WASHINGTON -- The Obama administration has alarmed global health experts by opposing a new international fund that would fight disease in the developing world. The new fund would require other countries to share a cost burden currently borne predominantly by United States taxpayers, but has nevertheless generated ideological opposition from American negotiators.

Although they have received scant domestic media attention, major international talks currently taking place in Geneva, Switzerland, where many governments and public health advocates hope to establish a new fund to create medications that will combat disease in poor countries.

"At this time, we do not favor the establishment of an intergovernmental working group to further develop the ... proposals," said Nils Daulaire, director of the Office of Global Health Affairs for the United States Department of Health and Human Services.

Daulaire, who is leading negotiations for the U.S., went on to object to nearly every main tenet of the proposed fund -- most notably a provision that would require all nations involved in the talks to contribute to a fund to fight disease in developing countries. Although the U.S. has long spent far more money than any other nation on developing new drugs to help the global poor, Daulaire and the Obama administration want to keep this research voluntary, rather than binding under an international agreement. Daulaire also objected to the new fund on the grounds that it could be construed as "a global tax."

"The U.S. has tried to kill it for ideological reasons," said Jamie Love, director of Knowledge Ecology International, a medical-access nonprofit. "The U.S. is the only country that wouldn't have to pay more, because the U.S. already pays more for the research than every other country would. So the treaty would force everyone, even developing countries, to pay more -- Russia, Ecuador, even Sweden."

Drugs that treat diseases predominantly afflicting the global poor are not very profitable. As a result, private-sector research for cures tends to focus on problems in wealthier nations. The federal government's National Institutes of Health in the United States devotes billions a year to medical research in a wide variety of areas, including diseases afflicting the developing world, making it far and away the global leader in such research.

An April report by World Health Organization experts recommended the establishment of a research and development fund that all governments would be required to pay into based on their country's total economy. The Obama administration and the French government have obstructed the process, according to public health advocates attending the conference.

"We are especially surprised to see the U.S. taking such a hardline position, since they already meet the level of financial contributions to medical R&D suggested in the expert report," said Michelle Childs, director of policy and advocacy at Doctors Without Borders’ Access Campaign, in a written statement. "It's high time that all countries move toward a sustainable solution to fix the market failure of the current R&D model and meet the needs of the majority of people on the planet."

It is unclear exactly why American negotiators oppose the new program. In an email exchange with HuffPost, Daulaire insisted that the U.S. does in fact support the global fund, a claim that directly contradicts his public statement to the World Health Assembly from Wednesday, and the reports of public health advocates attending the conference in Geneva. [Read the full public statement and the email exchange with HuffPost below].

American pharmaceutical companies profit heavily from the existing intellectual property and drug financing regime, which grants firms long-term monopolies on every new drug they develop. The new fund could establish a new international precedent that could be used to argue against drug company profits in other trade negotiations, in the name of public health. If leaders agree to a new program in which R&D costs are financed by governments, rather than long-term patent monopolies for private-sector firms, developing countries might object to granting such monopolies in other situations.

The U.S. is currently pursuing intellectual property terms in a trade deal with eight other Pacific nations that would dramatically increase the price of lifesaving medications in those nations. Vietnam, a developing nation combating a severe AIDS epidemic, has resisted the the U.S. terms, which are supported by American pharmaceutical companies.

In the U.S., Sen. Bernie Sanders (I-Vt.) has introduced legislation that would reward drug companies with a large, upfront prize for developing a new AIDS medication, provided firms agreed to allow generic versions of the drugs to be produced at once. The pharmaceutical industry opposes the legislation.

Daulaire's statement to the World Health Assembly:

The United States is pleased at the level of attention devoted to this important topic. We strongly agree that more financing from more sources is needed for developing country R&D needs.

We are also pleased that the CEWG report highlighted that the US is the only country already making the level of investment in R&D for neglected diseases of the poor called for in this report - over $1.5 billion a year. The U.S. public and private sectors are deeply committed to this effort, and I can speak for the public sector to say we are committed to maintaining and building on this investment.

We are equally determined to find ways to incentivize others – particularly middle-income countries - to contribute substantially more, and to approach the financing levels proposed for each country in this report.

I would note that if the report's recommendations were followed, the BRICS countries together would be called on to make an annual contribution of over $1.4 billion per year, nearly as much as the US currently contributes.

We recognize that market forces are not sufficient to bring adequate attention to this vital area, and that IP protections are unlikely to be a major contributor to progress in R&D for neglected diseases of the poor.
We believe it is critical to look at these recommendations in the context of the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. Nevertheless, we have serious concerns about a number of the CEWG recommendations.

At this time, we do not favor the establishment of an intergovernmental working group to further develop the CEWG proposals. The member states of WHO have not yet adequately clarified the aims of such a process.

We do not support the call for a binding instrument on financing by Member States, and we have heard from a large number of member states that they are not prepared to commit .01 percent of their gross domestic product, as called for as obligatory under such a binding instrument.

Further, We cannot support any proposal that would put in place a new financing mechanism that could be characterized as a globally-collected tax

Other commitments undertaken to support R&D in low and middle income countries would need to be time-bound, and thus subject to periodic review by funders and the global community as to the relative value of the efforts.

We do not support the proposal that would establish a single pooled financing mechanism - the history of innovation does not suggest that such a single central mechanism would be likely to provide the kinds of discoveries and products that the world needs.

We believe the most appropriate way forward is to identify incentives and efficiencies for R&D coordination and capacity building for developing country health concerns. This effort should draw upon the expertise in, and build capacity within, developing country research institutions themselves.

