📰 India, China hold talks, agree to resolve differences peacefully
Foreign Ministry-level discussions reviewed bilateral ties, current developments
•India and China on Friday held talks between their Foreign Ministries and agreed to follow a consensus that differences should be handled peacefully and should not become disputes, in the highest-level diplomatic engagement since tensions along the Line of Actual Control (LAC) erupted in May.
•Both sides agreed “to handle their differences through peaceful discussion bearing in mind the importance of respecting each other’s sensitivities, concerns and aspirations and not allow them to become disputes”, the Ministry of External Affairs said in a statement.
•The MEA said the two sides “reviewed the state of bilateral relations, including the current developments”. Military-level talks will be held between two Lieutenant Generals on Saturday
•On Friday, Joint Secretary (East Asia) in the Ministry of External Affairs Naveen Srivastava held a videoconference with Wu Jianghao, Director General of the Asia Department at the Chinese Ministry of Foreign Affairs.
•The MEA said both sides noted the “consensus reached by the leaders of the two countries, that peaceful, stable and balanced relations between India and China will be a positive factor for stability in the current global situation”.
•A readout issued by China’s MFA said both agreed to “implement the consensus that the two countries do not constitute a threat to each other” and “do not let differences rise into disputes”. It called for enhancing strategic mutual trust and properly managing differences.
This will be the eighth time the nation will occupy a non-permanent seat
•India will highlight international terrorism, United Nations reforms and Security Council expansion, streamlining the world body’s peacekeeping operations and technology initiatives during its upcoming tenure as a non-permanent member of the United Nations Security Council (UNSC) in 2021-22, said External Affairs Minister S. Jaishankar here.
•“The normal process of international governance has been under increasing strain as frictions have increased. Traditional and non-traditional security challenges continue to grow unchecked. Terrorism is the most egregious of such examples,” said Mr. Jaishankar, releasing a campaign brochure ahead of the vote. “Unreformed and under-representative” global institutions and the COVID-19 pandemic and its economic impact would increase challenges for the UNSC, he added.
•“India’s overall objective during this tenure in the UN Security Council will be the achievement of N.O.R.M.S: a New Orientation for a Reformed Multilateral System,” he stated.
•This will be the eighth time India will occupy a non-permanent UNSC seat, with its last stint in 2011-2012.
Guaranteed place
•India is guaranteed a place in the UNSC as it is the sole candidate for Asia-Pacific, but needs two-thirds of the 193-member General Assembly to vote in its favour in a secret ballot scheduled for June 17 in New York. Mexico is also expected to be elected unopposed for the Latin American group but there will be a battle for 2 seats of the West European and Others Group (WEOG) between Canada, Ireland and Norway, and for the African seat between Kenya and Djibouti.
•While India is expected to sail through with the 129 votes required for the seat, the government is setting its sights on much higher numbers than that ahead of the election. In 2010, when India stood for the UNSC seat of 2011-2012, it won 187 of the 190 votes polled.
•The government launched its plan for the UNSC seat as far back as 2013, officials said, with a keen eye on 2021, the year that will mark its 75th year of Independence.
•“We were asked to identify an uncontested spot, which was a problem as the first such slot would only come available in 2026,” Asoke Mukherji who was the U.N. Permanent Representative in 2013 told The Hindu . “To our good fortune, the Islamic Republic of Afghanistan agreed, in a gesture to our friendship, to step aside for the 2021-22 seat. They cleared the decision in their Cabinet and then we wrote jointly to the General Assembly,” he added
•The next big challenge was to pursue the Asia-Pacific grouping nomination without any last minute contenders being propped up against India.
Diplomatic talks
•“While diplomacy between capitals certainly helps, the vote had to be tied down by negotiations on the ground,” said a diplomat, explaining how India was able to win a unanimous endorsement from the 55-nation grouping that included both China and Pakistan, in June 2019.
•However, given rising tensions in relations with both those countries since then, as well as criticism from countries such as Turkey and Malaysia and other groupings like the OIC (Organisation of Islamic Cooperation) over the government’s decision on Article 370 last August as well as the Citizenship Amendment Act, officials admit that the challenge to win the maximum votes at the General Assembly this time is going to be more uphill than in the past.
📰 A right time to shift pharma gears
As a workable idea, a Health Impact Fund can become an alternative track for pharmaceutical innovators
•Could the rules and practices organising health care around the world have been better suited to this COVID-19 outbreak? Consider the Health Impact Fund as a plausible institutional reform of the current regime for developing and marketing new pharmaceuticals.
•Medicines are among humanity’s greatest achievements. The global market for pharmaceuticals is currently worth Rs. 110 lakh crore annually, 1.7% of the gross world product. Roughly, 55% of this global pharmaceutical spending, Rs. 60 lakh crore, is for brand-name products, which are typically under patent.
