The mandates of the International Monetary Fund (IMF) and the World Bank (WB) include the obligation to facilitate financial stability, international trade, and economic growth, while securing assistance in the form of loans to countries suffering from balance-of-payments constraints. The European Commission (EC) provides both Budget Support – accounting for approximately 25% of EU development aid – and Macro Financial Assistance (EUMFA) in the form of loans and grants for non EU countries facing a balance-of-payments crisis, provided the country has an IMF programme.

This context gives these three institutions great power to shape domestic policies in other countries, through quite identical prescriptions.

Conditionalities: a threat to health?

As creditors, the three institutions seek to ensure that they recover their loans from borrowers by setting strict ‘conditionalities’ on lending. Loan disbursements have been linked to economic and trade liberalization with regressive consequences for poor people.

In most cases, conditionalities encompass cutting public spending, including  government subsidies and ceilings on government wage bills (common in Africa), as well as privatization of public services such as health and education and removal of barriers to international trade.

Critics have charged macroeconomic reform programmes with a narrow vision on economic stability and for not protecting social spending on health and education. For example, ceilings on governments’ wage bills disrupt the much needed expansion of the health workforce, thus impairing the ability of the health sector to recruit and retain health workers.

The impact of the reform recipes has been highlighted especially in Africa in terms of cuts in public spending and adopting user fees policies which are known to act against poor people, especially women. However, recently the same recipes have been implemented in high income countries such as Greece where cuts in public spending and dismissal of health workers have led to deterioration in the health of the population.

Moreover, cuts in the health spending affect the supply of medicines, which can have tremendous negative consequences on the health of a population, including fueling transmission of infections like HIV/AIDS, tuberculosis (TB), hepatitis and sexually transmitted diseases. For example, a study of the link between the IMF loans and TB in the former Soviet Union and Eastern European countries documented a 16.6% rise in annual TB mortality from early to mid-1990s.

The WB, IMF and EC defend themselves by denying fixing targets for specified expenditures or wages and stating that governments are accountable for expenditure priority allocations. They thus deny any responsibility for their actions.

However, regular reviews by the WB, IMF and EC determine whether a loan is released depending on economic performance, not on protection of social spending. As contended, ‘this is an example of how the power dynamics between WB, IMF, EC and the recipient of their programmes make it very difficult for the latter to ignore policy prescriptions, even when they are not legally binding.’

Basic requirements to reform

Given the influence of these institutions on domestic policies, they should focus on helping countries explore a wide range of options for dealing with fiscal deficits. These options should ensure the protection and increase in social spending, especially on health and education, and the removal of the budget ceiling on the recruitment and retention of health workers.

A key problem underlying the damage of the macroeconomic reform recipe is that negotiation is usually limited to a narrow circle of finance ministries in the absence of public participation or scrutiny. Transparency of negotiation and participation of other relevant ministries and civil societies are essential to ensure pro- human development policies.

Despite recent positive rhetoric by the IMF, WB and the EC to reform conditionality policies, a gap persists between the declared intentions and the general practice. As maintained in a recent Eurodad analysis, ‘…The IMF continues to attach problematic conditions to its loans, notably by suggesting reforms in sensitive economic areas. The World Bank continues to make loan decisions on the basis of the assessments made by its rich country-dominated board on the economic agenda of recipient countries. Finally, the EC’s Budget Support was originally created to support the local ownership of its recipients and its guidelines reflect that. In practice, though, it sometimes incentivizes economic reforms that are not part of partner countries’ development strategies…’

It is time for the three institutions to turn their new rhetoric into reality.  But, will they be up to this at this time of  Trump, Brexit, and the rising success of so-called populist/nationalist movements – which perhaps mirror the mounting unpopularity of the idea of globalization as the driver for economic prosperity?

These cases represent just the tip of the iceberg of the tactics employed to ensure that developing countries adopt measures  which  go beyond the full extensions they had a right to under the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS).

