© Julie Damond/MSF
“Reducing the costs of drugs could enable savings that could fund access to life-saving treatment for an additional one million people every year, even without new resources.”
– The Treatment Timebomb -- Report of the Enquiry of the UK All Party Parliamentary Group on AIDS4
Unaffordable, again…
Fierce competition among multiple generic pharmaceutical manufacturers in countries such as India and Brazil, where medicines were not patented, is what brought the cost of AIDS treatment down by 99% over the past decade, from US$10,000 to US$67 ppy today. India has thus been called the ‘pharmacy of the developing world,’ and, for example, MSF sources more than 80% of the ARVs used in its projects from India.
A lack of patents in India additionally fostered the production of fixed-dose combination (FDC) pills – crucial to the simplification of treatment that has fostered global scale-up – because patents on the individual compounds did not stand in the way of combining the drugs.
But across the globe, increased product patenting in developing countries is now threatening the production of affordable generic versions of newer medicines and the development of better FDCs. International trade rules now require the patenting of medicines in key producing countries like India and Brazil, essentially eliminating the kind of generic competition for the future that brought prices down in the past.
Under the World Trade Organization’s TRIPS Agreement and the 2001 Doha Declaration on TRIPS and Public Health, LDCs are not required to grant or enforce patents on pharmaceuticals until 2016. This period therefore expires in barely six years, after which these countries will be facing patent barriers. Consideration needs to be given to have this period extended.
Tomorrow’s battle for access to affordable ARVs will need to be fought in a different way. To ensure that funds stretch as far as possible to meet the needs, policy actions are needed to contain the cost of drugs, while ensuring quality treatment for the long term.
It will require routine use of public health safeguards in patent laws and of flexibilities in the TRIPS Agreement, and the participation of pharmaceutical companies – originator and generic – in new mechanisms to boost access.
© Christian Schwetz
Ensuring newer medicines are made affordable for people in developing countries thus depends on:
- a country’s right to design flexible patent laws that are favourable to access to medicines;
- a country’s right, when essential medicines are patented and unaffordable, to issue compulsory licenses to ensure access; and
- pharmaceutical companies participating in the new Medicines Patent Pool, the innovative mechanism recently established by UNITAID.
Put a stop to frivolous patenting
The Indian Patents Act, if rigorously interpreted, provides under Section 3(d) several grounds for rejecting a patent application, for instance if the patent claimed is only a new form of a known pharmaceutical substance.
In 2006, the Indian patent office rejected Novartis’ patent application for its anti-cancer drug imatinib mesylate (brand name Gleevec), on the grounds that the application claims a ‘new form of a known substance’ (Novartis’ patent application was related to a particular crystal form of the salt of imatinib mesylate).
In essence, the Indian patent office was applying the law, as applications that do not claim real ‘inventions’ do not deserve a patent. Like Novartis in this example, many patent applications filed by pharmaceutical companies are for a new use of an old drug, or simply for derivatives of old drugs or combinations of old drugs.
Novartis launched legal proceedings challenging the constitutionality of Section 3(d) of India’s Patents Act. This prompted MSF to launch the ‘Drop the Case’ petition in order to protect the ‘pharmacy of the developing world’.19 Novartis lost this case in August 2007 when the Madras High Court upheld the public health safeguard.
But Novartis is not giving up. Having lost the battle to strike down Section 3(d) of India’s Patents Act almost three years ago, Novartis has launched fresh legal proceedings in India to weaken this critical public health safeguard. The Swiss multinational pharmaceutical company has filed a case before the Indian Supreme Court in what can be considered the second part of the Novartis case.
This case will determine the manner in which Section 3(d) will be implemented in India.
A) Design flexible patent laws
The Doha Declaration stresses that countries have the right to design patent laws that serve the interest of public health.
When India amended its patent law in 2005, it included several key safeguards including a prohibition on the patenting of insignificant or minor improvements of known medicines. This part of the India Patents Act is known as Section 3(d). It means that pharmaceutical companies should not be able to obtain patents in India for medicines that are not actual inventions, such as combinations or slightly modified formulations of existing medicines. Such patent applications are designed to delay generic competition that could lead to lower prices.
For the first time, a country thus emphasised stricter patentability criteria for pharmaceuticals and included provisions in its patent law stipulating that patents should only be granted on medicines that are truly new and innovative.
