Access to medicines in the developing world

Por: Luisa Herrera Sierra - LL.M, Docente Investigadora

On the 11th of July 2013, The Guardian acknowledged the general concern originating from the challenges and inefficiencies of actual global health supplies. In effect, the newspaper highlighted an important question raised by the Centre for Innovation in Healthcare Logistics (CIHL) at the University of Arkansas[2]in a Report on the US Healthcare industry´s supply chains: “How does Coca-Cola get to remote villages while essential medications can't?” The main purpose of this article is to briefly analyse current issues related to the availability and affordability of medicines in the developing and less developed world.

Viernes, 30 de mayo de 2014

Keywords: TRIPS, pharmaceuticals, essential medicines, access, developing countries, flexibilities

The world we have made, as a result of the level of thinking we have done thus far, creates problems we cannot solve at the same level of thinking at which we created them.”[1] Albert Einstein.

On the 11th of July 2013, The Guardian acknowledged the general concern originating from the challenges and inefficiencies of actual global health supplies. In effect, the newspaper highlighted an important question raised by the Centre for Innovation in Healthcare Logistics (CIHL) at the University of Arkansas[2]in a Report on the US Healthcare industry´s supply chains: “How does Coca-Cola get to remote villages while essential medications can’t?” The main purpose of this article is to briefly analyse current issues related to the availability and affordability of medicines in the developing and less developed world.

The Agreement on Trade-Related Aspects of Intellectual Property Rights Agreement (hereafter TRIPS) established the international system of intellectual property (IP) protection, harmonizing and extending protection standards from all developed nations, that already had the infrastructure needed to face protection for technology inventions, to those less developed nations that did not. Therefore, the adoption of TRIPS created concerns about the negative effects IP protection could have on the availability, affordability and access to innovations by developing and less developed nations[3].

Less developed countries, whose economies directly depend on the importation of innovation from developed countries, are at a disadvantaged position at the international trade level[4]. The international community has debated the effects of IP on those less developed countries’ capacity for production. Despite arguments raised by supporters of stronger intellectual property (IP) protection, the global pharmaceutical market remains highly divided and polarised[5] about the effectiveness of IP, and studies have reported that one third of the population of developing countries does not have access to essential medicines[6]. According to the World Health Organization, only 17% of imports correspond to developing countries[7] and some studies have shown that 75% of sales are focused on North America, Europe and Japan.

Moreover the health scenario has drastically changed over the years. Originally, innovation was addressed to prevent or treat infectious diseases, but currently it is also focused on the treatment of chronic maladies. Even though most of the initial patents already expired, new patents are sought for other types of medicines whose main purpose is to enhance life. Those medicines have been produced in new innovation environments where genetics is the principal base for scientific research. Although science developments have helped patients to find more palliative and healing treatments, current innovation has been insufficient to meet the needs of every region of the world. Effectively, not only prices are increasingly higher, which hinders the access in less developed regions, but also diseases have spread over the world; there are more chronic illnesses affecting developed and under developed nations while infectious ailments have also affected richer populations.

Given this scenario, some authors such as Rodrigo Uprimny, a Colombian lawyer, have recently argued that the patent system discourages the research and development of medicines needed to attend diseases that usually attack the poorest countries (such as tropical diseases). In his article, professor Uprimny explained his position by referring to what the Bayer´s CEO stated to Businessweek. Mairjn Dekkers had strongly criticised India´s use of compulsory licenses and its refusal to extent patent protection over certain medicines that did not represent further innovation. The essence of his criticisms was condensed in the following statement, in which he referred to Nexavar, a medicine for cancer treatment: “We did not develop this product for the Indian market, let’s be honest (…) We developed this product for Western patients who can afford it, quite honestly. It is an expensive product, being an oncology product. But you know the risk in these situations is always the spill over. If this generic Indian company is now going to sell this product, then South Africa, and then New Zealand, you never know, you know, how this is going to spill over.”[8]

Consequently, several concerns remain unresolved and it is still undetermined who should be blamed for all the affordability and availability issues. Some have argued against patent systems, but others have maintained that patents are needed to promote innovation. Those in favour have stated that patents are not problematic, but that abusive behaviour of certain companies might be one of the main causes of the system´s drawbacks.

The TRIPS Agreement provides a general framework to control anticompetitive behaviour of IPRs holders. However provisions, characterized by an “open ended nature”, do not seem to provide developing countries with sufficient elements to control anti-competitive practices that hamper the access of medicines. In fact, TRIPS did not define important concepts such as “abuse”, “excessive pricing” or “refusal to licence” and failed to establish what might be considered as restrictions of trade. Thus, the TRIPS only acknowledged the importance for WTO members to adopt measures necessary to face anti-competitive behaviour and listed certain examples of anti-competitive conducts, leaving to the members the regulation of such measures.

Effectively, recognizing the important effects of TRIPS on the access to medicines, the DOHA Declaration on the TRIPS Agreement and Public Health of 2001, states that the agreement shall not impede countries from adopting the necessary measures to incentivise access to medicines[9]. Thus, are developing and less developed nations using all the legal measures to ensure greater availability and affordability of medicines? Do they have sufficient experience to control abusive behaviour that may hamper access to pharmaceuticals?

Among the legal measures available for countries, patentability criteria might be crucial to ensure greater availability of medicines. Effectively, governments should enforce strict patentability criteria in order to avoid excessive protection over poorly innovative medicines[10], which may constitute abusive behaviour of certain companies. For instance, in 2013 the Indian Supreme Court decided to refuse patent protection over “gleevec”, the second version of an existent drug already patented, due to its lack of novelty. The Court held: “In whatever way therapeutic efficacy may be interpreted, this much is absolutely clear: that the physiochemical properties of beta crystalline form of Imatinib Mesylate,namely (i) more beneficial flow properties, (ii) better thermodynamic stability, and (iii) lower hygroscopicity, may be otherwise beneficial but these properties cannot even be taken into account for the purpose of the test of section 3(d) of the Act, since these properties have nothing to do with therapeutic efficacy.”[11]

Furthermore, compulsory licensing is one of the most important flexibilities embedded in the TRIPS Agreement. This measure was established under article 31 (k) as an important remedy to unilateral anticompetitive behaviour and complements article 5 (A) of the Paris Convention. This provision waives the requirements established in articles 31 (b) and (f) when judicially or administratively, practices have been found to be anti-competitive. Therefore it enshrines the possibility for members to authorise compulsory licensing at lower prices than in voluntary licenses, without prior negotiations and the authorisation could also be for the supply to foreign markets.

However, several pharmaceutical companies and certain institutions, such as the U.S. International Trade Commission, have been opposed to the use of TRIPS flexibilities. In fact, given the vast experience of India using compulsory license as a mechanism to ensure affordability of medicines, the company Bristol Myers has maintained that it is “deeply concerned with the deteriorating protections for patented innovative medicines in India”[12]. