The Pharmaceutical Monopoly Enforcement Agenda and Access to Medicines

The global “intellectual property” enforcement agenda poses profound risks for consumers in the U.S. and around the world in many ways. The risks include privacy and transparency issues and threats to access to medicines in the U.S. and the developing world.

Essential Action and other public health and consumer groups have identified several particular risks posed by the pharmaceutical monopoly enforcement agenda on access to medicines. They include:

– risks for global access to medicines and other public costs,
– how the enforcement agenda misleads policymakers and confuses public debate,
– the actual relationship between drug quality, the enforcement agenda, and counterfeit medicines,

To learn more about the the access to medicines concerns as well as to review some policy recommendations , download an Essential Action powerpoint introduction to the pharmaceutical monopoly enforcement agenda here: IPenforcementagenda.ppt

U.S. Civil Society Platform on Trade-Related IP and Access to Medicines Issues

In May 2009, twenty-six U.S. consumer, development, HIV/AIDS, public health and religious groups, including Essential Action, Act UP Philadelphia and New York, Africa Action, CPATH, Forum on Democracy and Trade, Global AIDS Alliance, Health GAP, the Interfaith Center on Corporate Responsibility, Knowledge Ecology International and Oxfam America, released a common platform on trade-related intellectual property and access to medicines issues. The document broadly outlines the common policy agenda these groups are pursuing in the areas of access to medicines, innovation and transparency.

You can download the platform here: IP-MedsPlatformMay2009.pdf

You can download a list describing the organizations that endorsed the platform (including contact persons) here:
OrganizationalDescriptionsofPublicHealthGroupsforUSTR-May13.pdf

Read a text version of the platform in the continuation of this post.
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U.S. Civil Society Platform on Trade-Related Intellectual Property and Access to Medicines Issues

The following represents four key goals that our organizations agree should guide US trade policy and practice with regard to intellectual property (IP) and health matters.

Under each goal we have listed specific actions that we would like to see the Obama Administration — including but not limited to the Office of the United States Trade Representative (USTR) — and the U.S. Congress take, as appropriate, in order to work toward these goals.

This is not meant to be an exhaustive list of actions, but rather those we all agree are critical to achieving these goals. Some of our organizations do not work on all of the issues raised, while others work on relevant issues not specifically mentioned in this platform. Yet we are united in our support for these goals and would like to work with the Administration and Congress to advance such an agenda to promote both innovation and access to affordable life-saving medicines.

US trade policy and practice should:

1. Promote availability of affordable life-saving medications and protect public health in developing countries

Among the actions we recommend toward this end are the following:

• Reaffirm the US commitment to the 2001 WTO Doha Declaration on the TRIPS Agreement and Public Health and the 2008 WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property, permit use of TRIPS safeguards and flexibilities by Member Countries to increase access to medicines for all, and actively support and promote countries’ efforts to implement those flexibilities.

• Forbid the use of threats and punitive actions, such as listing in the Special 301 Watch List and/or withdrawal of Generalized System of Preferences benefits, in response to a country’s use of TRIPS safeguards and flexibilities or refusal to adopt TRIPS-plus measures.

• Commit to not implementing or enforcing TRIPS-plus provisions in existing free trade agreements (FTAs), which adversely affect access to affordable medicines, and adopt a policy not to implement, include or enforce TRIPS-plus measures in pending or future trade agreements.

• As a starting point, extend the limited public health flexibilities in the US-Peru Free Trade Agreement to existing, pending and future bilateral and regional FTAs that include TRIPS-plus provisions.

• Encourage governments to require open licensing of publicly funded medical inventions for use in the developing world, for example through licensing to the UNITAID patent pool for medicines.

2. Promote innovation to develop and distribute new, effective medicines that address essential health needs without limiting access to existing or future medical products

Among the actions we recommend toward this end are the following:

• Actively support and implement the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property of the WHO Inter-Governmental Working Group to promote both innovation and access to medicines.

• Establish a time-bound working group within the US government to consider new models of innovation that can encourage innovation for new medicines without restricting access to existing or future medicines, such as prize funds that separate the market for health products from the market for innovation, patent pools and a proposed WHO R&D Biomedical Treaty.

