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This meeting focused on Medical Research and Development (R&D). The purpose of the meeting was to discuss and seek consensus on drafts of two possible international agreements concerning medical R&D.

Research and development for new drugs, vaccines and other medical technologies is expensive, requiring substantial investment by both the public and the private sector. New products typically have a global market, and are often relatively inexpensive to manufacture. Developed economies have increasingly given higher levels of intellectual property protection to medical technologies in order to create private incentives to invest in R&D. These intellectual property regimes have become an important part of the global trade framework.

In 1994, the WTO adopted the TRIPS agreement, which imposes global standards for the protection of patents and other types of intellectual property.  There are also extensive bilateral and regional trade negotiations involving the United States, the European Community (both the Commission and its member states), and Japan that seek to raise the level, expand the scope and strengthen the enforcement of intellectual property rights.  Moreover, there are global trade negotiations that focus on drug pricing, in particular, efforts by the United States (Australia, Korea, New Zealand, Costa Rica, etc) and the European Commission (Korea, Turkey) that plainly ask countries to support higher prices for new medicines.  Taken together, these measures constitute a particular approach to financing medical R&D -- one that relies upon stronger exclusive rights to sell research outputs and products at high prices.

While the strong exclusive rights trade framework has benefits in terms of increased private investment in R&D, it also suffers from a number of well-known shortcomings, which are briefly summarized as follows:

• High levels of intellectual property protection are associated with high prices for products, leading to difficult fiscal burdens and creating inadequate and unequal access to medicines,
• Strong intellectual property rights can be a barrier to follow-on research,
• Strong intellectual property rights are not an appropriate mechanism to finance basic research or public goods (such as the Human Genome Project, the Hapmap Project, or PubMed Central) which are most useful if freely available to researchers,
• Intellectual property rights provide insufficient incentives to invest in innovative medicines, vaccines, or diseases that primarily afflict the poor.

In recent years there is an interest in expanding or changing the global trade framework in order to provide more appropriate mechanisms to share the global R&D costs -- one that addresses:

(1) both public and private sector investments,

(2) the flexibilities in intellectual property regimes needed to protect consumers, ensure affordability and access, and enable follow-on research,

(3) investments in priority research projects, including
a. basic research, open databases and other public goods,
b. medicines that have significant therapeutic benefits over existing treatments, and
c. treatments which address medical gaps, including vaccines, rare severe illnesses and diseases that primarily afflict the poor, and

(4) technology transfer and capacity building that enables developing countries to become providers of R&D.