UN Chronicle | Pharmaceuticals - Patents, Prices and Patients

Pharmaceuticals
Patents, Prices and Patients
By Ellen 't Hoen

Article

Infectious diseases kill over 10 million people each year, more than 90 per cent of whom are in the developing world.1 The leading causes of illness and death in Africa, Asia and South America-regions which account for four fifths of world population-are HIV/AIDS, respiratory infections, malaria and tuberculosis.

In particular, the magnitude of the AIDS crisis has drawn attention to the fact that millions of people in the developing world do not have access to medicines that are needed to treat disease or alleviate suffering. Over 3 million died of AIDS in 2002, including over 600,000 children, and an estimated 5 million became infected, bringing the total to 42 million.2 However, 95 per cent of people affected by AIDS are the poor living in developing countries, and only 300,000 of the 6 million people in immediate need of life-sustaining medicines are receiving them.3

The reasons for the lack of access to essential medicines are manifold, but in many cases the high prices of drugs are a barrier to needed treatments. Prohibitive prices are often the result of strong intellectual property protection. A producer who has a market monopoly is free from market competition and, unless strong pricing policies are in place, can charge whatever price the market will bear. Patents give their owners a monopoly to use, manufacture, sell and import the patented product and therefore to sell it at the most profitable price, which may not be the most equitable in most developing countries. Generic competition is crucial to ensuring downward pressure on drug prices. Médecins Sans Frontières (MSF) has witnessed this in many developing countries where we work, particularly in the case of antiretroviral medicines for the treatment of HIV/AIDS.

Just two years ago, the average cost of a triple combination of antiretrovirals was between $10,000 and $15,000 per patient per year; today, it is available for as little as $300. These price reductions were the direct result of international public pressure and generic competition, particularly from Indian and Brazilian manufacturers. Generic competition was possible because of the absence of patent protection in those countries.

The World Trade Organization's (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which sets out the minimum standards for the protection of intellectual property, contains flexibility designed to balance public and private interests. Under the Agreement, countries can overcome the high price of a patented medicine by either making or importing generic versions of pharmaceuticals (by issuing a compulsory license) or importing a more affordable version from another country (through parallel importation).

Recently, the United States Government turned to compulsory licensing as a means of reducing the price of Cipro-an anthrax antibiotic-during the anthrax scare in October 2001.4 However, Governments in developing countries that attempt to bring down the price of medicines have come under pressure from industrialized countries and the multinational pharmaceutical industry. Western Governments and the industry push for a much stricter interpretation, forcing countries to exclude those elements that allow for public health to be protected. South Africa was taken to court by the industry for attempting to pass a law that was perfectly compliant with TRIPS, which prevented implementation of health legislation for more than three years. Thailand has been pushed by the United States for the last ten years to adopt patent laws much stricter than required by WTO.5 Similar struggles are currently underway in many least developed countries.

The TRIPS Agreement has come under fierce criticism because of the effects that increased levels of patent protection will have on drug prices.6 While it offers safeguards, in practice it is unclear whether and how countries can make use of these safeguards when patents increasingly present barriers to medicine access.

The 4th Ministerial Conference of WTO, held in Doha, Qatar in November 2001, was a breakthrough in the international debate about the impact of the Agreement on access to medicines. The Declaration on the TRIPS Agreement and Public Health was adopted by 142 countries, driven largely by developing countries, which firmly placed public health needs above commercial interests and offered much needed clarifications about key flexibilities related to public health in the TRIPS Agreement.7

The very fact that public health and access to medicines have been singled out by WTO as an issue needing special attention acknowledges that health care must be treated differently from other products and gives countries leeway for taking measures to counter the negative effects of excessive intellectual property protection on health. The case of AIDS drug prices illustrates what is to come when all new pharmaceutical products will be patent protected in 2006, after most WTO members have implemented the TRIPS Agreement.8

For all these new medicines, generic competition will be stamped out, and the price of new medicines will inevitably shoot up far beyond the means of patients in need; the lever that has brought the price of AIDS drugs down will be lost. Unless flexible conditions for granting compulsory licenses are available, as per the Doha Declaration, and compulsory licenses are routinely issued to address public health concerns, competition that drives drug prices down will be lost.

