2. Background to Priority Medicines Project

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Chapter 2: Background to Priority Medicines Project





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Priority Medicines for Europe and the World

"A Public Health Approach to Innovation"





Background Paper







Background to Priority Medicines Project





Warren Kaplan and Richard
L
aing



7 October

2004





Chapter 2: Background to Priority Medicines Project





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Table of Contents


2.

Background to Priority Medicines Project

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3

2.1

EU Frameworks

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3

2.2

G10 EU Policy Environment

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5

2.3

Objectives of Project

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6

References

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8



Annexes


Appendices

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2.

Background to Priority Medicines Project

2.1

EU Frameworks


Although the EU Framework Programs (FPs) only started in 1984, the
evolution of European
research programs can be seen as far back as the 1950s, when the European Coal and Steel
Community (ECSC) was formed. The next major collaboration was the 1957 European Atomic
Energy Community (EURATOM), which encouraged research in
to nuclear energy. The
European Community was first formed in 1967 and attempts were made to formulate a
European research policy. Significantly, in the European context, research has never been just
research. It has always served some other, extra purpos
e, usually related to the cause of
increasing European unity. This is manifest as the importance given to ‘cohesion’ whereby
priority is given to projects involving the less developed countries of the EU. Industrial
competitiveness has been the other prime

motivation behind European research..


The rationale to justify research and development (R&D) at the European level was first agreed
in 1983 in the so
-
called “Reisenhuber Criteria”.
1

In brief, European Community involvement is
justified with:



“resea
rch conducted on so vast a scale that single Member States either could not
provide the necessary financial means and personnel, or could only do so with
difficulty”;



“research which would obviously benefit financially from being carried out jointly, aft
er
taking account of the additional costs inherent in all actions involving international co
-
operation”;



“research which, owing to the complementary nature of work carried out at national
level in a given sector, would achieve significant results in the w
hole of the Community
for problems to which solutions call for research conducted on a vast scale, particularly
in a geographic sense”;



“research which contributes to the cohesion of the common market, and which promotes
the unification of European science
, and technology; as well as research which leads
where necessary to the establishment of uniform laws and standards.”


All FPs since 1992 have followed the Maastricht Treaty of February 1992, which had a significant
effect on European research


notably

the addition to Article 130f, which expanded Community
research from the
“scientific and technological bases of Community industry”
to include
“all the
research activities deemed necessary by virtue of other Chapters of the Treaty
”.
1


There are several im
portant practical and policy issues that have been raised over the years
regarding the FPs.


How successful have they been and how does one measure this effectiveness?

Some have
taken the position that the association between the growth of the Framework
Programs and
measures of EU competitiveness and technological success is far from obvious (See Section 2.2).
The amount of money spent through this route is small relative to Member States’ research
budgets, or even the budgets of some European companies.

There are many

unanswered

questions
r
egarding the overall effectiveness of Framework Programs. The impact of other
Community policies may be more important than Framework Programs if the effect of the
Framework Programs is to discourage application of th
e ideas which result. Thus the activities
of a regulatory directive in biotechnology might outweigh the benefits of Framework
-
funded
R&D in that field.


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How should future priorities be se
t? The issue is that there is a large number of organizations
poten
tially involved, which creates a considerable challenge if the process is to be inclusive and
open.


What should priorities be?

There is, for the most part, some agreement on the main themes, but
room for debate over the details.


What is the real purpos
e of FPs?
i

In principle, research could be aimed at any of the following:
strengthening basic research in the EU, facilitating a more equal distribution of scientific skills
throughout the Community, encouraging industrial development and technology appl
ication,
developing prototypes or technology demonstrators in key market sectors, encouraging a
'European' dimension to industry, through collaboration between national companies, and
performing research to inform European policy. Overall,
economic competi
tiveness
will remain
a dominant rationale, but other objectives such as
quality of life
and
underpinning EU policy
are also possible.
ii



In particular, the 5
th

FP had a research agenda dealing with age
-
related diseases and disorders
of high morbidity.
It sought to sponsor research in the following areas:



nervous system: stroke, Alzheimer disease and other forms of cognitive impairment,
depression, Parkinson’s disease and peripheral neuropathies;



musculo
-
skeletal system: muscular atrophy, osteoporosis an
d degenerative joint
diseases;



urogenital system: incontinence and prostate disorders



other gender
-
specific health problems;



sensory systems: visual and auditory impairments;



pain management
iii


The 6
th

FP has a particular line of research that is relevant t
o the Priority Medicines Project. One
objective is to confront the global emergency caused by the three major communicable diseases
-

HIV/AIDS, malaria and tuberculosis
-

through the development of effective disease
interventions, particularly for use in
developing countries. This line of research, identified by the
6
th

FP, envisages that developing countries will be significant partners and will participate
directly in specific activities within the 6
th