• Encourage governments to provide open access to government funded medical research, such as is now required by the NIH Public Access Policy.

3. Respect the right of all governments to regulate pharmaceutical markets and ensure equitable access

Among the actions we recommend toward this end are the following:

• Forbid the restriction or interference with any national, regional, or local government program to establish reimbursement rates or otherwise control the costs of pharmaceuticals or medical devices.

4. Promote transparency and integrate public health interests into trade policy- making

Among the actions we recommend toward this end are the following:

• Assure fair and adequate representation by advocates for public health and for access to medicines on federal advisory committees to the U.S. Trade Representative.

• Provide adequate and open information regarding on-going US negotiations on key intellectual property treaties that will affect access to medicines, including bilateral FTAs and the Anti-Counterfeiting Trade Agreement (ACTA).

May 2009

Endorsed by the following organizations:

ACT UP/New York
ACT UP/Philadelphia
ActionAid International USA
Africa Action
African Services Committee
American Medical Student Association (AMSA)
American Public Health Association (APHA) Trade and Health Forum
American University, Washington College of Law, Program on Information Justice and Intellectual Property (PIJIP)
Center for Policy Analysis on Trade and Health (CPATH)
Essential Action
Forum on Democracy & Trade
Global AIDS Alliance
Health GAP (Global Access Project)
Interfaith Center on Corporate Responsibility (ICCR)
Knowledge Ecology International (KEI)
Missionary Oblates of Mary Immaculate
Oxfam America
Peoples Health Movement-USA
Salud y Fármacos
Stop HIV/AIDS in India Initiative (SHAII)
Student Global AIDS Campaign (SGAC)
TransAfrica Forum
Treatment Action Group (TAG)
Universities Allied for Essential Medicines (UAEM)
University Coalitions for Global Health (UCGH)
Vermont Global Health Coalition

Stop Fakes, Not Generics

By Peter Maybarduk
The Wall Street Journal
Letter to the Editor

Roger Bate correctly identifies the danger to patients posed by substandard medicines (“China’s Bad Medicine,” op-ed, May 5). But his article tends to confuse public health and patent and trademark concepts.

One reason this matters is poor drug quality is a much bigger public health problem than just fakes.

Another is that brand-name drug companies, unfortunately, are exploiting public fear of fakes to reinforce patent monopolies — in some cases demanding public officials treat generic competitor drugs as “counterfeits” that may infringe patents and should be subject to the same aggressive seize-and-destroy tactics applied to fake medicines. Dutch authorities’ recent seizure of legitimate generics (which Merck requested be destroyed), in transit to treat HIV/AIDS in South America, is an example.

Whether a drug infringes a patent is an entirely separate inquiry from whether a drug is substandard or otherwise unsafe. Public policy should be careful to maintain this distinction, as overzealous government efforts to anticipate patent infringement can limit access to affordable and lifesaving generic medicines. They can also leave taxpayers footing the bill to protect drug firms’ monopolies.

Peter Maybarduk
Essential Action Access to Medicines Project
Washington, D.C.
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The letter responds to the following story.

China’s Bad Medicine
The counterfeit drug trade is a problem that Beijing can cure.

By Robert Bate
The Wall Street Journal
May 5, 2009

China has had more than its share of embarrassing — and in some cases, deadly — incidents of drug quality. In January this year, two people died and nine were hospitalized after using counterfeit diabetes drugs in Xinjiang province. In 2007 and early 2008, a dangerous chemical was intentionally added to heparin, the widely used blood thinner, to fool quality tests. The allergic reactions caused by the chemical were deemed responsible for at least 95 U.S. deaths. In March of this year, the United Kingdom seized around $745,000 of counterfeit pharmaceuticals that originated in China, authorities said.

Beijing has made ensuring the quality and safety of its drug supply a major goal. But combating counterfeiters in China is a complicated task, mainly because it is an enormously profitable business. According to the World Health Organization, global counterfeit drug sales — sales of products falsely bearing labels that present them as branded or generic medicines — may total $75 billion next year. As many as five million Chinese citizens work in the counterfeit market, which includes fake drugs, patent infringement and trademark infringement.

