08 Fall

Public Return on Public Spending: H2020 needs strong public interest

conditions and incentives

PositionpaperpreparedforEuropeanCommission

PublicConsultationonHorizon2020

January 2017

Submission Authors

HealthActionInternational

KEIEuropeSaludporDerecho

MSFAccessCampaign

GlobalHealthAdvocates

UniversitiesAlliedfor

EssentialMedicines

Endorsed by

CommonsNetwork

ÄrztederWelte.V.

(DoctorsoftheWorldGermany)

All-Ukrainian

NetworkofPeople

LivingwithHIV/AIDS

JustTreatment

WEMOS HepatitisScotland DyingforaCure

EuropeanPublic

HealthAlliance

Praksis

Test-Aankoop

BEUC

GrupodeAtivistas

emTratamentos

HealthProjectsforLatviaOrganizaciónde

ConsumidoresyUsuarios

BrotfürdieWelt

BUKO

EKPIZO AIDSActionEuropeStopAIDS

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PublicReturnonPublicSpending: H2020needsstrongpublicinterestconditionsandincentives

PositionpaperpreparedforEuropeanCommissionPublicConsultationonHorizon2020 TheSocietalChallengespillarofHorizon2020(H2020)playsanimportantroleinreinforcingEuropeanscitizens’confidenceintheEuropeanUnion(EU).Throughinvestingininnovationthatdirectlyimprovespeople’slives,suchashealth,theEUusesitscombinedresourcestoprovidereal,added-valuebenefitstoitscitizens. Healthisconsideredourmostbasicandessentialasset.Article168oftheTreatyontheFunctioningoftheEuropeanUnion(TFEU)statesthatahighlevelofhumanhealthprotectionshouldbeensuredinthedefinitionandimplementationofallUnionpoliciesandactivities.However,majorinequalitiesstillexistinhealthcarecapabilitiesandchildren´swell-beingwithinEUmemberstates. AstronomicalpricesofnewdrugsforcancerandhepatitisCinEuropehaveattractedconsiderablemediaandpublicattention,whichhasbroughtthedebateonaccesstomedicinesinthepoliticalspotlightoftheEUanditsMemberStates.Thoughthechallengeofaccesstomedicineshaslongbeenaconcernforlow-andmiddle-incomecountries,highpricesnowalsothreatenequitableaccesstotreatmentintheworld’swealthiestcountries,includingEurope.Publichealthexpertshighlighttheneedtoimproveaccesstohighquality,timelyandaccuratediagnosis,care,treatmentandlongtermfollowupstrategiesacrossEurope.i HealthalsocontributestotheeconomicprosperityoftheEU.WithoutahealthyEuropeansociety,theEUcannotensuresmart,sustainableandinclusivegrowthanditwillnotmeetthetargetssetoutinEurope2020-theEU’sten-yeargrowthstrategy. Presently,thepublicinterestinH2020investmentsisnotsufficientlyprotected.Manyleadingexpertsandgovernments–includingEUMemberStates-havehighlightedtheneedtoimprovethewaypublicbiomedicalresearchanddevelopment(R&D)fundingismanaged.Thisiscrucialtorespondmoreefficientlytotheurgentneedforaffordablenewhealthtechnologiesthatmeetprioritypublichealthneeds.KnowledgegeneratedbyEU-taxpayerfinancedresearchshouldmaximisethegeneralpublicbenefitandnotpredominantlyleadtoreturnsforlargeprivateactors(seeBox1).

BOX1-Experts,scientistsandgovernmentscallformorepublicleadershipinbiomedicalR&Dfunding D-GResearchCommissionerMoedascalledformoreopen,transparentresearchasoneofhiskeyprioritiesinhisJune2015Speech‘OpenInnovation,OpenScience,OpentotheWorld’.IntheCouncilConclusionsonpharmaceuticalsofJune2016,EUMemberStatesdemandedincreaseddatasharingandfurtherexplorationofequitablelicensingofpubliclyfundedhealthR&Dtoensureabetterreturnonpublicinvestment.iiScienceEuropealsopointedtotheimportanceofopenscience,statingthat“allresearchandinnovationbuildsonthecapacityofscientists,researchinstitutions,businessesandcitizenstoopenlyaccess,share,andusescientificinformation”.iiiInavisionpaperonthefutureofH2020theCommission'sScientificPanelforHealth(SPH)statesthat‘betteraccesstoresearchdatacanmultiplythebenefitofinvestment’.ivTheScientificadvisorygrouponhealthunderHorizon2020identifiestheneedforequitableaccesstoresults,theuseoftrulyinnovativeopen-innovationandR&Dmodelsandreal-timesharingofdatabetweenallstakeholdersaskeychangestheywouldliketoseeintheH2020fundingframework.v Similardemandstoputmorestringentconditionsonpublicfundingtoensureincreaseddatasharingandaffordableaccesstofuturemedicineshavefeaturedinleadinginternationalreports.TheUNHighLevelPanelonAccesstoMedicines(UNHLP)hasrecentlyurgedgovernmentstomandatestrong,enforceablepoliciesondatasharinganddata

