I was surprised, and a bit disquieted, when I was notified in late December by the program committee that my proposal for a panel in the upcoming Bioindustry Organization (BIO) International Convention had been accepted. I have attended the BIO confab in the past during my employed years and more recently under my own banner, and, in the latter capacity, organized a panel when the meeting was last in Boston in 2009, but the topic I proposed for the Global Innovations and Markets Track of this year’s meeting, “Accelerating Access to Public Sector Markets,” is outside my professional experience. My theme is that the public sector buyers, i.e., international health agencies, governments, and non-governmental organizations, are an important part of the “emerging market” (that outside the US/EU/Japan), and pharma companies, big and small, need to figure out how to sell to them. Obviously, the public sector poses lots of challenges, like corrupt governments, uneven or nonfunctional approval systems, the bias of the donor governments to run own bilateral programs, the preference of NGOs for donations of “free” drugs, the general bad rep of the pharma industry in global health, and others. I guess my list of proposed panelists impressed the committee and I was given a slot. Fortunately, two of my speakers, a leader of a foundation’s drug access program and a diagnostic company CEO, have agreed to participate and I have invitations out to representatives of the emerging market groups of the major pharma and generic drug companies and, with luck and help, may be able to fill out the panel.
The program committee’s feedback (or warning) was to “cover new, novel approaches,” and my charge (request) to my panelists will be to be to posit approaches that not obvious and risky. Over the past 10-15 years, donors, policy wonks, and governments have implemented several programs to provide affordable medicines, mostly vaccines, but their sustainability, especially in the current recession, is uncertain. In several of my past posts, I have written about these programs as well as other efforts to create a market for essential medicines. Here is a recap:
Multilateral global programs: these intermediary wholesale purchasing agents are typically funded by governments and foundations, identify and certify suppliers, and negotiate prices and sometimes provide funds to subsidize purchases by the international agencies, national health systems, or sometimes nongovernmental organizations (NGOs) of large volumes of drugs or vaccines for the big three neglected diseases (malaria, tuberculosis, and HIV/AIDS) or for childhood immunization programs. Examples are the Advance Market Commitment program of the Global Alliance for Vaccines and Immunizations (GAVI AMC, my post “Creating the Upside” 1/20/10), the Affordable Medicines Facility for Malaria of the Global Fund (AMFm, my post “AMFm: not your Ordinary Radio” 6/10/10) and the Global Drug Facility for tuberculosis drugs (GDF). The WHO has a similar program for purchase of HIV meds and diagnostics for WHO-affiliated groups, the WHO/Contracting and Procurement Service (WHO/CPS), and the Pan American Health Organization has a Revolving Fund through which member states can pool their funds and purchase vaccines and related supplies at negotiated prices (Revolving Fund, Revolving Fund). While these multi-lateral programs have been criticized for being overly bureaucratic, too selective in the meds offered, and for negotiating too high a base price, I have not seen a comparison of what works best, perhaps their track record is too short (e.g., the AMFm is in Phase I and to be evaluated this year, AMFm Monitoring).
Not-for-profit company programs: in my post on sources of essential meds (“S and M” 8/14/11), I noted three not-for-profits companies (distinct from “non-profits” in that each seeks to make a profit to sustain their operations). One is Mission Pharma (Mission Pharma) which is based in Denmark, founded in 1975, and aims “to be the preferred provider of generic medicines and medical devices for the benefit of economically disadvantaged populations.” Their main product groups are generic pharmaceuticals, medical devices and equipment, and medical kits, representing about 2,500 different products that they distribute to customers in 70 countries, primarily governments and NGOs. The second company is the IDA Foundation (IDA) which is headquartered in the Netherlands with regional offices on most continents. In business since 1972 when it began International Dispensary Association, IDA now has 160 employees, more than 800 customers and distributes 3,000 mostly generic products in 100 countries to reach annual sales of $150 million. IDA also offers a range of services to the companies whose products it sells such as warehousing and distribution, repackaging and labeling, in-country knowledge, and country-by-country product registration (IDA services). The third is WomenCare Global (WCG) and it “provides access to high-quality, innovative and affordable reproductive healthcare technologies for contraception, fertility, and pregnancy management” to both public and private sectors in the underserved markets of Africa, Asia, and Latin America and, notably, it is oriented to “selling” products as opposed to responding to purchaser requests. WCG formed its recently formed a subsidiary, Devapharma Trading Ltd., to handle “all product-related activities including global sales, regulatory standards, quality assurance, pharmacovigilance, medical affairs, logistics and supply chain management, and product commercialization” (WCG press release).
For-profit company programs: as I mentioned above, big pharma has provided billions of doses of drugs for the neglected tropical diseases (my post “NTD TD,” 1/2/12), essentially having sales of product to wealthy countries subsidize purchase for the less wealthy. It is unlikely companies and their customers, who are primarily employers and governments, will be able to sustain the effort forever and expand it to include needed, novel treatments. The generic pharmaceutical companies are obviously major players in both the public and private sector markets in the emerging markets, and at least one, Cipla of India, has a strategy of keeping its costs as low as possible and passing the savings on to buyers (my post, “Generics Play,” 9/15/11). But these companies are successful due to their competitive nature and, absent deep-pocketed sponsors as those treating HIV/AIDS, public sector markets may cut their margins too thinly.
I am hoping my panelists will have the experience I lack and contribute some new ideas to improving, or creating, an international wholesale market place for essential drugs. In addition to facing and justifying the financial risk, any company or companies advocating an new approach will contend with the highly fractured and territorial members of global health field, which, according to the Council on Foreign Relations, involves forty bilateral donors, twenty-five UN agencies, twenty global and regional funds, and ninety global initiatives (CFR Backgrounder). Am I on a snark hunt?