5 April 2012: World Health Organization’s Consultative Expert Working Group on R&D Financing releases its Report

On Thursday, 5 April 2012, the World Health Organization released the report of the Report of the Consultative Expert Working Group on Research and Development: Financing and Coordination entitled “Research and Development to Meet Health Needs in Developing Countries: Strengthening Global Financing and Coordination”. The 218 page report will take some time to fully assess.

The report can be found here: http://www.who.int/phi/CEWG_Report_5_April_2012.pdf

The clear prose of the Report’s introduction spells out the task of the CEWG in facilitating the original mandate of the WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG) to secure “an enhanced and sustainable basis for needs-driven, essential health research and development relevant to diseases that disproportionately affect developing countries”

The Report states:

[t]he issue we were asked to investigate was identified at least two decades ago. Market mechanisms, and also publicly-funded research, collectively result in far too little investment in research and development on diseases that mainly affect developing countries. This means that poor people suffer and die because there are no effective health technologies like medicines, vaccines or diagnostics. Markets fail because intellectual property rights are not an effective incentive in these circumstances, and public investment is also dominated by the rich world and its own health needs. This is the challenge for the world as a whole which has guided our discussions and deliberations. We have framed our recommendations to indicate that finding solutions is the responsibility of all of us in this interdependent world, in developed and developing countries alike.”

“The search for new, innovative and sustainable sources of funding, and making better use of existing resources for research and development for the specific health needs of developing countries, was an unfinished agenda of the negotiations that led to the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property (GSPA-PHI) agreed in 2008. Those negotiations themselves were the response of WHO Member States to the report, published in 2006, of the Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) which was established in 2003. We in turn were asked by Member States to review the work of the Expert Working Group on Research and Development:
Coordination and Financing, established on the recommendation of the GSPA-PHI, which reported in 2010. We therefore felt an obligation to produce a solid report, based on empirical evidence, while also ensuring that our processes were as transparent and open as possible. The report from this Consultative Expert Working Group seeks to bring this longrunning debate, if not to closure, to a head.

This walkthrough will focus on the final chapter of the report (Chapter 6: Implementation: a binding instrument) which unequivocally states the following:

On balance we consider that the time has come for Member States to begin a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries. This would also be in order to put on a secure footing the implementation of the GSPA-PHI which Member States agreed in 2008, and in particular the sustainable financing of R&D.
[T]he time has now come for WHO Member States to begin a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries, and this would be under Article 19 of the WHO Constitution.

In terms of a pathway to establish an R&D convention, the CEWG report suggests the following next steps:

    As is evident from our report, the issues that will need to be addressed in a negotiation of a binding agreement are many and complex. One of the reasons why the negotiations on the GSPA-PHI took so long was that there was very little preparatory work done to generate a draft text for consideration by the Intergovernmental Working Group that was established to draft the GSPA-PHI. We suggest therefore a process on the following lines:

  • When dealing with our report the World Health Assembly should consider, first, establishing a working group or technical committee composed of two Member States from each WHO region to undertake preparatory work on the elements of a draft agreement, soliciting inputs as necessary from other Member States, relevant intergovernmental organizations, funders, researchers, the private sector, civil society and academics as necessary. Alternatively, as was done with the FCTC, an open-ended intergovernmental working group could be established with appropriate technical support.
  • It should also provide for the establishment of an intergovernmental negotiating body open to all Member States, to be established under Rule 40of the World Health Assembly’s Rules and Procedure, to draft and negotiate the proposed R&D agreement following on from the report of the proposed working group.
  • WHO would need to provide appropriate resources to support the working group or technical committee.

Today, the CEWG has provided the WHO the road map to reassert its primacy in public health and fulfill the promise of the WHO Global Strategy on Public Health, Innovation and Intellectual Property (WHA61.21) in providing a transformative architecture for enhancing sustainable, needs-driven medical innovation.

In its report, the CEWG noted that it evaluated the 22 proposals submitted to the original Expert Working Group (EWG) and 22 proposals subsequently submitted to the Consultative Expert Working Group along the following four criteria: 1) public health impact, 2) technical feasibility, 3) financial feasibility and 4) implementation feasibility.

The CEWG report noted the following in its evaluation of a global framework on research and development (Chapter 3).

Based on the two submissions we received proposing a treaty and a global framework, we considered that the time had now come for considering a coherent and comprehensive international framework or convention under the auspices of WHO for supporting priority medical R&D aimed at diseases that are prevalent in developing countries.

