Response to Peter Pitts – River Cities’ Reader (Iowa)

Stronger Patent Protections Will Take Lives, Not Save Them
Written by Robert Weissman
River Cities’ Reader (Iowa)
Wednesday, 19 March 2008

The reason for Peter Pitts’ overheated rhetoric in a recent River Cities’ Reader guest commentary (“We’re Taking Your Medicine, Literally,” Issue 674, March 5-11, 2008) would have been a lot clearer if he had disclosed his multiple entanglements with the brand-name pharmaceutical industry.

Mr. Pitts alleged that Thailand, Brazil, and other developing-country governments have stolen patented inventions from brand-name pharmaceutical companies.

What these countries have actually done is issue compulsory licenses – authorizations for generic competition, while products remain on patent – that have enabled sick people to get life-saving medicines they would otherwise be denied.

Here is what Mr. Pitts did not explain.

First, the compulsory licenses have yielded major public benefits. Compulsory licenses in Thailand lowered the price of an important HIV/AIDS drug (lopinavir plus ritonavir, brand name: Kaletra) by about three quarters, enabling the government to provide treatment to 8,000 people who would otherwise go without treatment. The generic version of a heart-disease drug (clopidogrel, 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 simply unavailable.

The price reductions obtained by Thailand have benefited the rest of the world. After Thailand issued is 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.

Second, Thailand and Brazil limited the scope of their compulsory licenses to the public sector. In the case of Thailand, the government specifically preserved the right of brand-name drug companies to sell high-priced, monopoly-protected medicines to the upper-income Thais who rely on private medical care.

Third, nothing was stolen. Compulsory licensing is legal under the World Trade Organization’s rules governing patent protection, and under the national law of the countries that have issued compulsory licenses. Patent holders are guaranteed adequate remuneration under these rules.

Fourth, the United States issues more compulsory licenses than any other country. The U.S. government commonly issues such licenses to enable government contractors to make use of patented inventions without the permission of the patent holder. U.S. antitrust authorities commonly issue such licenses to remedy abuse of patent cases, including for pharmaceuticals, and in connection with merger approvals. In fact, a recent Supreme Court case effectively integrates a compulsory-licensing approach into the heart of U.S. patent law, making it much easier for firms or individuals to infringe a patent and simply pay a royalty for doing so.

Fifth, Mr. Pitts contends that compulsory licenses 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 the brand-name pharmaceutical industry itself acknowledges, this has nothing to do with patent protection: the buying power in developing countries is inadequate to justify investments for diseases unique to poorer countries.

Here’s what else Mr. Pitts failed to reveal: Not only is he a former FDA associate commissioner and president of the deceptively named Center for Medicine in the Public Interest, he is senior vice president for health affairs at the public-relations firm Manning, Selvage & Lee. Manning, Selvage & Lee’s clients include many of the world’s largest pharmaceutical companies, including Novartis and Sanofi-Aventis, two of the companies whose products were compulsory-licensed in Thailand. The Center for Medicine in the Public Interest’s board includes a principal with a pharmaceutical investment firm, and its advisory board consists in large measure of representatives of pharmaceutical-industry-funded organizations. Disclosing this information would have helped readers put his hysterical claims in context.

The one thing Mr. Pitts does get right is that the world needs more medical innovation, including 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.

Discussions are ongoing at the World Health Organization to investigate models to both spur R&D and promote access to essential medicines. One promising idea is prize funds, which would offer rich rewards for those who make important medical discoveries, while de-linking payment to innovators from the price of medicines.

We do need fair-share contributions to R&D by middle-income countries such as Thailand and Brazil (whose per-capita income is, respectively, about one-16th and one-13th that of the United States). 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.

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 group based in Washington, D.C.

Full text of the Peter Pitts’ commentary:

We’re Taking Your Medicine, Literally
Written by Peter Pitts
River Cities’ Reader
Wednesday, 05 March 2008

Imagine that you are an inventor and the government steals your highly lucrative idea, without any warning. The next day, you are informed that the government plans to mass-produce your invention and give it away for free.

This is what happens, with increasing regularity, to the manufacturers of life-saving medicines. And self-appointed public-health activists the world over are urging other governments to follow suit.

The most recent example occurred last year in Brazil, when the government confiscated the patent of an antiretroviral treatment for HIV produced by Merck, a U.S. pharmaceutical firm.

Brazil’s decision came shortly after a similar move in Thailand, where the military-appointed government issued these “compulsory licenses” to obtain two drugs.

The first, the HIV/AIDS drug Kaletra, is produced by the U.S.-based Abbott Laboratories. The second, the heart-disease drug Plavix, is manufactured by Sanofi Aventis of France and Bristol Myers Squibb of the United States. The Thai government had already issued a compulsory license for Merck’s antiretroviral.

Thailand’s behavior is hardly unique. Across the world, it has been going on for years.

Last year in India, the government passed an amendment denying patents to pharmaceuticals derived from “previous knowledge,” a purposefully arbitrary phrase. Also last year, India’s Ranbaxy Laboratories began offering a generic form of Pfizer’s cholesterol-lowering Lipitor in Denmark, despite the fact that Pfizer still holds the patent. Although Ranbaxy’s version was already available in India and some other emerging markets, Denmark is the first Western country to sell a copycat version of the drug.

Meanwhile, many Latin American countries have repeatedly threatened the use of patent theft to strong-arm pharmaceutical companies.

Even worse, U.S. lawmakers are piling on. Last year, 22 members of Congress signed a letter to the U.S. Trade Representative expressing their support for the Thai government’s decision.

Such action is a slap in the face to the companies whose expensive investments in drug research and technology ensure that these life-saving medicines exist in the first place.

Thankfully, however, it finally appears that those responsible for ensuring global health are taking notice of the detrimental effects such sweeping policies have on the world’s poor.

Just three days after the Thai government’s decision, World Health Organization (WHO) Director-General Margaret Chan laid out the key reason why communicable diseases remain such a large problem in poor countries. As she explained, the pharmaceutical industry “has little incentive to develop drugs and vaccines for markets that cannot pay.”

In other words, such theft discourages innovation. Drug development is an enormously expensive, time-consuming venture requiring years of effort by teams of highly trained researchers.

In 2004 alone, according to the Government Accountability Office, the pharmaceutical industry spent $60 billion on research and development. Indeed, the average drug costs nearly $1 billion to develop.

If a company stands no chance of recouping even a portion of that investment, where is its incentive to tackle the many diseases that ravage the Third World?

Western drug companies may make good scapegoats, but in Thailand alone, they have contributed tens of millions of dollars to family-planning programs and training programs for nurses and doctors treating HIV/AIDS patients. And it’s doubtful that the Thai junta has the resources or the know-how to create such life-saving drugs on its own.

Furthermore, there is no guarantee that generic drugs produced overseas will even work. Quite often, copycat versions of patented drugs are manufactured in factories that do not meet WHO standards.

No one can question that activists and governments alike wish to combat these diseases in the most efficient way possible. But the greatest challenge in the world’s poorest nations is health-care infrastructure – not pharmaceutical patents.

In the face of these larger structural challenges, patent theft is simply a cop-out – and a deadly one at that.

Peter Pitts is president of the Center for Medicine in the Public Interest and a former FDA associate commissioner.