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accessasaconditiontopublicgrants,useopenmodelsofinnovationandapublichealthapproachtomanagingresultingintellectualproperty(IP).ItalsoasksgovernmentstomandatemanufacturersanddistributorsofhealthtechnologiestobefullytransparentonR&Dcosts,includinganypublicfundingreceivedinthisprocess.viThesecallsarerepeatedintherecentLancetCommissionreportonEssentialMedicines.Thisexpertcommitteeasksgovernmentstodevelopandimplementcomprehensivenationalactionplanstoguaranteeequitableaccesstonewessentialmedicines,includingopenknowledgeinnovationandfairlicensingpractices.ItalsodemandsgovernmentstotakeinternationalpublicleadershipforprioritysettingforessentialR&D,withdueregardforthepublichealthneedsoflow-andmiddle-incomecountries.vii

InthiscontributionwehighlightthekeyprinciplesthatshoulddrivethenextfundingframeworkprogrammetoenhancethequalityandefficiencyofHorizon2020biomedicalR&Dspending.FirmandbindingrequirementsneedtobeputinplacebytheEuropeanCommission(Commission)frombasicresearchonwardstoensurethatpubliclyfundedbiomedicalR&Dtargetsprioritisepublichealthneedsandresultsinhealthtechnologiesthataresuitable,affordableandavailablefortargetpopulations,includingthoseinresource-poorsettings.Keyprinciplestoenhancequality&efficiencyofH2020healthspending 1.MorepublicinvestmentsinbiomedicalR&D ● TheEUshouldreversethebudgetcutstoH2020causedbytheintroductionoftheEuropean

FundforStrategicInvestment.● TheEUshouldincreaseitsinvestmentinbiomedicalR&DunderH2020andsubsequentR&D

fundingprogrammes. 2.BiomedicalR&Dprioritysettingdeterminedbypublichealthneeds ● TheEUshouldkeepitsSocietalChallengepillarasoneofthekeycornerstonesofitsresearch

policiesandfunding.● TheEUshouldadaptprioritysettingproceduresunderH2020anditsjointundertakingsIMI2

andEDCTP2toensurebalancedstakeholderinvolvementandgreatertransparencyinthedecisionmakingprocesses.

● TheEUshouldincreaseconsistencyandcooperationbetweenH2020andothernationalandEuropeaninitiativesinthefieldofbiomedicalR&D.

3.Mandateopenaccesspublishingandopendata ● Openaccesspublishing:TheEUshouldprepareastrategypaperforalarge-scaletransition

toopenaccesspublishingthataddressescurrentbottlenecksineffectiveimplementation.ItshouldsetclearlimitsonEUresearchfundingcompensationforpublishersandanEU-wideobjectivetoachieveopenaccessscientificpublishingwithin5yearsforallEUfundedresearch(todayitislessthan20%).

● Opendata:oTheEUshouldlimitandfurtherspecifythegroundsforderogationsofopendata

requirementsallowedundertheH2020opendatapilot. oTheEU’sopendatarepository‘OpenAire’shouldbeexpandedandreinforcedwith

increasedresourcestofacilitateaccessandsharingofdatafromEUfinancedprojects.

oTheEUshouldconsider‘opensourcedividends’toincentivisethroughfundingrewardfundingrecipientswhoopenlysharedata,inventionsandmaterials.

4.Ensurepublicreturnonpublicinvestment&safeguardequitableaccesstopubliclyfundedhealthtechnologies

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● TheEUshouldmakeapoliticalcommitmenttoensurethatanytaxpayerfundinggoingtobiomedicalR&Dshouldresultinapublichealthreturnoninvestment,intermsoftheaffordabilityofendproductsandaccesstoresearchresults.

● PartiesreceivingEUbiomedicalR&Dfundingneedtoagreeontheaffordabilityofanyhealthtechnologytobedevelopedasaguidingprinciplethroughouttheresearchanddevelopmentprocess.

● EU-fundedbiomedicalR&DprojectsshouldincludetermsandconditionsinthegoverningagreementsthatrequiretheaffordabilityandavailabilityofproductsforEUMemberStatesandinLMICs–includingequitablelicensing.

5.Explorealternativeincentivemechanismsformoreefficient,high-qualityR&D ● TheEUshoulddomoretoexploretheuseofmilestoneprizesandmarketentryrewardsin

thefieldofbiomedicalR&D.Thereareseveralconcreteproposalsthatcanbefurthertestedandimplemented.

● TheEUshouldensuretheinclusionofconditionsrequiringaffordableaccessoftheendproduct,accesstoresearchdataandpro-publichealthmanagementofIP(e.g.throughpublicownershipofIP)uponrewardoftheprizetofullyde-linkthecostofR&Dfromproductpricing.

● SubstantiallyincreasethebudgetforprizesunderH2020toenablelargerprizesintheareaofbiomedicalinnovation,aswellasthedevelopmentofnewdiagnostics.

6.Increasetransparencyofresearchconsortiumagreements ● TheEUshouldmakeresearchconsortiumagreementsunderH2020,includingthoseofits

jointundertakings,availablethroughpublication.Thisshouldincludethepublic(EU)andprivateshares(in-cashandin-kind)ofthecontributiontotheresearchconsortium.

● Wheresuchpublicationisnotpracticable,governancemaybeaccomplishedbycommitteeswithbalancedstakeholderrepresentation(includingacademia,industryandpatient,civilsocietyandconsumergroups).