Although the proposals appeared ambitious, they were worthy of further consideration. They contained clearly defined purposes and objectives, including setting up a transparent, participative and effective governance structure for needs assessment of R&D gaps, priority-setting and allocation of funds for enhanced R&D efforts for conditions prevalent in developing countries, and raising of global-level funding with contributions from Member States and other earmarked sources of funding.

The proposals submitted to us address almost all of the criteria that we set ourselves. The proposals do not provide specific details on the operational modalities of the envisaged convention or framework, although general principles are set out. This is deliberate, since the proponents consider that it should be up to the WHO Member States to decide on the institutional mechanism and modus operandi under the suggested instrument. The basic strength of these proposals is that, if adopted, they would provide a comprehensive solution to the problem of underfunding and lack of a global coordination of pharmaceutical R&D, particularly to address the diseases prevailing in developing countries.

As regards key steps necessary to begin implementation and the financial feasibility of the proposals, it was emphasized that since the idea is to make a recommendation to the effect that Member States should agree to begin a process for formal negotiations on a global framework or convention, such aspects should be deliberated upon during the course of such negotiations. Although the goal was challenging, the time was right to initiate necessary negotiations for a convention.

The submitted proposals elaborate on the principles that should be enshrined in a treaty or framework, such as a fair arrangement for burden-sharing of the R&D costs, knowledge-sharing to promote scientific progress, and equitable access to the products arising from R&D activities. Basic concepts underpinning these proposals are the delinking of the prices of medicines from the costs of R&D and the involvement of all governments in setting priorities and coordinating and funding R&D efforts. We view the proposals not as a replacement for the existing intellectual property rights system, but as a supplementary instrument where the current system does not function to meet the R&D needs of developing countries”

The feasibility of these proposals will naturally depend on the willingness of WHO Member States to engage in the negotiation of an international instrument on the matter. The WHO Framework Convention on Tobacco Control and the Pandemic Influenza Preparedness Framework for the sharing of influenza viruses and access to vaccines and other benefits are the most immediate precedents for a negotiation of that kind.

In its reasoning for recommending an R&D convention, the report provided the following exposition on advantages and disadvantages of pursuing norm-setting via “hard law” versus “soft-law”. The report on page 119 provides a dedicated box (6.4) entitled “What makes international agreements effective?” (authored by the WHO in 1999) justifying the reasons for pursuing legally binding instruments. (Source: What makes international. agreements effective? Some pointers for the WHO Framework Convention on Tobacco Control. Document WHO/NCD/TFI/99.4. Geneva, World Health Organization, 1999 (http://whqlibdoc.who.int/hq/1999/WHO_NCD_TFI_99.4.pdf). Also embedded in its analysis of a binding legal instrument and financing mechanisms are insights from experiences of the Framework Convention on Tobacco Control, the Global Environment Facility (GEF) which is the financing mechanism for four international treaties including the UNFCCC, The Green Climate Fund and The Multilateral Fund of the Montreal Protocol on Substances that Deplete the Ozone Layer (pages 116-117 of the Report).

In relation to hard and soft law, the CEWG report notes:

[w]e assessed the advantages and disadvantages of a convention approach (so-called “hard law” which also encompasses treaties, covenants and some other regulations) and other forms of international agreements (so-called “soft law”). It is often thought that the main advantage of “soft law” approaches is that, precisely because they lack legal force and enforcement mechanisms, it may be easier to reach agreement and to achieve more bold or ambitious outcomes. However, this is not necessarily the case. For example, it took 12 years for the United Nations to adopt the non-binding “Declaration on the Rights of Indigenous Peoples”. In addition, governments can make pledges in non-binding instruments and easily fail to meet them. For instance, the target for industrialized countries to provide development assistance of 0.7% of GDP was first set in 1970 with countries making “best efforts” to reach the target by “the middle of the decade” (6). In 2010, 40 years later, only five relatively small countries have met the target and the average for all aid donors is just over 0.3% (7). On the other hand, such “soft law” agreements may carry moral force. The International Code of Marketing of Breast-milk Substitutes was adopted by the World Health Assembly in 1981 as a recommendation under Article 23 of the WHO Constitution rather than a “harder” regulation (under Article 21). In forwarding the draft code to the World Health Assembly, the WHO Executive Board agreed “that the moral force of a unanimous recommendation could be such that it would be more persuasive than a regulation that had gained less than unanimous support from Member States” (8). UNICEF estimates that, since 1981, 84 countries have enacted legislation implementing all or many of the provisions of the code.5 However, as illustrated by the negotiation of this code, a soft law agreement may just represent a final compromise when the parties fail to agree on a binding instrument which ultimately may not satisfy any of the sides in the negotiation (9).”