The law also allows any interested party to oppose a patent before or after it is granted (‘pre-grant’ and ‘post-grant’ oppositions). Such oppositions have been filed in India by civil society, patient groups and generic companies from India and Brazil, with the positive outcomes that several patents on key ARVs were rejected by the Indian patent offices on the grounds that they lack an inventive step and fail to satisfy the requirements of Section 3(d) of the patent law.
While Section 3(d) should help safeguard against the granting of frivolous patents, there is still great concern about newer drugs, invented after 1995, which can be patented under Indian law; several such as etravirine, maraviroc, raltegravir already are. Generic production of these newer ARVs will thus only start through licensing – be it voluntary or compulsory.
Three down; many more to go: Opposing patents in India in the name of access to affordable medicines
Since early 2006, the Indian Network of People Living with HIV/AIDS, the Delhi Network of Positive People and the Positive Women’s Network, together with other civil society groups in India and beyond have filed pre-grant oppositions against the granting of patents on ARVs recommended by WHO for first- and second-line treatment. Many of these oppositions have been filed on the basis of the patent law’s Section 3(d), which prevents ‘evergreening’ of known medicines.
In 2006, GlaxoSmithKline withdrew its patent application for the lamivudine/zidovudine fixed-dose combination, after PLHA networks filed a pre-grant opposition. In June 2008, India’s patent office decided not to grant Boehringer Ingelheim a patent for the nevirapine paediatric syrup after a pre-grant opposition was filed. This set an important legal precedent and was followed by two further crucial rejections in 2009 for patents on the key ARVs tenofovir and darunavir which is one of the most expensive ARVs today.
While several patent applications relating to tenofovir, darunavir and other key ARVs are still pending before the patent office, these rejections represent a major victory for access, as generic manufacturers have taken up the production of these medicines over time ensuring the lowest possible prices for these drugs. These decisions highlight the success and importance of Section 3(d) and opposition procedures in India’s patent law to safeguard public health. Other countries in need of access to affordable essential drugs should build similar public health safeguards into their own patent law.
B) Keep the door open for competition, despite patents
When drugs are patented, and pharmaceutical companies fail to fulfill their obligation to make patented medicines available and affordable to patients in developing countries, the only way to bring prices down is either through compulsory licensing or voluntary licensing which allows generic production. In both cases, royalties are paid to the patent holder.
Compulsory Licensing
Compulsory licensing is one of the public health safeguards enshrined in the TRIPS Agreement, which allows a government to override a patent by issuing a licence to a third party to produce or import the drug. Issuing a compulsory licence (CL) has proven to bring prices down dramatically by opening up the market to competition and thereby increasing access.
The case of the CL issued by Thailand for LPV/r in January 2007 clearly illustrates this. Over the course of one year, the price for LPV/r in middle-income countries decreased by as much as 75%, from $2,200 ppy to under $900 in Thailand and $550 in countries in the Clinton Foundation Consortium. Similarly, a CL issued by Brazil for efavirenz in May 2007 brought the cost for the drug in Brazil down by almost 70%.
Even though issuing a CL is entirely in line with WTO rules, countries that take the step typically face immense direct and indirect retaliatory measures and pressure from developed country governments and the pharmaceutical industry. This can serve to discourage other countries that are considering issuing CLs. In a world in which medicines are becoming increasingly patented, CLs, including those for export, will be a critical mechanism to help ensure that essential medicines are affordable enough for people to access them and countries must feel supported in their right to increase access to needed medicines for their citizens.
This also means revising the current mechanism designed to allow the exporting of medicines under a compulsory licence to countries which have no manufacturing capacity, and therefore cannot ‘simply’ issue a CL and produce their own generic medicines. This mechanism, known as the August 30 Decision, was adopted by the World Trade Organization (WTO) in 2003.
Billed as an ‘expeditious solution’ that would open up access to medicines for millions, the Decision is in fact completely flawed. Canada was one of the first countries to enshrine the Decision in its national law – but it took five years from the time the Canadian Access to Medicines Regime (CAMR) became law for the first medicines to be exported from Canada under CL to reach patients in Africa.
While the fact that the drugs finally made it is obviously good news, it’s quite clear that a process that takes so long, for just one drug, for just one country is not an adequate response. Given the global situation where 70% of patients in need of ART still do not have access to treatment, this procedure is simply not up to the task.
