The Prize is Right

What can we learn from drug PRICE setting mechanisms for the establishment of inducement PRIZES in medical R&D?

CPTech wants to show that the idea of introducing a Medical Innovation Prize Fund is not just a revery out of the ivory tower. Rather, it is a viable and highly promising approach to solve the problem of eminent market failures in the development of new medicines.

Why establish a Prize Fund?

Traditionally, medical innovation is rewarded by the granting of patent rights. In this scheme, innovators are given the right of unchallenged commercialization of their products for a few years. The expectation of due profits through exclusive intellectual property rights is expected to keep research and development (R&D) going at a high level.

Yet this mechanism is seriously flawed in many ways: Patent rights are indeed “exclusive rights” in many senses: they exclude large portions of the world population from enjoying the latest medical innovations – simply because most people lack sufficient funds to afford those medicines. Finding a cure for “neglected diseases” is delayed and even prevented, because potential customers lack purchasing power and there is no profitable market.

More and more people wonder why private entities should enjoy profits from patent protection, while basic research of these proucts has largely been funded with public grants.
Manifold efforts have been made to limit the grim effects of patent protection on people in both developing and developed countries. Yet in a way, these efforts are but meddling with the symptoms of a flawed system. A sustainable solution is much needed.

In many instances, prizes have proven to be an instrument to foster innovation. A wide range of technological innovations has been spurred by the competition for the achievement of prizes. Examples include the race for the first transatlantic flight, for the first private flight into space, for the most enduring robots in an all-terrain race, for the first computer to defeat a world chess champion, for developing a method of precisely measuring longitude…

Why not employ inducement prizes as methods to boost medical innovation in much-needed (and so far neglected) fields of research?

How would it work?

A prize fund could grant abounding rewards to researchers who bring about true innovation in essential fields. Thus, questionable spending on research for “me-too drugs” and “lifestyle drugs” could be avoided and redirected towards finding drugs for the fight against rampant diseases.

The prize fund would be installed instead of the currently used intellectual property regime. This means that the morally problematic effects of patent protection could be effectively tackled. New drugs would immediately become eligible for cheap generic production. (In fact, the term “generic manufacturing” would become somewhat obsolete, since all drugs would enter generic manufacturing mode after prizes have been awarded.)

The effect would be what economists call a “separation of markets”. On the one hand, there would be a highly competitive R&D struggle for prize money. On the other hand, there would be a market for the manufacturing of drugs – where drugs would be free of extra costs for the homaging of patent rights.

Research and Development of pharmaceuticals is an expensive endeavour. But don’t worry, the prize fund would be well-equipped financially and prizes would be luring incentive more than just fair reimbursement.

Sounds good? Well, the prize fund is not yet fully workable, though. Here’s why:

Troubleshooting

Let us suppose that somebody proposed a prize for the best drug against, say, Malaria.
Evidently, this would create competition for a new and better drug. Yet who knows how big the prize should be in order to spur optimal investment? It should neither be too modest nor too lush.

Matters are further complicated when it comes to figuring out which of the many innovations should be rewarded with how much prize money. Who gets the biggest chunk of the pie? Who determines whether the new AIDS vaccine or the new cancer treatment gets more? And if there are multiple solutions for the same disease, who determines which one will make the race? These questions are important – they have to be solved!

Already, there are people who say they would rather be willing to put up with the negative side-effects of the patent system than permit inefficient, intransparent government agencies to begin arbitrary prize-setting.

Help is on the way…

These people ignore the fact that solutions are just around the corner. Most developed countries already employ efficient, sophisticated and highly acclaimed schemes to assess how much pharmaceuticals are worth. Among them are Australia, Canada, Germany, New Zealand, the United Kingdom…

These countries want to find out whether a medicine should be put on a list of drugs that are reimbursed by public healthcare systems. They also want to know what a reasonable price would look like for those drugs and how much they are going to pay for them through public healthcare systems.

Many such schemes of price regulation rely on a mechanism called “reference pricing”. In reference pricing, similar drugs are put into a category and the average (“reference”) price is figured out. No new drug may then exceed the reference price – this prevents exceedingly high prices. While this might be a useful mechanism, it does not relate immediately to the Prize Fund idea.

