International Development Committee Extreme Poverty Inquiry

Written submission on behalf of UK civil society organisations of the Missing Medicines coalition, including Global Justice Now, Just Treatment, Oxfam GB, RESULTS UK and STOPAIDS.

This submission will answer the following questions from the Terms of Reference:

●         How the FCDO can play a more effective part in the eradication of poverty as a convener, thought leader and investor.

●         How well is UK Official Development Assistance (ODA) targeted towards tackling extreme poverty and how effectively do the FCDO policies and programmes contribute to the achievement of Target 1.1 of SDG 1

●         What effect have the cuts in UK ODA had on the FCDO’s ability to address extreme poverty? What evidence is there to suggest poverty was a key consideration in deciding where the cuts should fall?

Access to healthcare and extreme poverty

1. Access to health is grossly unequal across the world. Across low-income countries in 2017, the average health spending was only USD 41 per person in 2017, compared with USD 2,937 in high-income countries – more than 70 times greater. Global spending on health has more than doubled in real terms over the past two decades, reaching 9.8% of global GDP, however, it was unequally distributed with high-income countries accounting for approximately 80% of this. 

2. In lower income countries (LIC), the disease burden is far higher than in high income countries (HIC). Each day nearly 4,000 people die from tuberculosis and 1,500 are killed by malaria, most of them children. One third of the world does not have access to essential medicines, and in the lowest income parts of Africa and Asia, this figure rises to half the population.  

3. Prior to the coronavirus pandemic, access to healthcare and poverty were deeply interrelated, with spiraling drug prices already creating unsustainable pressures on patients and health systems around the world. Before the pandemic more than half a billion people were pushed or further pushed into extreme poverty because they had to pay for health services out of their own pockets, with almost 1 billion people spending more than 10% of their household budget on health. 

4. The office of the United Nations High Commissioner on Human Rights states that “Human rights are interdependent, indivisible and interrelated. This means that violating the right to health may often impair the enjoyment of other human rights, such as the rights to education or work, and vice versa.” Good health is required to be able to attend school and go to work but when high prices of medicines lead to scarcity, patients are forced into fronting the extra capital to meet their health needs or simply going without. 

5. Developing health technologies to meet the needs of people in low- and middle- income countries (LMICs) is not a priority for pharmaceutical companies. This is because biomedical innovation takes place within a framework that prioritises research and development (R&D) not according to public health need but according to the profit that stands to be made. This leads to skewed priorities that have life-threatening consequences. For example, between 2000 and 2011, only 37 of 850 (4%) of newly approved products were for neglected diseases despite over 1.7 billion people being affected by them.[1]

6. The coronavirus pandemic has further exposed and entrenched the deep inequities in healthcare across the world – and has driven 160 million additional people into poverty. In 2020, the pandemic disrupted health services and stretched countries’ health systems beyond their limits. As a result, for example, immunisation coverage dropped for the first time in ten years, deaths from malaria have increased, it is estimated that the TB response has been set back 12 years and the HIV response by 10 years. The pandemic also triggered the worst economic crisis since the 1930s, making it increasingly difficult for people to pay for care. 

7. Extreme inequality in access to COVID-19 health technologies – vaccines, diagnostics and treatments - has been an enduring but avoidable feature of this pandemic. The World Health Organization (WHO) set a target to vaccinate 40% of populations in country by the end of 2021, but 92 countries missed this target due to a lack of access. COVAX had only delivered 900 million of the planned 2 billion vaccine by the end of 2021. At the same time, rich countries have over-bought vaccine doses - by September 2021, G7 countries had purchased over a third of the world's vaccine supply, despite accounting for just 13% of the global population. In the six weeks leading up to December 2021 alone, USA, EU and UK received more doses than African countries received for the full year. As a result, LMICs have become dependent on donations from high income countries, which are insufficient, slow and frequently wasted because they arrive with little or no warning, too close to expiry or without the necessary equipment to administer them. 

8. The inequality in access to COVID-19 tests and treatments is also stark. While low-income countries such as Cote d’Ivoire and Nigeria have only had access to a few tests per thousand people, high income countries like Denmark and the United Arab Emirates have done more tests than there are people in the country. For example, in the UK there are over 6,600 tests per 1000 people compared to just 38 per 1000 in Mozambique.

9. This inequality has been caused and exacerbated by several key factors which have reduced access to life-saving interventions, prolonged the pandemic and therefore contributed to an increase in poverty rates.