While the Chinese government might not directly participate in drug counterfeiting, it certainly enables the practice, at a minimum by looking the other way. Fines for counterfeiters are as small as 100 to 4,000 yuan ($15 to $580). Considering the potential profits, such penalties are much too small to act as a deterrent. Indeed, drug counterfeiting may be a significant part of the economy. According to Chinese anticounterfeiting expert Li Guorong, General Manager of China United Intellectual Property Protection Center, “Counterfeiting is now so huge in China that radical action would crash the economy overnight [and] even destabilize a government where counterfeit factories and warehouses are often owned by local military and political grandees.” While it may be far-fetched to believe a strict clampdown on counterfeiting would undermine the entire economy, it might well harm certain sectors and cities, and would be strenuously opposed by the many thousands who make a great living this way.

Despite these challenges, the Chinese government has made some serious attempts at reform over the last several years. Between 2006 and 2007, the government committed $500 million to food and drug regulation — more than was spent in the previous seven years combined. During that time, the agency charged with monitoring the drug supply, the State Food and Drug Administration, shut down about 1,000 illegal drug facilities. In July 2007, a former SFDA official was sentenced to death — and executed — for taking bribes. Yet more needs to be done.

To start, the legal mechanism for prosecuting counterfeiting needs to be restructured. At present, after a counterfeit product is identified, the company involved generally has to launch its own investigation into the incident and then present a case gift-wrapped to the authorities. Ostensibly this is because insufficient resources have been allocated to investigations, which means authorities can only take on cases that are obviously significant from the outset. Even then the authorities are rarely very vigorous in their investigations, and companies don’t allocate enough to gift-wrap all but key cases.

Regulators should be given the resources and authority needed to independently investigate reported cases of counterfeiting — with or without the offending company’s cooperation. Regulators can increase scrutiny of their own, as well. Drug safety rules are not always enforced in a consistent, unbiased fashion. Chinese and overseas media routinely report on cases of SFDA officials facing prosecution for taking bribes to approve untested or substandard drugs. Beijing must step up enforcement against corruption in the ranks of the SFDA.

Even simple steps could have a significant impact: China employs an unreliable government database to register information on drug facilities, including past violations. A more coherent nation-wide system could go a long way toward preventing repeat counterfeit offenders.

Finally, China’s intellectual property regime needs to comply with the World Trade Organization’s international IP agreement. Notably, China still allows drugs that infringe trademarks and may be substandard to be resold (after repackaging), rather than destroyed. In other areas, China has taken steps on paper to comply with its commitments under the WTO. But not all of these measures are fully implemented.

It’s not just China’s 1.3 billion citizens that are affected by counterfeit drugs. China has a booming drug-export business which is also plagued by counterfeits. It’s in everyone’s interests, except the counterfeiters, for the Chinese government to address this issue sooner rather than later.

Mr. Bate is the Legatum Fellow at the American Enterprise Institute and a director of Africa Fighting Malaria. His latest paper, co-authored with Karen Porter, “The Problems and Potential of China’s Pharmaceutical Industry” was published last month by AEI.

Printed in The Wall Street Journal, page A15

Colombia Sets Price Ceiling on Important HIV/AIDS drug

Under sustained pressure from civil society groups to grant a compulsory license, the Colombian government has issued an order establishing maximum prices for Abbott Laboratories’ HIV/AIDS medicine Kaletra (generic name LPV/r or lopinavir/ritonavir). The order sets a price ceiling of $1,067 per person, per year for Kaletra sales to the public sector, and $1,591 for the private sector, down from around $3,400 and representing average price reductions around 54% – 68%. The order, signed by the Health and Commerce Ministers as well as the Office of the President, follows unsuccessful efforts to negotiate better prices from Abbott.

Meanwhile, the Colombian Health Minister is expected to announce later this week whether the Health Ministry finds access to LPV/r to be in the public interest – a finding that should lead automatically to a compulsory license. A compulsory license would authorize generic competition with Abbott’s patented product. New Clinton Foundation agreements with three generics firms offer LPV/r in partner countries for $470, and Peru recently obtained LPV/r from Eske Group – a Cipla affiliate – for the low price of $396.

