IP and Public Health

1
IP and Public Health

• William New
• Intellectual Property Watch
• Geneva

2
Finding Balance in Costs, Access

• Key public policy debate
• Various efforts in recent years to ensure wide
  access while supporting IP rights for innovation
• WTO, WHO, WIPO, UNCTAD, etc
• Bigger changes seen in FTAs, national courts

3
WHO and IP

• WHO has been working on problem for years. Target
  is neglected diseases, mainly affecting poor
  populations for which there is no market
• Cit. new WTO-WHO-WIPO report
• 2006 Commission on IP, Innovation Public Health
  (CIPIH)
• 2008 Global Strategy Plan of Action
• Several Working Groups (EWG, CEWG) ongoing

4
WHO RD cont.

• WHO in financial crisis, concern about influence
  of funding sources on policies (Gates Fdn, US)
• CEWG tasked w finding new models for financing
  neglected disease RD, proposed an RD treaty,
  requiring countries to give .01 of GDP to cause.
  
• But quietly rejected in Nov 2012, now discussion
  of voluntary contributions

5
WHO RD cont.

• CEWG contd meanwhile initiatives favouring
  industry and patent system continue to move ahead
• Eg, product development partnerships
• Companies, foundations taking own initiative to
  create research facilities
• Question of sustainability

6
WHO - Pandemics

• May 2011 Pandemic Preparedness Framework aims
  at concern from developing countries about
  sharing their virus strains for research and
  having the resulting treatments patented and not
  accessible at affordable prices.
• Review of framework this week at WHA
• Partnership Contribution - private sector
  required to pay for use of virus-sharing system

7
Substandard, Fake Medical Products

• substandard/spurious/falsely labelled/
  falsified/counterfeit medical products
  difficult issue
• New Member State Mechanism collaboration on
  supply chains, trends
• Focus on public health, not IP

8
Noncommunicable Diseases (NCDs)

• Soared to top of agenda in 2011 w UN Political
  Declaration
• Focus on 4 NCDs cancer, diabetes,
  cardiovascular, chronic respiratory diseases
• Actions on WHA agenda adopt Global Monitoring
  Framework, endorse Global NCD Action Plan
  2013-2020?

9
Vaccines

• Focus on vaccines now ramped up since 2010 launch
  of Decade of Vaccines by WHO, Gates Fdn
• Focus on health and delivery systems
• WHA to take note of Global Vaccine Action Plan,
  review Monitoring and Evaluation Framework
  (provides indicators, targets for Decade of
  Vaccines)

10
WHO Reform

• Biggest reform of WHO ever
• WHA to approve program of work 2014-2019
  includes MDGs, NCDs, International Health
  Regulations, access to medicines, social
  determinants of health
• WHA will approve entire budget for 2014-2015 (not
  just assessed contributions from member states)
• Questions of role of non-state actors

11
World Intellectual Property Organization

• Recently moved into global issues such as
  public health, seeking relevance within UN
  context
• Standing Committee on Law of Patents proposals
  developing countries out front of issue, proposed
  study of flexibilities (opposed by devd
  countries)
• WIPO ReSearch project targets LDCs for
  royalty-free use of patents, not mid-sized
  developing countries

12
Problems in Developed Countries Too?

• Signs that US, EU citizens increasing demand for
  cheaper drugs
• Online pharmacies, Obama 2014 proposed budget
• Stories of cancer patients in Greece, AIDS
  patients in Spain unable to afford treatments
• Switzerland recently announced deal with pharma
  industry to reduce drug prices in return for
  faster approval

13
India Supreme Court - Novartis

• Decision on imanitib, under Art 3(b) against
  evergreening of patents
• Harm or Help Innovation?
• Most people in India already use generic version,
  not Novartis Glivec
• Every one of top 20 most valuable meds in US
  market is available as generic in India. Only 2
  of which originator company brought the drug to
  India first, some still have not come

14
WTO TRIPS Agreement

• Agreement on Trade-Related Aspects of
  Intellectual Property Rights (TRIPS)
• Encouraging trade and investment through IPR
  protection
• Providing certainty and security
• Raising levels of IPR protection, innovation,
  economy for all WTO members

15
Flexibilities in the TRIPS Agreement

• TRIPS contains several flexibilities designed to
  help developing countries, no direct mention of
  compulsory licencing.
• Para 8 (Principles) . Members may, in
  formulating or amending their laws and
  regulations, adopt measures necessary to protect
  public health and nutrition, and to promote the
  public interest in sectors of vital importance to
  their socio-economic and technological
  development, provided that such measures are
  consistent with the provisions of this Agreement.
  
• Art 30 Members may provide limited exceptions
  to the exclusive rights conferred by a patent,
  provided that such exceptions do not unreasonably
  conflict with a normal exploitation of the patent
  and do not unreasonably prejudice the legitimate
  interests of the patent owner, taking account of
  the legitimate interests of third parties.