•Commercial pharmaceutical research and development (R&D) efforts are encouraged and rewarded through the earnings that innovators derive from sales of their branded products. These earnings largely depend on the 20-year product patents they are entitled to obtain in World Trade Organization member states. Such patents give them a temporary monopoly, enabling them to sell their new products without competition at a price far above manufacture and distribution costs, while still maintaining a substantial sales volume. In the United States, thousand-fold (100000%) markups over production costs are not atypical. In India, the profit-maximising monopoly price of a new medicine is much lower, but similarly unaffordable for most citizens. To be sure, before such huge markups can yield any profits, commercial pharmaceutical innovators must first cover their large R&D costs, currently Rs. 14 lakh crore a year, including the cost of clinical trials needed to demonstrate safety and efficacy, the cost of capital tied up
during the long development process, and the cost of any research efforts that fail somewhere along the way.
R&D and concerns
•While we should evidently continue funding pharmaceutical R&D, it is worth asking whether our current way of doing so is optimal. There are three main concerns. First, innovators motivated by the prospect of large markups tend to neglect diseases suffered mainly by poor people, who cannot afford expensive medicines. The 20 World Health Organization-listed neglected tropical diseases together afflict over one billion people but attract only 0.35% of the pharmaceutical industry’s R&D. Merely 0.12% of this R&D spending is devoted to tuberculosis and malaria, which kill 1.7 lakh people each year.
•Second, thanks to a large number of affluent or well-insured patients, the profit-maximising price of a new medicine tends to be quite high. Consequently, most people cannot afford advanced medicines that are still under patent. This is especially vexing because manufacturing costs are generally quite low.
•Third, rewards for developing and then providing pharmaceutical products are poorly correlated with therapeutic value. Firms earn billions by developing duplicative drugs that add little to our pharmaceutical toolbox — and billions more by cleverly marketing their drugs for patients who will not benefit.
•To address these problems, we propose a complement to the present regime: the Health Impact Fund as an alternative track on which pharmaceutical innovators may choose to be rewarded. Any new medicine registered with the Fund would have to be sold at or below the cost of manufacture and distribution, but would earn ten annual reward payments based on the health gains achieved with it.
On funding
•The Fund could start with as little as Rs. 20,000 crore per annum and might then attract some 10-12 medicines, with one entering and one exiting in a typical year. Registered products would then earn some Rs. 17,000-Rs. 20,000 crore, on average, during their first 10 years. Of course, some would earn more than others by having greater therapeutic value or by benefiting more people.
•Long-term funding for the Fund might come from willing governments — contributing in proportion to their gross national incomes — or from an international tax, perhaps on greenhouse gas emissions or speculative financial transactions. Non-contributing affluent countries would forgo the benefits: the pricing constraint on registered products would not apply to them. This gives innovators more reason to register (they can still sell their product at high prices in some affluent countries) and affluent countries reason to join.
•The Fund would get pharmaceutical firms interested in certain R&D projects that are unprofitable under the current regime — especially ones expected to produce large health gains among mostly poor people. Such projects would predominantly address communicable diseases. With the Fund in place, there would be much deeper and broader knowledge about such diseases, a richer arsenal of effective interventions and greater capacities for developing additional, more targeted responses quickly.
•The Fund would make an important difference also by rewarding for health outcomes rather than sales.
•For achieving health gains with their product, innovators need new strategies. They need to deliberate holistically about how their drug can work in the context of, or in synergy with, other factors relevant to treatment outcomes; think about therapies and diagnostics together, in order to identify and reach the patients who can benefit most; monitor results in real time to recognise and address possible impediments to uptake or therapeutic success; ensure that high-value patients have affordable access to the drug and are properly instructed and motivated to make optimal use of it with the drug still in prime condition. A reward mechanism oriented towards health gains rather than high-markup sales would lead to a sustainable research-and-marketing system.
Issue of state risk
•Participation of commercial pharmaceutical firms is crucial for tackling global pandemics. They are best suited to develop and scale up provision of new vaccines and medications fast. At present such firms do, however, face discouraging business risks from governments which may as some have done use compulsory licences to divest them of their monopoly rewards. Health Impact Fund registration would remove this risk as states would have no reason to interfere with innovators whose profit lies in giving real and rapid at-cost access to their new product to all who may need it.
•Nowhere is this focus on results, which the Health Impact Fund would encourage in innovators, more important than in the domain of communicable diseases. Collaborating with national health systems, international agencies and NGOs, such a firm would seek to build a strong public-health strategy around its product. Its highest goal would be complete eradication. If it succeeds in year seven, it can enjoy the world’s gratitude and collect three additional handsome reward payments for investment in its other research projects.
•Applying this point to a new disease such as COVID-19 is complicated by the fact that we lack here a well-established baseline representing the harm the disease would have done in the absence of the new medicine to be assessed.
•Still, despite the roughness of such a modelled baseline, the Fund would give innovators the right incentives. It would guide them to ask not: how can we develop an effective product and then achieve high sales at high markups? But rather: how can we develop an effective product and then deploy it so as to help reduce the overall disease burden as effectively as possible? The pandemic should make us stop and think: which of these two questions should be guiding our pharmaceutical innovators?
