Who Profits from Patents being voided?

Everyone is upset about the price of gasoline at the pumps.  Yet I keep reminding myself that there must be some oil stocks in my pension funds so it can’t be all bad – can it?

I heard a very interesting talk the other day about speculation in the oil industry.  Speculators are driving up the price of oil not the big oil companies.  Not OPEC.  Not big government.  But speculators.

Now speculation in the commodities markets is nothing new.  Speculation over the price of tulip bulbs 400 hundred years ago destroyed the economy of The Netherlands and ended that country’s attempts at empire-building.  Investments and fortunes being made around the speculation about the price of gold have been around for decades.  Now that there are thousands of real estate foreclosures in the US, land speculators are moving in, buying up properties for pennies on the dollar, and speculating that the inherent value of land will rise in the future.  Likewise there are speculators out there driving up the price of oil too – big time.

But what does this have to do with patients and patents – plenty maybe.  When I used to teach a graduate course in health policy I used to always ask my students when analyzing a policy, cui bono?  Who benefits?  In this case, who benefits from the abolition of patent protection for research-based pharamaceutical companies?  Well, certainly not the patients as innovation for new cures and vaccines will roaringly grind to a halt without the incentive of patents.  Not the small shareholders of the affected firms that’s for sure.  Also, not doctors and hospitals as an increasing amount of their good work is pharamceutical based which keeps patients living longer healthier lives and keeps hospital costs down. 

NGO’s and bloggers would have you believe that developing countries would benefit – but they wouldn’t.  Nearly 100% of all WHO-designated essential medicines are off-patent now and the remainder are available free or at special discounted prices.  The problem here is the lack of infrastrucsture, security and rule of law to allow products to be delivered to the patients in these countries.

So who could conceivably benefit from the voiding of drug patents, compulsory licensing, open-access compund libraries and all the other assorted attacks on the protection of intellectual property contained in the WHO’s IGWG strategy?  Speculators.  Speculators who would short the research-based pharmaceutical companies and reap huge rewards from their existing investments in generic manufacturers.  Of course, their gains would be short-term but enormous – and all at the expense of patients around the world.

The question that needs to be asked is who funds these NGOs, lawyers and bloggers who have waged this campaign against drug patents?  As the old saying goes, I’ll bet you dollars to doughnuts that the financial backers of these NGOs, lawyers and blogs are also the speculators who would love to see – and profit immensely – from the demise of intellectual property protection for pharamaceuticals.

Come clean guys; expose yourselves; disclose your funders and your links with copiers and patent pirates;-  much of this is  about personal gain, at the expense of lives around the world. 

What was the final outcome of the IGWG anyway?

After all the talk, all the negotiations late into the night, all the lobbying and the mud slinging, what actually happened to the IGWG at the end of the 61st World Health Assembly – and what does it mean for patients around the world? 

According to the WHO web site, the “Global Strategy on public health, innovation and intellectual property endorsed by the 61st World Health Assembly is designed to promote new approaches to pharmaceutical R&D and to improve access to medicines. It also provides a framework for enhancing and making sustainable essential R&D relevant to diseases impacting developing countries”.

So… what does that mean? What final document was tabled, and what areas are still under debate?

According to the WHO web site:

• The Global strategy was approved by the World Health Assembly; 
• The plan of action was also approved, except for 9 actions, which remain “open”; 
• In the short term, the WHO will prepare a ‘quick start’ programme and will begin to immediately implement the elements of the global strategy that fall under its responsibility;
• The WHO will finalize the outstanding components to the plan of action;
• The WHO will estimate the cost implications of the plan;
• The WHO will establish (yet another) expert working group to examine current financing and coordination of R&D, as well as proposals for new and innovative sources of funding to stimulate R&D.

The implications of this strategy for patients around the world remain to be seen.  What is clear, is the important role that patients around the world should be playing in these discussions on global innovation and access to medicines.  In an ideal situation, the WHO will acknowledge patients as the key stakeholder in global health and invite patients and their advocates to join the discussion.  Until that happens, patients and patient advocates should take every opportunity to engage their regional representatives, WHO officials and each other in this important dialogue.

Generic drugs cost more in Canada

Efforts by generic manufacturers to undermine intellectual property rights are not limited to developing countries.  The following article highlights how generic drug makers are excessively profiting on the backs of Canadian consumers and private and government run drug plan payers.

Generic drug manufacturers are spreading misinformation about amendments to patent regulations in order to draw attention away from the real story.

The fact is that according to the Competition Bureau of Canada and other independent studies, provincial governments and Canadians at large are paying among the highest prices in the world for generic drugs.

These studies have clearly shown that generic prices here are on average about 30 per cent above generic prices in other developed countries.

In contrast, prices for patented medicines have been nearly flat over the last 10-year period, and have actually dropped in recent years when inflation is taken into account.

The generic drug makers’ fear mongering about proposed changes to patent regulations is quite simply a diversion tactic. It is designed to protect a loophole in the regulations that would allow them to get premature access to the fruits of the research of innovative pharmaceutical companies.

The truth is these amendments serve only to clarify the intent of changes made by the federal government in 2006 and do not extend patent protection by even one day.

However, they do help to provide Canada with stable intellectual property rules that are consistent with international standards. These rules can play a major role in fuelling research in our hospitals and universities, and in creating jobs for Canadians in the increasingly important health-care sector.

The innovative pharmaceutical sector invests more than $1 billion in Canada each year on research to develop the medicines that improve and save lives. If provincial governments and other jurisdictions are looking to save on drug expenditures, they should take a close look at generic drug prices, just as the Competition Bureau did.

