Patents and Health Issues

Checking with the Reality in Developing Countries

November 5, 2004

Lars VerschaerenMSF Access to Essential Medicines Campaign

MSF Access Campaign

Started in 1999, based on our experience in the countries where we work:

⇒Life saving treatment is not available because of price eg. HIV/AIDS:

- Price is set by patent holder

- Patent system is being implemented world wide through the TRIPsagreement

⇒ No one is searching for new treatments for diseases affecting populations mainly in Developing countries

Access to Essential Medicines

•75% of the world’s population live in developing countries

•They account for 8% of the pharmaceutical sales

•1/3 world’s population does not have access to essential medicines

•In most impoverished areas of Africa and Asia > 50%

Causes of Access Problems

• Inappropriate selection and use

• Supply problem

• Regulatory problems

• Production problems

• Lack of resources

• Prohibitive drug prices

• Lack of research and development

Do Patents Matter?

Antiretroviral Drugs Patented in Africa

27 27 2624

12 1210

3733

25 24

1512

17

0

510

15

20

2530

35

40

Com

bivi

r

3TC

Nev

irapi

neNel

finav

irAca

bavi

rAm

pren

avir

AZT

Number of Countries under patent

PhRMA

Attaran/IIPI

Cost per capsule or tablet (US $)

2.00

1.31

2.90

1.551.851.72

1.04 0.830.28 0.08

0.51

0

1

2

3

4

5

Indinavir

400 mg

Saquinavir

200 mg

Lamivudine

150 mg

Stavudine

40 mg

Zalcitabine

0.75 mg

Didanosine

100 mg

1996 1997 1998 1999 2000

Competition and Drug Prices

Source = UNAIDS, B. Samb, 2000, quoted in WHO-Health

Technology and Pharmaceuticals, Revised Drug Strategy,

April 2000

Competition (2 to 6 producers per product)No competition

Generic CompetitionSample AIDS triple-combination: lowest world prices

per one year per patient(stavudine 40mg + lamivudine 150 mg + nevirapine 200 mg)

Brazil:

$2767

Cipla: $800

Cipla: $350

Hetero: $347

Brand: $10439

Brand: $931Brand: $712

Ranbaxy: $295

Aurobindo:289$

Price Fluconazole June 2000

8.25South AfricaPfizer

27.60GuatemalaPfizer

12.20USAPfizer

11.84Guatemala (neg.)Pfizer

10.57SpainPfizer

10.50KenyaPfizer

6.29Spain Vita

6.20ThailandPfizer

3.00Guatemala (neg.)Bussie (Colombia)

0.64IndiaCipla

0.29ThailandBiolab (Thailand)

US$ Price per unit (200 mg)

Country of distribution

Manufacturer

Prices: WHO recommended regimens

-70%

US$ 3950/year3

Originator’s

US$ 13 151/year

Originator products

(2nd line)

TDF+ddI+LPV/r

26 times more

expensive

1.5 times more

expensive

2nd line vs

1st line

-98%Reduction

US$ 154/year2

Triomune®(Cipla)

Some dev. countries

US$ 8 773/year

Originator products

Western countries1

(1st line)

3TC/d4T/NVP

1 Australian EXW price, 2 Clinton Foundation price (FOB) + 10% , 3 EC ddI

Australian EXW price , TDF and LPV/r prices FOB prices + 10%

Drug development outcome

1975-1999: 1393 new chemical entities marketed

Tropical diseases: 13

Tuberculosis: 3

13 NCEs for Tropical Diseases ’75 – ‘99

• 13 for tropical diseases

–5 result of veterinary research

–2 developed by the US army

–3 result of R&D by the “research based industry”

»2 reformulation of existing products

Need for Rebalance

• 97% of the patents held world wide are in the hands individuals and companies of industrialised countries

• 80% of the patents granted in developing countries belong to residents of industrial countries (UNDP HDR 1999 )

• Stronger IP laws will increase the possibility of western companies to seek protection and charge high prices, but it will not stimulate needed research in return

Purpose of Intellectual

Property Protection

IP protection is a social policy tool. Primary justification for granting intellectual property rights is the benefit to society by promoting innovation, technological development and progress

Objectives: Article 7 TRIPS

• The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

Correct the Imbalance

• Medicines are not CD-ROMs, they are not Barbie dolls, they are not computer games. They are for millions of people a matter of life and death

• There is a dire imbalance between the sanctity of patents and the health of people. Access to essential medicines should not be a luxury reserved for the wealthy, but should be reinforced as a critical component of the human right to health

The Doha Declaration : Unanimously adopted by all WTO members in Nov 2001

The Declaration gives an unambiguous road map to key flexibilities the TRIPS offers:

Compulsory licensing not just in cases of emergency: free to determine grounds.

Determine themselves what is a national emergency or urgency

A clear statement that countries can have the parallel import regimes they want.

Least Developed Countries (LDCs) do not have to grant or enforce patents on medicines before 2016

Post 2005…

• Deadline for implementation for TRIPs is varied: developed countries by 1996 and developing countries by January 1, 2005

• …. This last group includes countries with manufacturing capacities such as India, Brazil, etc. from where the competition of last years originated….

…So not able anymore to produce a generic version of patented drugs.

Free Trade Agreements (FTAs)…

• FTAs signed between the USA and Morocco, and with Central American countries (CAFTA), etc. contain TRIPS plus provisions:

- Data exclusivity provisions that block the registration of generics

- Extending patent life - compensatory

- Limitation of grounds for CLs

- Linking DRA and IP Office

Post Doha Agenda

• Implementation and use of the safeguards at national level

• LDCs to make use of the 2016 implementation deadline

• Inclusion of Doha principles in funding mechanisms (Global Fund)

• Doha Declaration a ceiling for bilateral/regional agreements

• Appropriate technical assistance

What about new drugs and tools adapted to poor setting

conditions?Need for:

• pediatric AIDS drug formulations

• Vaccine research (strain presented in DC&LDC)

• Easy to use therapies (Fixed-dose combinations)

• Treatment for pregnant women

• Laboratory Monitoring Tools

• Etc.

Public Policy Failure• Societal choice to

confine drug development to the private sector

• Medicines arecommodities that need to generate profit in return for private investment

• Public policies to stimulate private R&D investments and ensure attractive returns

This system:

• Stimulated drug development for richcountry markets

• But limited innovation

• And failed to provide effective, affordable and easy-to-use medicines for 75-80%of the world population

Recommendations:

• Implement the Doha Declaration:

- No granting nor enforcement of patents in LDCs (2016)

- Test the August 30 WTO solution to the paragraph 6 of the Doha Declaration: apply for import of generic drugs

Recommendations (cont.):

• Do not trade away health: respect the letter and spirit of the Doha declaration in trade agreements

• Ensure access to affordable versions of new drugs after Jan. 2005

• Support the establishment of new mechanisms for guaranteeing R&D for neglected diseases

• Technology Transfer …

for more information visit:

www.accesssmed-msf.org