Rationing life-saving medicines in Thailand – Denver Post op-ed

DenverPost.com
Rationing life-saving medicines in Thailand
By Robert Weissman
04/02/2008

Denver Post readers might reasonably have been confused by Professor Kristina Lybecker’s astounding claims in a March 18 online guest commentary (“Compulsory drug licensing disastrous“). Professor Lybecker alleged that Thailand’s efforts to lower the price of life-saving medications and make them available to poor people would have a “disastrous effect on public health worldwide.”

Readers might have been able to put this remarkable and misguided argument in context if Professor Lybecker had revealed her extensive financial entanglements with Big Pharma.
Professor Lybecker takes issue with Thailand’s decision to issue “compulsory licenses” on several AIDS, heart disease and cancer drugs.

A compulsory license is a lawful government authorization of generic competition for products while they remain on patent.

The Thai compulsory licenses have lowered the price of an important HIV/AIDS drug (brand name: Kaletra) by about three quarters, enabling the government to triple the number of people receiving this life-saving treatment. The generic version of a heart-disease drug (brand-name: Plavix) is 1/70th the cost of the brand-name product, enabling the government to offer the drug in the public health system.

Previously, it was unavailable.

The price reductions obtained by Thailand have benefited the rest of the world. After Thailand issued its compulsory license on Kaletra, for example, the maker of the brand-name version, Abbott, lowered its middle-income-country price from $2,200 a year per person to $1,000.

Professor Lybecker contends that poverty is “actually responsible” for people in developing countries not being able to obtain medicines (a problem not limited to poor countries). Of course poverty affects people’s ability to access medicines.

But price matters, too. Consider the case of first-line HIV/AIDS drugs. Less than a decade ago, they cost as much in developing countries as in rich nations — more than $10,000 a year per person, an amount that meant an HIV diagnosis almost everywhere in the developing world was a death sentence. Now, thanks to generic competition, including due to actual and threatened compulsory licenses, the same drugs are available for as little as $100 a year.

As a result, roughly 3 million people in developing countries are receiving life-saving treatment.

Professor Lybecker also writes that compulsory licensing and efforts to introduce generic competition will undermine incentives for brand-name drug companies to invest in treatments and cures for diseases unique to developing countries. But as even Big Pharma acknowledges, the companies have no such incentive now — there is too little buying power in developing countries to justify investments for diseases unique to poorer countries.

Professor Lybecker’s misleading and deceptive commentary closely reflects the interests of Big Pharma, not public health. Perhaps this coincidence is related to her past and current relationships with Big Pharma, associations not revealed in her commentary or accompanying bio. According to her c.v., Professor Lybecker is presently a consultant for the brand-name pharmaceutical industry trade association, PhRMA — the Pharmaceutical Research and Manufacturers of America, and a consultant to a communications firm that works for the industry. She has held several other consultancies for brand-name pharmaceutical companies, and received research grants from Big Pharma.

The world desperately does need more medical inovation, inncluding but not only for diseases endemic to developing countries. The current system is doing poorly on this score. There are too few resources devoted to priority health R&D needs, from new antibiotics to new tuberculosis drugs.

But we can and must find ways to support R&D that do not result in the rationing of life-saving medicines in developing countries, and denial of life-saving treatment to people simply because they are poor. One promising idea is prize funds, which would offer rich rewards for those who make important medical discoveries, but not require patients to pay high prices.

There is growing interest in the U.S. Congress in searching for such win-win arrangements. Senate Resolution 241/House Resolution 525, for example, proposes a U.S. trade policy aiming to promote pharmaceutical innovation and access alike.

Robert Weissman is director of Essential Action, a public health advocacy and corporate accountability group based in Washington, D.C. Funding for Essential Action’s Access to Medicines campaign comes from the Ford Foundation and the Open Society Institute.

Full text of Kristina Lybecker’s commentary:

DenverPost.Com
guest commentary
Compulsory drug licensing disastrous

By Kristina M. Lybecker
Article Last Updated: 03/18/2008 09:18:46 PM MDT

Are drug patents preventing people in poor countries from gaining access to life-saving medicines?

Some public health advocates say so. And by allowing governments to break drug patents through “compulsory licenses,” they believe we can cure the ills of the world’s poorest.

Compulsory licenses grant third parties permission to produce, use, or sell a patented product prior to the patent’s expiration. But compulsory licenses won’t do much to alleviate the extreme poverty that is actually responsible for keeping drugs from poor people. Instead, such policies will have a disastrous effect on public health worldwide.

Consider Thailand’s experience with compulsory licensing.

Last year, the Thai government granted itself the right to produce copies of two HIV/AIDS anti-retrovirals and a popular heart-disease drug, all of which were patented.

Thai officials claimed that the patents were seized in order to fulfill their obligation to provide universal health care. But they were really just interested in bolstering ineffective Thai producers and lining their supporters’ pockets.

For starters, they turned down dramatically discounted offers from the firms that manufactured the drugs. Then they rejected the chance to purchase generics certified by the World Health Organization (WHO) with money from the Global Fund, an international philanthropy. In effect, refusing free drugs.

Thai leaders instead tasked the Government Pharmaceutical Organization (GPO) with producing the medicines, even though it had already been censured by the WHO for producing harmful drugs in substandard facilities.

What was really going on? The Thai government wanted to establish the GPO as a drug manufacturer capable of competing on the world stage — and enrich political supporters working there in the process. Unfortunately, the citizens of Thailand are stuck footing the bill for drugs that may be dangerous or even lethal.

Compulsory licensing doesn’t just hurt poor patients in the short run — it hurts them in the long run as well.

Drug development is a fundamentally difficult and expensive process. New cures require years of research, and the invention of a new drug costs close to a billion dollars, on average. According to the Tufts University Center for the Study of Drug Development, only 3 of every 10 drugs earn enough to cover their research and development costs.

If governments of developing nations overrun patents, it’s a virtual certainty that pharmaceutical manufacturers will pull out of the marketplace and scale back production. Faced with the risk of having their investments stolen, firms will divert their resources away from neglected diseases, and instead concentrate on drugs for larger markets. So the diseases that uniquely plague the developing world — like Dengue Fever, Chagas Disease, and Trypanosomiasis — will disappear from the research agenda.

What’s more, patents aren’t blocking drugs from reaching patients in the developing world. Virtually none of the drugs on the World Health Organization’s essential drug list are on patent. And of those that are, few patents are enforced.

The real barrier to accessing medicine is extreme poverty. Half the world’s population lives on less than $2 per day. They can’t afford drugs no matter how cheap they are.

And then there’s the problem of infrastructure. Even if drugs were suddenly free, few governments in developing nations are capable of delivering medicine to their citizens.

Look at Coartem, the world’s most effective anti-malarial drug. In 2001, drug maker Novartis signed a contract with the WHO to provide the drug at production cost to patients in Africa.

But many of these drugs became unusable after sitting in hot, ramshackle storage facilities for months on end. Few hospitals had the staff or financial ability to distribute the drugs. And many of the Africans most in need of treatment were in rural areas, without any means of transportation.

Novartis, facing enormous losses, was left with little choice but ask for guaranteed orders of the drug. And the manufacturer even had to shut down a production facility.

It’s hard to see how revoking patents will solve the fundamental problems facing developing nations.

Compulsory licensing may deliver more affordable drugs today, but it undermines public health and all but ensures that the drugs of the future will exclusively treat the maladies of industrialized nations. Public health advocates must explore alternatives that get people access to drugs without jeopardizing pharmaceutical innovation.

Kristina M. Lybecker is an assistant professor of economics at Colorado College.