Klaus Leisinger Novartis Foundation 10 04 2011

Schwab Charitable Philanthropy Speaker SeriesProfiling Global Change Makers

Dr. Klaus LeisingerPresident and Managing DirectorNovartis Foundation for Sustainable Development

October 4, 2011 The Partnership Puzzle: How global organizations work to solve social issues

Corporate Responsibilities for Access to Medicines

Klaus M. LeisingerNovartis Foundation for Sustainable Development

UC Berkeley, 4th October 2011

The social and economic context

Despite significant progress made in poverty alleviation and health-related Millennium Development Goals achievements,

2.5 billion people continue to live in poverty (USD 2.50 per day), thereof about 1.4 billion in extreme poverty (USD 1.25 per day);

These people’s living conditions are characterized by nutritional deficiencies, lack of access to safe water and sanitation, squalid housing, insufficient knowledge about health, lack of access to preventive and curative medical services and lack of access to safe medicines, lack of voice and visibility – therefore lack of political power;

Due to neglected tropical diseases alone, • millions of children, women and men die prematurely,

• the number of disability-adjusted life years is in the dozens of millions, and

• the economic burden adds up to an amount beyond USD 15 billion per year.

| UC Berkeley | Klaus M. Leisinger | 4 October 2011 | Corporate Responsibilities for Access to Medicines

Poverty and health: a vicious circle

Basic education for health

awareness and appropriate

health seeking behavior

Freedom from discrimination, violence and

harmful traditional practices

Good governance incl. appropriate

allocation and funds for health and good

health policy

Sufficient health infrastructure for preventive and curative care

Access to diagnosis and medical care

(treatment and prevention)

Life style choices and risk taking

(e.g. food) habits, sexual behavior,

smoking

Save and adequate food

Appropriate habitat incl. good

sanitation

Save drinking water and good

personal and food hygiene

Individual and collective poverty

State of health

Source: Novartis Foundation for Sustainable Development

4 | UC Berkeley | Klaus M. Leisinger | 4 October 2011 | Corporate Responsibilities for Access to Medicines

Good health has a lot of influencing factors......and many stakeholders contributing to healthcare and prevention

Source: Dahlgren G. / Whitehead M. (1991): Policies and strategies to promote social equity in health, Stockholm


The societal context

People all over the world rate “health” as one of their top personal concerns;

For people living in low-income countries HIV/AIDS, tuberculosis, malaria and other infectious diseases rates are most important (> 5 mio deaths p.a.), along with malnutrition, access to clean water, access to medical care, above all ante-natal, peri-natal and postnatal care;

Pharmaceutical products (medicines and vaccines) play an important role – along with well-trained and motivated staff medicines are the most important means available to prevent, alleviate and cure illnesses;

Lack of access to essential medicines and vaccines is seen to result in more than 10 million premature deaths;

Many NGOs and civil society media see patents and prices to be the most important obstacles for the access to medicines;

The access-to-medicines debate is a political debate, using methods and techniques of the political communication, including agitation.


Causes of death among children aged <5 years and influence of medicines (%)

WHO region Neonatal HIV/AIDS Diarrhea Measles Malaria Pneumonia Injuries Other

African Region 21.0 5.0 16.3 3.9 15.6 20.4 2.4 15.4

Region of the Americas

37.7 0.7 12.7 0.0 0.2 12.7 5.9 30.0

South-East Asia Region

39.0 0.4 19.5 5.5 0.4 13.7 5.3 16.2

European Region

37.8 0.7 14.0 0.1 0.0 14.9 5.7 26.7

Eastern Mediterranean Region

32.6 0.3 16.7 3.0 2.3 19.6 3.5 21.9

Western Pacific Region

46.2 0.3 12.0 0.8 0.3 9.8 7.5 23.1

Source: WHO World Health Statistics 2009


“Health” as an international political subject-matter:UN Millennium Development Goals

The Millennium Development Goals (MDGs) were adopted by 189 nations-and signed by 147 heads of state and governments during the UN Millennium Summit in September 2000.

Eradicate extreme poverty and hunger

Achieve universal primary education

Promote gender equality and empower women

Reduce child mortality

Improve maternal health

Combat HIV/AIDS, malaria and other diseases

Ensure environmental sustainability

Develop a global partnership for development

... to be achieved by 2015. | UC Berkeley | Klaus M. Leisinger | 4 October 2011 | Corporate Responsibilities for Access to Medicines

The Right to Health debate: Article 25

Universal Declaration of Human RightsArticle 25.(1)Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.


