference pricing and has ambitions to expand the pricing database by adding fields such as sales volume. The European Parliament has also recommended that “real” prices should be included in the EURIPID database.

No room for complacency in the pharmaceutical industry

The pharmaceutical industry may choose to take comfort in the fact that the final resolution consists largely of recommendations for voluntary action rather than the requirements for comprehensive disclosure proposed in the original draft. However, such a response could prove to be dangerous complacency. The WHA in Geneva may not have given the WHO the authority to demand information from manufacturers, but the agenda will be pursued further at future meetings-starting with a UN High-Level Meeting on Universal Health Coverage in New York in September.

Even if the WHO does not receive the powers mooted in the draft resolution, there is nothing to stop the existing cross-border alliances from expanding, in terms of both their membership and the range of their activities. Europe has led the way and other parts of the world will follow if they see the early initiatives achieving success. Inspired by their collaboration in Geneva, it is not inconceivable that countries from different regions could forge new, and more-ambitious, partnerships in the coming years. Increased transparency and information sharing would be a challenge for the pharmaceutical industry, but the growth of multi-country price negotiation and procurement would be a far more troubling development.


Neil Grubert is a global market access consultant and trainer.




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