Rather, today’s take-home message is that many countries already implement evaluation mechanisms for drugs. They assess drugs with regard to their effectiveness - to find out whether they are worth their price.

How does that relate to the Prize Fund?

These assessment strategies, evidently, could help figuring out how reward sums should be shared out in the Prize Fund. New drugs would be awarded according to their merits in terms of quality of life improved, life years gained, negative side-effects avoided etc.

In the assessment of pharmaceuticals, so-called utility measures play an important role. They reflect how people assess certain health outcomes that are brought about by medical treatment.

Many people might prefer losing a leg over losing their life. The amputation of the leg can thus be a preferred health outcome in some states of severe illness. This sounds banal. But a similar rationale can be applied to more tricky questions, too.

To do this, drugs can be evaluated according to how many “quality adjusted life years” (QALYs) they bring about. What is the concept behind this bulky term, and why might it be so important for the Prize Fund?

Assessing drug QALYty

To evaluate a drug in terms of QALYs gained, medical trial data are needed. The drug is scrutinized to find out which improvements – and which adverse effects – it brings about.

The next step is to find out how patients, professionals, or the public value those improvements and adverse effects. This can be done through questionnaires that may be designed according to various principles: Respondents may be asked to place each health state in question on a list, with intervals between items reflecting preferences. They might also be asked how much of their lifetime they would be willing to trade in for reaching a certain health state. Sometimes, preference scaling has been done by asking respondents how much they would be willing to pay for a certain outcome. (Yet this approach might reflect a person’s ability to pay rather than their true preferences).

Let (Y) be the score that a certain state of health reaches on a preference scale between 0 (death) and 1 (perfect health). QALYs are then the arithmetic product of this score multiplied by life expectancy. Thus, if a drug leads to a perfect state of health and prolongs the patient’s life for 20 years, it produces 20 QALYs. If the drug leads to a sub-optimal state of health with a score of 0.5 (for example, lack of appetite, or severe dependency), and prolongs the patient’s life by 20 years, then it produces 10 QALYs.

The employment of QALYs and similar quality measurements has advantages that might make those instruments meaningful for the Medical Innovation Prize Fund. QALYs are like a currency to compare health outcomes. Their biggest advantage is that they refer to the general health status of patients rather than to disease-specific improvements. Thus, they can be used to make comparisons across different groups of treatments and diseases – which is exactly what would be needed to determine which innovation deserves how much reward.

Yet the concept of QALYs still includes many serious drawbacks. These flaws have to be fixed and considered if quality assessment of drugs is to become a workable part of the Prize Fund. I would like to list some of them here.

Problems that have to be considered

One problem is that even if a drug was successfully assessed in terms of QALYs, the QALY-score alone could hardly be the decisive factor in setting a prize. I don’t know whether maximising overall raw QALY scores should be considered an end in itself. Scores might have to be adjusted in various regards.

This is because additional QALYs may be very difficult and expensive to reach in a field where research has been conducted for a while. Maybe some kind of progressive scaling could be implemented that grants bigger awards to more difficult QALY-accomplishments.

Drugs for some diseases might be structurally disadvantaged in the race for rewards, because it would be more difficult to score extra QALYs in tackling chronic diseases. Even though in chronic diseases, quality of life could be significantly improved, life expectancy might not necessarily increase at all. Thus the little QALY gains in chronic disease treatment might be completely unattractive compared to QALY gains in tackling acute life-threatening diseases.
To solve this problem, a key would have to be developed in order to adjust QALY gains by the type of sickness treated.

Another important question is whether preference scaling methods used for the valuation of health states lead to morally and politically sound results.
Even if the majority of patients preferred a certain health outcome and therefore gave it higher scores (leading to higher QALY-scores and rewards for the drug), this procedure would not reflect the preferences of everyone concerned. It might even be that the voice of those that are affected most is ignored, because preference ranking might rely on questionnaires given to the general public, not given to patients. QALY measures as they are collected today grossly misrepresent mental, emotional and social factors. For example, QALY scores would not directly reflect the improvements and burdens a drug brings about for a person’s social surroundings. A drug might bring about disproportionately great relief for poor patients or parents, thus benefiting the patient and many dependants at the same time. Yet it would still be judged only according to the utility it has for the single patient.