Backgroundnote 1.MorepublicInvestmentinbiomedicalR&D BiomedicalinnovationlargelytakesplacewithinanincentiveframeworkthatprioritisesR&Dspendingnotaccordingtopublichealthneeds,butaccordingtotheexpectedreturnoninvestment.Asaresult,diseasesthatprimarilyaffectthepoorviiiandwherethereislittlefinancialincentivetodevelopandtestnewtreatments(e.g.newantibioticsorrepurposingexistingdrugs)arelargelyignored.Moreover,therehasbeenastrikinglackoftrulyvaluablemedicinesbeingbroughttothemarketoverthelastdecade.ixWhenmarketforcesalonedonotleadtothedevelopmentofappropriatenewhealthtechnologies,thereisaneedforfirmpublicconditions,publicsectorstewardshipandincreasedinvestmentinbiomedicalR&D.EUpublicspendingonbiomedicalR&Disoneofthekeydriversforbetterhealthandpatientcare,frominnovationandimplementationtothediscoveryoforiginalfindings.Inthiscontext,theEUhasamajorroletoplay. TheEUshouldthereforereversethebudgetcutstoH2020causedbytheintroductionoftheEuropeanFundforStrategicInvestmentandincreaseitsinvestmentinbiomedicalR&DunderH2020andsubsequentR&Dfundingprogrammes.Particularfocusshouldbegiventopublichealth

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needsthatarenotpresentlyservedbythepharmaceuticalmarket.2. Improvepublichealthneeds-drivenprioritysetting TheCommissionCommunicationontheEURoleinGlobalHealth(2010)highlightsthatresearchprioritiesshouldfocusonthoseinterventionswiththe‘biggestimpactonpublichealth’.Forthispurpose,theCommissioncommissionedtheWHOReportonPriorityMedicinesforEuropeandtheWorld(2013),whichidentifiesexistingpharmaceuticalgapsandmedicinesdevelopmentneeds,tobeusedasaresourceinplanningtheHorizon2020researchprogramme. However,inH2020SocietalChallenge1-Health,DemographicChangeandWellbeing-noreferenceismadeto‘unmetpublichealthneeds’asadriverforpublicinvestment.NordoesthisChallengementiontacklingmarketfailuresorcallforpubliclyfundedmedicaltoolstobeaffordable,suitable,andaccessible. Inpractice,prioritysettinginpublic-privatepartnershipsfundedthroughH2020,andjointundertakingsunderH2020,areoftendeterminedbyprivatestakeholdersandnotbythepublicinterest.Thisismainlyduetoalackofpluralisticstakeholderparticipationandaweakpoliticalleadership.Forexample,theInnovativeMedicinesInitiative2(IMI2),Europe'slargestpublic-privateinitiativeunderH2020,hadtheoriginalpurposeofdevelopingtreatmentsandessentialmedicines,particularlyinareaswherethereisanunmetmedicalneed.However,researchprioritysettingunderIMI2currentlyremainslargelyindustry-driven. ThecurrentprioritysettingprocessunderH2020-andIMI2inparticular–needstobechangedifwewanttoachievethegreatestimpactonpublichealthofHorizon2020publicR&Dspending.PrioritysettingforbiomedicalR&Dspendingshouldbeadaptedtoensureabalanced,pluralisticstakeholderinvolvementandstrongpublicleadershipinprioritysetting.InadditionthereisaneedtoincreaseconsistencyandcooperationwithothernationalandEuropeaninitiativesinthefieldofbiomedicalR&D,whichsofarhavebeenlimited. 3.Mandateopensciencewithagreatersocietalimpact Thesharingandofdataandknowledgefromthescientificprocessacceleratesandimprovesoutcomes.Non-disclosureofessentialR&Dhealthdatameansadditionaldelays,bottlenecksandwastefuland–inthecaseofclinicaltrials–unethicalrepetitioninthedevelopmentoflife-savingmedicines.Broadsharingofdataresultingpubliclyfundedprojectsisthereforeessentialtoreinforcecollaborativeandcumulativeprocessestoincreasescientificknowledge.BetteraccesstoresearchdatacanmultiplythebenefitofEUinvestmentunderH2020andsubsequentfundingprogrammes.TheCommissionhasenthusiasticallyembracedopenscienceandopeninnovationinitspublicstatements,sayingthat:‘theon-goingtransitionsinthewayresearchisperformed,researchers

collaborate,knowledgeisshared,andscienceisorganised.Intheshortterm,OpenScienceis

expectedtoleadtomoretransparency,researchintegrity,openness,inclusivenessandnetworked

collaboration.’’x

Opensciencealsoallowsfortransparencyandgreaterparticipation,allowingforinnovativesolutionsandtheengagementbetweenscienceandsociety(SciencewithSociety).xi