Because we do not believe sufficient consensus exists on fundamental elements of the CEWG recommendations, we believe the Director-General should be tasked with undertaking discussions with Member States, individually or regionally on the concepts in the experts’ report. We do not support launching a new InterGovernmentalWorkingGroup., The DG could be requested to report on the findings of these consultations to the EB in January 2013. this is the thrust of the draft resolution that has been submitted by Australia, Canada, Japan, Monaco and the US.

We also believe those member state discussions should include greater consideration of proposals passed over by the CEWG, such as advance marketing and procurement agreements, orphan drug legislation, regulatory harmonization and priority review vouchers. As these recommendations also must be seen in the context of the overall Strategy and Plan of Action, we would recommend that the original Expert Working Group recommendations, which are still on the table, be considered as well.

The goals of this consultation process should be to identify:

Areas of agreement or consensus among Member States;

Which proposals for R&D promotion enjoy the strongest support among Member States, and which do not;
Concepts in which action could begin on a voluntary basis among Member States (such as regional or targeted financing pools); and

Steps that countries could take at smaller scale, with the possibility of scaling them up through time-bound financial or programmatic commitments.

We have now had two rounds of expert consideration of this significant issue. These recommendations also come to this organization at a time of significant restructuring due to reform. Undertaking consultations in the way that we described will provide us time to better integrate our response with the reform underway at WHO, ensuring it receives the appropriate attention among many competing priorities.

On the basis of such consultations to identify areas of broad agreement or consensus, the Director-General should then report back on such areas of agreement, and seek the advice of Member States on potential ways forward, including on which proposals the Secretariat could further refine and develop. The Secretariat could also recommend a process for more formal Member State discussion, if warranted.

Daulaire's email exchange with HuffPost:

-------------------------------------------------------------------------- Zach Carter to Nils Daulaire 4:33 PM

Hey Nils -- I'm writing a story on the U.S. opposing a global R&D fund for lifesaving medications targeting the developing world. Why is the U.S. opposing the fund? Doesn't the U.S. already agree on the IPR/market failure here?

Thanks,

Zach

--------------------------------------------------------------------------

Nils Daulaire (HHS/OS/OGA) 4:38 PM
to me

You are misinformed. We do not oppose R&D funding - especially since we provide most of it.

Nils Daulaire, M.D., M.P.H.
U.S. Representative to the WHO Executive Board
Director, Office of Global Affairs
Office of the Secretary
U.S. Department of Health and Human Services
Washington, D.C.

---------------------------------------------------------------------------

Zach Carter 4:39 PM
to Nils

But you're opposing the global fund, yes?

----------------------------------------------------------------------------

Daulaire, Nils (HHS/OS/OGA) 4:42 PM
to me

Again, you are misinformed.

Nils Daulaire, M.D., M.P.H.
U.S. Representative to the WHO Executive Board
Director, Office of Global Affairs
Office of the Secretary
U.S. Department of Health and Human Services
Washington, D.C.

------------------------------------------------------------------------------

Zach Carter 4:44 PM
to Nils

A bunch of global health advocates are about to issue statements saying the U.S. is opposing the fund up for consideration at the WHA. Are they all confused?

-------------------------------------------------------------------------------

Zach Carter 4:45 PM
to Nils

Is this not your statement?

http://keionline.org/node/1417

--------------------------------------------------------------------------------

Daulaire, Nils (HHS/OS/OGA) 4:50 PM
to me

Where did I say the US was opposed to funding for R&D?
Nils Daulaire, M.D., M.P.H.
U.S. Representative to the WHO Executive Board
Director, Office of Global Affairs
Office of the Secretary
U.S. Department of Health and Human Services
Washington, D.C.

---------------------------------------------------------------------------------

Zach Carter 4:55 PM
to Nils

This all sounds like opposition to a global R&D fund to me:

At this time, We do not favor the establishment of an intergovernmental working group to further develop the CEWG proposals. The member states of WHO have not yet adequately clarified the aims of such a process.
We do not support the call for a binding instrument on financing by Member States, and we have heard from a large number of member states that they are not prepared to commit .01 percent of their gross domestic product, as called for as obligatory under such a binding instrument.
further, We cannot support any proposal that would put in place a new financing mechanism that could be characterized as a globally-collected tax
. . . .
We do not support the proposal that would establish a single pooled financing mechanism - the history of innovation does not suggest that such a single central mechanism would be likely to provide the kinds of discoveries and products that the world needs.
. . . .

We do not support launching a new InterGovernmentalWorkingGroup.

------------------------------------------------------------------------------
Daulaire, Nils (HHS/OS/OGA) 4:57 PM
to me

Then show me the binding treaty that set up the Global Fund to Fight AIDS, TB and Malaria. You are confusing means and ends.

Sorry, but I expect reporters to be better informed. I won't be responding further.


Nils Daulaire, M.D., M.P.H.
U.S. Representative to the WHO Executive Board
Director, Office of Global Affairs
Office of the Secretary
U.S. Department of Health and Human Services
Washington, D.C.

-------------------------------------------------------------------------------
Zach Carter 5:00 PM
to Nils

have fun in geneva

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Technically, much of what Daulaire said is accurate -- the U.S. government has not come out against R&D funding altogether, merely the internationally binding fund being urged by WHO experts. The Global Fund to Fight AIDS Tuberculosis and Malaria does not finance drug research, but rather helps countries pay the costs associated with existing medications. The high price of patented drugs has caused funding shortages in the program of late.

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