Let’s do it!

These problems will be but minor obstacles on the way to a Prize Fund for Medical Innovation. They can and will be overcome.

Everyone is invited to think about how this can best be done.

Public Hearing on U.S.-Korea FTA

Today, a Public Hearing on the planned FTA between the United States and Korea was held before the Trade Policy Staff Committee (TPSC).

Witnesses included Seok-young Choi, (Economic minister at the Embassy of the Republic of Korea), as well as a good number of American trade association representatives. Panel members and visitors included members of different US administrative bodies: USTR, Agriculture, Commerce, Labor, State, Treasury and USITC.

Assistant US Trade Representative Wendy Cutler welcomed the multitudinous audience as a symbol for the strong interest of both countries in fruitful negotiations. She said the outcome of the negotiations will rely on contributions from many different parties. She welcomed the fact that great progress had been made already, due largely to Korean efforts. During the currently ongoing phase of consultations, all efforts would be made to let stakeholders express their views.

Seok-young Choi of the Korean Embassy highlighted the enourmous political and economic importance the reaching of an FTA would have for both Korea and the US. He mentioned that the trade volume between the US and Korea has already reached 72 billion USD by now, and referred to impressive Korean growth figures over the last decades. He regarded the positive dynamic effects an FTA would have as a vital step towards a comprehensive long-term partnership between both countries.
Choi emphasized the fact that the timely completion of procedures leading to an FTA was one of the highest priorities of the current Korean government. However, negotiations would be carried out mindful of the well-being and interest of Korean citizens. Choi concluded his statement in saying he was confident that a high-quality agreement would be reached.

When asked about whether Korea actually had the resources to carry out several negotiations about different trade agreements and play an important role in Doha negotiations at the same time, Choi answered that Korea had deliberately decided to negotiate several FTAs at the same time. He said that this was not an overload and that Korea was seeking to complete high-quality, WTO-consistent agreements while ensuring extensive participation of Korean stakeholders. He reported that FTAs with Chile, Singapore and the EFTA had been completed, and FTAs with Canada, ASEAN and Mexico were hoped to be completed this year. While negotiations with Japan had stalled, China had expressed high interest of entering negotiations. There would soon be a decision on whether to enter negotiations with China.

When asked about whether Korea has commissioned studies as to the effect of an FTA on the Korean economy, Choi said that studies have been done and are promising. Outcomes of the studies were positive, estimating a GDP increase of about 2%, double-digit increases in exports to the US and 0,63% increase in employment rates (about 100,000 jobs). Yet another study, done by Korean Rural Economy Institute showed that for the agricultural sector, outcomes would be quite negative for Korean agriculture, with losses of 1 billion USD.

Ambassador Richard Holwill, speaking on behalf of the US-Korea Business Council, said he believes that the the FTA will have tangible benefits for both countries. He highlighted the fact that US businesses have huge stakes in these negotiations. As to the interest of US pharmaceutical companies, he stated that US companies have encountered intransparencies in the past and that this was an issue to be talked about. The FTA should contain measures to ensure fair compensation for production and research costs of innovative companies. In negotiating the agreement, international regimes like TRIPS or the WIPO internet treaty should be respected. Also, there should be better enforcement of penalties for copyright infringement and enforcement of provisions concerning data exclusivity.

One comment to Ambassador Holwill's testimony stated it was a well known fact that the US-Korea Business Council had established close ties to Korean counterparts. It would thus be interesting to hear an insight opinion on whether Korean businesses have an equally strong appreciation of the planned FTA.
Holwill responded that although there was anxiety in the agricultural and broadcasting sector, there still was broad support and a widely shared understanding that Korean businesses in the US will profit from the FTA.