These measures, collectively termed TRIPS-plus, would include making it easier to patent new forms of old medicines that offer no added therapeutic benefit for patients (the so-called ‘ever-greening’); restricting ‘pre-grant opposition’, which allows a patent to be challenged before it is being granted; enforcing intellectual property (IP) beyond what TRIPS requires; allowing customs officials to impound shipments of drugs on mere suspicion of IP infringement, including ‘in transit’ products that are legal in origin and destination countries; expanding data exclusivity beyond WTO’s request for data protection against unfair commercial use only; extending patent lengths beyond 20-year TRIPS requirements; and preventing drug regulatory authorities from approving new drugs if they might infringe existing patents.

TRIPS-plus measures add to the impending threat of investor state dispute settlement (ISDS) provisions with regards to access to medicines.  Indeed, most currently-being negotiated or finalized trade agreements are feared to introduce ISDS clauses whereby many forms of government regulations, including price cuts of medicines that do not conflict with the TRIPS agreement, could be sued by the patent owners for alleged discriminatory practices.

ISDS risk sectors encompass tariffs on medicines, as would be the case should a country that has agreed to reduce tariffs on an imported product later subsidize home manufacturing of the same medicine. A complaint against this country under an ISDS system would be allowed to re-establish the conditions of competition in the original transaction. Additionally, the sectors relevant to packaging and labelling requirements, and to IP protection enforcement measures, may also result as ISDS target areas, since they might affect the patent holders’ access to the market of medicines. Under these circumstances, a claim could easily be lodged against a government for nullifying or eroding benefits by applying IP protection rules or packaging and labelling models that, despite full alignment with TRIPS requirements, are deemed to be insufficiently stringent or fraudulent.

Against the backdrop mentioned above, which policies should be pursued at a national level to curb the negative public health impact of international trade and investments agreements?  A timely answer entails referring to the recommendations laid down on the 14^th of September by the United Nations High Level Panel on Access to Medicines  in their final report. The Panel was established in November 2015 and tasked with reviewing and weighing proposals and making recommendations for ending the misalignment among the right to health, and trade rules and the patent system, as the main barrier to the equitable access to health priorities.

The Panel’s recommendations take place under the UN 2030 Agenda perspective consisting of 17 Sustainable Development Goals (SDGs) and 169 targets. In this scheme, the health goal ranks high as an overarching aim amidst the other 16 SDGs. It includes nine targets: three related to the Millennium Development Goals (MDGs), three to non-communicable diseases and injuries, and three cross-cutting or focusing on systems encompassing universal health coverage, universal access to sexual and reproductive health care services, and also to reduced hazards from air, water and soil pollution. Furthermore, the health goal strictly entwines with a number of the other 16 goals. For example, health is a contributor to (and a beneficiary from) poverty reduction, hunger relief and improved nutrition, safer cities, lower inequality, sustainable consumption, affordable and clean energy, toxic chemicals management, clean water and sanitation, and to the efforts to combat climate change and safeguard aquatic and terrestrial ecosystems as well.

Overall, at a time when the SDGs focus on universal access to medicines and services for different health targets, trade agreements are undermining access to these very medicines. Now, what can be done about it, particularly at the level of national or state governance?

• Rejecting pressures towards adopting heightened IP rights and strengthened enforcement mechanisms as the keys to foreign investments and innovation. Reportedly, inclusive evidence typically shows that most low- and middle-income countries do not benefit economically from IP maximization since they are net importers of IP goods and since the path to technological development is ordinarily through copying and incremental innovation-development tools that are severely undermined by IP monopoly rights and their related restrictive licensing agreements.

• Rejecting the World Bank income classification to measure a country’s capacity to afford high-priced medicines. As argued, the World Bank classification dates back to the 1980s and only measures a country’s per-capita average of total income. However, the map of poverty has changed since the 1980s. Today, the majority of the world’s poor no longer live in poor countries, but rather in places where there is greater wealth along with higher inequality.

