Access to medicines in India: feedback from a gov’t consultation on compulsory licensing

India’s Department of Industrial Policy & Promotion (managed by the Ministry of Commerce and Industry) recently released a Discussion Paper on Compulsory Licensing and invited feedback from civil society groups, industry, academia and other stakeholders to guide their formulation of a compulsory licensing policy.

The Discussion Paper expressed concern regarding the availability of new products and technologies in India, including medicines and other pharmaceutical products, and seeks to explore whether compulsory licensing could be a viable solution.

Many of the submitted comments, including those of foreign business lobbies, warned that a proposal to allow government-owned or private companies to manufacture products and technologies patented by other companies, to ensure they are not in scarce supply, could discourage overseas investment in India.

Of particular interest was a submission by the Organization of Pharmaceutical Producers of India, which noted that:

Even a prima facie analysis of the situation in India would make it apparent that patents are not the primary cause for poor access to medicines in India.  Sales of patented products account for much less than 1% of the Indian Pharmaceutical market.

Thus, compulsory licensing of patented medicines can have no meaningful impact on improving access to medicines for the vast majority of the Indian population who lack the financial capability to pay for even generic, off-patent, medicines that comprise even more than 99% or so of the Indian Pharmaceutical market.

Over the past several years, the experience in most middle and low-income countries has been that private-public partnerships and affordable publicly supported health insurance do much more to improve access to medicines.

We do not believe that compulsory licensing of patented inventions is a sustainable or viable course of action to address India’s healthcare challenges.   Proposals to promote the use of compulsory licenses could inhibit technological development in the pharmaceutical sector in India and thereby undermine efforts to make medicines and other products widely available to patients.

Other key points raised in the OPPI’s commentary included:

• The use of compulsory licensing is rarely the best policy option and cannot be a suitable tool to deal with the long-term healthcare issues confronting India.
• It has been demonstrated that patents are not a principal barrier to access to essential medicines, particularly here in India.  The World Health Organization (WHO) determined that during 2000-2007 period, India had significantly greater lack of access to essential medicines than many African countries, even though it had excluded pharmaceuticals from patent protection for almost 30 years.

The US-India Business Council (USIBC), which represents nearly 350 global companies, also expressed concern that adopting the proposed policy would inhibit the growth of intellectual property-intensive industries. It will create uncertainty and have a chilling effect on innovation and investment.  Similar views have been expressed by BusinessEurope, a European trade body, and Japan Pharmaceutical Manufacturers Association (JPMA), a drug industry lobby representing at least 68 top pharmaceutical companies in Japan.  (Source:  Livemint.com)

Backgrounder on compulsory licensing

The Council on Foreign Relations recently posted an interesting article which discusses global trade rules for intellectual property in the context of access to essential medicines.  The following is a brief overview of the article: 

In 1995, members of the WTO ascribed to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which established minimum levels of protection for member countries for products including pharmaceuticals.

WTO members were also given flexibility in how to establish their patenting systems, which allowed them to issue compulsory licenses to produce generic versions of products, including drugs, without the permission of the patent holder under circumstances such as a national emergency. But this flexibility has led to a lot of controversy. Do Hyung Kim of the University of the Houston Law Center in February 2007 says in a research guide on TRIPS that the problem is “any nation can, in theory, declare a public health emergency for questionable reasons to assign compulsory licensing for any patented drug.”

By the turn of the century, a number of emerging economies threatened to issue compulsory licenses just as they would have come under TRIPS jurisdiction, primarily as a tool in drug price negotiations.

Some experts are concerned that the inclusion of noninfectious diseases, such as cancer, diabetes and heart disease, into this little- or no-profit scenario could undermine innovation for chronic diseases, because there would be few profit avenues left for pharmaceutical companies. “Somebody’s got to pay, there’s no free lunch,” argues Fidler. With the investment climate so competitive, R&D money for a product likely to be “immediately stolen” by countries breaking patents could be a difficult sell to investors.

Read the full backgrounder at the Council on Foreign Relations site.

Lower tariffs to fight AIDS

25,000 people from around the world gathered this week in Mexico City for the 17th International AIDS Conference.  Thomson Ayodele’s column in yesterday’s New York Post focuses on the main challenges facing patients in developing countries:  lack of healthcare infrastructure and access to safe medicines.

( August 4, 2008 )  This week, 25,000 people from around the world have gathered in Mexico City for the 17th International AIDS Conference.

Many discussions will focus on how best to deal with AIDS in the developing world. Looking to the West – where scientific advances have allowed those with HIV/AIDS to live long, comfortable lives – many attendees will argue that pharmaceutical patents are the main barrier to getting medicines to the poor. That argument misses the true obstacle – local policies.

Consider tariffs. In some African countries, duties and taxes on medicines drive the costs through the roof.

In my home country of Nigeria, there’s a 5 percent tariff on Imported Pharmaceutical Ingredients (APIs). And all generic medicines imported into Kenya, Uganda and Tanzania are subject to a 10 percent tariff. The rate is 34 percent in Nigeria, 40 percent in Sierra Leone and a whopping 50 percent in Kenya.