Although the Doha Declaration broke new ground in guaranteeing members' rights to override patent barriers to access to medical products, it did not solve all the problems associated with intellectual property protection and public health. The right to issue a compulsory license to produce a medicine for domestic use is clear in the TRIPS Agreement. However, many developing countries lack adequate manufacturing capacity to produce medicines; the possibility of producing in one country for export to another that does not have manufacturing capacity was not resolved in Doha. WTO members recognized this as a problem and vowed to find a solution before the end of 2002. Sadly, since then, we have seen a massive backtracking on the Doha promises by the rich countries. The European Union is pushing for needlessly complicated procedures and the United States wants to limit the production and export of generic medicines for AIDS, tuberculosis and malaria. If there is not a workable solution to the export problem, over time, the Doha Declaration will become useless.9

Another major problem of the patent system, which is intended as a stimulus for innovation, is the imbalance between rights and obligations, but there is no mechanism for directing that innovation. As a result, many diseases are totally ignored. Drug research and development, exclusively confined to the private sector, are driven by profit, not public health needs. Thus, in the last 25 years, almost 1,400 new medicines have been developed, but only 1 per cent was for tropical diseases, which kill thousands of people every year, but all almost entirely confined to the developing world, and therefore do not represent a profitable market for the industry.10

Patent protection has increased over the last 20 years, but the mean innovation rate has fallen, with an increase in the number of "me-too drugs" of little or no therapeutic gain. Millions continue to die from tuberculosis and malaria every year, but virtually no new drugs have been developed in over 30 years.11 The pipeline for drugs for tropical infectious diseases is virtually empty. Exacerbating this neglect, drug resistance is wiping out drugs that were once effective.

High pricing can be overcome under the current system if the Doha Declaration is implemented as intended and countries prioritize health wherever patent monopolies are a barrier to drug access. The lack of drug research and development into "non-profitable" infectious diseases that take millions of lives every year will require a new strategy. MSF is proposing an international convention on health research and development (R&D) to establish a burden-sharing obligation to address an essential international research agenda. Such a convention would correct the current imbalance between private sector rights and obligations under present international agreements, and provide legal options to make drugs for neglected diseases global public goods. Public-sector not-for-profit R&D capacity should also be promoted.

The United Nations has a central role to play in addressing the access crisis, in particular the World Health Organization as the only international body whose absolute objective is to promote and protect health. WHO should be setting the research agenda according to unmet needs and clearly advocating for public sector involvement to ensure these needs are met.

Ninety per cent of all biomedical research and 60 per cent of all the profits for pharmaceutical drugs are in the United States, while Africa represents around 1 per cent of drug sales worldwide. Only 1 per cent of medicines produced in the last quarter of a century is for tropical diseases, which account for almost 10 per cent of the global disease burden. Governments must pay greater attention to the way medicines are researched, developed and sold, and to the global laws that surround this increasingly inequitable process. In the face of rising infectious diseases, such as AIDS, tuberculosis and malaria, and the increasing marginalization of health problems that do not affect the developed world, the importance of an international independent United Nations that is brave, aggressive and vocal in its defense of global public health has never been more important.

Notes

1 World Health Organization, The World Health Report 2001, 144 (WHO 2000).

2 UNAIDS. AIDS epidemic update. Geneva, December 2002.

3 Equitable access: Scaling up HIV/AIDS treatment in developing countries. MSF, Geneva, 27 November, 2002.

4 Kristin Jensen K. Thompson May Seek to Void Cipro Patent If Talks Fail. Bloomberg, 23 October, 2001.

5 von Schoen Angerer T, Wilson D, Ford N, Kasper T. Access and Activism: the provision of antiretroviral in developing countries. AIDS 2001; 15 (supp 4).

6 't Hoen Ellen. TRIPS, pharmaceutical patents and access to essential medicines: a long way from Seattle to Doha. Chic J Int Law 24 June 2002.

7 World Trade Organization, Doha Ministerial Declaration on the TRIPS Agreement and Public Health. WTO document number WT/MIN(01)/DEC/2 (2001). Qatar: WTO, 2001.

8 Recently extended to 2016 for least developed countries, as per the WTO Declaration on the TRIPS Agreement and Public Health.

9 Ford N, 't Hoen E, McKee M. Trade concerns must not be allowed to set the global public health agenda. Lancet 4 January 2003. 361: 71-72.

10 Trouiller P, Olliaro P, Torreele E, Orbinski J, Laing R, Ford N. Drug development for neglected diseases: a deficient market and a public-health policy failure. Lancet 22 June 2002 359;9324: 2188-2194. 11 Fatal Imbalance: the crisis in research and development for drugs for neglected diseases. Médecins Sans Frontières/Drugs for Neglected Diseases Working Group, Geneva, October, 2001.

Biography

Ellen 't Hoen is coordinator of the globalization project of the Campaign for Access to Essential Medicines of Médecins Sans Frontières. She worked as a drug policy consultant for a number of institutions, including WHO.

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