• Banning TRIPS-plus clauses, including ISDS provisions, since they jeopardize the right to health and make inequalities in access to care and treatments even worse.

• Pushing for open knowledge and new approaches to pharmaceutical innovation that do not rely on the patent system and de-link the costs of R&D from the end price of medicines.

• Promoting technology transfer with least-developed countries without exporting excessive IP standards through assistance programs.

• Backing generic competition as the most effective way to lower medicine prices in a sustainable way. This would include asking for organizations with potential conflicts of interests and IP perspectives to issue statements eschewing the use of IP law to counter generic medicines.

• Linking together patent offices and legislators to develop evidence-based reforms of the patent regime of medicines. As contended, If countries set higher standards for incremental innovation patenting, and permit citizen or third-party review of patents before and after examination, then we will likely see increased generic competition in the….market, new combination therapies, and lower… prices. In the longer term, higher inventiveness standards will help clear the patent thicket to allow new products to develop, and push industry towards genuine innovations.
• Ensuring that governments and leading institutions boost transparency and needs-driven rather than market-driven rules. This would mean giving up closed doors negotiations, while working with health ministries and multi-sector counterparts for decisions affecting national health, growth, employment and budgets.

• Pushing for country-governments’ leadership to implement a coordinated response to fight corruption, while refraining from being caught with corporate holdings in a circle of mutually reinforcing political and commercial interests over public health concerns.

• Asking for anti-counterfeit laws and law enforcement policies not to substitute for effective national regulatory provisions.

• Ensuring that international agreements include clauses whereby donors must strengthen WHO-aligned quality clauses in tender transactions with non-governmental organizations, while purchasers must insist that manufacturers and distributors supply medicines that meet WHO requirements, and governments must authorize export only of products meeting WHO quality, efficacy and safety standards.

As argued, Achieving health equity is not just a matter of coming up with technical solutions and providing the means to finance them. We have to consider the political landscape and rectify the dysfunctions in global governance that undermine health

The United Nations High-Level Panel on Access to Medicines was established in November 2015 and tasked with reviewing and weighing proposals and making recommendations for ending the misalignment between the right to health, trade rules and the patent system, as the main barrier to equitable access to health priorities.

The much-anticipated High-Level Panel report  finally went public on 14 September. Its well-grounded recommendations and requests to the interested parties make it a cornerstone for all decisions relevant to fair access to treatments and care – and not just at a poor country level. Indeed, access to medicines is a problem of global concern at a time when extortionate drug prices are jeopardizing  healthcare systems throughout the world.

The Panel calls for WTO members to comply with and globally implement the WTO Doha Declaration on TRIPS (WTO Agreement on Trade-Related Aspects of Intellectual Property Rights) and public health. This includes facilitating the issuance of compulsory licences, rejecting the so-called ever-greening of patents and restricting patents to genuine inventions only.

The report says that “Governments and the private sector must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.” It maintains that “Instances of undue political and commercial pressure should be reported to by the WTO Secretariat during the Trade Policy Review of Members.” As per its terms, “WTO Members must register complaints against undue political and economic pressure which includes taking punitive measures against offending WTO Members.”

The report also calls on governments engaged in international trade and investment negotiations to ensure that these do not include clauses contrary to their obligations to the right to health. The public health impact of the agreements should, instead, be carefully weighed throughout the negotiations and made publicly available.

The Panel insists that UN agencies such as UNCTAD, UNDP, WHO, WIPO (among others) should mutually collaborate as much as possible, including with the WTO and all relevant bodies, to support governments to introduce public health-friendly patentability standards.

As the Panel stresses, “universities and research institutions that receive public funding must prioritize public health objectives over financial returns in their patenting and licensing practices.” That includes the use of non-exclusive licences while giving up intellectual property (IP) rights and joining public sector patent pools and other mechanisms equipped for the maximization of innovation and access. Governments are asked to enhance their levels of investment in health technology innovation to meet neglected needs.

