The development of a new medicine is financially demanding and requires considerable time and resource commitment by pharmaceutical companies. The average cost to produce a new medicine is estimated at $1.3bn, with other figures indicating a much higher average cost. The time commitment is also very substantial - it has been suggested that developing a new medicine takes an average of 10 years.
In order to encourage this level of investment pharmaceutical companies are offered incentives in the form of patent, market exclusivity, and data exclusivity. While this level of protection can clearly be justified, they can have a significant impact on low- and middle- income countries (“LMIC”) due to the high initial pricing of protected medicines prior to generic equivalents becoming available. Reportedly, more than two billion people in LMICs lack access to essential medicines. Budget limitations mean that sales revenues from LMICs are unlikely to make a substantial contribution to the costs of developing a medicine.
Once medicine protection has expired, it is common practice for pharmaceutical manufacturers to produce generic versions of the previously protected medicines. The affordability of generic medicines means greater access for those in LMICs.
Short of waiting for medicine protection to expire, potentially up to 20 years for each new drug, is there an alternative solution to encourage the market to provide more affordable medicines worldwide? Various answers to this question have been put forward. One is The Medicines Patent Pool (“MPP”) - a UN-backed public health organisation working to increase access to, and facilitate, the development of life-saving medicines for LMICs. The MPP’s intention is to negotiate licences with medicine patent holders, in return for fair royalty payments, and then sub-license to generic manufacturers in LMICs to encourage the sale of lower-cost generic equivalent medicines. The MPP is proud of successes to date. Initially focused on HIV, tuberculosis and hepatitis C medicines, the MPP has expanded to include COVID-19 therapeutics and has recently signed a deal for its first cancer treatment, to help treat leukaemia. According to the MPP, in 2021 it facilitated 26.91 billion doses and 148 countries benefiting from access to MPP-licensed products.
Whilst the MPP is clearly part of the answer to the LMIC market gap, it does not offer a complete solution. The incentive for medicine patent holders to sign up is limited. The arrangements offered can result in patent-holders signing up only towards the end of their protection period. For example, the new leukaemia treatment is thought to have only has two years of protection left.
There are a range of other potential approaches. Many major producers engage in voluntary schemes to make medicines available in LMICs. Donations from higher income countries (monetary or medicines), and charities such as International Health Partners, make some medicines available. Others make the contentious argument that compulsory licensing by patent holders to generic manufacturers is the answer. Clearly, none of these approaches alone will eliminate shortages in LMICs. However, the Medicines Patent Pool is likely to make a meaningful contribution towards improving access to essential medicine for LMICs.
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