William Primosch, Senior Director of the International Business Policy department of the National Association of Manufacturers (NAM), stated that he sees great potential in the FTA with Korea. Yet to reach full potential, both tariff as well as non-tariff trade barriers had to be regarded. Of the two, the non-tariff barriers were surely the ones more tricky to tackle. Primosch stated that two areas had been of particular difficulty. If both concerns were addressed, the FTA was to become a success.
Firstly, he considered the lack of transparency in the Korean regulatory system to be a serious problem. In this regard, he welcomed Korea's recommitment to the WTO Technical Barriers to Trade (TBT) agreement, but said this was not enough. American manufacturers wanted to see genuine openness in Korean regulatory procedures, similar to transparency measures at the American Federal Register. Primosch called for mechanisms to appeal regulatory decisions and called for independent review bodies. He said standard solutions would clearly not be sufficient here, approaches would have to be made “outside the box”.
Secondly, he criticized widespread anticompetitive practices in Korea.

Questions posed to Mr. Primosch started out with an inquiry of why the NAM considered the Korean FTA to be so very important. Primosch answered that this was due to economic assessments carried out by the NAM, with analyses showing that Korea was on the top of the list regarding trade potential. Asked about NAM's critical stand towards current Korean competition practice, he said that from what he has heard, problems lie in implementation of laws rather than in the actual legislation.
Primosch was then asked about whether previous FTAs would be good precedence for the tackling of problems like those he mentioned in his testimony. He answered that the Peruvian and the Australian FTAs offered good approaches as to TBTs, but that these approaches were not sufficient for a Korean FTA. He again pressed for the provision of independent appeals bodies, notably in the context of pharma regulation.

Robert Vastine, President of the Coalition of Service Industries, equally welcomed FTA negotiations with Korea and said this was one of the most important FTAs in terms of market potential.
He commented on the “negative list” approach as an efficient tool in negotiations, excluding from negotiations certain sectors that are marked down on a “negative list”. He welcomed that compared to the GATTS, the negative list in US-Korean negotiations was relatively short.
Mr. Vastine highlighted the fact that transparency commitments in regulation would be a very important element in reaching this FTA.
When asked to comment on Korean anxieties about opening up service markets, he judged the FTA a “win/win situation”. He said that liberalization was in itself highly desirable and in the best interest of any country.

Steven J. Metalitz, Senior Vice President of the International Intellectual Property Alliance, applauded plans for a FTA with Korea as being laden with benefits for all parties.
He said a successful agreement should specify what to do in terms of the protection of temporary copies, about broad exclusive rights for broadcasting and about the extension of copyrights to various matters. He also called for an upgrade of enforcement practices and said Korea needs to develop new tools to crack down on pirates and punish infringement. He lamented that all sectors of American industry suffer from piracy in Korea, even though admittedly there were improvements in the last years. He said it was hard to speculate as to what was causing these improvements. Piracy hotspots should be kept in view and provisions to address piracy should be included in the FTA. Metalitz said he hoped for Korean cooperation, as copyright issues have importance for high-potential Korean game and music industries. Metalitz stated that there might even be the chance of building coalitions with local industries to call for better copyright enforcement policy.

Shawn Brown of the Generic Pharmaceutical Association very outspokenly emphasized that the strenth of the pharmaceutical market depends not only on intellectual property (IP) protection, but also on a robust generic industry. FTA provisions should therefore not only take into account IP interests, but also interests regarding access to medicine.
Brown called for the revisions in several fields. He said that the proposed FTA with Korea included many provisions that would exceed American domestic IP rules by far, these provisions regarding patent extensions, market exclusivity terms, bolar provisions, best mode, and patent linkage among others.
When asked to describe specific access constraints generics companies are facing at this moment, Brown answered that his major concern was rather about the fact that the FTA would lopsidedly enhance IP protection while omitting access provisions.
He was then asked whether any US generic companies were operating in Korea. He said he did not know.
Concerning tariffs, he said he was definitely supportive of reducing non-tariff barriers and about opening market because this was just always a positive thing to do.

