Drug delusions

This week, Brazil and Kenya will ask representatives of most of the world's governments to set up a new "Global Framework on Essential Health Research and Development." They claim too little money is being invested in drugs for the diseases of poverty: their scheme would make sure this myth became reality.

At first glance, the resolution being proposed to the World Health Organization's annual World Health Assembly jamboree in Geneva seems unobjectionable. It starts with concerns such as "the need for appropriate, effective and safe tools for patients living in resource-poor settings" and "the urgency of developing new medicines to address emerging health threats."

It is difficult to disagree with these things, which should be the main goals of medical R&D: creating new products that address unmet needs.

But much of the proposal seems to be driven more by ideology than reason. It complains that some 70 percent of all new drugs offer little benefit over older ones - a claim that ignores the actual nature of product development, which proceeds not in a series of bangs, but in a continuous process of improvement and refinement.

With this false premise, it is hardly surprising that the proposal envisages a very different future for medical R&D. Under the new global framework, priorities and parameters of medical research and development would be defined by a new bureaucratic agency, not by the real needs of patients. The resolution says member states should make health and medicines a "strategic sector." Such words are all the justification populist governments need to confiscate and overregulate. Bolivia recently claimed that oil and gas were "strategic sectors." Then the troops came in. Brazil has already threatened to ignore the patent on any drug it deems essential.

The global framework fundamentally misdiagnoses the problems faced by the poor, claiming the market has left the poor without treatments for their myriad diseases. In reality, the vast majority of the diseases of poverty can be treated with existing, cheap, off- patent drugs. While there remain some diseases that lack adequate cures, these kill far fewer people than diarrhea, chest infections and malaria, for which treatments exist. The real problem is getting existing medicines to those in need - a problem the global framework does not even acknowledge.

Shockingly, these barriers to access include extortionate taxes and tariffs on drugs: 37.8 percent in Kenya and 28.6 percent in Brazil.

Most government-directed initiatives to develop new medicines have ended in failure. At best, such schemes are poorly managed and wasteful. At worst, R&D is diverted to the interests of bureaucrats and researchers (in some cases even directly into their bank accounts), rather than the needs of patients.

The US government's attempt to develop a malaria vaccine in the early 1980s offers a salutary warning. This project absorbed millions of dollars and produced no results. To keep the money flowing, researchers exaggerated their successes and pursued all kinds of blind alleys. One of the lead researchers was even implicated in a multimillion-dollar embezzlement. Do we really want to see this on a global scale?

Global frameworks aside, we already have a system that gives incentives for the development of new products, promotes technological progress and drives up living standards. It is known as the market. It works, thanks to a combination of property rights (in the case of drugs, intellectual property), free exchange and a highly effective system for transmitting information from potential consumers to potential innovators: prices.

No body of bureaucrats, no matter how many doctoral degrees they hold, and no matter how many NGOs and activists are behind them, could ever have the knowledge and the ability quickly to identify needs, never mind respond to those needs by developing new products.

And it is not true that the poor are left behind by the market mechanisms that this resolution seeks to eliminate. They have been left behind by mismanagement and corruption in public health systems, extortionate taxes on medicines and a general failure of governments to put in place the institutions that allow the poor to prosper - the best cure of all.

None of these problems are addressed in the global framework.

The proposal from Brazil and Kenya would make a bad situation worse, giving dirigiste governments even more power and money while undermining the complex, fragile and expensive process of R&D. We need to encourage the private sector to continue to invest in new treatments, not scare it off by effectively nationalizing R&D.