As Director-General of the World Health Organization, I am very pleased to be here today. I wish to thank you for your invitation to address your Commission on the vital subject of access to essential drugs and vaccines.

I am greatly encouraged by the importance which the Parliament and Government of Brazil is giving to this subject.

I start with a statement of principle. The people of our world do not need to bear the present burden of illness. Most of the severe illness that affects the health and well-being of the poorer people of our world could be prevented. But first, those at risk need to be able to access health care - including essential medicines, vaccines and technologies. Millions cannot - they cannot get the help they need, when they need it. As a result they suffer unnecessarily, become poorer and may die young.

A country's health service cannot respond to people's needs unless it enables people to access essential drugs of assured quality. Indeed, this access represents a very important measure of the quality of the health service. It is one of the key indicators of equity and social justice.

The essential drug concept is widely accepted today as an approach for promoting modern, evidence-based, and cost-effective health care. It focuses therapeutic decisions, professional training, public information and financial resources on those drugs which represent the best balance of quality, safety, efficacy and cost for a given health setting. Health systems of all types, from basic health systems in the poorest countries, to highly developed national health insurance schemes in the wealthiest, have recognised the therapeutic and economic benefits of an essential drugs approach.

In the implementation of National Drug Policies, recommended by WHO, several countries today are promoting two major policy lines: the first is fundamental and concerns the promotion of essential drugs as the best approach from the health viewpoint, and this is supplemented by promoting the use of quality generic drugs as an important strategy to promote both affordability and access.

The National Drug Policy, launched by the Government of Brazil in 1998 in a broad consultation process with all stakeholders, follows the essential drugs principles and strategies recommended and promoted by WHO. You may be pleased to know that a summary of the Brazilian National Drug Policy has been published in Spanish, English and French by the WHO Department of Essential Drugs and Medicines Policy. It is presented as a good example for other countries in this region and in other parts of the world.

Much has been achieved in expanding access to drugs and vaccines during the last two decades. Yet, we have a long way to go before everyone can get the medicines and vaccines they need at an affordable price.

At the beginning of the 21^st century, one-third of the world’s population still lacks access to the essential drugs it needs for good health. In the poorest parts of Africa and Asia, over 50% of the population do not have access to the most vital drugs.

According to the latest figures that WHO will be presenting in the forthcoming World Health Report, 10.3 million children under five years of age died in developing countries last year. About 8.6 million of these deaths are due to communicable, perinatal and nutritional conditions. A large proportion of these deaths could be prevented if those at risk could access essential drugs.

We all have got used to hearing such figures: we do not forget that they describe scandalous inequity. All of us working as partners in this endeavour need to respond to the challenge in a strategic manner. I am delighted to hear that Brazil is showing what is needed by making major efforts to improve access to essential drugs and so promote equity in people's health.

Developing countries, with three-quarters of the world’s population, get only a quarter to a third of the income generated by the world economy. While developed countries are trying to cope with cost control of drug expenditure as a major concern, developing countries still face issues such as the high cost of newer essential drugs, the lack of a primary health care infrastructure, insufficient funding for health and pharmaceuticals and, on occasion, ineffective management of available resources.

Access to drugs is a critical component of a health sector strategy. Governments face difficult choices: they cannot invest in a few costly drugs and ignore all the other aspects of care. It is our role to help make those choices less difficult.

Many factors determine the complex question of access; such as distribution systems, financing procurement and prices. Medicinal drugs are not ordinary commodities: their procurement, storage, inspection and distribution need special skills.

In line with the Revised Drug Strategy which was adopted by last year’s World Health Assembly, WHO, in close cooperation with the World Trade Organization and the World Intellectual Property Organization, is ready to provide advice to ministries of health on how to assess the public health consequences of international trade agreements. That includes informing them on provisions relating to the public health safeguards included as part of the TRIPS agreement.

We now need to study how the global rules and regulations work in practice. One assumption of strengthened intellectual property rights was that more research, development and production would take place in developing countries and that prices would come down. We have to ask: is this happening?

On intellectual property rights WHO’s position is clear: they must be protected. We depend on them to stimulate innovation. Patents for pharmaceuticals should be managed in an impartial way, protecting the interest of the patent holder as well as safeguarding basic public health principles.

There are no simplistic solutions and there are no magic bullets. Still, complexity is a challenge, not an obstacle. There are several possibilities to explore.

WHO will support any measure which will enhance access to all essential pharmaceutical products in a sustainable way. We have to find a way to bridge the issues of commercial viability and right to access.

We need to build new bridges between supply and demand. Today’s gaps amount to a giant market failure. To succeed we will need broad partnerships between governments in developing and industrialised countries, financial institutions and the pharmaceutical industry. We will need to build an emerging consensus on the needs of the poor and the basic requirements for improving their access to life saving drugs.