Canadian civil society is currently pushing for the CAMR to be reformed, but their efforts are being resisted by the pharmaceutical industry. Reform is needed at the international level at the WTO, and an in-depth review will be held at the next TRIPS Council meeting in October.189 Yet a number of developed countries continue to oppose any review of the August 30 Decision, insisting there is not enough evidence to show that the mechanism is not working.190
Voluntary Licensing
When a drug is patented in a given country, the patent holder may choose to grant voluntary licences (VL) to other manufacturers, allowing them to produce and export the drug. When these VLs are offered to multiple producers within a market or in several countries and are not restrictive in terms of where the licensees are allowed to export the drug, they can be a useful way to increase access.
However, restrictive VLs can also serve merely to extend the originator company’s control over a given market, stipulating conditions such as which source the active ingredient must be purchased from, as well as to which countries the drugs can be exported. Such restrictive VLs ultimately do not lead to the unhindered competition that allows patients to benefit from the lowest prices possible, nor do they increase access in all countries where the medicines are needed.
As an example, U.S. pharmaceutical company, Gilead Sciences, offered voluntary licence agreements for the production of tenofovir to any interested generic manufacturer in India with a number of clauses. The VL agreements stipulate that the generic manufacturers must purchase the active pharmaceutical ingredient from Gilead itself or from a Gilead licensee, instead of from a cheaper source, and that the manufacturers may not export the drug to several middle-income countries, including Brazil and China. This means that while competition among multiple manufacturers (licensees) within India has been taking place, Gilead maintains control over which countries are able to benefit from these lower prices, often keeping itself as the sole supplier source in these countries.
Crucially, all this was established by Gilead at a time when their patent application on tenofovir was still awaiting a ruling from India’s patent office. In 2006, Indian civil society organisations had filed pre-grant oppositions to the patent applications on the grounds that the drug consists of a previously-known substance and is therefore not patentable under India’s Patents Act.
In September 2009, the Indian patent office subsequently declined to grant a patent for tenofovir disoproxil and tenofovir disoproxil fumarate and in July, the Brazilian patent office declined the patent for TDF. Gilead is now pursing a new tactic to maintain its patent on TDF by filing divisional applications (a type of patent application which contains matter from a previously filed application) in the Brazilian and Indian patent offices.
Stop the deliberate confusion of quality generic medicines and counterfeit medicines
Over the past few years there have been concerted attempts to subject developing countries to much stricter enforcement of intellectual property (IP) rules which go beyond the obligations required under the TRIPS Agreement and threaten the continued supply of affordable medicines to developing countries. As part of this push, there are proposals to introduce new procedures and laws against ‘counterfeiting’ – be it as national legislation, as a part of free trade agreements (FTAs), in multiple international fora such as the World Health Organization or the Council of Europe, or in the Anti- Counterfeiting Trade Agreement. Such initiatives threaten to hamper or prevent the trade in affordable generic medicines between developing countries.
Crucially, the use of the term ‘counterfeiting’ differs according to the context: in intellectual property law, it refers to the protection of commercial trademarks, yet the way in which it has been commonly understood by many in public health, is as a reference to fake or falsely-labelled medicinal products that present a public health threat. This confusion has been exploited and the public health concerns about fake or falsely-labelled medicines used as an argument to push for stricter enforcement of intellectual property. Not only do these measures fail to address the public health problems, but they also actively interfere with and threaten access to medicines.
The dangers of overbroad IP protection are illustrated by the recent use of European Union customs rules, which are used to help enforce EU patents and trademarks. These rules have in fact prevented the timely access to life-saving medicines. Several shipments of generic medicines - including AIDS drugs - have been detained in transit through European countries based on allegations of IP infringement, even though they are not protected by IP rights in the countries of export or import. This has affected the supply of essential medicines from manufacturers in India to patients in developing countries in Africa and Latin America. The EU customs rules should be amended to prevent this occurring again.
Another example is the Kenyan Anti-Counterfeiting Act which passed in December 2008, and which uses a definition of counterfeiting so wide that it includes all products that are copies of patented goods. This would also cover quality-assured and legallyproduced generic medicines. The Act thus has the potential to seriously endanger access to generic medicines, such as those used by MSF and other treatment providers in Kenya. It is critical that the Act be revised. Three people living with HIV, supported by public health groups, have successfully obtained an interim injunction to stop key parts of the Act being implemented, pending a full hearing of a judicial review, on the grounds that the new legislation contravenes their ‘right to life’ under the Kenyan Constitution. At the 63rd World Health Assembly in May 2010 the Kenyan Minister of Health announced publically that the Ministry of Health had not been consulted on the draft law which has hampered efforts to improve access to medicine in the country.11, 22 There have been recent encouraging statements from the Kenyan Government that this legislation must not affect access to medicines. However the Act has not yet been amended.