Russell Williams

President, Canada’s Research-Based Pharmaceutical Companies

Global growth of counterfeit medicines threatens patient safety

According to the World Health Organization, counterfeit medicines pose a major public health risk for all communities.  It is not only popular lifestyle medicines that are being counterfeited, but also treatments for malaria, heart disease and other serious conditions.

The following article published on Bloomberg News highlights the growing threat of counterfeit medicines to patients around the world:

Counterfeit medicines are on the rise worldwide, as criminals capitalize on the growing use of the Internet by consumers searching for inexpensive drugs.

Copies of 19 of the world’s 25 best-selling drugs were among those seized by industry security, customs agents and police last year at ports of entry, in free-trade zones or at illicit manufacturing and distribution sites, according to data compiled by Bloomberg.

“It’s a big issue, it’s a global issue, it’s an insidious issue,” said John Lechleiter, Eli Lilly & Co.’s president and chief executive officer, in an interview at his Indianapolis headquarters.

New York-based Pfizer, the world’s largest drug-maker, estimates it may be losing sales of $2 billion a year in Viagra alone, given how much of the drug’s active ingredient is produced in India and shipped abroad, says Rubie Mages, a company director of global anti-counterfeiting.  Sales of the impotence drug in 2007 totaled $1.8 billion.

“Over the past six years we’ve seen double-digit increases around the world” of counterfeit drug seizures, said Thomas Kubic, a former U.S. Federal Bureau of Investigation agent who is executive director of the pharmaceutical institute, in an interview at his office in Virginia.

“Oftentimes, the drugs that are being sold emanate from China, from Russia and from India,” says Steven Rucker, an executive managing director of Kroll Inc., a New York security firm used by pharmaceutical companies to track down counterfeiters.

Rucker says in the last two years, Kroll has worked for 10 drug and medical device companies, though he says confidentiality agreements prevent him from identifying them.

“Our awareness of the extent of counterfeiting came about mainly as a result of Cialis,” says Lechleiter of Indianapolis- based Lilly. “But the problem is not restricted to Cialis. We’ve seen counterfeit versions of other Lilly products emerge in markets around the world”

While a portion of drugs identified as counterfeit lack proper ingredients or contain incorrect and misidentified dosages, authorities have also seized chemically identical duplicates created by manufacturers in China and India and shipped to the U.S. or Europe in violation of patent laws.

U.S. Food and Drug Administration officials say they are unable to stop the flow of illegal drugs sold on the Internet.

“There are counterfeiters circulating all over the world,” says Ilisa Bernstein, director of pharmacy affairs at the Rockville, Maryland-based FDA. “It’s hard to tell how many there are because the counterfeiters are just so good at what they do.”

The agency can’t police all the international drug shipments referred to the FDA by U.S. Customs and Border Protection Inspectors at post offices, she says.

It is unclear how much, if any, health damage is caused by the counterfeiting.  The World Health Organization says 10 percent of the drugs worldwide may be counterfeit, with more than 50 percent of the medicines that are shipped to some countries not containing the proper ingredients.

The Geneva-based WHO estimates that tens of thousands of people may be dying from counterfeit drugs used to treat malaria, HIV/AIDS, diabetes and tropical diseases.  The deaths are hard to identify since people die partly as a result of getting no effect from the treatments they are taking, according to Valerio Reggi, executive director of WHO’s International Medical Products Anti-Counterfeiting Taskforce.

Millions of Americans buying from the Internet are at risk, says Frederick Felman, executive marketing director for MarkMonitor, a San Francisco company that helps drugmakers protect their trademarks on the Internet. While there are fewer than 300 online pharmacies in Canada authorized by government agencies, more than 11,000 fake Canadian pharmacies are operating online from overseas jurisdictions, Felman says.

New Government in Thailand Supports the Role of Medical Innovation in Improving Patient Outcomes

A recent editorial in the Wall Street Journal Asia (Good Medicine for Thailand) commends recent efforts on behalf of the Thai government to improve support for drug research and development and highlights the importance of medical innovation in improving health care delivery and patient outcomes.

It appears the new government in Thailand is starting to recognize that encouraging innovation, and developing better drug pricing and delivery schemes is in the best interests of Thai patients.

Last week the government removed one of the most vocal opponents of intellectual property rights from the board of the state-owned Government Pharmaceutical Organization.  It’s a small step, but an important one for restoring Thailand’s international reputation and protecting patients’ health.

Vichai Chokeviva argued that Bangkok was acting according to domestic and international law when it allowed the government to manufacture HIV/AIDS and cancer drugs using formulas patented by Sanofi-Aventis, Abbott Laboratories and other companies.

That’s debateable, at best. The World Trade Organization says patents can be seized – after negotiation – in cases of “national emergency” or for “public non-commercial use.”  But Thailand doesn’t have an HIV/AIDS epidemic like sub-Saharan Africa, and its cancer incidence rates are average.  As for the “non-commercial use” clause, Mr. Vichai opposed the appointment of the president of Thailand’s Pharmaceutical Research and Manufacturers Association to the GPO board last month because “the private sector” is “our business competitor [our emphasis].”  Thailand also didn’t do much to negotiate with the drug companies before seizing their inventions.

Health Minister Chaiya Sasomsup, who took office in February, deserves kudos for removing the official sanction for these kinds of harmful public voices.

Mr. Chaiya understands that drug companies won’t devote significant resources to researching Thai-specific diseases if they aren’t compensated for their innovations. The Government Pharmaceutical Organization has a history of corruption and isn’t certified by the World Health Organization. It is hardly an institution to invest with more power.

Far better to encourage world-class, private drug companies to invest in Thailand and work with the government on better drug pricing schemes and delivery programs. Mr. Chaiya’s quiet war for property rights isn’t on behalf of the drug companies. It’s in the best interest of Thai patients.