Financial Times Worries that APCs May Crowd Out Other Policies

In today's Financial Times (subscription only link, full text reproduced here), Andrew Jack says that policy-makers are divided about how to promote development of new vaccines. He says that "In practice, APCs have sparked dissent."The article is somewhat thin on detail of this supposed controversy. The claim seems to be that advance purchase commitments might divert resources from more pressing needs, or that that there are already increasing incentives for the development of new vaccines.Owen's commentI wrote a letter to the editor in reply to this article, which was published on 21 June. It said:

Sir,Policymakers are rightly turning their attention to finding ways to use scientific knowledge to address the health needs of the developing world. As Andrew Jack reports ('Rich World Divided Over The Health Of The Poor', 17 June), there is no single solution which will ensure that new medicines and vaccines are developed and affordable. But it is not true that policy-makers are "sharply divided" about which approach to adopt: on the contrary, there is a clear consensus among experts that we need a mixture of publicly funded research, public-private partnerships, and commercial investment to accelerate development of new medicines. It is not surprising that this combination has such wide support: it is the mixture of funding and incentives that has led to the development of medicines for the health needs of the rich world.Private sector investment is constrained by the absence of a valuable market for medicines for poor countries. The G8 Finance Ministers communique endorsed advance purchase commitments as an additional policy which would create a market incentive for more private sector investment, to complement public and charitable funding of research. As your other report ("Drug Companies Appeal for G8 Backing to Fight Diseases", 17 June) explains, public and charitable funding alone are not sufficient for new medicines to be developed and brought to market.There is no competition between these approaches. A benefit of advance purchase commitments is that payments are only needed if and when a new vaccine has been developed; so in the meantime the donors can and should increase public funding of research. Without an advance purchase commitment, many medicines will remain stuck in the pipeline, and there is no guarantee that poor countries will be able to afford them if and when they are developed.Yours sincerelyOwen BarderCenter for Global Development, Washington, DC 20036.

Here is the full text of the FT article

Rich world divided over health of poor

The Bill & Melinda Gates Foundation, Medecins sans Frontieres and Gordon Brown represent just three of the differing approaches on how best to find cures for mass killer diseases, writes Andrew JackAs the leaders of the world's richest nations prepare for next month's G8 meeting in Scotland, policymakers remain sharply divided over innovative ways to address the health needs of the citizens of developing nations.Organisations such as Medecins sans Frontieres have been lobbying hard for new funding and regulatory mechanisms to stimulate research and production of drugs for the most lethal "neglected diseases", such as tuberculosis, malaria and sleeping sickness. Their concentration in the developing world offers little commercial interest to drug companies.But there is little consensus about how best to proceed. One key issue concerns the role of "advance purchase commitments" (APCs), a phrase frequently used by Gordon Brown, the UK chancellor, and cited in the recent G8 finance ministers' communique as "potentially a powerful mechanism".Much emphasis in health research since the start of the decade has been on "push funding" to distribute money between companies and research organisations, spurring new work on medicines and vaccines. The Bill & Melinda Gates Foundation has been instrumental in working through a series of public-private partnerships.Recently, academics such as Michael Kremer from Harvard University have argued for the creation of alternative "pull mechanisms" designed to stimulate vaccine research and development by pharmaceutical companies through advance commitments by governments to purchase them if they prove successful.On paper, APCs seem appealing. As spelled out this spring in a report funded by the Gates Foundation and co-ordinated by the Centre for Global Development, a US think-tank, nations would make legally binding future pledges to guarantee purchases of Dollars 3bn (Euros 2.3bn, Pounds 1.6bn) for each vaccine. Manufacturers would in exchange supply at fixed, low and sustainable prices."There's broad awareness among the G8 and we hope for a strong commitment by next year's meeting," says Ruth Levine from the centre. "It's a pretty attractive argument for people advocating more funding for health today to be able to say that it will not necessarily continue for ever (as new vaccines emerge)."In practice, APCs have sparked dissent. Don Light, a researcher at Princeton University who was on the working group but refused to sign the final report, argues that the mechanism is flawed. He also believes it will divert money, scarce official time and political capital from other health initiatives that could save lives now."Why not give first priority to what can be achieved today with effective vaccines?" Mr Light says. "If there is real money being set aside, it is being diverted from elsewhere. If not, it is subject to political change and meaningless."Drugs companies are already working on vaccines for developing world diseases without APCs - such as rotavirus and malaria - and a guaranteed market to provide them continued incentives is already beginning to operate.The most prominent example is the global fund to fight Aids, tuberculosis and malaria, a UN-backed co-ordinating mechanism to distribute donor governments' money, which launched a public awareness campaign across Europe this week as it geared up to boost support to Dollars 7bn by 2007. "Before the global fund, there was no answer for Aids, TB and malaria," says Richard Feacham, its director. "Now we are a major answer, providing an incentive for pharmaceutical companies (to work on neglected diseases)."Dr Feacham argues that his organisation's resources have already helped create a market to support the development of two large-scale malaria treatments, produced by Novartis and Sanofi-Aventis.While APCs could prove useful, Dr Feacham is concerned that by increasingly discussing them "sometimes the argument is swinging too far" towards abstract future research at the expense of the need for spending today on treatments known to work.Speaking at a Medecins sans Frontie`res conference in London last week, Stewart Tyson from DFID, the UK government agency for international development, said providing market incentives such as APCs to stimulate vaccine research was one option, amid other approaches including the direct funding of existing vaccines and drugs.But Mr Tyson also argued that investing in strengthening health systems, as well as in broader development goals, was extremely important. He stressed that for many developing nations themselves "health is not a priority". The G8 alone can only do so much.(This posting contains copyrighted material the use of which has not been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of economic issues. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)