16
TRIPS Flexibilities cont.

• Art 31 use w/o authorization of right holder
• Art 31(b) such use may only be permitted if,
  prior to such use, the proposed user has made
  efforts to obtain authorization from the right
  holder on reasonable commercial terms and
  conditions and that such efforts have not been
  successful within a reasonable period of time.
  This requirement may be waived by a Member in the
  case of a national emergency or other
  circumstances of extreme urgency or in cases of
  public non-commercial use. In situations of
  national emergency or other circumstances of
  extreme urgency, the right holder shall,
  nevertheless, be notified as soon as reasonably
  practicable. In the case of public non-commercial
  use, where the government or contractor, without
  making a patent search, knows or has demonstrable
  grounds to know that a valid patent is or will be
  used by or for the government, the right holder
  shall be informed promptly

17
Doha Declaration on TRIPS and Public Health

• At 2001 WTO Ministerial in Doha, members
  declaration the TRIPS Agreement does not and
  should not prevent members from taking measures
  to protect public health.
• Agreed that  the Agreement can and should be
  interpreted and implemented in a manner
  supportive of WTO members' right to protect
  public health and, in particular, to promote
  access to medicines for all. 
• Paragraph 5 In applying the customary rules of
  interpretation of public international law, each
  provision of the TRIPS Agreement shall be read in
  the light of the object and purpose of the
  Agreement as expressed, in particular, in its
  objectives and principles.
• Each member has the right to grant compulsory
  licences and the freedom to determine the grounds
  upon which such licences are granted.
• Each member has the right to determine what
  constitutes a national emergency or other
  circumstances of extreme urgency, it being
  understood that public health crises, including
  those relating to HIV/AIDS, tuberculosis, malaria
  and other epidemics, can represent a national
  emergency or other circumstances of extreme
  urgency.
• The effect of the provisions in the TRIPS
  Agreement that are relevant to the exhaustion of
  intellectual property rights is to leave each
  member free to establish its own regime for such
  exhaustion without challenge, subject to the MFN
  and national treatment provisions of Articles 3
  4.

18
Compulsory Licensing and TRIPS

• In Doha Declaration, members also agreed Each
  member has the right to grant compulsory licenses
  and the freedom to determine the grounds upon
  which such licences are granted. 
• WHO definition of CL   Governments may issue a
  compulsory licence to allow the use of an
  invention (e.g. a patented drug) without the
  consent of the patent holder on grounds of public
  interest. Compulsory licensing has been used by
  the public sector to introduce price-lowering
  competition and to ensure the availability of
  needed medicines, the WHO says.
• Expenditure on medicines accounts for a major
  proportion of health costs in developing
  countries and access to treatment is heavily
  dependent on the availability of affordable
  medicines, WHO says. Most trade in medicines is
  increasing rapidly, with most of this trade
  taking place between industrialised countries.
  Developing countries account for 17 of imports
  and 6 of exports.

19
Effect of CLs on Prices

• Prices of generic medicines are much lower than
  branded drugs.
• A story in the Business Standard on 4 April gives
  a comparison between branded and generic drugs
  (in Indian Rupees, eg R125,000 CHF 2100)

20
Compulsory Licensing and Prices

• According to Médecins Sans Frontières, (in 2011)
  generic prices on HIV/AIDS medicines were notably
  cheaper than branded drugs

21
Example of Savings Malaysia

• In 2003, Malaysia issued government use
  compulsory licenses on three patented AIDS
  medicines, and began importing generic versions
  of the drugs from India
• Reduced the cost to Malaysian Ministry of Health
  of treating an HIV/AIDS patient by 81 - from
  315 to 58 per month
• Savings enabled Malaysia to increase number of
  AIDS patients treated in govt hospitals from
  1,500 to 4,000
• In recent years, Indonesia, Mozambique, Zimbabwe,
  South Africa, Zambia, Eritrea, and Thailand
  issued compulsory licenses to promote access to
  medicines
• World Bank estimated Thailand could reduce cost
  of second-line therapy by 90 with CLs for all
  the drugs it needed in second-line therapy,
  saving itself 3.2 billion over the next 20 years

22
Brazil CL Issued

• Brazil 2007 on ARV efavirenz under Merck
  patent, sharp criticism similar to Novartis case
• Treated 77,000 patients, 42 of all patients
  under govt HIV program
• Brazil said Merck selling drug cheaper in
  comparable countries
• Indian generic versions brought after patent
  found lacking technical information
• Merck injunction against Indian generics rejected
  by Brazil courts
• CL saved 58 of Brazil govt program resources,
  2007-2012

