The live Q&A took place on 11 September 2015
What are the benefits to medical research and development including access to medicines and other healthcare innovations? We explore the views from the pharmaceutical industry and leading academics on what TTIP means for them.
TTIP is a trade negotiation between Europe and the United States that addresses a broad range of trade and investment policies and global issues of common interest between Europe and America. Potential benefits include increased investment in research and development, job creation and access to innovative medicines and other health technologies.
Successes like the dramatic reduction death rates from cardiovascular diseases, significant gains in survival rates for cancer and massive improvements in health outcomes from vaccine-preventable diseases are in large measure due to investments in health-related research and development. Open markets are needed for society to benefit from advances in information and communication technologies and clean energy innovations. The regulatory environment also needs to support and encourage investments in research and development, ensuring that we avoid reinventing the wheel for each country by having similar requirements.
I’d like to thank our panelists for sharing their wealth of experience with us and to everyone else who has participated today. These are important issues and I’m very supportive of having these discussions with all stakeholders so that we can clearly show the benefits and address some of the concerns around TTIP.
Many businesses support TTIP, as it can make trade easier, but in our sector the benefit goes beyond reductions in bureaucracy or removal of barriers. As we have seen, regulatory convergence is a great example of one such benefit as it will bring medicines to patients faster by avoiding unnecessary and protracted duplication. This has to be in everyone’s interest. It is therefore essential that we have a balanced free-trade debate and allow the facts to speak for themselves. The evidence that TTIP will boost the healthcare in both the EU and the US is difficult to doubt, if we take the time to look.
There are very specific, concrete, guarantees that public services such as the NHS in England, Scotland and the other UK nations will not be threatened by compulsory privatisation because of any EU trade agreement. Member State and European policies already require competitive tendering in some circumstances, but this will not be affected by TTIP. Likewise, purchasers will not be forced to buy products or services at the cheapest available prices, regardless of the quality standards they set.
If governments wish it, they will also go on being able to return privately run services to the public sector when they think that is the right thing to do after TTIP is agreed. Some groups say that they fear that wages in areas like health care will be forced down, or that the prices of medicines might be forced up. Yet in reality TTIP will not override local decision making and the choices made by politicians on behalf of the communities they represent.
Investor State Dispute (ISDS) resolution mechanisms exist in trade agreements to prevent investors being treated unfairly if and when they come into conflict with the governments of countries into which they have channelled resources. West Germany originally pioneered such arrangements when making an agreement with Pakistan. However, since a recent claim for compensation by the Swedish State owned nuclear power company Vattenfall after Germany decided to cancel the development of a power station that had been commissioned and half constructed, ISDS mechanisms lost the support of German politicians
It is therefore uncertain as to whether or not the final version TTIP will be permitted to contain an ISDS clause. The case for saying it should offer such a provision in part rests on the need to bring into closer alignment the numerous bilateral trade agreements that already exist between European States and the US. A new, well specified, ISDS provision would help simplify the current position and increase investor confidence on both sides of the Atlantic.
Just as other provisions in the TTIP ensure that foreign and domestic firms are competing on a level playing field, so does the ISDS chapter. The inclusion of the ISDS mechanism ensures that investors will receive fair treatment, and be treated as the equals of domestic firms. Importantly, the provision is only to be used when negotiations, arbitration and all other means of resolution have been exhausted.
ISDS is a mechanism that is already in use to resolve disputes that cannot be solved through the domestic court system. ISDS is a neutral, international arbitration procedure available to provide an impartial law-based approach to resolving disputes. More than 3,000 existing bilateral investment treaties include an ISDS provision and the United States is party to 50 of these.
As described by the U.S. Trade Representative’s office, governments put ISDS in place for at least three important reasons, all of which confer benefits both domestically and with our trade partners.
1. To resolve investment conflicts without creating state-to-state conflict
2. To protect citizens abroad
3. To signal to potential investors that the rule of law will be respected
We do not know more than others about the status of negotiations. EFPIA does not have "preferential access", as some people think :)
In general data in clinical study reports after approval are not confidential, and hence no trade secrets. Some data is confidential and should be redacted before publication. The EMA rules and the Clinical Data Regulation allow redactions (deletions) of this, limited data. Although industry in Europe and the US have collaborated to go beyond the clinical trials regulation through the EFPIA - PhRMA principles on responsible sharing of clinical trial data.