By contrast while hard law has both legal and moral force, conventions can take a long time to negotiate and can involve quite complex governance arrangements and enforcement mechanisms. On the other hand, they provide a framework for future policy innovation and for future protocols to address particular issues in the scope of the convention (of which the Kyoto Protocol is but one of many in the environmental field alone) and the greater possibility of ensuring compliance by nation states with the agreement.

On balance we consider that the time has come for Member States to begin a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries. This would also be in order to put on a secure footing the implementation of the GSPA-PHI which Member States agreed in 2008, and in particular the sustainable financing of R&D.

Having said this, the landscape of international health law should also be considered. In recent times suggestions have been made for the adoption of international legal instruments on health-related issues. These include, for instance, alcohol (10,11), obesity control (12), counterfeit drugs (13), impact evaluation (14), and a framework convention for global health (15). Such calls need to be balanced against the very substantial costs of negotiating a series of agreements each with their own governance structure. We acknowledge that there are costs related to international health laws which should be taken into account when considering the available options, and that there would also be benefits from harmonizing new legal instruments in a common framework (16).

Nevertheless, and having considered these concerns, we believe a binding instrument on R&D is necessary to secure appropriate funding and coordination to promote R&D needed to address the diseases that disproportionately affect developing countries and which constitute a common global responsibility. Our mandate relates, as previously stated, to product-related research but we would repeat that we recognize the value also of greater investment in other kinds of health-related research.

In terms of a comparison of pathways to pursue under existing Articles of the WHO Constitution, the CEWG examined Article 19 (agreements), Article 21 (regulations) and Article 23 (recommendations). The only example of an Article 19 implementation is the Framework Convention on Tobacco Control while the International Health Regulations is the only example of an Article 21 approach. Examples of Article 23 “recommendations” include the Pandemic Influenza Preparedness Framework and, the International Code of Marketing of Breast-milk Substitutes.

In its view, the CEWG asserted, “[w]e believe that a recommendation under Article 23 is not sufficient due to the collective action problem of providing global public goods and since stronger commitments and monitoring and enforcement mechanisms are needed, and that the time has now come for WHO Member States to begin a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries, and this would be under Article 19 of the WHO Constitution.”

In terms of laying out the principles and elements of a framework for a possible convention, the CEWG notes that the wheel need not be re-invented; rather WHO can utilize the existing GSPA-PHA framework:

(a) provide an assessment of the public health needs of developing countries with respect to diseases that disproportionately affect developing countries and identify their R&D priorities at the national, regional and international levels

(b) promote R&D focusing on Type II and Type III diseases and the specific R&D needs of developing countries in relation to Type I diseases

(c) build and improve innovative capacity for research and development, particularly in developing countries

(d) improve, promote and accelerate transfer of technology between developed and developing countries as well as among developing countries

(e) encourage and support the application and management of intellectual property in a manner that maximizes health-related innovation, especially to meet the R&D needs of developing countries, protects public health and promotes access to medicines for all, as well as explore and implement, where appropriate, possible incentive schemes for R&D

(f) improve delivery of and access to all health products and medical devices by effectively overcoming barriers to access

(g) secure and enhance sustainable financing mechanisms for R&D and to develop and deliver health products and medical devices to address the
health needs of developing countries

(h) develop mechanisms to monitor and evaluate the implementation of the strategy and plan of action, including reporting systems”.

In framing the objectives, financing and coordination of a possible treaty, the CEWG proposes the following (pages 123-124). It should be noted that the de-linkage concept, a principle underscored by the Global Strategy, is embedded in objective 2.

[t]he proposed convention aims at providing effective financing and coordination mechanisms to promote R&D. As we noted in our third meeting, we see a convention not as a replacement for the existing intellectual property rights system but as a supplementary instrument where the current system does not function. R&D under the convention should focus on the development of health technologies for Type II and Type III diseases as well as the specific needs of developing countries related to Type I diseases.”

We take as granted that our suggestions are set in the context of a broader framework for health research and that the proposed financing mechanisms and the convention should: i) be supportive of health research in general, including on public health and health systems, ii) not imply resource shifts from other important areas of health research or iii) limit scope for financing of R&D on health needs in developing countries only to particular technologies or options.

