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UN panel challenges market-based approach to drug R&D

* High-level group urges new deal to close health access gap

* Recommends R&D Convention to fund priority research

* Condemns undue pressure on governments over drug patents

By Ben Hirschler

LONDON, Sept 14 The world cannot rely solely on free markets to deliver medicines needed by billions of people in poor countries, so governments should commit to a legally binding convention to coordinate and fund research and development.

That's the conclusion of a major United Nations report, which is bound to stir fierce debate between supporters of the current market-based system of drug development and those favouring a greater role for the state.

The high-level panel was set up last year by UN Secretary-General Ban Ki-moon to find solutions to the "policy incoherence" between the rights of inventors, international human rights law, trade rules and public health needs.

The issue has been given added urgency by the recent Ebola and Zika outbreaks, two diseases centred on the developing world where there has been little commercial incentive to develop either vaccines or treatments.

The final report, issued on Wednesday, calls for a de-linkage of R&D costs and drug prices -- at least in areas where the system is failing, such as tropical diseases and the hunt for new antibiotics against "superbug" resistant bacteria.

It urges the UN Secretary-General to start a process for governments to negotiate global agreements on the coordination, financing and development of priority research programmes.

"This includes negotiations for a binding R&D Convention that delinks the costs of research and development from end prices to promote access to good health for all," the report said.

The report attacks the "implicit threats" it says are sometimes used by Western governments and companies to stop poorer countries from exercising their right to over-ride drug patents under World Trade Organization rules.

That may not go down well in Washington, given the United States' long-standing defence of the international intellectual property system, which has governed world trade for more than two decades.

The panel also calls for greater transparency on the true cost of developing a new drug, citing estimates of anything between $150 million and $4 billion per medicine. And it wants disclosure on the real prices paid by insurers and governments for drugs, after discounts.

The UN panel consisted of representatives from government, academia, health activism and industry, under the leadership of Ruth Dreifuss and Festus Mogae, the former presidents of Switzerland and Botswana.

Not all the panel's members agreed with all its conclusions.

GlaxoSmithKline Chief Executive Andrew Witty, one of the panelists, expressed serious doubts about the proposed R&D Convention, given the difficulty of raising the very substantial funds that would be needed from governments to make it work. (Editing by Louise Heavens)

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