Monday, July 10, 2006

CPTech comments on the APC/AMC approaches

by James Packard Love
The debates over the various version of the Advanced Purchase Commitment (APC)/Advanced Marketing Commitments (AMC) proposals have a fairly long history (since the late 90s). Most of the people in the debate are sincerely motivated to address extremely important gaps in R&D for persons living in poverty in developing countries. There were, particularly in the beginning, ideological aspects of the debate, as some proponents of the APC/AMC approaches presented the issue in such as way as to understate the importance of public sector directed medical research and overstate the efficiency and benefits of the patent system -- which they claimed, "worked fine" so long as people had sufficient purchasing power, which the APC/AMC sought to remedy. (Views emphasized by the IFPMA, for example). This led to a backlash against the proposals by persons who saw other flaws in the patent system, or wanted to defend the importance of "push" funding by governments and PPPs, and to call attention to the potential "crowding out" problems if massive funding went into APC/AMC proposals.

There have also been a host of practical issues raised about the proposals, including the specifications of the qualifying products, rewards for follow-on R&D, and many other issues.

CPTech has viewed the APC/AMC proposals as having the most appeal in the context of vaccines or other products where it is particularly useful to tie the incentive to innovate to practical plans to insure that patients actually have access to and benefit from the new products. Our concerns about the APC/AMC proposals are several, including those about the crowding out of other R&D funding possibilities, but more importantly, we question whether or not the fundamental approach of structuring commitments to buy products that meet particular standards is the best approach.

Like the proponents of the APC/AMC proposals, we are convinced that some significant public funding should be devoted to so called "pull" mechanisms, that reward successful drug developers. In terms of the R&D incentive aspects of the proposals, we would reduce the complexity of the AMC proposal by replacing the purchase commitments with large prize fund like rewards that were tied to positive health care outcomes. We proposed such systems in 2002, in the context of a broader separation of the markets for innovation and products. Others, particularly Aidan Hollis, have elaborated on how this might be done in the context of neglected diseases.

The APC/AMC proposals essentially link together the R&D incentives with the delivery of products to patients. We would prefer if these were not tied together, and rather that developers would be rewarded regardless of who markets, sells or delivers products. We (as others) would also prefer that rewards be tied more generally to health outcomes, rather than specific product standards, so that drug developers would have more flexible targets -- the more general, the better, in our view. Perhaps this could be also tied to the voluntary licensing of patents to a patent pool that faciliated generic competition for products.

That said, we do appreciate and agree with the point made by APC/AMC proponents that it is important to fund also the systems that deliver products to patients. We would not link this so closely in practice to the R&D issue, however.


Here are a few links for some background documents on the G8 discussions on Advanced Marketing Commitments

Proponents and explainers of the AMC proposals
Advanced Market Commitments for vaccines, A new tool in the fight against disease and poverty, Report to the G8 Finance Ministers, Giulio Tremonti, Minister of the Economy and Finance, Italy, December 2, 2005
Advance Market Commitments, Results Of UK Consultation, February 2006
Making Markets for Vaccines (one of many of the CGDev papers on this)
Advanced Market Commitment (AMC) Proposal an Important Step in Right Direction to Develop & Provide Access to New Vaccines, IFPMA, Geneva, Switzerland, 4/24/2006

Critics of AMC approach
Run-AMC: The latest idea in vaccine funding won't cure AIDS and malaria.
By David Dobbs, Dec. 29, 2005, which makes refers to:
Concerns Regarding the Center for Global Development Report, "Making Markets for Vaccines," Submission to the CIPIH, 29 April 2005. Andrew, W.K. Farlow, Donald, W. Light, Richard, T, Mahoney, Roy Widdus.


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