Mr. Robbie Lawlor:

While the pharmaceutical industry might claim that high prices are essential to encourage innovation, a recent report from the World Health Organization, WHO, concluded that concerns that lower cancer medicine prices might impair future research and development would seem to be misplaced. Evidence suggests first that prices of cancer medicines bear little or no relationship to research development costs. Second, financial returns on cancer medicines are high.

Third, the potential impact on revenue due to lower prices could be offset by higher volume, especially when the marginal cost of production is low. Fourth, governments and the non-profit-making sector have made substantial contributions to the research and development of medicines through direct funding and other incentives.

There are other problems with the current research and development model. There is a lack of financial transparency to justify the high prices the industry places on drugs, with industry citing "commercial sensitivity". Research and development is directed towards projects which are likely to maximise shareholder profit as opposed to public health gain, hence a plethora of "me too" drugs of limited therapeutic advantage and an absence of research into new antibiotics to address the problem of antimicrobial resistance. There is silo-based research, with companies working on similar research projects but with no communication between them, which may lead to duplication of research and missed opportunities for shared learning. There is high expenditure on marketing and we know from research that double the amount is spent on marketing of drugs compared to what pharma puts into the research and development of new drugs. There are also high senior management salary costs. For example, the CEO of Biogen, the pharmaceutical company that makes Spinraza, received €12 million in pay, shares and other compensation in 2017, even though we cannot reimburse Spinraza due to the high cost of the drug. A huge proportion of investment in research and development, estimated at 30%, is funded globally from public sources but without public return. In this respect, the public is paying twice for a drug, as seen with sofosbuvir, the hepatitis C cure, to which Mr. Harkin referred earlier.

Access to Medicines Ireland recognises the efforts of the Government to try to contend with the high cost of drugs. It has introduced reference pricing and generic substitution, negotiated deals at a national level with the IPHA and entered the BeNeLuxA pact at an EU level, all of which are welcome developments in the effort to ensure and improve access. This has delivered savings and promises to deliver more. In truth, though, these measures can only be considered as doing the best we can within a very broken system. The high cost of drugs is caused by a systematic problem and our policy efforts to date are constrained by that very system. Together with international organisations such as the UN, the World Health Organization and various campaign groups, we believe there are specific measures that can be taken at an Irish, European and global level. With regard to transparency, we should support the upcoming Italian resolution on transparency at the World Health Assembly. We should press for transparency at an EU level and we should attach conditions to public funding of research and development to require increased transparency for any drugs developed as a result. For price control, we should press for conditions to be attached to research and development grants, both at national and EU level, to ensure there is a price control down the line. We should consider the use of flexibilities in international patent law, such as compulsory licensing for certain drugs. In this case, we should potentially push for Spinraza in Ireland. In February, the UK Parliament discussed the possibility of a compulsory licensing in respect of Orkambi, which has put pressure on the manufacturer, Vertex, prior to forward negotiations this month. Within recent weeks, the Swiss Government has been petitioned to issue compulsory licensing for a Roche cancer drug, pertuzumab.

In the long term, the use of market exclusivity as an incentive to develop new medicines must be set aside as this disempowers governments seeking to determine a fair price. Alternative incentives for research and development should include upfront government funding in the form of grants and prizes. All medicines developed as a result would be patent-free and manufactured generically at affordable prices. Such models have led to successful research and development by public-private partnerships, such as DNDi - the Drugs for Neglected Diseases initiative. Ideally, a EU grouping or an global organisation such as the WHO research and development observatory needs to be established as suggested by the UN High Level Panel on Access to Medicines. I will now hand over to Dr. Conlan.