Robert D. Hormats
Under Secretary for Economic, Energy and Agricultural Affairs
Washington, DC
March 17, 2011

As prepared for delivery

Unknown tag could not be displayed.

Thank you Carl for that introduction. I would also like to thank our speakers and guests for their attendance today and moreover their commitment to improving global health. In particular—Global Health Initiative Executive Director Lois Quam—who will be moderating today’s discussion with: USAID’s Amie Batson; OES Acting DAS Jonathan Margolis (unfortunately Assistant Secretary Kerri-Anne Jones couldn’t attend at the last minute); GlaxoSmithKline’s CEO Andrew Witty; PhRMA’s head John Castellani; and Neeraj Mistry from the Sabin Vaccine Institute’s Global Network for Neglected Tropical Diseases. My staff and a number of individuals from both within and outside of the government have been working on the concept for this symposium for a number of months now.

The goal today is not to focus on specific therapies or treatments for diseases—important as they are—but rather, how it is that we can work together to ensure the development of global public goods such as drugs and vaccines and encourage innovation in areas where there are barriers for investment—market failures—such as in the case of neglected diseases.

I know that the actual cost for the development of a new drug or vaccine is a debated figure but I think that we can all agree that regardless of the final number, R&D for new medicines is expensive and product development is a lengthy process. We can also all agree that the return on investment for an Alzheimer’s or anti-obesity medicine is likely to be higher than that of an anti-malarial or anti-TB drug. Nonetheless, the need for new anti-malarials, anti-TB and other life-saving drugs, including those for neglected disease are desperately needed, even more so with the growing prevalence of drug resistance.

The scientist Paul Ehrlich, was awarded the Nobel Prize in 1908 for his “magic bullets” to fight various diseases. Modern medicine has come far in the past hundred years though, unfortunately, we still don’t have a one-size fits all “magic bullet” to incentivize innovation for neglected diseases.

But there are ways in which the private sector, NGOs, governments, and international organizations such as the WHO can work together to address market failures. I know that the other speakers have some very interesting stories to share so I’ll quickly touch on only two topics on which I’m sure they will expand. How governments can promote innovation in general and specifically for global health? And leadership by the private sector and NGOs to help incentivize R&D for neglected tropical diseases.

First, government policies can help create an environment conducive of innovation. Not just in global health but in general. This includes, of course, education and research and development funding but also good governance, transparent regulatory policies, markets that are open and competitive, and policies that allow companies to succeed and sometimes fail. If countries do not get these policies right, even massive investments in education and R&D are unlikely to afford innovation gains. Strong IPR protection is also vital because it fosters innovation by providing incentives for companies to produce new products or services. The State Department is working both bilaterally and in multilateral fora such as the World Health Organization and the Asia-Pacific Economic Cooperation (or APEC) to promote a range of policies that promote innovation.

Neglected diseases and the development of cost effective interventions are two of the Administration’s top Global Health priorities. That’s why the National Institutes of Health is starting the National Center for Advancing Translational Sciences. This center is designed to build new bridges that link basic drug discovery research with therapeutics development and clinical care, particularly in high-need areas that attract little commercial interest, such as rare and neglected diseases. This includes working with companies to develop novel approaches to IP to facilitate development later in pipeline. The center would also provide incentives for greater sharing of scientific information. This is just one example of how the U.S. government is helping to push forward global health innovation.

Many organizations and companies are experimenting with different models. For example, UNITAID has established a voluntary Patent Pool Initiative for medicines, initially focusing on HIV medicines. Their goal is to encourage patent holders to offer, under certain conditions, IP related to the pool. NIH has embraced this opportunity and contributed to the pool.

The World Intellectual Property Organization (WIPO) is doing work on “open innovation” which often takes the form of finding suitable partners, especially through the Internet. These types of programs are a step in the right direction but I want to stress that they have to be voluntary—there isn’t a one size fits all option here.

Technology transfer from the public to the private sector leads me to my second point, that is, leadership by the private sector, NGOs, and academia to help lower barriers to neglected diseases R&D. Take for example, the Medicines for Malaria Venture or MMV. MMV brokers and manages industry-academia research collaborations to develop new anti-malarials. Collaborations have been formed between pharmaceutical companies such as GSK, Pfizer and Genzyme as well as universities such as Harvard and MIT. MMV has received funding and support from government agencies (including USAID), private foundations, international organizations, corporations, corporate foundations, and private individuals. Funding for R&D is important. But I choose this example because, in addition to funding, MMV fosters data sharing, IPR transfer, and a mechanism to exchange expertise in R&D and manufacturing between collaborators. In effect, they are lowering barriers to innovation.

Later this afternoon, Andrew Witty is going to talk about GSK’s initiative to share their company’s knowledge and IPR so that others can build upon their past efforts to develop new drugs. Again—this is an example of lowering barriers to innovation for global health.

Before I pass the stage to Lois, I want to note that we have allotted a significant amount of time for questions from the audience. I’d like for this to be an open dialogue. Thank you.