How can we arrive at a situation where the poor get sustainable access to drugs at affordable prices? The pharmaceutical companies have a moral obligation to contribute to the solution. But we also need to see protective tariff barriers and distribution margins come down, and we need to get political acceptance for the concept of "equity pricing", especially for newer essential drugs of vital public health importance.

Equity pricing means that the poor would not have to pay the same price for life-saving drugs as those who are better off.

To accept this principle is a political decision. Governments of industrialised countries must lead in its establishment: Meanwhile, governments in developing countries must do their share to facilitate access by improving financing, importation, purchasing and distribution systems for medicines, vaccines and medical equipment in their own countries.

WHO will take this public health debate forward, with our Member States, with our other United Nations partners, with civil society and with industry.

The strategies and policies to combat poverty and ensure access to health and pharmaceuticals in such a vast and complex country as Brazil need to be comprehensive and clearly oriented to ensure population-wide access to health services and pharmaceuticals.

Given the emphasis on ensuring access to medicinal drugs, the Brazilian National Drug Policy also highlights generic drugs and stipulates mandatory adoption of generic names in all public purchases and promotes prescription and use of generic drugs as one of the important components of the Policy.

I do not want to propose a universal definition of a "generic" drug. It is a matter on which opinions differ. Let me, for present purposes, consider as a "generic medicine" a "copy of an original, marketed product on which the patent has expired and which is marketed as equivalent to, and therefore can be interchanged with, the innovative brand".

In terms of health sector reforms, promoting generics can help meet the objectives of reforms by improving affordability, reducing cost, increasing choice and helping to rationalise both the selection and use of pharmaceuticals.

Since these strategies can make drug markets more competitive and efficient and can contribute to the goals of improved equity, quality and efficiency in health, they are of significant value as reform measures. The current changes occurring in the Brazilian health sector represent an excellent opportunity to promote and benefit from these strategies.

Policies promoting generics are frequently only associated with the public sector. But these strategies can be just as beneficial in the private sector because they promote efficiency within pharmaceutical markets. This is particularly important in developing countries, where up to 90% of drug consumption is through the private sector. Consequently, as with health sector reform in general, a generic policy will be most successful and yield greatest benefit if it is comprehensive; it needs to be implemented in both the public and private sectors to cover all groups of society.

The public-private separation in pharmaceuticals is, in a way, artificial anyway. Health professionals may be active in both sectors and patients may receive prescriptions in the public sector to be filled in the private sector. Given that – in many countries – the vast majority of pharmaceuticals are obtained in private markets, the benefits of generic drug strategies can only be realised when they receive widespread acceptance in both public and private sectors.

The essential drugs policy recommended and promoted by WHO identifies four key elements for ensuring the success of a generic drugs programme:

1. Supportive legislation and regulation;
2. National capacity for quality assurance;
3. Professional and public acceptance;
4. Economic incentives and information.

In other words, generic strategies involve much more than legal mandates; they are processes requiring support and enforcement, they must respond to the concerns of involved parties and they must provide adequate economic incentives.

In Latin America, several countries have already enacted legislation relevant to generic strategies but, in most cases, implementation is limited. Overall, the results indicate that lower prices have been observed where solid and transparent legislation exists.

In the United States of America, generic drugs represent half of the market in volume. Although this market share is one of the highest in the world, the process leading up to this has been long and bumpy. Many hospitals in developed countries have lists of approved drugs which identify products by generic name.

The European Union has agreed on three major policy regulations regarding pricing and reimbursement of pharmaceuticals:

(i) to contain growth in pharmaceutical expenditures;

(ii) to enhance competition by making the market more transparent and encouraging generics;

(iii) to raise the cost-awareness of patients by better informing them of the cost-benefit ratios of therapeutic alternatives.

WHO has, for a long time, been encouraging drug policies based on the promotion of generic drugs of assured quality. This has proven to be a cost-effective strategy in containing drug expenditure.

WHO is, therefore, in favour of so called "early workings" of patented drugs for generic manufacturers, to encourage competition; this is also a major motivation in the research for improved products. This includes the use of patented drugs for research and testing, which necessitates prompt registration and early production of generic drugs. Countries with variations of early workings provisions include Argentina, Australia, Canada, Hungary, Israel and the USA.

Mr Chairman,

It is becoming increasingly clear that poverty not only causes ill health, but that ill health keeps people in poverty. We have compelling evidence that investing in health is a measurable, results-oriented and effective way to reduce poverty. If there is one universal element that features in every economic transition over the past two centuries, it is that improved health results in lower child mortality and longer life expectancy.

Access for all to essential drugs and vaccines is also a shortcut to lower mortality and better health for the entire population. Improving such access is among the most effective health interventions any country can make.

Health is not a peripheral issue that only more affluent economies can afford to spend money on. It is a central element of development. And access to drugs is a central element of any health policy.

Our shared mission is to make medicines available to all who need them regardless of their income. It is possible – if we act together.