In a worrying trend, there are attempts to introduce similar legislation in Uganda. Public health organisations there are concerned that the country’s draft Counterfeit Goods Bill 2009 may also threaten access to generic medicines if passed in its present form.
One major problem that is not addressed by the use of the excessively general term ‘counterfeit’, and which MSF teams face in many countries, is posed by substandard drugs. These are drugs from originator companies as well as from generic producers that do not meet international standards of quality set for them.
To date though, the focus of the response to these questions has been placed on protecting commercial interests, rather than addressing serious public health issues. This has meant diverting attention from what needs to be done.
In direct response to these concerns, WHO member states agreed at the World Health Assembly in May 2010 to set up an intergovernmental working group to ensure WHO takes a public health perspective in its efforts to ensure the availability of quality, safe, efficacious and affordable medicines, excluding trade and intellectual property considerations. It is important that the working group acts quickly to address these issues, and that proposals for greater protection of commercial interests that threaten access to medicines are rejected.
To learn more about the fatal confusion between legitimate generic medicines and illegal fakes, watch MSF’s animation:
C) Pool patents and take the plunge for affordable treatment
Company-led ‘access’ schemes have proven to be minimally effective. While most multinational companies today do offer discounts through tiered pricing, the data contained in Untangling the Web of Antiretroviral Prices clearly shows that in the absence of generic competitors, manufacturers enjoying a monopolistic situation do not reduce prices significantly enough to make medicines affordable for developing countries. Also, countries that are classified as ‘middle-income’ such as Brazil, Thailand, China or Colombia, are often left out of the discount scheme altogether or are offered only minimal discounts. Primarily the threat of losing a patent or having a patent barrier removed is what makes companies respond and reduce prices. In some cases, generic competition is only possible through governments issuing compulsory licences.
There is one way companies could act to make a difference to improve access to medicines in the developing world, however. The international drug purchase facility UNITAID has recently established a Medicines Patent Pool for antiretrovirals. Instead of having patents act as barriers, companies, researchers or universities license the patents on their inventions to one entity: the Medicines Patent Pool.
In this way, any generic company that wants to use the patented inventions can seek a licence from the pool, under pre-determined licensing terms, in exchange for the payment of royalties to the patent holder. The licensee could then produce generic versions of the patented inventions and export them to countries covered by the licence. In order to ensure a sufficiently attractive, large market for potential producers, the licences must be valid for a wide geographical area which includes all developing countries. This would result in competition between producers, bringing drug prices down.
The Medicines Patent Pool has the potential to help increase access to ARVs in three key areas:
- By fostering competition among multiple manufacturers, bringing prices down for newer medicines and increasing access, it will help mitigate the impact of the TRIPS patent regime, especially for the newer ARVs patented in manufacturing countries such as India and Brazil;
- It will help facilitate the creation of needed fixed-dose combinations, where otherwise patents on the individual drug compounds stand in the way; and
- It will further facilitate the development of paediatric ARV formulations and combinations, by eliminating patent barriers in developing countries.
MSF has identified a list of medicines whose patents should be included in the pool, and a list of needed fixed-dose combinations that it is hoped the pool will help deliver. However, the pool will be voluntary, so crucially, the success of the patent pool depends on companies’ willingness to include their patents in the pool for use in all developing countries, and on generic manufacturers’ interest in those licences. With the Foundation entrusted with running the patent pool now officially established, companies have no excuses not to act.
Médecins Sans Frontières is calling for all patents on the following antiretrovirals (and combinations thereof) to be put in the UNITAID patent pool:
lopinavir, ritonavir (Abbott); nevirapine, tipranavir (Boehringer Ingelheim); didanosine, atazanavir; (Bristol-Myers Squibb); tenofovir disoproxil fumarate, emtricitabine, GS-9350 elvitegravir (Gilead Sciences); efavirenz, raltegravir (Merck); SPI-452 (Sequoia Pharmaceuticals); darunavir, etravirine, rilpivirine (Tibotec/Johnson & Johnson); lamivudine, maraviroc, abacavir, fosamprenavir, S/GSK1349572 (ViiV)
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