Putting profits over people

10. Access to COVID-19 vaccines, diagnostics and treatments varies significantly from country to country, in large part due to artificial supply constraints caused by the monopoly of pharmaceutical corporations on health technologies. Despite a large proportion of public money funding the R&D and manufacturing of most of these technologies, pharmaceutical corporations have a monopoly on how many doses are produced, who gets them and what price they pay. This has resulted in extortionately high prices for all countries – lower-income countries pay $6.88 on average per dose for COVID-19 vaccines, compared to $0.80 a dose for non-COVID jabs. As a result, the Pfizer/BioNTech vaccine is set to become the most lucrative drug in history, with the Moderna vaccine close behind.

11. Enabling countries to manufacture their own vaccines, treatments and tests would overcome some access challenges by increasing, diversifying and localising supply. However, pharmaceutical companies have not been willing to share patents and other intellectual property that would allow for this to happen. In October 2020, India and South Africa proposed a temporary waiver to the Trade-Related Intellectual Property (TRIPs) at the World Trade Organisation (WTO), which would allow countries to choose not to grant or enforce intellectual property (IP) related to all COVID-19 medical products and technologies. This would remove key production and supply barriers by releasing critical safety, efficacy and manufacturing data to allow for international collaboration and export, and remove legal risks of patent infringement. Such a waiver could allow for over 100 manufacturers across Africa, Asia and Latin America with adequate capabilities to produce mRNA vaccines.

12. Despite support for the TRIPs waiver from over 130 countries, including many LMICS, and over 300 scientists, the UK is one of few countries that continues to block the proposal at the WTO. This action, whilst also monopolising global vaccine supplies, is shameful, and will keep countries in a cycle of relying on donations. In the words of South African President Cyril Ramaphosa: “we want to manufacture the drug substance ourselves, and that is where the real heart of the IP argument comes in”. The UK’s position that a waiver of intellectual property threatens innovation for the future is to misunderstand the incentives at play for pharmaceutical corporations during this pandemic, namely unprecedented public subsidy and global demand.

Charging excess dose donations to the aid budget

13.    Many high-income countries pre-ordered more doses of COVID-19 vaccines than would be needed, and a portion of these surplus vaccines have been or will be redistributed to lower-income countries. Decisions regarding how much countries can charge for these doses to their existing Official Development Assistance (ODA) budgets were to be made at the Organisation for Economic Co-operation and Development (OECD)’s Development Assistance Committee (DAC), however, member states have been unable to reach an agreement, and the DAC has simply issued guidance that countries must follow. These guidelines propose that countries should count excess donated vaccines at a cost of $6.72 per dose.

14.    Allocating donated vaccines, never intended for use by developing countries, to an already much reduced ODA budget with a ceiling of 0.5% of GNI will undoubtedly cause further significant harm by displacing urgently needed financing for the recovery of low- and middle- income countries. In the case of the UK, under the guidance of $6.72 per dose, and based on the UK’s commitment to donate 100 million excess vaccines, the Centre for Global Development estimates that this could amount to a $232 million reduction in UK’s actual ODA—roughly equivalent to the UK’s entire 2020 bilateral allocation to Uganda and the Tanzania combined. Counting doses that were not bought with the intention for use in developing countries as ODA, particularly as their over-purchase was directly responsible for unnecessary lives lost in developing countries, is morally unacceptable. The UK must count donated doses over and above the 0.5% aid budget.

15.    The African Union and Gavi, the Vaccine Alliance have made public their concern about the poor quality of many donations, with vaccine doses sometimes arriving with little warning; close to expiry dates; and sometimes without essential equipment. Without clear and accountable eligibility criteria, poor quality donations that are unable to be used also risk being counted towards an already much reduced UK aid budget. The quality and timeliness of donations must improve to avoid such waste, and the UK should ensure it implements clear and accountable eligibility criteria so that poor quality donations that are not used are not counted as ODA.

Cutting UK aid

16.    Cutting the UK’s lifeline to the world’s lowest income countries in the midst of a global pandemic will undoubtedly result in more people being pushed into extreme poverty. In 2021, the UK cut funding to key agencies like UNAIDS, Unitaid and UNFPA by over 80%, as well as cutting global health R&D spending in half and decimated what remained of the UK’s bilateral funding to HIV civil society and community-led organisations. These cuts will lead to a severe rollback in progress towards the Sustainable Development Goals on poverty elimination and global health.

Lack of transparency and effectiveness of UK aid spending

17.    The UK is a large funder of global health R&D including initiatives such as the Coalition for Epidemic Preparedness Innovations (CEPI). However, even when the UK Government has funded a large part of the R&D underlying an innovative and effective health technology, the conditions of these funds remain opaque and there is no guarantee that this medicine will be accessible to patients in the UK or worldwide. Recipients of public funding are also not required to publish the public funding they’ve received nor make the research and data generated openly available for follow-on science to take place.