An Annex on pharmaceuticals in the text of TTIP would promote fair, predictable and transparent processes for the pricing and reimbursement of pharmaceuticals, recognizing the value of innovation. Such an Annex can already be found in the EU-Korea and KORUS FTAs, promoting best practices. It is also important to note that the EU already has a transparency directive aimed at addressing the same issues - an annex would reconfirm commitment to those principles.
On top of securing high global standards and create greater compatibility between EU and US regulatory systems, there is also an economic argument: the Copenhagen Economics’ study shows that an ambitious TTIP agreement on pharmaceuticals could potentially create €400 million in additional exports and 1500 new jobs in Denmark alone.
The aim of the TTIP is to get rid of trading barriers, and not to create a transatlantic internal market. We do not expect the TTIP to have an influence on price setting or reimbursement of pharmaceuticals in Europe or the US. Firstly, because of how the healthcare systems are constructed; the European systems are mostly public, whilst the American mostly private. Secondly, the EU does not have the mandate to decide how member states deliver healthcare to their citizens, and so neither price nor reimbursement is included in the framework of what is negotiated in TTIP.
No, it will not. The existing capacity of nations within the EU to – despite laws requiring the free movement of all goods throughout Europe – control the local prices payable for prescription medicines and allied products will not be affected by TTIP. What it should do is help to make processes like medicines testing and licensing less costly by reducing the need for needless duplications.
TTIP will not force either the US or any EU country to accept higher (or lower) prices for pharmaceuticals. Neither will it slow the introduction of generic medicines nor interfere with clinicians’ abilities to treat patients in the ways they judge appropriate and cost effective.
Industry is committed to engage and interact with various stakeholders in order to make sure that patients fully benefit from the value of the TTIP outcomes. We are open to engage publicly with various stakeholders and patient groups representatives, for instance in the framework of the public stakeholder forum organised by the European Commission and also in bilateral discussions. EFPIA is organising a Health Collaboration Summit on 28-29 October, which will be a great platform to interact with key stakeholders on sustainable healthcare and better outcomes for patients.
We have had good experiences with including consumer organisations as well as patient organisations when discussing TTIP, e.g. in the Danish parliament earlier this year
From the moment when the compound first shows medicinal promise, data is generated and compiled, a process that is both expensive and time consuming. Data exclusivity provides the innovative firm with a period of protection for their investment in clinical trials and data collection, regardless of the length of time required to bring the drug to market. Although complementary, patents and data exclusivity protection incentivize innovation in different ways and serve distinct purposes. Patents provide protection for innovations that meet the standards of patentability and are novel, nonobvious, and useful.
Due to the length of the drug-development and patent-approval processes, effective patent terms rarely correspond to government approval. Accordingly, in some cases innovative therapies may experience patent expiry shortly after making it to market. In contrast, data exclusivity protects the tremendous investments of time, talent, and financial resources required to establish a new therapy as safe and effective. Data exclusivity is not an extension of patent rights, and it does not preclude a third party from introducing a generic version of the innovator’s therapy during the data exclusivity period, provided that the innovator’s data is not used to secure marketing approval
I am not primarily concerned with what industry needs, rather with what is in the European and US public’s interests. RDP has been introduced from the 1980s to help ensure that when an individual or company has invested in trials to generate safety and other data required by regulators, then profit seeking copyists cannot immediately use that information to licence an alternative version of the same treatment. There is nothing to stop anyone funding their own research. However, agencies seeking to get a new licence for a recently introduced product cannot just take the data submitted by the innovator company.
The provisions for RDP and medicine patents are slightly different in the US and Europe. For example, in the EU the so called 8+2+1 RDP protection available for small molecule products is rather longer than the equivalent US term, although for biological medicines the US RDP available runs for 12 years as opposed to the European maximum of 11 years. The importance of this difference should not be exaggerated, and TTIP is in itself unlikely to change such terms. However, I believe that in principle it would be desirable to slightly extend European data protection for biologicals in order for it to match that available in America.
RDP is currently of special value in the rare disease and child medicine contexts. For instance, if an old generic medicine is developed for the treatment of a new rare disease indication, RDP can help to make it financially viable by in effect requiring the innovators’ appropriately licensed product to be used, albeit in practice this cannot be ensured. As yet RDP cannot be used to help encourage the development of new uses for mature drugs outside these fields, although in future European and American policy makers might be well advised to lift this restriction if they want to encourage more adaptive approaches to developing better treatments.