The Right to Health debate: The International Covenant on Economic, Social and Cultural Rights

Article 12

1. The States Parties to the present covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

2. The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for:

(a) The provision for the reduction of the stillbirth-rate and of infant mortality and for the healthy development of the child;

(b) The improvement of all aspects of environmental and industrial hygiene;

(c) The prevention, treatment and control of epidemic, endemic, occupational and other diseases;

(d) The creation of conditions which would assure to all medical service and medical attention in the event of sickness.


The Preamble of the Universal Declaration of Human Rights

THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS (has been proclaimed) as a “common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.” (excerpt)


What are companies competing with integrity responsible for?

Be successful in the core competencewith integrity and comply

with applicable laws and regulations

Corporate Responsibilitybeyond legality:

Legitimacy in thespirit of international norms

Corporatephilanthropyand pro bono

work

Desirable(can)

Expected(ought to)

Essentials(must)

Corporate responsibility excellence

Good management practices


Success in the core competence serves people and the common good

Sources: OECD Health Data 2004; Health, United States, 2003: Chartbook on Trends in the Health of Americans; Manton KG, Gu X., Proc Natl Acad Sci USA 2001 May 22; 98(11):6354-9.

26.2%

19.7%

0%

10%

20%

30%

1982 1999

-27%

-19%

-15% -14%

-30%

-20%

-10%

0%

Drop in death rates 1990-2000 among US pop. 45-64 65

70

75

80

1960 1970 1980 1990 2000

US life expectancyYears at birth

Females

Males

0

5

10

15

20

1960 1970 1980 1990 2000

Average length of stay in patient days

26.2%19.7%0%5%10%15%20%25%30%19821999

US pop. > 65with disability

Heart Disease

Cancer Stroke All causes


Corporate responsibility challenges Market failures and failing states

Who is in charge if markets fail due to the lack of purchasing power of patients and / or the state authorities not able or willing to deliver a basic package of primary health care goods and services?

Under which conditions can a pharmaceutical company be expected to do what for whom until when?

What is “appropriate” in a world with 2.5 billion people living in absolute poverty? How much is enough? Who has the legitimacy to determine this?

What medicines and vaccines should be offered with differential pricing?

What is a “fair” proportion of research dedicated to neglected diseases?

What would a “stakeholder-solution-team” consist of, given the dimension and complexity of the global health problems?


There is an access-to-medicines problem


But price is only one of several reasons: e.g. poor people use available health services less often

Source: Lancet 2008, 372, 1661-69 | UC Berkeley | Klaus M. Leisinger | 4 October 2011 | Corporate Responsibilities for Access to Medicines

Corporate responsibility tools for „Access to Medicine“

Differential (preferential) pricing;

Licensing for market failure;

Corporate philanthropy incl. donations;

Pro Bono research;

Screening of patent library;

Project and program co-operation with development institutions;

Management support (Human Resources, logistics, etc.);

Other innovative and creative private sector skills and methods as well as innovative business models.


Political and economic preconditions for differential pricing

Preferential prices (and donations!) can only benefit poor patients in the context of a functioning health care and supply system;

Market segmentation and separation must be possible to prevent leakage of products that are offered at low prices to the poor into the “normal” market of insurance covered and well-to-do patients;

Differential prices must not be used as benchmark for reference price regulation schemes in industrialized countries;

Acceptance of governments, health insurances and patients in high-income counties for preferential pricing in low-income countries;

More (international) resources are needed even if all medicines would be given away at preferential prices.


Differential pricing controversial issues

Differentialpricing

For what products? For countries or for patients? Who controls proper access?

Donations

Pro bono research

Constructiveuse of patents

What products? For whom? How long?

What diseases? Also improved efficacy / side effect profiles?

Access to patent library? What products? Who develops the medicines?