18.    Despite the millions of UK public funds used for the development of vaccines, taxpayers continue to be left in the dark on how these funds are used, lacking access to information on access conditions, costs, prices and supply of any future COVID-19 vaccines, and what this means for equitable access. The UK Government’s Pandemic Preparedness Partnership has rightly recognised the importance of building in conditions into their diagnostic, therapeutic and vaccine funding arrangements to ensure LMIC access to such products on a not for profit basis and at scale. Such conditions on public funding will safeguard a public return on public investment; and ensure that public funding contributes to people everywhere being able to realise their human right to benefit from scientific progress and their right to health, which includes access to safe and effective health technologies.

19.    The UK has also been a principle donor to COVAX, however, COVAX has not delivered on its promises, and has now run out of money. COVAX’s failure to push approaches that would have maximised the production of vaccines including open licensing and shared technology, meant that its strategy has relied only on securing supply through purchases on the open market from pharmaceutical corporations – often in competition with the same rich countries that provide COVAX with funding. These purchases were not just dependent on the willingness of high-income countries to forego vaccine hoarding but also dependent upon the overall vaccine production targets and vaccine allocation policies set by each pharmaceutical corporation. This has left COVAX at the back of the queue with limited supply and paying inflated prices for vaccines - an average of nearly five times more than production value.

Recommendations for the UK Government

20.    Increasing equitable access to medicines and healthcare is a vital component in the fight against poverty. In order to do this, the UK government and FCDO must: 

1. Fulfill its commitment to the WHO resolution on strengthening local production of medicines and other health technologies to improve access by helping to maximise the production of safe and effective vaccines and other COVID-19 products, by:
1. Immediately supporting the proposal by India and South Africa at the World Trade Organisation to temporarily waive relevant intellectual property rules under the Agreement of Trade-Related Intellectual Property Rights (TRIPs) for COVID-19 vaccines and other technologies. 
2. Endorsing and funding the World Health Organisation COVID-19 Technology Access Pool (C-TAP) to facilitate sharing vaccine, tests and treatments technologies, know-how and intellectual property, and use all policy and legal tools available to compel pharmaceutical corporations to contribute to them. 
3. Funding the WHO-backed mRNA vaccine hubs, including the facility in South Africa which is successfully reverse engineering Moderna’s mRNA vaccine. Of the €92 million needed to fund the initiative over the next five years only 59% has been raised so far.

2. Ensure that vaccines, treatments and tests are sold to governments and institutions at a price as close to the true cost as possible, provided free of charge to everyone, everywhere, and allocated according to need, by:
1. Rejecting OECD guidance to allocate excess donated doses as ODA as well as the guide price of $6.72. At the very least, price donated doses at a nominal and negligible amount and certainly no more than the UK originally paid for each dose.
2. Ensuring vaccines are shared in a safe, timely and effective manner, and that only vaccine doses that are used are counted towards the ODA budget.
3. At a minimum, counting shared excess vaccine doses above the 0.5% GNI UK aid budget.

3. Increase UK aid funding for public health systems especially primary health care and for the millions of additional health workers needed for a successful vaccine roll out and for delivering everybody’s right to health care. Health services should be free at the point of use, and all user fees eliminated.

4. Introduce conditionalities on publicly funded contracts for health-related research and development, to ensure that knowledge and intellectual property is shared openly, that R&D costs and investments are transparent and that end products are affordable and accessible to all. The UK Government also should ensure that terms and conditions in funding agreements are transparent and available to the public.
1. The UK Government must build upon the recommendation from the Pandemic Preparedness Partnership on building in conditionalities when investing public funds, and expand it to also include conditions around openly sharing knowledge and intellectual property (including active technology transfer) to enable local manufacturing in LMICs, and not only in pandemic situations. Access inequity for health technologies is not only an issue for vaccines or pandemic tools, this is a systemic issue affecting many medicines from HIV and hepatitis C treatments to cancer drugs. In the same vein, this issue is not only applicable to LMICs, it is a problem domestically too. Prices for medicines and health technologies are only increasing, which has led to delays in NHS procurement for hepatitis C, cancer and cystic fibrosis drugs - to name but a few.  
2. Conditions should be applied to all UK funded health R&D, including the Government’s funding to CEPI. CEPI does not currently have a strategy around open-licensing their vaccines or engaging in active technology transfer to ensure local manufacturing can happen around the world. The UK Government is hosting the upcoming CEPI replenishment in March, so has an opportunity to be a leader in setting standards for its funding to steward CEPI into being an institution that prioritises access from the beginning of the R&D process. 
3. The UK Government must also push for these conditions to be part of any Pandemic Treaty which is agreed at the WHO. In addition they should ensure the Treaty sets standards for international knowledge sharing - clinical data, research and intellectual property - once a pandemic is declared.

6