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HavingmadeimportantstepsinmandatingopenaccesspublishingandopendatainH2020,itisnowtimetorigorouslyimplementtheseopenscience&openinnovationprinciples,especiallyinthepriorityareaofhealth.OpenAccessPublishing AlthoughopenaccesspublishingisamandatoryobligationunderH2020RulesofParticipation,thepracticeofOpenAccessstillonlyaccountsfor14%ofnewscientificarticlespublishedintheEU.TheincreaseinopenaccesspublishingintheEUhasbeenonly1%eachyear.Thisisnotsatisfactoryinacontextinwhichscientificpublishershavearateofreturnoninvestmentofbetween30and40%andwhilescientificandacademiclibrariesoftencannotaffordsubscriptionscosts.xii Therefore,theCommissionshouldprepareastrategypaperforlarge-scaletransitiontoopenaccesspublishingwithaneconomicallyviableplanforcreatingthebestconditionsforthistransitionwithconcretemeasurablegoalsforbothEUfinancedresearchandgeneralscientificresearchintheEU. ThisshouldaddresscurrentbottlenecksineffectiveimplementationwithclearlimitsonEUresearchfundingcompensationforpublishers. OpenData InH2020,theCommissionhaslaunchedaflexiblepilotforopenaccesstoresearchdata(ORDpilot).Thepilotaimstoimproveandmaximiseaccesstoandre-useofresearchdatageneratedbyH2020projects.xiiiGiventheimportanceofdatasharing,exemptionstoopendatarequirementsshouldbeextremelylimited.However,underthispilot,participantscanopt-outofresearchdatasharingatanystage-beforeorafterthesignatureofthegrantagreement.Reasonshavetobeprovided,butthelistofadmissiblegroundsforoptingoutisverybroadlyformulated:includingforintellectualpropertyrights(IP)concerns,privacy/dataprotectionconcerns,nationalsecurityconcerns,ifitwouldrunagainstthemainobjectiveoftheprojectorforotherlegitimatereasons.xiv Healthhasbeenaddedtothescopeofthispilotprojectonlyin2016–itisthereforetooearlytoevaluatehowoftenthisoptoutmechanismhasbeenexercisedinpracticeinthisarea.However,giventheclearneedforincreaseddatasharingtofacilitatefollow-onbiomedicalresearch,weareconcernedaboutthewidescopeandlackofspecificguidelinesforoptingoutunderthecurrentpilot. WeencouragetheCommissiontotakemeasurestofurtherlimitandspecifythegroundsforderogationsofopen-datarequirementsallowedintherulesforparticipationanddisseminationinH2020,sotheycanbeconsistentlyappliedinallprograms.Thisisneededtoguaranteelegalandproceduralcertaintyforallparticipants,andensureanequitableandfairtreatmentofparticipantsregardingopenaccesstotheresultsgeneratedwithinallprojects,includingofitsjointundertakings(suchasIMI2).Moreover,theEU’sopendatarepository“OpenAire”shouldbeexpandedandreinforcedwithincreasedresourcestofacilitateaccessandsharingofdatafromEU-financedprojects. TheCommissionshouldfurtherconsider‘opensourcedividends’toincentivizethegreatestdegreeofopennessandsocialresponsibilitywithdata,resultsand,eventechnologytransferandIPinsensitiveareassuchasbiomedicalresearch.Suchan‘opensourcedividend’wouldrewardscientistsandresearcherswhoopenlysharedata,inventions,materialsandknowledgeconsideredsignificantandusefultootherresearchersinthearea.xvThiscouldbefundedwithapercentageofadditional

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grantfinancingandshouldbeavailableinareasofsocietalbenefit,includingpublichealth,securityortheenvironment.4. Ensurepublicreturnonpublicinvestment&safeguardequitableaccesstopubliclyfunded healthtechnologies Theintroductionofnew,expensivemedicinescomesatahugecosttohealthsystemsandtheirpercentageoftotalpharmaceuticalexpenditurehasbeenrising.xviEUMemberStatesarecurrentlystrugglingtoaffordnewmedicineswithexcessivepricetags,suchasforcancerandhepatitisC.xviiPricesaresetinawaythatbearsnorelationtothecostofR&Dorproduction,butratheraccordingtothemaximumofwhatwewillpaytocareforoursick,whiletherealcostsofR&Dremainunknown.xviii StrongEUpublicleadershipinthisareaiscrucial.About80percentofallfundsforbasicresearchformedicinesxixand30to40percentofallglobalR&Dforhealthxxispubliclyfunded.However,despitethislargeshareofpubliccontribution,noneoftherelevantWorkProgrammesofH2020–includingIMI2andtheEuropean&DevelopingCountriesClinicalTrialsPartnership2(EDCTP2)-containprovisionstoensureaffordableaccessorsuitabilityofthefinalmedicalproduct.Bindingprovisionsonhowtoensurepatients’accesstomedicaltoolsandaccesstoresearchdatashouldbeinplaceforallR&DconsortiumsthatreceivefundingfromtheEU. Ensuringequitableaccessandfacilitatingpatient-driveninnovationneedstobeconsideredbytheEUfromtheverystartoftheR&Dprocessandineachresearchagreement.Thispro-publichealthmanagementofresults–includingIP-needstobeincludedasanendgoalearlyinthedevelopmentprocess,bymakingthisaconditionforreceivingR&DgrantsinthefirstphasesofR&D(basicresearch,etc.).Itisallthemoreimportantthatprivatecompaniesthatreceivepublicgrantsneedtoremainengageduntilthelaterstageofthedevelopmentprocess.InthatcasetheywouldnotbeboundbytheIPmanagementrulesandtheEUisleftwithoutleveragetorequireaffordableaccess.Theseconditionsaresocrucialthatwecannotaffordtohavefaithinvoluntarycooperationdownthelineandthereforethisneedstobeabindingcommitmentthroughoutthedevelopmentprocess. Manyoftheconcretestrategiesanddecisionswillneedtobetakenonacasebycasebasis,sincethesolutionswillbedifferentdependingontheproduct,thediseaseandthemarket.However,thereareprinciplesandgoalsthatareofgeneralapplicabilityandthatcanhelpguideEUreformofH2020theRulesofParticipationinthisarea.Asastart,theEUneedstoensurethatpartiesreceivingfundingagreeontheaffordabilityofanyhealthtechnologytobedevelopedasaguidingprinciplethroughouttheresearchanddevelopmentprocess.InthecasewheretheEUprovidescontributionsatalaterstage(oranystage)oftheR&Dprocess,itshouldestablishclearaccesscriteriaforwhatitwillfundandhowtheresultingtechnologieswillbemadeavailabletopatients. IPmanagementhasthepotentialtoenableorrestrictaccesstopublicfunding-derivedhealthtechnologies.GiventheEU’sfundamentalroleinresearchaswellastheirresponsibilitytoprioritizepublicinterestsinH2020,itmustactivelypromote,andnotrestrict,accesstohealthproducts.Therefore: ● PartiesreceivingEUbiomedicalR&Dfundingneedtoagreeonaffordabilityofanyhealth