In 2010 Novartis supported more than 85 million patients with access-to-medicine programs

1Novartis Institute for Tropical Diseases; 2Novartis Vaccines Institute for Global Health; 3Based on approximate market value

2010

Programs and research valued

at USD 1.5 bn

Coartem® subsidized > 82 million treatments shipped – cumulatively delivered > 380 million treatments, helping to save about 950,000 lives of mostly children under 5 years

Leprosy medication free of charge> 5 million patients cured since 2000

Tuberculosis medicine donations500,000 treatments committed, 50% delivered

Glivec® patient assistanceFree to >37,000 patients in about 80 countries

NITD1 in SingaporeFocus on tuberculosis, dengue fever and malaria

NVGH2 in Siena, ItalyVaccines research institute for neglected diseases


Current strategy to fight malariaToday’s efforts focus on prevention and cure

Treatment

Artemisinin-based Combination Therapies (ACTs)

Insecticide spraying Indoor residual

insecticide spraying (IRS)

Bed nets

Long Lasting Insecticide-Treated Nets (LLITN)

Diagnosis

Rapid diagnostic tests (RDTs) to diagnose malaria

Prevention Cure


The Novartis Malaria Initiative A holistic approach to best serve patients needs

Capacity building – patient-focused education and information Best practice sharing workshops for public health officials responsible for malaria control

State-of-the-art packaging and patient information developed specifically for not yet literate populations

Training material made available free of charge in several local languages

Access – affordability and availability are keyTreatment provided without profit to governments and NGOs

Over 50% price reduction and a 21-fold production increase since 2004

SMS for life: using mobile technology to help avoid stock-outs at health facility level

R&D – leading the path to malaria eliminationMass screening and targeted treatment of asymptomatic carriers

Next generation of malaria treatments

Treatment – Coartem®,a story of firstsFirst fixed-dose ACT brought to market in 1999 and > 95% cure rate* with demonstrated safety profile

First ACT pre-qualified by the WHO for its efficacy, safetyand quality

First dispersible sweet- tasting ACT specifically developed for infants and children

* 28-day PCR-corrected in evaluable population


We are helping to make a differenceKey indicators are showing progress

2004

* Estimate** 2009***2008

Every 30 secondsChildmortality

Every 45 seconds***

Malaria Cases

225 million**243 million

12 countries served

Coartem®deliveries

Patient shareof ACT market

Countriesserved

30% ACT market share 50% ACT market share*

60+ countries served

Average priceper treatment

USD 1.57 per treatment Price for public-sector buyers has dropped by over 50%

82 million treatments4 million treatments

2010


Healthcare projects of the Novartis Foundation for Sustainable Development


Foundation research on access-to-healthcare obstacles: A complex and multi-dimensional issue

Source: Obrist B. et al. (2007): Access to health care in contexts of livelihood insecurity: A framework for analysis and action. In: PLoS Med 4( 0): e308.doi: 0. 37 /journal.pmed.0040308

Are there enough points of care to serve the population? Do drug supplies suffice?

What is the geographical distance between points of care and the homes of intended users?

Do the prices of services match patients‘ ability to pay?

Does the organisational set up meet patients‘ needs and expectations?

Does the information and treatment provided take local values into account?


Foundation research on “Community effectiveness of malaria treatment”

| Access to Medicines UC Berkeley| Klaus M. Leisinger | October 2011

Provider compliance with official guidelines

Patient adherence

Source: Alba et al. 2010: Improvements in access to malaria treatment in Tanzania following community, retail sector and health facility interventions - a user perspective. In: Malaria Journal 2010, 9:163.


Video on the ACCESS project in TanzaniaImproving access to effective malaria treatment


www.youtube.com/watch?v=kdW07TNe6pI

ICATT: Innovative e-learning tool to scale up training in childhood diseases (1/2)

9 million children under five die every year, mostly due to preventable and treatable diseases.

IMCI (Integrated Management of Childhood Illness) is a WHO/UNICEF strategy reduce child mortality by improving diagnosis and treatment at primary healthcare level.

IMCI implementation faces two major challenges: • Ensuring periodical updates of national IMCI clinical guidelines, and

• Scaling up training of a very large number of health workers globally.

Decision by WHO and NFSD to develop ICATT (IMCI Computerized Adaptation and Training Tool)

ICATT is a flexible and easy-to-use software program which• Facilitates adaptation of global IMCI guidelines to local circumstances (languages etc.)

• Helps scale up training through interactive e-learning program


ICATT: Innovative e-learning tool to scale up training in childhood diseases (2/2)

ICATT was successfully piloted in Tanzania, Peru and Indonesia.

To date 12 countries have implemented adaptation; global roll-out is ongoing.

Other major challenge is maternal and newborn health: Every day, up to 1,500 women and 10,000 newborn babies die due to complications in pregnancy and childbirth.

WHO and NFSD decided to continue collaboration to develop a similar tool for maternal and newborn health.