Joe Damond of PhARMA started out his statement by mentioning that in 2005, American pharmaceutical and life sciences companies invested 39,4 billion USD in Research and Development. His testimony had quite theatrical quality to it, including a statement like “We are businesses, but our broader mission is enabling patients around the world to live longer, healthier and more productive lives” (“...if they are able to pay well”, one is tempted to add).
He said Korean patients wanted access to new and leading technologies and innovative medicines. In order to bring such innovations to the Korean population, PhARMA had directed attention to several issues in the past and would keep on addressing those issues. He said a major concern has been that imported drugs were kept off the National Reimbursement List (NRL). Also, distorted medical prescribing practices and an intransparent decision-making process at Korea's National Health Insurance (NHI) would have to be addressed during FTA negotiations.
Damond said that while PhARMA respected the choices made by NHI about health care for the Korean Nation, some challenges needed to be tackled in order to improve PhARMA member companies' operating environment in Korea.
Firstly, NHI proceedings would have to be more transparent and “fair”. Damond criticized the fact that generic products are typically reimbursed at very high rates (70% of originator products), directing scarce NHI resources from truly innovative, newer products (and thus cheating Korean patients of the best and most innovative treatment).
He said these practices were nothing but disguised industrial policy, granting high rates of return to those who merely imitate. Damond suggested that such practices were inconsistent with Korea's ambitions to become a high-tech hub in the 21st century. Korean patients could only benefit from a more transparent, science-based and participatory reimbursement procedure. “We view the FTA as a potential breakthrough for Korean patients”, he said.
Secondly, Damond called for reform in reimbursement guidelines. He said reimbursement decisions should be driven by science, not by local protectionism.
Thirdly, he called for more transparency and “meaningful consultation” in the course of NHI decision-making on reimbursement.
By “meaningful consultation” he might have meant that foreign companies have the opportunity to present the advantages of their products, thus guaranteeing Koreans' access to “breakthrough US medicines”.
Fourthly, fostering ethical business practices would have to be addressed in the FTA, even though this would be an FTA-novelty. He said unethical business practices (such as doctors accepting money if they prescribe certain drugs) were a major commercial issue in that they were robbing American companies of significant market shares.
Lastly, Damond lauded the Korean IP protection regime. However, he called for a clarification and strengthening of data exclusivity and patent linkage.
Above all, he said that the reforms PhARMA suggests will be beneficial to Korean patients and to Korea's efforts to build up its own innovative pharma industry. He left open why helping Korea build up a competitive pharma industry would be used as a PRO-FTA argument by American PhARMA.
He said that PhARMA would have to spend more efforts on convincing the Korean public that protection wasn't simply good for foreign multinationals. “IP protection is the lifeblood of [the pharmaceutical] sector”, he stated, and Korea had the potential to be a leader in this market by implementing more intellectual protection.

Last witness before the first panel was Ralph Ives of the Advanced Medical Technology Association (AdvaMed). He spoke very brief and mainly harped on the issue of opaque reimbursement procedures. He said for pharmaceutical companies, market access was not a problem but addressing the issue of reimbursement decisions was essential.

Brazil's Trade Policy in the Doha Round

A Discussion on “Brazil's Trade Policy in the Doha Round”
with Ambassador Clodoaldo Hugueney Filho (Brazilian Mission to the UN)

Feb 23rd, 2006. In a public discussion held at the Carnegie Endowment for International Peace, Brazilian Ambassador Filho spoke about some of the cornerstones of Brazilian trade policy in the Doha Round.

Generally speaking, Filho underlined that commitments in the three fields of domestic support, market access in agriculture, and NAMA have to be evenly balanced in order to reach results. He said finding a balanced formula was essential. He called “absurd” a proposition by EU's trade commissioner Peter Mandelsohn to cut non-agricultural barriers in developing countries by 75%, while conceding not more than 39% cuts in agricultural barriers by developed countries.

1.Brazil's policy on Agriculture

Filho emphasized that he considered market opening to be essential essential for growth, and that Brazil would keep on moving in terms of agricultural reform. He said he considered domestic support reduction as “absolutely central” in this trade round and to be more important than the issue of market access, since market access issues could mainly be talked about on a bilateral basis.