Moreover, the report calls for all the relevant parties to “test and implement new and additional models for financing and rewarding public health research and development (R&D), such as the transaction taxes and other innovative financing mechanisms.”

What’s more, the Panel urges to begin negotiations at the WHO for a binding research and development treaty, up to delinking R&D costs from the end prices of medicines. The treaty “should focus on public health needs, including but not limited to, innovation for neglected tropical diseases and antimicrobial resistance and must complement existing mechanisms.”

Furthermore, the Panel contends that “Governments should strengthen national level policy and institutional coherence between trade and intellectual property, the right to health and public health objectives by establishing national inter-ministerial bodies to coordinate laws, policies and practices that may impact on health technology innovation and access.”

Meanwhile, the UN Secretary-General is asked to set up an independent review body tasked with assessing progress on health technology innovation and access, while monitoring the challenges and advances on innovation and the enjoyment of technologies for health under the UN 2030 Agenda perspective. Membership should encompass representatives from governments, the UN and multilateral organisations, civil society, universities, and the private sector.

The UN Secretary-General is also requested to establish an inter-agency taskforce on health technology innovation and access working “toward increasing coherence among United Nations entities and relevant multilateral organizations like the WTO.”

The report contends that “Governments should require manufacturers and distributors of health technologies to disclose to drug regulatory and procurement authorities information pertaining to:

(1) the costs of R&D, production, marketing and distribution of health technology being procured or given marketing approval with each expense category separated; and

(2) any public funding received in the development of the health technology, including tax credits, subsidies and grants.”

In addition, the WHO is invited to establish and keep up to date an “accessible international database of prices of patented and generic medicines and biosimilars in the private and public sectors of all countries where they are registered.” At the same time, governments are asked to establish, preserve and update publicly accessible databases with patent information status and relevant figures to drugs and vaccines.

Falling Short of Expectations?

The UN system needs to work with governments to ensure that the report’s recommendations are carried into effect with no delay. Unfortunately, since the Panel asks all counterparts to act in unison toward the best collaboration, coherence, accountability and transparency, the success rate is unpredictable at the moment.

In today’s global landscape, which is torn by misalignment, litigations and frictions among the involved parties, governments look like they won’t be ready to embark on these recommendations as an opportunity to advance public health over political and commercial interests.

To make things even worse, the current governments’ directions and trade agreements, largely instigated by the European Union (EU) and the United States (US), run contrary to the Panel’s principles while turning IP agendas into policies that protect monopolistic interests at the expense of equitable access to care and lifesaving treatments in resource-limited settings.

Just for example, the Panel’s request for cost transparency  to help curb extortionate drug prices looks like a difficult task now that pharma companies and their allies are lobbying policy decision makers  to scupper any rules that would force them to disclose the real R&D costs and profits of their medicines and the rationale for charging what they do. As such, it comes as no surprise that the report was opposed by the US Chamber of Commerce and the pharmaceutical industry.

These circumstances bode ill at a time when the US administration is lobbied by the pharmaceutical corporations,  European authorities are doing almost nothing to check the tide of ‘me-too’ drugs, and the European Medicines Agency keeps testing new medicines only in terms of safety and efficacy compared with a ‘pretend’ drug.

To conclude, what are the expectations against the backdrop mentioned above? Hopes that comprehensive, non-discriminatory health goals could speedily be reached are threatened by the load of conflicting issues still on the table.  As argued, “Achieving health equity is not just a matter of coming up with technical solutions and providing the means to finance them. We have to consider the political landscape and rectify the dysfunctions in global governance that undermine health…”

All things taken together, the Panel’s report recommendations look like a hard bet. Yet, they matter as an overarching voice hammering the point home that prospects to achieve global health goals depend on non-stop multi-sector engagement worldwide to pressure governments into making “U-turn” changes, implementing common measures on a shared agenda.