The price ceiling is a direct result of public pressure for a compulsory license. And competition remains the only way Colombia can access the far better generics prices, and ensure prices continue to fall with time. Deep cost savings would enable health programs to scale up treatment, and come closer to universal coverage.

Concerned their government might be content with its price action, Colombian civil society groups are arguing a still-expensive monopoly is no substitute for competition, and demanding the government issue a compulsory license as proposed.

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For more information about the Colombian campaign for a compulsory license on Kaletra, contact Peter Maybarduk of Essential Action at [email protected]

To view an online Spanish language archive of materials about the Colombia compulsory license request, click here.

Following is an article from Bogota newspaper El Tiempo which gives further details about the Colombian government’s decision to set a price ceiling for Kaletra.

Duro ‘apretón’ para Abbott; le fijan topes máximos a precios de medicamento para el Sida
El Tiempo (Bogotá)
11 de Mayo de 2009 –

Los costos anuales máximos del tratamiento serán de 1.067,28 dólares en el mercado de hospitales y clínicas, y de 1.591,20 dólares en el canal comercial de otros operadores farmacéuticos.

El medicamento es al Kaletra, contra el VIH-Sida producida por laboratorios Abbott, reduciendo hasta en 2.000 dólares el costo del tratamiento anual por paciente, lo que aliviará las finanzas del sistema de salud.

De acuerdo con la circular 002, expedida por la Comisión Nacional de Precios de Medicamentos (Cnpm) y que lleva las firmas de los ministros de Comercio y la Protección Social y del delegado del Presidente de la República, cada frasco de Kaletra no podrá venderse al mercado institucional a más de 88,94 dólares ni a más de 132,60 dólares al mercado comercial.

El tratamiento anual requiere 12 frascos, por lo que los costos máximos serán de 1.067,28 dólares (mercado de hospitales y clínicas) y de 1.591,20 dólares (canal comercial de otros operadores farmacéuticos).

Según la Cnpm, los valores cobrados el año pasado por cada tratamiento fueron de 3.443 y 3.296 dólares, respectivamente.

La diferencia entre el valor del mercado institucional y el de referencia fijado por la Comisión le dará un respiro a las finanzas del Fosyga, que es el fondo público al cual las EPS le recobran parte del valor del tratamiento de afiliados con VIH-Sida que reciben Kaletra.

Hasta ahora, ese ha sido el apretón más fuerte que le ha dado el Gobierno a la farmacéutica Abbott, sobre cuya patente del medicamento pesa una petición de un grupo de ONG para que sea levantada y permitir la competencia de productos genéricos con precios más bajos.

El Ejecutivo ha tratado de negociar con la multinacional la reducción del costo del tratamiento, pero no ha sido posible llegar a un acuerdo.

Esta semana, el ministro de la Protección Social, Diego Palacio, debe decidir si el medicamento puede considerarse de interés público, en cuyo caso el Superintendente de Industria y Comercio debe iniciar el estudio de la petición de las ONG para aceptarla o negarla.

Según la Cnpm, el costo del tratamiento con Kaletra en Brasil es de 1.029,11 dólares; en Ecuador, de 1.027,29 dólares (canalinstitucional) y 2.598,96 dólares (canal comercial) y en Perú 1.138 dólares.

Al ajustar los valores de Brasil y Perú por el arancel, el promedio de los tres países es de 1.067,28 y 1.591,20 dólares para los mercados institucional y comercial, respectivamente, que fueron los fijados como precios de referencia por la Comisión.

El sida en Colombia

Se estima que en Colombia existen unas 171.500 personas infectadas o con la enfermedad desarrollada, pero no todas tienen acceso a la medicina, que en el país está protegida con la mencionada patente que vence en el año 2016, y cuyo titular es la multinacional estadounidense Abbott.

La mayoría de los portadores de VIH-Sida son atendidos con los recursos públicos del sistema nacional de salud.

Hay proyecciones no oficiales que han señalado que el costo anual por paciente tratado con Kaletra se ha movido hasta ahora en el país entre los 1.650 y los 4.900 dólares.

JORGE CORREA C.
REDACCIÓN DE ECONOMÍA Y NEGOCIOS