He said Brazil is looking for significant cuts in the overall level of trade-distorting domestic support, and for substantial improvements in monitoring and surveillance of cuts and disciplines. He emphasized that Brazil is interested in an “ambitious proposal” and substantial outcomes of the Doha round, for this is where gains in development would come from.

He said he considered G20 proposals concerning trade barrier reduction to be a good middle ground proposal and stressed that the main contributions must be made by the EU. Filho said he sees room for compromise in the field of sensitive products.

The audience appreciatively took up his report on discussions among the G20. He said there were differences among G20 nations on agricultural trade issues, and that the G20-proposal was the result of long and tedious negotiations among heterogeneous parties. Therefore, the proposal does not necessarily reflect the exact interests of each of the members when it comes to issues such as special safeguard measures. Yet he said Brazil acknowledges upfront that even though positions are very different, every effort to converge has to be made. Otherwise the future of WTO negotiations would be at risk.

When asked about his appraisal of current American stands in trade policy Filho stated that he was critical of box-shifting attempts towards the blue box. He conceded that it was still better to move support from amber box to blue box status than to do nothing at all, but expressed skepticism about beneficial outcomes. Filho welcomed the fact that the EU and Japan were clearly moving in the question of domstic support, commiting themselves to decoupling of payments and other agricultural reforms. (Although they were not doing anything more concerning trade commitments than they would be doing anyway in the context of agricultural reform.)

Filho stated that a clear signal from the US was lacking and said “it's up to the US to reform”. He warned that if the US didn't send a signal of willingness to reform their agricultural sector (namely through a farm bill), the EU would be likely to blame the US alone for a failure of the trade round.

Filho said that if substantial results are to be reached, all countries will have to move. He said he stated a change in negotiators' attitudes. Negotiators are now trying hard to focus on the central issues, he said. He is confident that some results will be reached by April, the rest would then fall into place.


2.Brazil's policy on NAMA (non-agriculture market access)

Again, Ambassador Filho emphasized Brazil's interest in open and liberalized markets. Accordingly, he stated Brazil's offensive interest in the elimination of tariff escalations and the reducing of bound tariff rates. However, he admitted that Brazil does have defensive interests in the protection of certain industrial sectors that are not competitive so far.

In this context, Filho suggested economists should pay more attention on real impacts of trade liberalization on poverty reduction (implying that those impacts were far less beneficial than officially assumed). He expressed doubts about the validity of studies like the one recently published by the World Bank.

Filho directed attention to the huge amounts of “water” in Japanese, European and American amber boxes. He said Brazil is prepared to cut overall non-agricultural trade barriers by 1%, amounting to as much as 12 billion Dollars. Asked by a representative of the National Foreign Trade Council whether a 1% reduction could really be considered to be the “art of the possible”, Filho called calls for higher cuts “totally unjustifiable”.

He reiterated the G20-proposal of 54% Ag cuts in developed countries for a 54% cut in NAMA by developing countries.

When asked about the possibility of sectoral negotiations, he expressed doubts as to their effectiveness. He indicated that due to the fragility of the respective Brazilian industries, Brazil preferred high technology, automotives and chemical sector not to be subject to sectoral talks.

In what appeared to be an interesting aside of his talk, Filho touched the issue of biofuels. He said that Brazil was already experiencing strong impacts from the growing international demand for ethanol. He said the US and Brazil shared major interests in the field of biofuels and should therefore develop common strategies in this sector.

An interesting remark by Jean-Francois Boittin of the French Embassy conveyed that France would increasingly be willing to accommodate in the dispute over trade distorting measures in agriculture, since it considers the importance of its agricultural trade to be diminishing anyway.

3.Brazil's policy on Services

Ambassador Filho did not devote much time on the topic of services, since he deemed it to be of minor importance for the outcome of this trade round. He said he did not “see services as a cause of failure” of this trade round.

He said that in general, Brazil would be willing to negotiate questions of trade in services in a multilateral setting and thus remain faithful to its Hong Kong commitments. However, public sectors would be excluded from this offer.