Signatories to the TTIP national governments are endowed with this decision-making power and they determine the pricing and reimbursement of pharmaceutical products. This will not change under the TTIP. Drug prices will still be determined by the national entities of member states.
It is important to underscore that TTIP will not impact national governments’ decision-making powers for pricing of pharmaceuticals. The EU and US have high standards of IP protections, though they are not exactly the same. The industry has simply asked that those high standards be reconfirmed as IP is the lifeblood of our industry. We have not asked for an increase in patent terms. As we move toward the EU patent implementation we would like to see in the interim a simplification of the current patent litigation system – a type of early resolution mechanism -- as the current system is an expensive patchwork of litigation across many member states, but this would not impact patent terms.
We expect TTIP to enhance patient access to innovative medicines on both sides of the Atlantic. IP protection is not intended to hinder access to and distribution of medicines to patients. IP is about giving companies incentives to invest in researching and developing new treatment options for patients.
It is important to include IP rights provisions in TTIP as maintaining companies’ incentive to invest in research and development of new medicines is key to ensuring that innovative treatments continue to be developed for the benefit of patients worldwide.
We are not asking for longer IP protections, just a system that is consistent and reliable. This can help stimulate more investment and jobs. In the case of the US and EU, our IP standards are already high. IP is the lifeblood of our industry. We are also exploring new models, for e.g. IMI, the MPP or TransCelerate to find efficient, effective and high-quality solutions to deliver new medicines.
Our company and industry as a whole is committed to sharing its clinical data through responsible data sharing, which protects patient privacy in the EU and around the world. Through adopted joint industry principles on responsible clinical data sharing, the industry is committed to transparency and fully supports transparency, while upholding the balance between patient privacy and medical progress.TTIP will not interfere with EMA regulatory guidelines and procedures set out for responsible data sharing in the EU. In TTIP, the industry would like to see the harmonization of clinical results data fields. This would make reporting easier and access to information faster. This would benefit everyone involved with medicine development but particularly SMEs, where resources are more limited.
Maintaining a high standard of safety in our systems is in all of our best interests. However, many of the current differences in our regulatory approaches do nothing to increase safety – they are just an increased cost – a de-facto tax on innovation. We believe by minimizing duplication, increasing cooperation, and synchronizing future regulation we will speed development, reduce cost, maintain or even increase safety (as additional inspections can focus on higher-risk production facilities elsewhere, for example) and set a global standard that will benefit patients around the world. We believe this is also true in many ways for the generic industry and the innovative industry has pushed for inclusion of the generic industry in the ICH discussions and we welcome their participation in the TTIP discussions on regulatory harmonization.
The aim of TTIP is to remove trade barriers and make sure authorities are not doing the same job twice while still maintaining the existing high standards. This could for instance be the case for clinical trials that involve children. The problem is not different levels of standards, but different approaches and definitions in the EU and US. An example is how a paediatric patient is defined differently in the two regions which in practical terms mean that children on both sides of the Atlantic have to participate in trials, leading to the total number of children in trials to be much higher than would be the case if the regions shared the same standards and definitions.
Both systems work, but they can work more efficiently. Our regulatory systems are both very high standard and have the same overall goals. However, there is considerable extra time and higher development costs required to comply with transatlantic regulation that is redundant or duplicative. Our hope is that by eliminating unnecessary duplication and increasing future collaboration between regulators, patients can get quicker access to new and innovative medicine without compromising safety. We also expect TTIP to provide patients with increased choice of available treatments.
The TTIP will encourage the US and EU to collaborate on harmonizing their regulatory systems which should ensure that patients get quicker access to cutting edge treatments and cures. The increased efficiency should also generate cost savings. In addition, the greater coordination across governments should provide patients with an increase in the choice of available treatments.
Over time, the benefits should translate into greater investment into biopharmaceutical research and development efforts and the discovery of new medicines to improve patient health and lengthen patient lives.