Government regulations also add to the price of drugs. It takes the South African government more than three years to grant regulatory approval for medicines already available in developed countries. This not only delays access, it closes off a market – and so drives up drug prices all over the world.

On top of that, drug companies already sell their drugs to poor countries at prices well below cost. Often, they’re free. Just this year, GlaxoSmithKline, Merck and Pfizer donated $450 million worth of drugs to Burkina Faso.

Then there’s the lack of investment in infrastructure. In 2000, numerous African leaders signed the Abuja Declaration, a pact to combat malaria. The agreement called for 15 percent of every country’s budget to be directed toward improving health care – yet most countries that signed it spend less than 10 percent.

That means low wages and low morale for health-care workers – and, ultimately, a loss of medical personnel. Recently, the National Association of Nigeria Nurses and Midwifes said over 300,000 nurses are needed to fill positions in the nation’s hospitals and clinics.

Add to that the lack of roads and electricity in many poor countries, and you start to see why focusing on drug patents misses the point. Many developing countries don’t have the roads to transport drugs to patients, nor the electricity to keep temperature-sensitive AIDS medications refrigerated.

Kevin De Cock, director of the World Health Organization’s Department of HIV/AIDS, recently noted that the main barrier to essential medicines “is not the current price of drugs. The real obstacle is the fragility of the health systems. You have health infrastructure that is dilapidated and supply chains that do not exist.”

Despite understanding these fundamental problems, the WHO has backed a global treaty aimed at weakening pharmaceutical patents and putting drug research under government control. The treaty, known as the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), lets developing nations issue “compulsory licenses” to legally override pharmaceutical patents.

This practice of compulsory licensing isn’t just a distraction from the real issues: It also threatens the safety of many AIDS patients.

Just look at India. As a result of poor-quality knock-offs that don’t have to pass the same safety tests as their brand-name counterparts, drug resistance is on the rise. As a New Delhi-based pharmacist recently remarked, “We lack quality infrastructure to test the quality and purity of drugs.”

This problem extends far beyond AIDS drugs. In May, the science journal PloS One published a study showing that 35 percent of all malaria drugs in Africa are of substandard quality. Such low-grade drugs provide no medical benefit to patients and pose a serious health risk.

If this week’s conference is to have an impact on the growing AIDS pandemic, the participants need to get their priorities straight. Improving medical infrastructure and lowering tariffs should be their chief concern – not weakening drug patents.

Thompson Ayodele is the executive director of Initiative for Public Policy Analysis, a public-policy think tank based in Lagos, Nigeria (ippanigeria.org).

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.

Anti-IP Special Interests Continue to Pursue Strategies at IGWG that Benefit Grey Market Suppliers and Others that Profit from Their Agenda

At the World Health Organization meetings, a myriad of special interest groups are aggressively lobbying member states to loosen the definition of counterfeit medicines and to weaken intellectual property protection. Three key strategies are at the heart of the Anti-IP activists tactics o benefit generic and “grey –market” suppliers of drugs.

The first strategy is to weaken the definition of counterfeit drugs. Recently BUKO, one of the organizations that belong to Health Action International, an anti intellectual property and an anti -health industry interest group, released a paper that, among other things, made the claim that “counterfeits may at times have advantages”. http://patientsandpatents.wordpress.com/2008/05/22/resolution-on-counterfeit-medicine/. During the current round of WHO meetings the leaders if knowledge Ecology International and Essential Action are working aggressively to water down the WHO’s definition of counterfeit medicines.

The second strategy is to encourage governments in developing countries to seize intellectual property through compulsory licenses, a mechanism that basically expropriates patent protection. This strategy is popular with some governments that profit from the sick by adding tariffs and mark- ups to drug purchases. However it has also lead to a proliferation of sub standard drug manufacturing to the extent that at least one African country resorted to withdrawing the operating licenses of dozens of generic manufacturers.

The third strategy is to convince the member states of WHO through recommendations of the Intergovernmental Working Group on IP and Public Health (IGWG) that somehow governments in developed countries can redirect precious health resources away from sustaining their own health systems in order to replace the billions of dollars in health research and development that are currently provided by health industries and pharmaceutical companies. A recent article by Helen Disney points out the folly of this approach:

Under Slovenia’s presidency of the EU, the Union has put the achievement of the Lisbon Agenda goals at the core of its activities. The use of market forces and incentives is held up as the most appropriate way to stimulate research and development, with strong intellectual property protection underpinning the innovation system. There thus appears to be a mismatch between the rhetoric being used in Geneva, as a result of the recent discussions of the inter-governmental working group, and the language of Brussels and Ljubljana. The question is: which direction does the EU really wish to choose?

The EU’s innovative performance currently falls well below that of the US and Japan. Europeans simply cannot afford the consequences of compromising the Lisbon Agenda goals for a state-led innovation system that will do little to help those in the developing world.

