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CRISIS AND HOPE

Crisis and Hope: The War between Public Health and Patenting

 

Author- Sheel Chandra

Ellen T’Hoen, former executive director of the Medicines Patent Pool, recounted a story of crisis and hope. In 2002, there was a young man, a Kenyan social scientist, who was diagnosed with HIV and needed access to treatment. 2002 was a time when many people in countries in Europe and the U.S. lived with HIV, and lived healthy lives, butinfected people in countries like Kenya, were told that there was no treatment. Prices for antiretroviral (ARVs), which were used to treat HIV, cost about $12000 per patient per year, a death sentence.[1] These drugs were patented by huge western pharmaceutical firms which had exclusive rights to the manufacture and distribution of the drugs and were not quite willing to make those available. A patent can be used to exclude anyone from making low-cost, generic versions of those drugs and patent wars circled all over the world in the backdrop of an AIDS crisis.

            India, luckily for Nelson Otwoma, the Kenyan social scientist, and his three-year old son who was also diagnosed, did not recognize pharmaceutical patents under its Patent Act of 1970. While this infuriated the United States’ PhRMA, Indian pharmaceutical companies like Cipla would take advantage of the absence of product patent laws and reverse-engineer drugs manufactured by industrial giants, and sell them at discounted prices in developing and under-developed countries. In less than a year, the price of the AIDS cocktail went down from $10,000 to $350 per patient per year. This price went down even more-so by 2014, when it was sold for $60 per patient per year.[2] Nelson Otwoma is now a treatment activist and is the national coordinator for NEPHAK, National Empowerment Network of People living with HIV/AIDS in Kenya.India believed the Patent Act of 1970 to be a win for public health.The western lobby, however, saw it as a crisis for innovation.

            The battle between the public health crisis and the innovation crisis came to a head at the Uruguay Round of the General Agreement on Tariffs and Trade which had countries necessarily set down minimum standards for regulation of intellectual property in exchange for membership in the WTO. This was the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS brought with it a paradigm shift in the international trading system by introducing intellectual property law, which called for product patents to be recognized. The agreement also meant that all member nations were required to provide patents for pharmaceuticals lasting at least twenty years.

            Amit Sen Gupta of the Delhi Science Forum has expressed his apprehensions about the TRIPS agreement. He worries that patents on products will turn back the clock to the 1960s, post-war era when western MNCs held power in India’s market and set exorbitant prices on essential medicines and pursued little research on diseases like malaria, which affected tropical countries such as India, and not the developed world. [3]

            Mr. Sen Gupta’s statement is not unwarranted.The WHO reports that in 2016, $2.7 billion was invested in malaria control and elimination globally by governments of malaria endemic countries and international partners. It also estimates that in 2015, there were 214 million new cases of malaria. That amounts to only $13 per incident. The WHO further reported that among the 41 “high-burden countries”, funding per person at risk of malaria was below $2.[4]

            The main selling point of the TRIPS agreement was innovation. The western lobby argued that lax patent laws allowed the “copycat” industry to sell drugs that were manufactured by pharmaceutical firms that put several years and a lot of money in research and development at cheap prices by making so-called “generic” versions of those drugs. This stifled further research and development because profits were being cut by these“pirated” drugs. TRIPS argued that it would not only help bolster R&D in western countries but also in developing countries, who could develop and manufacture their own drugs with the help of foreign direct investment and transfer of technology, improving both their revenue and their sciences.

            Has R&D in India flourished? There are several studies with conflicting reports. But even if one found that TRIPS may have a positive effect on R&D expenditure[5] of Indian pharmaceutical firms, has there been an increase in R&D investment in diseases affecting tropical countries like India?

            Research on basic medicine is less expensive and time-consuming than the development of the actual drug or vaccine. Which explains why even though the genome of the malarial parasite Plasmodium falciparum was sequenced almost two decades ago, the first vaccine for it was introduced only three years ago. Nevertheless, the question here is- did the TRIPS regime encourage the R&D that led to the development of GlaxoSmithKline’s Mosquirix, the first malarial vaccine to be introduced for pilot testing?

            Not quite. The New York Times reports that Mosquirix is not a testament to the profit motive as an incentive for innovation.[6] The Bill and Melinda Gates Foundation funded much of the research, and Glaxo does not even expect to make money on its investment. So GSK’s research and innovation into finding a vaccine for a tropical disease wasn’t to move ahead in the market as TRIPS envisioned, but a rare “public service moment” funded by a foundation that will not always be available to sustain every R&D effort in diseases like malaria, which do not provoke much interest in Western countries.

            Understandably so. Pharma companies will not invest in the development of drugs for people overwhelmingly poor that cannot afford medication and vaccines.[7] Manufacturing vaccines and drugs for tropical diseases such as malaria means selling them at a lower cost in order to allow people economic access. Development of drugs is a long, tedious, and expensive affair. It takes about 12 years to get a drug from the laboratory to the shelf. And that’s when it is lucky enough to be approved. Only 5 in 5000 drugs entering pre-clinical trials progress to human testing. This is why intellectual property rules are especially important to the pharmaceutical industry, because they need good profits to incentivise their “effort”.