technologytobedevelopedasaguidingprinciplethroughouttheresearchanddevelopmentprocess

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● EU-fundedbiomedicalR&DprojectsshouldincludetermsandconditionsinthegoverningagreementsthatrequireaffordabilityandavailabilityofproductsforEUMemberStatesandinLMICs–includingequitablelicensing(seeBox2).

TheEUneedstobeclearthatR&DfundingproposalsunderH2020andsubsequentfundingprogrammesneedtoincludearobustaccessstrategyfocusingonmakingthefinalproductaccessible.Ifproposalscontainrestrictiveprovisionsthatundermineaccess,theseproposalsshouldnotbeeligibleforpublicfunding. Animportantstrategyis‘equitablelicensing’ofIPforR&DthathasreceivedEUfunding.Therationalebehindthistypeoflicensingistogeneratethehighestpossiblesocialbenefitoutofpubliclyfundedresearch.Abasicprincipleistheuseoflicensingprovisionsthatfostergenericcompetitionorincludeotherrobustmechanismstoensurelowendpricesoftheproduct.Thepublicfunderkeepstherighttointerveneifsocieties’accesstotheproductisnotensured.Thelicenseeisobligedtousedifferenttoolsforimprovingaccesstotheproducts,suchas,technologytransfer,andaccessandtrainingprograms.xxi(SeeBox2). H2020mustbringscienceandinnovationclosertocitizens.Products,dataandfindingsresultingfromsuchpublicfinancingmustbeconvertedintoaccessiblepublicgoods.Accessibility,productsuitabilityandaffordabilityshouldbethekeyelementsonwhichHorizon2020isbased. BOX2EquitablelicensingEquitablelicensingispromotedintheUnitedStates(US)byseveralleadingtechnologymanagersofUSuniversities,includingUCBerkeleywhichhasimplementedthe“SociallyResponsibleIPManagementProgram”.xxiiThroughthisprogramme,UCBerkeleyhascollaboratedwithseveralcompaniesonlicensingagreementstoensureaffordablepricinginlow-incomecountriesforproductsstemmingfromuniversityresearch.Projectswithagreementsunderthisprogrammeinclude,amongothers,tuberculosis(TB)vaccineresearch,malariaartemisinin-combinationtherapies(ACTs)researchandresearchforapossibleHIVtreatment. EquitablelicensingconditionscanbeattachedtotheH2020RulesofParticipation,specificallytograntsfundingbiomedicalresearch.Werecognizethatspecificlicensingconditionsbetweenresearchinstitutesandprivatepartiesneedtobedeterminedonacasebycasebasis.However,thisdoesnotprecludetheCommissionfromformulatingandimplementingclearguidelines,andwhereappropriatemandatoryrules,regardingtheuseandlicensingofresearchresultsgeneratedunderanEUgrant.Werecommendparticularlyfar-rangingequitablelicensingconditionsinthefieldofpoverty-relatedandneglecteddiseasesandnewantibiotics,vaccinesanddiagnostics. Anappropriatesetofsuchconditionsshouldenablenon-exclusivelicensingasadefault.Non-exclusivelicensingwouldhelptoachievebroaderaccesstohealthtechnologiesandproducts,asitallowsformorethanonecompanytoexploittheinnovation,therebyenablinggenericcompetitionandasaconsequencelowerspricesofhealthtechnologiesandproducts.Ifanexclusivelicenceisnegotiated,theEUshouldretaintherighttointerveneincaseofunmetmarketorpublichealthneeds.

Rulesforspin-offcompaniesInsomecasestheresultsofpubliclyfundedresearchareoutsourcedtospin-offs/start-upcompaniesthattakeresponsibilityforfurtherdevelopment.EquitableaccesstothefinalproductshouldbeconsideredwhennegotiatingtheIPrules,evenifitisclearthatitmighttakeseveralyearstoreachmarketentry.IftheIPiscompletelytransferredtothespinoffcompany,thepublicoriginatoroftheinventionshouldkeepafunctionintheadvisoryboardtoensureinvolvementduringfurtherdevelopment.