Indeed, it is the private sector that contributes the bulk of health-related research and development. Private pharmaceutical expenditure on research and development in Europe is estimated at €22.5 billion in 2006, outstripping by far the EU’s annual healthcare budget for the 7th framework programme for research of €850 million. In all likelihood, the private market will continue to be the major driver of research into new treatments, including for diseases that affect the world’s poor – but only if the right incentives exist.

Well-funded special interest groups no doubt attract many people who genuinely share the global concern for access to health in Africa and other developing regions. They also attract those that are well paid to pursue an agenda on behalf of undisclosed governments and corporations who can profit handsomely from the efforts of anti-IP activists.

Among those lobbying most aggressively is Knowledge Ecology International (KEI), an organization who according to public records has had its key employees very well paid by Essential Action, another Anti-IP lobby group.
 
KEI’s website acknowledges that it supplies “technical” support for governments and “firms” but provides no information on what firms and what governments are the beneficiaries of this “technical” advice or whether it collects fees or other considerations for these services.

The WHO, through IGWG, has an opportunity and a responsibility to develop a global strategy that can save millions of lives in the developing world. But it needs to be wary that this agenda actually improves the potential for medical innovation to meet the global health challenges we face and to ensure that this agenda is not hijacked by special interests who hide behind ideological rhetoric, who lobby for undisclosed firms and governments and who invest significant effort in trying to intimidate patient advocates and others who have a contrary view of how best to improve global health outcomes.

Truth from the front lines

I had the pleasure of attending the Patients and Patents reception and workshop in Geneva on the eve of the 61st World Health Assembly where we received an update on the progress made by the IGWG on Public Health, Innovation and Intellectual Property.

One of the speakers was an Anglican priest from Nigeria, Father Ojeh.  Quoting Jesus, Father Ojeh said,”What I do, ye can do also”.  Anyone one of us, if we put our minds to it, could discover the next life-saving drug.  Yet, realistically, to do so we would require education, materials, assistance and the incentives to devote our lives to such a noble cause.   Father Ojeh went on to say that the real barriers to drug access in Nigeria was not patents, but politics and poverty.

Every life-saving drug we enjoy today was discovered in a system that provided incentives, the chief amongst which, is intellectual property protection.  No one will spend a life time dedicated to something only to have it stolen from them for ill-gotten profits the minute they achieve their life’s goal.  All this talk at IGWG by silk-stockinged socialists about compulsory licensing is nothing but self-serving bunk.

Thank-you Father Ojeh for your words of wisdom and for putting patients first in your congregation in Nigeria.  The WHA could learn from priests who serve the people of developing countries by putting patients first and not self-serving politicians, bureaucrats and NGO’s.

The relationship between intellectual property (IP) rights & drug efficacy and safety

Without any meaningful input from patients, intense efforts are underway at the WHO to weaken – or dismantle – the system of intellectual property (IP) rights that has produced nearly every life-saving medicine that is available today.  On behalf of a variety of both public and private sector special interests, anti-IP NGOs are using the Intergovernmental Working Group on Intellectual Property and Public Health (IGWG) as a vehicle to weaken the rules for drug innovation and development by promoting the expropriation of patent rights through compulsory licenses.

Issues of innovation, access and safety are of keen interest to patient advocates. The regulatory framework that supports a healthy patent regime is entwined with standards of safety & efficacy and is threatened by the proposals to weaken patent rules that are currently before IGWG.

Last summer, Bright Simons wrote an article that examines the relationship between patents and drug safety and efficacy.  According to Simmons:

Without clear patents and robust licensing regulations, the incentive to enforce standards disappears. Patents need not be owned solely by individuals or firms. They may also be owned by communities. But whoever owns these patents would be able to license them for revenue, and will therefore be much greater disposed toward ensuring adherence to standards by licensees. Without patents governments are likely to be solely responsible for enforcing standards. A licensing regime brings in more self-interested brand managers and intellectual property trustees. Hence, the efficacy of standards and the health of any patent regime are intimately intertwined.

Recent events in the East African country of Ethiopia illustrate this principle very well. Late last year, the country’s health and safety watchdog (DACA) withdrew the licenses of some 60 pharmacies representing Indian generic drug manufacturers. The action was prompted by the outcome of a series of working tours conducted by DACA personnel in India during which extensive evidence was uncovered that showed a high rate of negligence among some India drug makers in complying with internationally recognized standards of drug manufacturing. In many cases, the medicines that some of these companies were busily marketing to Ethiopians through local intermediaries had never passed any well-supervised clinical trial. There were even instances of outright fraud in which some of the drugs sent to Ethiopia from India were misrepresented as other, more standards-compliant, drugs. The Ethiopian authorities felt that they had no choice than to bar the entry of many Indian generics in order to protect the health and well-being of the Ethiopian people.

It follows without need for much argument that if standards suffer due to the absence of robust patent regimes, commercial prospects are similarly undermined. This is a piece of common knowledge not amiss anywhere, not even in India, the home in Asia of the patent-busting movement.