IMPACTT (Integrated Management of Pregnancy and Childbirth Training Tool) will include modules on:

• Pregnancy care, childbirth care, postnatal maternal care, newborn care, and postnatal newborn care.

• Module on newborn care is under development and will be tested by end of 2011.


Overall results of the Novartis Foundation healthcare projects and programs

Saved 10’000s of lives, particularly of children under 5, and improved livelihood of millions of people in low-income countries;

Contributed with new concepts towards bringing leprosy down from about 13 million patients in 1985 to less than 220’000 (2010) and helped to cure more than 5 million leprosy patients, preventing more than 4 million disabilities;

Developed innovative “access-to-medicines” systems (e.g. patient-based TB therapy) and did innovative research on obstacles to access (e.g. Malaria);

Developed and field-tested innovative “bare foot health insurance” as well as computer-based learning and diagnosis program for IMCI;

Developed and scaled up psychosocial support programs for vulnerable children;

Developed and field-tested performance-based funding system, measuring outcome rather than input;

Are in the process of setting new benchmark for telemedicine in Africa.


NIBR efforts to address medical needs in the developing world: infectious disease examples (1/2)

Tuberculosis(Prevalence/100,000 – WHO 2004)

Dengue Fever(Incidence/100,000 – WHO 2005)

Malaria(Prevalence/100,000 – WHO 2004)

<1>250Known risk

<25>25000

<50>1000

Infectious Diarrhea

(Mortality rate/100,000- WHO 2002)

1-5>100

Chagas(Prevalence/100,000 – WHO 2002)

<1000>6000

Typhoid Fever(Incidence/100,000 – WHO 2004)

>10010-100<10


NIBR efforts to address medical needs in the developing world: infectious disease examples (2/2)

Malaria TBInfectious Diarrhea

Dengue Fever

Typhoid FeverChagas Disease

Incidence250 million (Tropics, mostly Africa)

9 million (Developing World)

2.5 billion children(Dev World)

50 million(Tropics & Subtropics)

16-33 million(Developing World)

10 million(mostly Latin America)

Mortality (per year)

1 million(mostly children)

1.3 million (often AIDS patients)

1.6 million children (3-5 million total)

>100,000 (mostly children)

>200,000 (mostly children)

>10,000

Organism PlasmodiumMyco-bacterium

GI bacteria (incl. cholera)

Flavivirus Salmonella Trypano-soma

Medical need/issue

Drug resistance (incl. Coartem)

Multi /extensive drug resistance;treatment length;HIV co-infection

Drug resistance; rapid dehydration

No effective treatment for hemorrhagic fever

Drug resistance;no pediatric vaccine (<2yrs)

No available treatment for chronic disease

CollaborationNITD, GNF & two European Research Centers

NITD, GNF & TB Alliance, NIAID Grand Challenges in Global Health (GC11) grantees

NIBR (RESP) & OneWorldHealth

Singapore Dengue Consortium (incl. NITD)

NVGHNIBR (ID), NITD and GNF

Outside Funding

MMV, Wellcome Trust & Singapore Gov

Gates Foundation & GC11 Grant

Gates Foundation

Singapore Government & Novartis Foundation

Wellcome Trust, Gates Foundation, Local Gov & Siena Foundation

NIH & Drugs for Neglected Disease initiative

Research Status

Drug candidate NITD609 entering clinic

Compound discovery

Lead optimization

Compound discovery

Vaccine vi-CRM197 in Phase II trials

Screening & biomarker discovery


Why become involved in health and access issues beyond the conventional business model?

Because it is the right thing to

do! You cannot have a first class economic performance

and be perceived not to care about preventable mortality and morbidity, predominantly in children under 5 years of age.


Plausible arguments for a “Business Case”

Engagement in corporate responsibility for the achievement of the health-related UN Millennium Development Goals mainly depends on top-management’s normative thinking. But

Saving lives, curing patients and preventing illness by providing innovative solutions is also likely to

Engender employees’ motivation and identification;

Enhance the attraction of the corporation as a partner for cooperation, ethical investment, excellent people, and critical customers);

Be positive from a political point of view as being “part of the solution” of one of the most difficult social issues ought to trigger good will and overcome negative stereotypical thinking. | UC Berkeley | Klaus M. Leisinger | 4 October 2011 | Corporate Responsibilities for Access to Medicines

Klaus Leisinger Novartis Foundation 10 04 2011

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