            Patenting and public health is complex. It creates a Catch-22-like situation. On one hand, patenting encourages the monopoly of big western pharma firms over several life-saving and essential drugs that are simply not accessible in low-income and developing countries. Pharmaceutical firms have also found to abuse the framework. The New York Times reported that there have been several studies showing pharma companies playing the system.[8] Once the original patents on their drugs expire, these companies prevent the entry of cheap generic rivals by layering the drugs with secondary patents covering slight and redundant variations.A case study on secondary patenting identified 108 patents layered on two key antiretroviral drugs for HIV that can delay generic competition until at least 2028.[9]

            On the other hand, a weak and narrow intellectual property framework that India had,encourages theft, even if well-meaning, of drugs and medicines that took a lot of resources to be developed. This sort of framework not only limits innovation but also discourages foreign firms from investing in any little R&D interest that India may have. At the same time, however, if Indian pharma firms do not have the revenue they get from generic medications, they will not get the chance to develop drugs for tropical diseases, which would normally not interest western firms.

            There have been attempts to deal with the public health crisis inducted by TRIPS, most notably the Doha Declaration which called for developing and under-developed countries to navigate through and make use of the flexibility of the TRIPS agreement. Some of the key strategies to deal with accessibility and affordability were compulsory licensing and parallel imports. But a 2005 report by the WHO found that many developing countries have actually not incorporated these TRIPS flexibilities into their legislation mostly because they do not possess the legal and technical expertise to draft these legislations.[10]

            But just like Nelson Otwoma’s story, this catch-22 can also be one of crisis and hope. “I do not think we need stronger patents than we have now.”, says Browyn H.Hall, an expert on intellectual property at the University of California, Berkeley.[11] Alternative strategies for encouraging R&D effort on neglected diseases may be more effective than the extension of patent protection.[12] Such strategies should now be the focus of policy makers and legislation officials. For instance, the first Advanced Market Commitment (AMC) for a vaccine against pneumonia, was introduced in 2007 by GAVI, the vaccine alliance. Recently, the patent on a pneumonia vaccine was granted to the pharma giant Pfizer by India, which means that Pfizer gets exclusive rights to distribute the vaccine in India till 2026.[13] This doesn’t necessarily have to be a crisis. Through GAVI, Pfizer has been delivering the vaccine to low-income countries at lower prices and is ready to work with the Indian government to “scale-up deployment” in India.[14] Similarly, Ellen T’Hoen’s UNITAID proposed the use of a patent pool to counter the “drug price crisis” that several HIV endemic countries may face due to product patenting. For there to be hope in this patent v. public health crisis, however, the government has to strengthen its legislation to accommodate TRIPS flexibilities and resist lax patent laws so as to not discourage foreign investment. This will help with delivery of medicines already in existence but unavailable because of monopoly pricing, and simultaneously encourage foreign firms to allow Indian firms to manufacture several drugs that will increase revenue and further the Indian market and aid local firms with resources to research diseases endemic to developing countries like India. The government can also provide tax incentives and pair up with more public-private partnerships like GAVI and patent pools like UNITAID to encourage production of new medicines, especially those needed in the developing world. The goal here is neither to eliminate a strong patent framework that can dismantle a culture of innovation, nor to encourage monopolies that lead to inaccessible and unaffordable medications. The goal here is to find the sweet-spot between these two, constantly warring sides.

 

 

 

[1] https://www.ted.com/talks/ellen_t_hoen_pool_medical_patents_save_lives

[2]See Above.

[3]The New York Times, Selling Cheap ‘Generic’ Drugs, India’s Copycats Irk Industry, Donald G. Mcneil Jr., Dec 1 2000.

[4]World malaria report 2017. Geneva: World Health Organization; 2017.

[5]Banerjee and Nayak, Effects of Trade Related Intellectual Property Rights on the R&D Expenditure of Indian Pharmaceutical Industry,2014 ‘Journal of Pharmaceutical Health Services Research.

[6]The New York Times. Lifiting the Patent Barrier to New Drugs and Energy Sources. By Eduardo Porter. April 12 2016.

[7]A cure for indifference, Jeffrey Sachs and Michael Kremer, Financial Times (London, England), May 5, 1999, Wednesday London Edition 1.

[8]The New York Times. Lifting the Patent Barrier to New Drugs and Energy Sources. By Eduardo Porter. April 12 2016.

[9] Amin, Tahir & S Kesselheim, Aaron. (2012). Secondary Patenting of Branded Pharmaceuticals: A Case Study of How Patents on Two HIV Drugs Could be Extended for Decades. Health affairs (Project Hope). 31. 2286-94. 10.1377/hlthaff.2012.0107.

[10]Musungu, Sisule F.; Oh, Cecilia (August 2005), The use of flexibilities in TRIPS by developing countries: can they promote access to medicines?, Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH)

[11]The New York Times. Lifiting the Patent Barrier to New Drugs and Energy Sources. By Eduardo Porter. April 12 2016.

[12]Investments in Pharmaceuticals Before and After TRIPS Margaret Kyle and Anita McGahan NBER Working Paper No. 15468 October 2009

[13]‘This is about life and death’: Pharmaceutical patents threaten India’s generic drug industry by Jessica Washington for Saturday Extra. http://www.abc.net.au/news/2017-09-28/what-india-pfizer-patent-decision-means-for-region-health/8981206