23
Use of CLs cont.

• Since TRIPS took effect on 1 Jan 2005, at least
  12 developing and least-developed countries have
  granted CLs
• Mostly for HIV/AIDS treatments
• Others cancer (India, Thailand), cardiovascular
  disorders (Thailand), avian flu (Taiwan)
• Others have threatened to use CLs

24
WTO Disputes vs National CL Laws

• Brazil 2001, Argentina 2000, both by US
• Said Brazils CL authorization inconsistent w
  TRIPS, for failure to work the patent
• US withdrew, possibly concerned about setting
  negative precedent on TRIPS interpretation
• Argentina reached settlement confirming must
  show abuse of dominant position

25
Use of Threat of CL

• Lowers prices if company responds
• Brazil - used threat for two ARVs for AIDS, 2001,
  lowered price 40 and 70
• Colombia 2008 on ARVs, govt declined CL, but
  filed a class action lawsuit that Abbott violated
  govt pricing order. Govt ordered reductions of
  54-68.

26
Doha Declaration Paragraph 6

• Doha Declaration Paragraph 6 We recognize that
  WTO members with insufficient or no manufacturing
  capacities in the pharmaceutical sector could
  face difficulties in making effective use of
  compulsory licensing under the TRIPS Agreement.
  We instruct the Council for TRIPS to find an
  expeditious solution to this problem and to
  report to the General Council before the end of
  2002.
• WTO members on 30 August 2003 agreed to waive
  some restrictions from the TRIPS agreement by
  making it easier for countries to export drugs
  made under compulsory licensing to countries
  unable to manufacture the medicines themselves.
• Dec 2005 agreed to first TRIPS amendment - need
  two-thirds of members to ratify. For remaining
  members, the waiver will continue to apply until
  that member accepts the amendment and it takes
  effect.
• 45 member states (including the EU) have agreed
  to the amendment. But waiver only used once since
  2003.
• The amendment will become Article 31bis, after
  Article 31 and an annex will be added to the
  TRIPS agreement after Article 73

27
2003 TRIPS Waiver

• Here is what the Paragraph 6 waiver says in
  particular
• The decision waives countries obligations under
  TRIPS Art 31(f) which says production under
  compulsory licensing must be predominantly for
  the domestic market. This effectively limited the
  ability of countries that cannot make
  pharmaceutical products from importing cheaper
  generics from other countries.In the decision,
  WTO member governments agreed that the temporary
  waiver will last until the TRIPS article is
  amended.
• TRIPS Council review of Paragraph 6 solution
  leads nowhere

28
Branded Drugs Too Expensive For Developed
Countries?

• According to an MSF paper published by the BBC
• Sorafenib tosylate is a drug for liver cancer
  patented by German pharmaceutical company Bayer
  and marketed as Nexavar.
• Bayer priced the drug at nearly 3,500 per month
• India granted a compulsory license on the drug
  which slashed the price of the drug by 97 -
  generic versions of sorafenib in India cost to
  around 84 per month.
• In the UK, where an affordable generic version
  isn't available, the price is around 3,000 per
  month, which drug regulators say is "simply too
  high" to justify making it available on the NHS.
• The National Institute for Health and Clinical
  Excellence rejected Nexavar for NHS use based on
  its cost-benefit calculation
• According to MSF We need to move to a system
  where new drugs are priced as close to the cost
  of production as possible - and where innovation
  is paid for and rewarded separately. We need
  innovation and affordable access.

29
CLs Seen Hindering Innovation by Pharma Companies

• According to the International Federation of
  Pharmaceutical Manufacturers Associations
• The research-based pharmaceutical industry
  undertakes different access initiatives to
  facilitate access to medicines for those who
  cannot afford them.
• Given the different mechanisms currently
  available for developing countries, the use of
  TRIPS flexibilities would not improve access to
  medicines and could act as negative incentive for
  the RD and marketing of new drugs

30
Pharma worried about eroding earlier forecasts
for emerging-market sales growth

• According to FiercePharma, a report from the
  market research firm GlobalData found that a
  convergence of intellectual property worries,
  price controls and budget cuts eroded earlier
  forecasts for emerging-market sales growth.
• Among causes are China and Russia using European
  prices as benchmarks for their drug spending as
  those prices have been slashed, and  the threat
  of compulsory licensing 
• According to the story,  while governments may
  not actually force generic licenses on many
  companies, just a few could induce drugmakers to
  cut their own prices as a defensive move. 
•  This isn't to say that emerging markets aren't
  worth the effort. They are still the
  fastest-growing on the planet. But profiting from
  them promises to be a much more complicated
  effort than drugmakers may have expected. 

31
More CLs Issued
32
Other Health Issues at WTO

• WTO Disputes over Australia plain-packaging of
  tobacco products
• - Said to violate TRIPS on trademarks, et al
• - Raises bigger questions about interplay of
  health and trade