FP. In particular, this aspect includes
support of



i

At the first level of analysis, there is always the question of whether the Framework programmes
should be continued at all (one ‘radical’ option would be to redeploy framework funds into a
corpora
te R&D tax credit scheme on the grounds that the increase in corporate R&D could have more
impact on innovation and competitiveness than funds mediated through the Commission). In the
increasingly global marketplace and with increasingly global companies,
the very concept of
European collaboration may also be questioned since to many ‘European’ companies, what matters is
collaboration with companies in the USA, Japan, or Pacific Rim countries. See Section 2.2.


ii

A full report on the history of European Fra
meworks (up until the beginning of the 5
th

Framework)
can be found at
The European Union and Research

EU Framework Programmes and National Priorities

(October 1996, 73 pp.) available from the Parliamentary Office of Science and Technology (POST),
House of
Commons, 7 Millbank, London SW1P 3JA


iii

See Fifth Framework Programme Website
http://www.cordis.lu/life/src/part_docs.htm
, accessed 8
March 2004.

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phase II and phase III clinical trials of promising products in, with, and for, developing countries

through the European and Developing Countries Clinical Trials Partnership (EDCTP).

2.2

G10 EU
Policy Environment


2.2.1

The Pammoli Report and its progeny


The E
uropean pharmaceutical and chemical industry has its roots in the mid 19th century when
French chemists from the dye industry expanded use of such materials to manufacture
pharmaceuticals.


Over the years, the European pharmaceutical industry has become a

stronghold of European
industrial development. Recently however, a perception has emerged that the European
pharmaceutical industry has been losing ground to that in the United States. This was
strengthened by the so
-
called Pammoli report (named after one

of its authors), a report issued
in 2000 called “
Global Competitiveness in Pharmaceuticals: A European Perspective
” (
See
Appendix 2.1
).


T
he main finding of the Pammoli Report was that the European pharmaceutical industry has, in
fact, been losing competitive advantage as compared to the United States, even though large
differences exist across Euro
pean countries. As a whole, the Report found that Europe is
“lagging behind in its ability to generate, organize, and sustain innovation processes that are
increasingly expensive and organizationally complex”. In essence, competitiveness of the
European
pharmaceutical industry is inhibited by domestic and fragmented markets and
research systems. Several variables were found to be relevant in this regard to pharmaceuticals:
1) The size and the structure of the biomedical education and research systems; 2)

Some basic
institutions governing labor markets for skilled researchers and managers, as well as corporate
governance and finance; 3) Intellectual property rights and patent law; 4) The nature and
intensity of competition on the final market.


Between 199
0 and 2000, United States R&D expenditure was double that of Europe. Eight of the
top 10 selling medicines originated from the United States, compared with one of the top 10
from Europe.
2

To highlight the differences in industry structure, we provide this

brief Table 2.1,
taken from a Scrip publication (24 December 2003, 2913/2914) showing pharmaceutical sales for
Europe and North America for all of 2002 and up until October 2003.


Table 2.1. Pharmaceutical Sales for Europe and North America

Geographical A
rea

2003 Sales (million$)

2002 Sales (million $)

North America

167895

151562

United States

159398

144626

Canada

8497

6936

Europe

72215

58179

Germany

21337

16947

France

17684

14213

Italy

12339

10180

UK

12468

10528


Spain

8387

6311


In lar
ge part as a response to the Pammoli Report, a high level commission of the European
Union (
High Level Group on Innovation and Provision of Medicines
-
(the “G
-
10 Medicines
Group”
)
:
(
Appendix 2.2
) was convened to provide a number of recommendations for public
health policies and actions in the area of pharmaceuticals. These proposals were directed to
co
mpetitiveness within the industry, pharmaceutical regulation and innovation, generic
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medicines and the role of patients. On July 2003, the European Commission provided its
responses to the 14 wide
-
ranging recommendations set out in the G
-
10 Report. It t
ook each
recommendation of the G10 Report and discussed how
the recommendations might be taken
forward and what the G
-
10 Group could
do to facilitate the process (
See
Annex

2.
3
)
.
Significantly, these Commission recommendations were cognizant of the health issues raised by
the soon
-
to be expanded EU.
The recommendations put forward were considered in the
perspective of the enlargement of the EU to central a
nd eastern European co
untries.


2.2.2

The Barcelona European Council : The “3% Solution”


In March 2002, the European Council, partly in response to the Pammoli report, officially called
for action to increase public and private investment in research and technological development
.
To this end, the EC asserted that investment in research (both public and private) should rise
from 1.9% to 3% of GDP in the European Union by 2010. The share allocated to
private
funding
should rise to two
-
thirds of the total.
3

The thesis is that
there is a “research gap” in investment
causing less attractive conditions for private investment in public and private research in
Europe. Based on consultations arising from this initiative, the EC discovered that although
many EU companies are strategi
zing for global development, they are not planning new
research investment in the European Union but rather in other regions that they deem more
attractive, such as the United States and some Asian countries.