Within that broad framework we would suggest, on the basis of our own analysis, that the following proposals be considered as part of the framework for a negotiation process for a convention:


  • Implementing states’ obligations and commitments arising under applicable international human rights instruments with provisions relevant to health.
  • Promoting R&D for developing new health technologies addressing the global challenges constituted by the health needs of developing countries by means which secure access and affordability through delinking R&D costs and the prices of the products.
  • Securing sustainable funding to address identified R&D priorities in developing countries.
  • Improving the coordination of public and private R&D.
  • Enhancing the innovative capacity in developing countries and technology transfer to these countries.
  • Generating R&D outcomes as public goods, freely available for further research and production.
  • Improving priority-setting based on the public health needs of developing countries and decision-making relying on governance structures which are transparent and give developing countries a strong voice.
  • Core elements under the convention should focus on development of health technologies for Type II and Type III diseases as well as the specific needs of developing countries related to Type I diseases.

  • All countries should aim to achieve specified levels of public funding on healthR&D relevant to the needs of developing countries.
  • Countries could fulfil their financial commitment through contributions to a financing mechanism established under the convention, in combination with domestic spending on R&D undertaken to attain the convention’s objectives, or through development assistance where applicable.
  • A financing mechanism should be established on the basis of contributions by governments. The convention may determine a level of contribution, taking account of countries’ own investments in relevant R&D, either domestically or in other countries. We have suggested a contribution of 20-50% of their total funding obligation to a pooled funding mechanism.
  • Such financing may be generated from existing taxpayer resources, from new national revenue-raising measures, or by channelling a portion of the resources raised from any new international mechanism to this purpose. Voluntary additional public, private and philanthropic contributions to a pooled funding mechanism can also be envisaged.
  • The convention and its financing mechanisms for the more defined objectives of R&D need to be supportive to the broader context of overall allocation of public financing to health research and the sustainability of financing in other areas of health research.
  • The convention should define which research entities in the public and private sectors, in public/private partnerships, and in developed or developing countries, should be eligible for funding.
  • Funding should be directed so as to promote cost-effective R&D in ways that will also promote subsequent access to technologies in developing countries, in particular using the tools identified in our report which best meet these criteria, such as open knowledge innovation.
  • Funding should also be directed in ways that promote capacity-building and technology transfer to the public and private sectors in developing countries.

  • A coordination mechanism will be needed which would help to promote, in particular, the objectives in Element 2.3 of the GSPA-PHI (“improving cooperation, participation and coordination of health and biomedical research and development”). This could be based on the ideas we put forward in Chapter 5.
  • The coordination mechanism would need to improve the measurement of the volume, type and distribution of relevant R&D and the evaluation of R&D outcomes, particularly so that progress against commitments and compliance could be measured. This will depend in part on data and reports provided by parties to the convention. Compliance mechanisms also need to be devised, including through cooperation between the parties to the convention.

Chapter 4 of the report is dedicated to financing and provides some interesting data points highlighting the fact that the United States of America (USA) is the largest funder (both absolutely and relatively) on health R&D on neglected diseases as a proportion of GDP in 2010; the report states that the USA spent around 0.01% of its GDP on such R&D in 2010. The United Kingdom of Great Britain and Northern Ireland spent just over 0.006% of its GDP on R&D for neglected diseases (Source, G-FINDER). Sweden spent just over 0.004% of its GDP on R&D for neglected disease while South Africa, Switzerland, Denmark, India and Australia, spent just over 0.002% of their respective GDP on R&D for neglected diseases.

In relation to financing, the CEWG report proposes:

Conclusion: health research and development: goals and targets

We have reviewed the current status of R&D and performance against proposed targets for health spending and R&D spending. Our review suggests that such targets have generally not been met by developing or developed countries but, on the other hand, there has been considerable movement towards meeting them. It is our contention, however, that proportionate targets related to health related public expenditure or development assistance are not the best means of achieving the objective, principally because the denominator is itself not necessarily at its target level. We therefore propose an approach which sets targets that relate a country’s effort in R&D spending, relevant to our mandate, to its GDP. This is a concept that is applicable both to developed and developing countries and takes account of the international public good that can be generated by each country’s own R&D spending.

    Our principal conclusion is that:

  • All countries should commit to spend at least 0.01% of GDP on government-funded R&D devoted to meeting the health needs of developing countries in relation to the types of R&D defined in our mandate.
    In addition we propose that countries should consider these targets:

  • Developing countries with a potential research capacity should aim to commit 0.05-0.1% of GDP to government-funded health research of all kinds.
  • Developed countries should aim to commit 0.15?0.2% of GDP to governmentfunded health research of all kinds.