MOREPRESS RELEASE
PRESS/220
12 April 2001
(01-1887)
WHO/WTO WORKSHOP ON PRICING AND FINANCING OF ESSENTIAL DRUGS
EXPERTS: AFFORDABLE MEDICINES FOR POOR COUNTRIES ARE FEASIBLE
HØSBJØR, NORWAY — Making life-saving medicines more affordable for poor countries is vital
for improving public health. More importantly, it is realistic, experts said in a three-day workshop thatended today (11 April 2001).
In particular, “differential pricing” — companies charging different prices in different markets
according to purchasing power — is a feasible means of achieving this, provided certain conditions
are met..
That was a widely held view among a diverse group of 80 experts from 21 countries and a wide range
of professional backgrounds, participating in a workshop organized jointly by the World Health
Organization, World Trade Organi zation, Norwegian Foreign Ministry and Global Health Council, a
broad-based US organization in the healthcare field.
The workshop examined in detail ways to reduce pharmaceutical prices in low-income countries and
how to increase financing so that the world’s poorest people can obtain necessary medicines and
healthcare. HIV/AIDS, malaria and tuberculosis featured prominently, but a wide range of other
diseases that affect poor people were also  discussed.
WHO Director-General Gro Harlem  Brundtland said the meeting had been constructive and helpful.
“It is clear that the price of medicines does matter — especially for people in poor countries,” she
said.
“We heard from the experts that much lower prices can be achieved for the poorest countries. Equally
important is strengthening health systems, and, for the poorest countries, securing additionalinternational financing,” Dr Brundtland said.
Participants attended as experts in their own right. They came from: developed and developing
country governments; international research-based companies; generic pharmaceutical companies
from Asia, Africa and Latin America; non-governme ntal organizations; consumer and treatment
groups; universities; and international organizations.PRESS/220
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MORE“Although participants clearly approached the issues from different points of view, there was broad
recognition that differential pricing could play an important role in ensuring access to existing drugs
at affordable prices, particularly in the poorest countries, while the patent system would be allowed to
continue to play its role in providing incentives for research and development into new drugs,” said
Adrian Otten, director of the WTO’s Intellectual Property Division.
Two of the organizers, the WHO and WTO, will each report on the outcome to forthcoming meetings
in their organizations to be held in the next few months. In May, the WHO holds its World Health
Assembly, and in June the WTO’s Council on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) will hold a special discussion on intellectual property and access to drugs.
All participants will be able draw on the ideas an d experiences exchanged in the workshop, for use in
their own work, together or separately.
Differential pricing has already been achieved fo r commodities such as vaccines, contraceptives and
condoms through a combination of high-volume purchasing, reliable and adequate financing,
advocacy, corporate responsibility and market forces.
The challenge is to find ways to expand this to life-saving medicines. The participants accepted that
there is no single formula to achieve this. A wide mix of options is needed, they said.
“Intellectual property rights stimulate development of new medicines, but must be implemented in an
impartial way that safeguards public health. We also need to ensure that there are additionalincentives for the development of the drugs needed to address the health problems of people in poor
countries,” Dr Brundtland said.
Among the ideas emerging from the meeting were :
Differential prices
Differential pricing would allow companies that make patented drugs to recover most of the costs of
research and development in richer markets and at the same time to sell or license production at lower
prices in lower-income countries. Advocates said this could be a win-win solution if consumers inricher countries do not face higher prices as a result.
Critical to the success of this would be methods of  preventing lower priced drugs from finding their
way into rich country markets. A number of speakers were also concerned that lower prices in
development countries should not be used as reference points for price controls in industrialized
countries.
Options for appropriate strategies suggested in the workshop included: creating the right conditions so
that the market determines differential pricing; discounts negotiated bilaterally between companies
and purchasers (which could include bulk purchasin g on behalf of many customers); licences agreed
voluntarily between patent owners and generic manufacturers; and global procurement and
distribution systems.
Competition and generic drugs
Several speakers also felt that generic drug manufacturers play an important role in bringing
competition to pharmaceutical markets and improving production efficiency, which would reduceprices further.PRESS/220
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ENDIntellectual property and TRIPS safeguards
Participants acknowledged that intellectual property protection is an important incentive for research
and development into new drugs. Some said there are also other ways to encourage research and
development.
At the same time, countries need to be able to make  use of the public health safeguards built into the
TRIPS Agreement — including compulsory licensing (governments allowing others to produce a
patented invention without the patent owner’s permission) and “parallel” imports (i.e. imports of
products supplied by the patent owner or a licensee at a lower price in another country).
Financing
When drug prices fall — and many low priced essential drugs are already available — there is still no
guarantee that poor communities can afford them. This is particularly true for HIV/AIDS drugs. Even
with costs coming down to $500 per patient per year, this is well beyond the reach of the many
countries whose total health expenditure is less than $10 to $20 per year. In these cases, significant
amounts of external financing is needed.
Many of the participants also said financing for drugs should not be considered in isolation. They
called for massive increases in finance to develop effective healthcare systems in general, including
training, education and delivery, as well as for buying the drugs.
For more information:
Background papers for the conference are available on the WHO and WTO websites.  For the WHO
(www.who.int) look for “medicines” and “documents”.  For the WTO (www.wto.org) follow this
sequence from any page: trade topics > intellectual property > TRIPS news, and look for “workshopon affordable drugs”.
For more information on TRIPS and pharmaceuticals, see a WTO factsheet, downloadable from the
TRIPS news page.
A report of the workshop’s proceedings and the presentations will shortly be available on these
websites.