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5. Explorealternativeincentivemechanismsformoreefficient,highqualityR&D Theneedtoinvestinalternativemodelsofinnovation Thepredominantmodelforincentivisingbiomedicalinnovationreliesonmarketexclusivities,andthushighproductprices.Pharmaceuticalcompaniesdevelopdrugsbasedonthelikelyreturnthataproductwillofferthroughsales.Thisbusinessmodelisundergirdedbythepatentsystemwhicheffectivelyestablishesmonopolies,allowingcompaniestoselltheirproductswithoutgenericcompetitionforalimitedtimeperiod. Thereare,however,severallimitationstothismodel.Thefirstisthatitleadstohighpricesasitlocksoutcompetition.Manygovernmentsandmedicalprovidersfaceunsustainablyhighpricesformedicines,suchasforthehepatitisCdrugsofosbuvirthatcostsuptoUS$1,000perpill.Italsofailstoprioritiseaccordingtohealthneeds.Thepatentmonopolysystemconcentratesinvestmentonproductsthatwillsellwellandnotnecessarilyonpublichealthpriorities.Forexample,theurgentneedfornewantibioticshasbeenwidelydocumented,butgovernmentshavebeenslowtoputinplacetherightincentivemechanismstoencouragedevelopmentofnewantibiotics,andthismedicalpriorityremainsunansweredbypharmaceuticalcompanies.Further,exclusiveIPrightsencouragescientiststoworkinisolationfrom,andincompetitionwith,oneanother.Follow-oninnovationisalsorestricted;forexample,creatingamultidrugregimenoracombinationpillcannoteasilyhappeniftherelevantpatentsareownedbycompetingcompanies.Thissiloedapproachhasblockedthedevelopmentofnewtherapiesagainsttuberculosis. Prizesasamechanismforde-linkageandapathtoaffordability Inordertoovercomethesechallenges,policy-makersshouldactivelyseektobreakthelinkthattodaybindsbiomedicalinnovationtodrugsalesandhighpricesbackedbyexclusivityrights.PublicpoliciesthatdriveindustrytoembracenewapproachestoR&D,andthatdonotrelyonexclusivityasthemethodtoincentiviseinnovation,areurgentlyneeded.Theconceptofde-linkagereferstotheseparationoftheincentivesforfinancingresearchanddevelopmentfromthepriceandvolumeofsalesofthedevelopedproduct(drug,diagnosticorvaccine).Assuchitprovidesapathwaytoaffordableproducts,byremovingtheincentivetochargehighprices.Inordertoachievefullde-linkage,thefullcostofR&Dandadequateincentivesneedtobeprovided,andconditionalitiesneedtobeattachedtofunding. Therearearangeofwaysinwhichde-linkagecanbeachievedthroughbothpushandpullfunding. Prizes,ormarket-entryrewards,canactasamechanismforde-linkageandapathtoaffordability,byrewardingthedevelopmentofproductsupfront.Theycanbedesignedtorewardmid-termmilestoneresultsoronlybepaiduponmarketentry,orboth. H2020prizesforhealthR&D-notusedenough Wenotethatprizes-called'challenge'prizes(or'inducement'prizes)-existunderH2020andaimatofferingacashrewardtowhoevercanmosteffectivelymeetadefinedchallenge.Inthefieldofpublichealth,Horizon2020hasdeliveredonlyonesingleprizeentitled‘betteruseofantibiotics’of€1millionin2016tobeawardedforideasondevelopingand/orbringing-to-marketatesttoquicklyidentifywhetherapatientcanbetreatedsafelywithoutantibiotics.Atthecurrentfundinglevel,suchaprizeismoreasignalofrecognition,thananincentivethatseekstospearheaddevelopmentinanunderservedarea.

