A controversial United Nations plan to impose consumer taxes on such things as Internet activity and paying bills online in order to drastically restructure the world drug industry hit a wall of disagreement on Friday, and is likely dead -- for now.
Delegates to the World Health Organization’s annual World Health Assembly could not reach agreement on the plan -- first reported by Fox News -- to marry “innovative financing" for global public health with a radically reorganized research, development, production and distribution of medicines around the world, putting greater emphasis on drugs for communicable diseases in poor countries.
Instead, they agreed to create a new “consultative expert working group” to examine all the issues involved one more time, and report back to the next World Health Assembly in two years' time.
“This is a ‘Do Not Pass Go. Do Not Collect $200’ resolution,” said a U.S. participant at the Assembly. “My guess is that it will take one or two years or possibly longer.”
In effect, the latest WHO resolution calls for a complete do-over of the work that was done over the past two years by yet another “Expert Working Group on Research and Development: Coordination and Financing,” which came up with the radical R and D scheme. The initial 25-member Expert Working Group, a panel of medical experts, academics and health care bureaucrats, first presented their plan last January to a meeting of WHO's 34-member Executive Board in Geneva.
Their strategy involved a wide variety of actions to transfer “pharmaceutical-related technology” and its production, along with intellectual property rights, to developing countries. The rationale for the drastic restructuring of Medical R and D, as outlined in the group of experts’ report, is the skewed nature of medical research in the developed world, which concentrates largely on non-communicable diseases, notably cancer, and scants research on malaria, tuberculosis and other communicable scourges of poor countries.
The group also recommended creation of regional “networks for innovation” across the developing world, and proposed the encouragement of technology to exploit “traditional medicines” in Africa, among other places.
But the capstone of the deal for Western consumers was the “innovative financing” suggested by the original working group, which the experts hoped would raise “tens of billions” of dollars for the restructuring effort. Among the ideas suggested:
-- a "digital" or "bit" tax on Internet activity, which could raise "tens of billions of U.S. dollars";
-- a 10 percent tax on international arms deals, "worth about $5 billion per annum";
-- a financial transaction tax, citing a Brazilian levy that was raising some $20 billion per year until it was canceled (for unspecified reasons);
-- an airline tax that already exists in 13 countries and has raised some $1 billion.
In effect, the plan amounted to a pharmaceutical version of the U.N.-sponsored climate-change deal that failed to win global approval at Copenhagen last December. It would have put WHO, the United Nations’ public health arm, in a position to dominate a "global health research and innovation coordination and funding mechanism" for the planned revolution in medical research, development and distribution.
Countries such as the U.S., with large pharmaceutical industries, were opposed to the radical approach to R and D, while large developing countries like Brazil and India, with industries that focus on copycat “generic” drugs, were more in favor, and radical regimes, like Cuba, Ecuador and others, wanted, if anything, an even more drastic set of actions.
The decision to keep studying the matter clearly could be read as a victory for the naysayers, as it “doesn’t jump-start the kind of thing the WHO imagined,” according to the U.S. participant. But on the other hand, the strong signal to spend more money on diseases that affect the world’s poor has also not been lost.
“There is more attention and more resources than two years ago focused on R and D for the diseases of poor people,” the participant said, and that effort would likely increase. “The good part of this is that ongoing R and D efforts are not affected.”
And neither—for a time, anyway—is the global taxpayer.
George Russell is executive editor of Fox News.