Filho stated that the Brazilian service sector was mostly open, as could easily be seen by looking at who operated Brazilian services in finances, telecommunication, computers etc.

The main problem Brazil sees is that the service sector is mostly under-regulated in the developing world. Thus there is a perceived need to regulate and a resistance to bind to trade agreements that prohibit regulations. As an example for such resistance, Filho mentioned the strong Brazilian opposition to deregulate the insurance sector. As a consequence, agreements on services would have to include high implementation flexibilities, provisional clauses, safeguard measures, technical assistance and peace clauses (allowing for sufficient transition times).

Open Document Format (ODF), What's in it for Consumers?

On my first day at CPtech, I attended the "Public Brown Bag Lunch" meeting, entitled: "Open Document Format (ODF) - What's in it for Consumers?"

Lots of acronymns and (sometimes) rather technological details made it difficult to gain a fully complete picture of what the different positions were all about.
Yet it was evident that software industry representatives were desperately interested in reaching consensus with consumer interest groups.

Find beneath my report on the meeting.



Public Brown Bag Lunch: "Open Document Format (ODF), What's in it for Consumers?"

February 16, 2006
13 representatives from consumer and public interest groups, industry associations as well as public institutions (libraries and university) gathered at CPtech's Washington office for a two-hour lunchtime meeting. On the agenda was a discussion about implications of the so-called “Open Document Format” in view of consumer interests.

ODF (short for “OASIS Open Document Format for Office Applications”) is a file format for electronic office documents, including text documents, spreadsheets, and presentations. It offers a free and transparent alternative to established, proprietary file formats such as .doc, .ppt, or .xls.

Since open standards like ODF are not controlled by any company, they can be enhanced and worked upon without obligation to pay royalties. To open and edit ODF-files, users can use software tools provided by different vendors, which guarantees that they cannot be hit by a vendor lock-in. Thus if ODF standards became more widespread, consumers would be able to choose from an array of competing office tools without having to fear that files cannot be opened due to compatibility problems.

A good example for a successful non-proprietary code is omnipresent HTML-encoding and its beneficial impacts on a flourishing WWW.

But ODF is not only about creating more competition and interoperability among software vendors. Open standard file formats make it possible to store vital documents in a way that ensures long-term unlimited access to public records and free interaction with government authorities. Public records should not be archived in proprietary standards, ODF-supporters emphasize. In the case of proprietary standard files, citizens are forced to buy certain software in order to access them – making freedom of information a matter of owning the right computer software, newly updated version.

At the CPtech-hosted meeting, risks and potentials of ODF were discussed and possible future cooperation was deliberated upon.

Consumer group representatives expressed concerns about ODF-editing tools' compliance with disabled users' needs. Software industry representatives pointed out that rapid software improvements to address accessibility problems are under way, making ODF-processing software a viable alternative for persons with disabilities.

While government authorities such as the Massachusetts Department of Administration and Finance have decided to provide public records in an open standard, consumers were said to be the “missing voice in the game” so far. It was thus recorded that there would have to be better communication of the immediate dangers that result from the use of proprietary standard documents by public authorities.

Attendants included:

Patrice McDermott of the American Library Association (ALA), www.ala.org

Bob Oakley of the American Association of Law Libraries (AALL), www.aallnet.org

Doug Newcomb of the Special Library Association (SLA), www.sla.org

Jeff Kaplan of the Open ePolicy Group at Harvard Law School's Berkman Center for Internet and Society, http://cyber.law.harvard.edu/policy, http://jakaplan.blogspot.com/

Jeannine Kenney of Consumers Union, www.consumersunion.org

Ed Mierzwinski of the US Public Interest Research Group (USPIRG), www.uspirg.org

Paul Hyland of Computer Professionals for Social Responsibility (CPSR), www.cpsr.org

James Love and Manon Ress of CPTech,

Matt Schrueb and Will Rodger of the Computer and Communication Industry Association (CCIA), www.ccianet.org

David LeDuc of the Software Information Industry Association (SIIA), www.siia.net

Sam Hiser of Hiser & Adelstein via telephone conference http://hiser-adelstein.com/