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Aspartoftheconditionsmentioned,“thetestneededtobecheap,rapid,easy-to-useforhealthcareprovidersandnon-orminimallyinvasiveforpatients”.Westronglysupporttheinclusionoflow-costandaffordabilityaspartoftheeligibilitycriteriaforapplicants.However,weurgethattheCommissiongofurtherandensurethataffordabilityisamandatoryconditionofeligibility.Adaptingtheconditionstoprioritizeaffordabilityasamandatoryselectioncriteriawouldsendastrongsignaltodeveloperstoensureaffordableaccessisbuiltintothedesignandplanningphasesoftheirwork. Forwardlooking:PrizesforhealthR&DunderH2020 AsprizesaimtocreateanincentivebenefitingallEuropeans,theCommissionshouldmakesurethatthereareconditionsattachedconcerningsocially-responsibleIPRgovernancetothedeliveryofalargeamountofpublicmoneythroughaprizeincentive,exclusivelycomingfromtheEUbudget,i.e.fromEuropeantax-payers. Expertsxxiiihaverecommendedthattheprizerewardsneedtobesetatalevelwheretheyareacredibleincentiveforprivateinvestors,andnotsimplyatokenofrecognition.Inaddition,aprizeshouldbelinkedwithcrediblegovernanceinstitutions;clearrulesfortheawardofprizesandreputablescientificadvisorycommittees.xxivThemostimportantrecommendationis,however,thatprizesshould-asacentralpurpose–de-linkthecostsofR&Dfromproductpricestopromoteaffordableaccesstoproducts.Forrealde-linkagetobeachieved,thegrantingoftheendprize/marketentryrewardormilestoneprizemustbeaccompaniedbyobligationsforthedevelopertolicensetheirintellectualproperty,know-howanddataontheproducttoallowforaffordableaccess.Bycontrast,thenotionof‘partialde-linkage’willmarrythegrantingofthemarketentryrewardtocertainconditions,butwouldstillenablethedevelopertosetpricesandtorecoupatleastpartoftheirinvestmentthroughproductsales. Oftentheopportunitytoensurede-linkageisoverlookedbypublicfunders,includingtheEU,becausethefundingforR&Disnotlinkedorcoordinated.Forexample,theEUframeworkprogrammeshavesupportedalotofbasicscienceandearlystageresearchandtheEDCTPhasprovidedfundingforclinicaltrialsfromPhasesOnethroughFour.However,unlesstheEUattachesconditionstothisfunding,thepotentialforde-linkagetolowerpricesandsteerneeds-drivenR&Dwillnotbeachieved. Prizesallowforincentivizinginnovationinpriorityareas,andforensuringtheinclusionofconditionsrequiringaffordableaccessuponrewardoftheprize.TheEU,however,hasonlyusedthisincentivemechanismonceinthefieldofhealth–andwithoutanymandatoryaccessconditionsattached.TheEUshoulddomoretoexploretheeffectiveuseofmilestoneandendprizes/marketentryrewardsinthefieldofbiomedicalR&D.Thereareseveralconcreteproposalsthatcanbefurthertestedandimplemented. BOX3–ExampleprizeproposalsThe3Pproject Asasuccessfulexample,the‘3PProject’offersaviableandimmediatelyimplementablesolutiontoaddresstheshortfallsintuberculosis(TB)drugdevelopment.Thefirsttwopillarsofthe3PProject–“pull”and“push”funding–addressthisissuebyincentivizingandrewardingparticipation,especiallyamongsmall-andmedium-sizedcompanies,throughbreakingdownthedrugdevelopmentprocessintodistinct,manageablestages.Byintroducingtheprize(thepullmechanism)earlyinthepipeline,the3PProjecthelpstheorganisationscurrentlyinvestinginTBdrugR&Dtoseeatimelyreturnontheirinvestmentintheearlycostsofdrugdevelopment,andaimstostimulatealargeincreaseinsuchinvestmentsbyessentiallycreatingamarketfortheprize-andthusamarketforthedevelopmentofpre-clinicaldrug

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compounds,wherenonehadpreviouslyexisted.The3PProject’sthirdpillar–IPanddata“pooling”–respondstotheuniqueneedsofTBtreatment.BypoolingIPthroughlicensingandensuringdatasharing,the3PProjectallowsearlier,fasterandmoreinnovativecombinationstobetrialed.ThismechanismoffundingeffectivelydelinksR&Dfinancingfromtheendproductprice,sodrugscanbemadeavailableataffordableprices.xxvCancerPrizeFundproposalAnotherproposalistocreateaninnovationfundforcancerdrugsthatincludesanallocationforinnovationinducementprizestorewardnewdrugsforcancer.Thisproposalwouldincludethefollowingfeatures:1.De-monopolizecancerdrugs2.Put10percentofEUmemberstatetreatmentbudgetsintoaninnovationfund3.Providehalfintograntsforcancerresearch(pushfunding)4.Provideprovide40percentforendproductprizes5.Provide3percentforopensourcedividends6.Provide7percentformilestoneprizes.Moreinformationat:http://delinkage.org/.

6. Increasetransparencyofresearchconsortiumagreements EffectivegovernanceisessentialtoensureandmonitorthattheimplementationofHorizon2020biomedicalR&Dspendingisdrivenbypriorityhealthneeds,spentefficiently,andleadstonewhealthtechnologiesthatareavailableandaffordabletothoseinneed. Toensuretransparencyandaccountability,researchconsortiumagreementsunderHorizon2020(includingthoseofitsjointundertakings:IMI2andEDCTP2)shouldbemadeavailablethroughpublication.Thisshouldincludethepublic(EU)andprivateshares(in-cashandin-kind)ofthecontributiontotheresearchconsortium.ThisiscrucialbecausewithoutthistransparencyanydiscussionaboutthesustainabilityoftheR&Dprocessremainsimpossible.Wheresuchpublicationisnotpracticable,governancemaybeaccomplishedbycommitteeswithbalancedstakeholderrepresentation(includingacademia,industryandpatient,civilsocietyandconsumergroups). ENDNOTES iReport(2016)Advice2016oftheHorizon2020AdvisoryGroupforSocietalChallenge1,"Health,DemographicChangeandWell-being",p.48.Availableat:https://ec.europa.eu/research/health/pdf/ag_advice_report_2018-2020.pdf(Accessed11January2017).iiCouncilConclusions(EC)pressreleaseno.350/16of17June2016onstrengtheningthebalanceinthepharmaceuticalsystemsintheEUanditsMemberStates.iiiScientificPanelforHealth(May2016)Avisionon‘BetterResearchforBetterHealth”,p.7.Availableat:http://ec.europa.eu/programmes/horizon2020/sites/horizon2020/files/SPH_Vision_Paper_27052016.pdf(Accessed11Janaury2017)ivIbidendnoteiii–p.14.vIbidendnotei-p.37.viUnitedNationsHighLevelPanelonAccesstoMedicines(2016)PromotingInnovationandAccesstoHealthTechnologies.