An ambitious TTIP is important for the pharmaceutical industry, because approx. 80% of pharmaceutical sales are between USA and Europe. 70% of innovative medicines take place between EU and USA. If you look at Denmark, you will see that 40% of exports are from the pharmaceutical industry. And for Novo Nordisk 2/3 of our growth is going to come from the US. So it is important for both US and Europe, it's important for the industry, it's important for Denmark and it's important for Novo Nordisk.
The TTIP is important to the pharmaceutical industry in numerous ways. The potential signatory nations constitute 80% of global sales of new medicines. Through the agreement, the industry ties across these nations will strengthen. The TTIP will also increase investment in biopharmaceutical research, generate research cooperation, foster the sharing of knowledge and expertise, and speed the launch of new treatments and cures for patients in both the EU and the United States.
The TTIP also presents a number of specific opportunities to enhance research effectiveness and create cost savings. This is a chance for the US and EU to concentrate on regulatory harmonization, thereby reducing duplicative clinical trials and unnecessary expenses. It may also facilitate fair, predictable and transparent policies on pricing and reimbursement processes.
Fundamentally, because – as politicians ranging from Merkel to Obama stress - TTIP is important for everyone in Europe and the US. It offers modest but nevertheless significant and sustained increases in the incomes of both the EU and the US – the estimated figure is about 0.5% of GDP. It also offers efficiencies in terms of less unproductive duplication of rules and regulations, without threatening safety or a loss of basic standards.
Internationally, America and the European Union also want to set an example with regard to transparency and fairness, with a view to as far as possible universalising agreed good practices. For example, the recent EU-South Korea bilateral FTA (often referred to as the KOREU agreement) contains a pharmaceutical chapter which requires the publication of all new regulatory developments in advance, to allow for comment and the open and honest consideration of objections. It is this sort of approach that I think Europeans and Americans have a common interest in sharing and promoting across the world.
On behalf of EFPIA, I’d like to thank Global Health Progress for convening this interactive discussion. This is a great opportunity for us to highlight the benefits TTIP can bring - not only to businesses working in health but crucially to patients and society. I’m delighted that we have two senior business leaders, one from the EU and the other from the US, as well as two leading academics to take us through their thoughts and perspectives. So with that brief introduction let’s take the first question.
Lars Rebien Sørensen joined Novo Nordisk’s Enzyme Marketing in 1982. In 1994 he was appointed as a member of Corporate Management. He was appointed President and Chief Executive Officer of Novo Nordisk in November 2000. He completed several overseas postings for Novo Nordisk including the Middle East and the United States. He holds a BSc in International Economics from the Copenhagen Business School and in 2007 he became an adjunct professor at the Faculty of Life Sciences of the University of Copenhagen.
David Ricks has been President of Lilly Bio-Medicines and Senior Vice President at Eli Lilly & Company since January 2012 and served as President of Lilly USA, LLC since November 2009. Previously he served as General Manager of Lilly China. Previously Mr. Ricks held various positions in the technology sector including positions with IBM Corporation and Hewlett-Packard Corporation. Mr. Ricks holds an MBA in Finance and Marketing from Indiana University and a Bachelor of Science in Industrial Management from Purdue University.
Between 2000 and February 2009 he was Chair of Camden and Islington NHS Foundation Trust. He subsequently became a non-executive director of the Camden Primary Care Trust. He has published extensively on issues relating to health. David’s current work includes studies on public health and pharmaceutical policy formation and the future development of pharmacy, the pharmaceutical industry and health care provision globally.
Dr. Lybecker received her Ph.D. in Economics from the University of California, Berkeley. Kristina’s research analyzes the difficulties of strengthening intellectual property rights protection in developing countries. Recent publications have also addressed alternatives to the existing patent system and the balance between pharmaceutical patent protection and access to essential medicines. She has also worked with US Food and Drug Administration, PhRMA, the National Peace Foundation, the OECD, and the World Bank, on issues of innovation and international trade.
Richard Bergström has been the Director General of the European Federation of Pharmaceutical Industries and Associations (EFPIA) since April 2011. Previously he served for nine years as the Director-General of LIF, the Swedish Association of the Pharmaceutical Industry, following positions in Switzerland in regulatory affairs at the pharmaceutical companies Roche and Novartis. Mr Bergström was also appointed by the Swedish Government to the Board of the Karolinska Institute. He is a pharmacist by training, receiving his MScPharm degree from the University of Uppsala, Sweden in 1988.