The EC recognizes the value of public funding
insofar as links to industry are emphasized. There
are explicit directives in the Report to improve the effectiveness of public support for research
and innovation and redirect public resources towards research and innovation. For instance, the
EU desires
to improve links between public research institutions and the private sector and
“…such partnership offers a potentially powerful tool to make investment in research more
attractive to business while also benefiting public research.”
3


The sense of this
“3%” initiative, given that the share allocated to private versus public funding
is to rise to 3:1, is that research and innovation should be primarily directed towards the private
sector. There is a role for publicly
-
funded institutions to deal
with “research gaps” as well as
failure of the private sector to innovate in certain areas (e.g., “neglected” diseases of developing
countries exclusive of HIV, malaria and TB, medicines specifically geared towards children,
women and the elderly).


A rec
ent development has been the creation of a Technology Platform for Innovative medicines
which would be launched as part of the 7
th

Framework programme for research.
The overall
policy objective of the Technology Platform for Innovative Medicines would be

to enhance and
accelerate the development process of medicines so as to ensure the most rapid application of
scientific breakthroughs into approved new medicines. This will be achieved by stimulating
integrated forms of cooperation in research and develop
ment, in particular through reinforced
public
-
private partnerships, with a view to providing the European population with early access
to new, more targeted medicines, while at the same time, strengthening the European science
base and fostering economic g
rowth in the pharmaceutical and biotechnology industry.
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2.3

Objectives of Project


It is accepted that the resources available for developing and supplying medicines to respond to
unmet medical needs is not infinite and that decisions will have to be mad
e between competing
priorities. The aging of the EU population , the impact of EU Enlargement, and the relatively less
developed state of healthcare systems in the EU Accession countries will pose substantial
challenges. This is especially so when the EU
seeks to meet the dual goals of promoting equity
in healthcare on one hand, and promoting innovation and sustaining the competitiveness of the
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pharmaceutical and biotechnology industries on the other. The need for new medicines and the
maintenance of hig
h standards of safety are unarguable and the present system has served both
these objectives and avoided major public health disasters.


Nonetheless, for many diseases, there exists a “pharmaceutical gap” between the burden of
disease and a clinically eff
ective medicine. Pharmaceutical innovation, such as the creation of
new chemical entities, can fill these “gaps” but, from a public health viewpoint, “innovation”
can include many other different options: modifications of known medicines; development of

less invasive administration routes; use of simpler administration schedules. It is one objective
of this Project to prepare a public
-
health
-
based medicines development agenda, for support by
the EU in the immediate (2005

2006) and medium
-
term (2007

2010
) future. The document is
intended as a guide for policy making, not as a guide to researchers or clinicians. In this regard,
a further objective of this Project is to develop a systematic methodology that allows interested
parties to gain insight into wh
at constitutes a “pharmaceutical gap”.


There are several phases to this Project. In Phase I, we have undertaken a detailed analysis of the
burden of disease in Europe and the world, reviewed the efficacy of certain existing
pharmaceutical interventions f
or these diseases, considering both their benefits and risk. Based
on this, we have developed a preliminary list of candidate conditions for which additional
in
-
depth review of pharmaceutical intervention
is justified. This additional
review

occurs in Pha
se
II of the Project.


In Phase II, ZonMw will conduct an inventory of European research institutions that are
involved in the identified priority conditions with a view to establishing a program of
cooperation to further research in these areas.

(See
http://www.zonmw.nl/upload/32344/priority_medicines_summary_and_objectives.doc

)

Based on our preliminary list of candidates, we will perform in
-
depth studies of

diseases

that are
on our preliminary list of candidates
.


Ultimately, we aim to also provide supporting public health justification for pharmaceutical
R&D by including an approach to pharmacoeconomic analysis of potential benefits from new or
existing m
edicines. The purpose is to assist policy
-
makers to define research priorities on the
basis of public health considerations. The Project will also attempt to identify needs regarding
special patient groups and better delivery mechanisms and formulations of

existing preventive
and therapeutic medicines. The original proposals for this Project can be found in
Annex 2.
1


and
a
n expanded version in
Annex 2.2
.


This project is not about improving access to medicines through improving the efficiency of the
health care delivery system.
iv

It is restricted to investigating EU pharmaceutical innovation from
a pu
blic health, not a market
-
based, viewpoint.




iv

An example of a “health delivery gap” is the
situation regarding epilepsy, where a variety of
political, economic, social, and cultural factors result in a difference between the numbers of people
with epilepsy and the numbers actually being treated. See the ILAE Commission Report, “ The
Treatment G
ap in Epilepsy: The Current Situation and Ways Forward”, Epilepsia, 42: 136
-
149 (2001).

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References




1

Research and the European Union, Parliamentary Office of Science an
d Tec
hnology, Summary
Report, 1996, at
http://www.parliament.uk/post/pn083.pdf
, last accessed 13 March 2004.


2

Scrip publication, 24 February 2004, No. 2923,
www.scrippharma.com


3

Raising EU R&D Intensity: Improving the Effectiveness of the Mix of Public Support
Mechanisms for Private Sector Research and Development, Report to the European
Commission by an Independent Expert Group 2003.
http://europa.eu.int/comm/research/era/3pct


4

Technology Platform for Innovative medicines
-
Aims and Objectives URL
http://www.cordis.lu/lifesc
ihealth/innomed_aims.htm

Accessed August 26 2004