Availableat:http://www.unsgaccessmeds.org/final-report(Accessed28September2016).viiReflancetreportviiiSuchastuberculosis,neglectedandpoverty-relateddiseases,rarediseaseslikeEbola,etc.ixIndependentdrugbulletinLaRevuePrescrirehasratednewpatentedmedicinesthatwerebroughtontothemarketfrom2000-2013andconcludedthatonly9%offeratherapeuticadvantageascomparedtoexistingproductsonthemarket.See:

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RevuePrescrire(2011)Newdrugsandindicationsin2010:inadequateassessment;patientsatrisk.RevuePrescrire,20(115):pp.105–110.RevuePrescrire(2015),35(376),pp.132-148;RevuePrescrire(2005),25(258),pp.139-148.xDGResearch&Innovation:http://ec.europa.eu/research/index.cfm?pg=dgxiAsstatedintheEUParliamentResolutiononHorizon2020in2012:‘’FindingtherightanswerstothechallengesEuropeisfacingrequirestheinvolvementofasmanydiverseactorsaspossibleintheresearchandinnovationprocess.Traditionally,

interactionbetweenscienceandsocietyhasbeenlimitedtoaone-way,top-down,transferofknowledgefromexpertsto

citizens.Advancingtowardsanopen,effectiveanddemocraticknowledge-basedsocietyrequiresachangetoamore

bidirectionaldialogueandactivecooperationbeyondtraditionalscienceeducationorthecurrentconceptionofcitizensas

mereconsumersofresearchfindings.Thisdialogicrelationshipandactivecooperationwillundoubtedlyallowscienceand

innovationtoproceedmoreresponsibly.’’Resolutionavailableat:http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A7-2012-427&language=EN.xiiSchimmer,R.(2016)‘Makingmovestowardsthelarge-scaletransitiontoOpenAccess’,MaxPlanckDigitalLibrary,publishedbySPARCEurope.Availableat:http://sparceurope.org/wp-content/uploads/2016/11/Schimmer_231016_Final.pdf.xiiiWebpageEuropeanCommission‘OpenAccessandDataManagement’.Availableat:http://ec.europa.eu/research/participants/docs/h2020-funding-guide/cross-cutting-issues/open-access-dissemination_en.htm(Accessed11January2017).xivWebpageEuropeanCommission‘OpenAccessandDataManagement’.Availableat:http://ec.europa.eu/research/participants/docs/h2020-funding-guide/cross-cutting-issues/open-access-dissemination_en.htm(Accessed11January2017).xvLove,J.,(2014),‘TheValueofanOpenSourceDividend’,ManagingIntellectualProperty,16October[Online].Availableat:http://www.managingip.com/Blog/3390962/The-value-of-an-open-source-dividend.htmlxviCarone,G.,Schwierz,C.andXavier,A.(2012).Cost-containmentpoliciesinpublicpharmaceuticalspendingintheEU.EuropeanEconomy:Economicpaper,461,p.42.xviiAssociatedPress(2014)‘MedicalgroupsquestionpriceofnewHepCdrug’,CNSNews,11March[Online].Availableat:http://www.cnsnews.com/news/article/medical-groups-question-price-new-hep-c-drug(Accessed15August2016);OxfamInternational(2015)AccesstoCancerTreatment:Astudyofmedicinepricingissueswithrecommendationsforimproving

accesstocancermedication,pp.5-8.Availableat:https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/rr-access-cancer-treatment-inequality-040215-en.pdf(Accessed15August2016).xviiiSell,D.(2013)‘GlaxoSmithKline'sAndrewWittysays$1billionpricetagfordrugdevelopmentisa"myth"’,Philly.com,15March[Online].Availableat:www.philly.com/philly/blogs/phillypharma/GlaxoSmithKlines-Andrew-Witty-says-1-billion-pricetag-for-drug-development-is-a-myth.html(Accessed15August2016).xixLight,D.,Lexchin,J.(2015,August).PharmaceuticalResearchandDevelopment:WhatDoWeGetforAllThatMoney?BMJ.2012;345(August):e4348.Link:www.bmj.com/content/345/bmj.e4348.xxRøttingen,J-A.,Regm,S.i,Eide,M.,Young,A.J.,Viergever,R.F.,Årdal,C.,..Terry,R.F.(2013,May,20).MappingofAvailableHealthResearchandDevelopmentData:What’sThere,What’sMissing,andWhatRoleisThereforaGlobalObservatory?TheLancetHealthPolicy[publishedonline].Link:www.niche1.nl/resources/-content/publication_file_96_mapping_of_available_health_research_and_development_data.pdf.

xxiGodt,C.,2011.EquitableLicensesinUniversity-IndustryTechnologyTransfer.GRURUInt.Availableat:http://med4all.org/fileadmin/med/pdf/Godt_Equit_Lic_GRUR_Int_20111_377_385.pdf.

xxiiIPIRA.2011.Sociallyresponsiblelicensing&IPmanagement.UniversityofCalifornia,Berkeley.Availableat:http://ipira.berkeley.edu/socially-responsible-licensing-ip-management.

xxiiiApril2012,WHO‘ReportoftheConsultativeExpertWorkingGrouponR&D:FinancingandCoordination’availableat,http://www.who.int/phi/CEWG_Report_5_April_2012.pdf[accessed13/12/16]xxivIbidendnotexxiii,p.58.xxvhttps://www.msfaccess.org/spotlight-on/3p-project-new-approach-developing-better-treatments-tb.