WHO Fair Pricing Forum: Watching for Drug Industry Accountability

[Republished with the permission from the Health and Human Rights Journal. See the original bog post here.]

by Katrina Perehudoff and Jennifer Sellin

Expensive medicines are a ubiquitous challenge from which no government is immune. Excessive price hikes are an urgent human rights issue with serious ramifications for public health. One such example is that of Truvada (emtricitabine/tenofovir disoproxil fumarate), a breakthrough medicine that can be taken once a day to lower the risk of HIV infection (called pre-exposure prophylaxis or PrEP). In the United States, Truvada costs between US $1,600-$2,000 every month and the average monthly wage is $3,498 for women and $4,345 for men. A recent 4.9% price increase will make this treatment even less affordable.

This is only one of many such examples, sometimes involving far greater price increases. Global leadership is needed urgently to catalyse long-term solutions that prompt governments to take regulatory action, hold the pharmaceutical industry to account for its human rights responsibilities, and to fulfil everyone’s right to the highest attainable standard of health.

That’s why all eyes will be on the second WHO Fair Pricing Forum, taking place in Johannesburg, South Africa, from 11-13 April 2019. Stakeholders, including senior policy-makers, representatives from the pharmaceutical industry, NGOs, and patient organisations, will gather to discuss options for a fairer pricing system that is sustainable for health systems, patients, and research-based and generic pharmaceutical industries. Participants at this high-level meeting will discuss their experiences of using regulatory and non-regulatory tools to achieve ‘fair’ prices. The hope is that common understandings on affordable and sustainable prices for medicines will be reached. But the question remains: Will the second WHO Fair Pricing Forum achieve a commitment to promote (regulatory) actions that dissuade pharmaceutical industry from excessively high medicine prices?

Access to medicines is a human rights issue that imposes obligations on governments and responsibilities on the pharmaceutical industry. The right to health is recognised by the 169 State parties to the International Covenant on Economic, Social and Cultural Rights. As a result, these governments have a legal obligation to regulate the pharmaceutical industry to ensure that corporate interests and power do not unjustifiably interfere with individuals’ access to (essential) medicines, in particular through high medicines prices. Price negotiations between public payers (governments) and industry are one example of this regulation. When negotiations with the industry and other government action does not result in reasonable prices, States should make full use of the flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to balance patent protection for pharmaceuticals with public health interests. Yet, focusing solely on State obligations and TRIPS flexibilities simply cannot keep pace with the ever-increasing corporate power in our globalized world.

The international community is gradually recognising that businesses have a role to play in protecting and promoting human rights. The UN Human Rights Council unanimously approved the “Guiding Principles on Business and Human Rights” put forward by the Special Representative of the UN Secretary General John Ruggie. Moreover, the Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines, formulated by former Special Rapporteur on the Right to Health, Paul Hunt, implore the pharmaceutical industry to “consider all the arrangements at its disposal with a view to ensuring that medicines are affordable to as many people as possible”. Unfortunately, these statements alone are unenforceable on non-state actors such as the pharmaceutical industry. Curiously, the recent reports of the UN High-Level Panel on Access to Medicines and the first WHO Fair Pricing Forum emphasised neither the pharmaceutical industry’s human rights responsibilities towards medicines affordability nor enforcement mechanisms. Alternative accountability strategies must be sought.

Competition law is one of the many legal strategies by which the pharmaceutical industry can be held accountable. For example, in September 2018 the Pharmaceutical Accountability Foundation, a Dutch citizens’ initiative, made waves in response to the excessive price of the medicine CDCA (or chenodeoxycholic acid), which treats a rare metabolic disease known as CTX. The pharmaceutical manufacturer, Leadiant, increased the price of CDCA in the Netherlands 500-fold from €0,28 to €140 per capsule. This price hike was possible after Leadiant received exclusive marketing rights for 10 years on the basis of CDCA’s orphan drug designation granted by the European Medicines Agency. (The EU Orphan Drug Regulation is currently under review.) In response, the Foundation submitted a request to the Dutch competition authority (Autoriteit Consument & Markt) to examine whether Leadiant’s behaviour is compatible with Dutch competition law. This investigation is still underway. On April 5, 2019, consumer organisation Test Aankoop/Test Achats filed a complaint with the Belgian competition authority about Leadiant’s 360-fold price hike for CDCA in Belgium.

The pharmaceutical industry’s human rights responsibilities are globally endorsed yet rarely enforced. But all legal options should be employed to hold the industry to account for its human rights responsibilities, including health rights. We watch with great interest to see what leadership emerges on these issues at the WHO Fair Pricing Forum.

Katrina Perehudoff is a post doctoral research fellow at the Dalla Lana School of Public Health, University of Toronto, and a post doctoral researcher at the International Centre for Reproductive Health, Department of Public Health & Primary Care, Ghent University in Belgium. She is a board member of the Pharmaceutical Accountability Foundation and one of Medicines Law & Policy’s affiliates

Jennifer Sellin is an assistant professor at the Faculty of Law, Maastricht University, a member of the Maastricht Centre for Human Rights in the Netherlands, and momentarily a visiting professor at the Dalla Lana School of Public Health, University of Toronto. She is a member of the advisory council of the Pharmaceutical Accountability Foundation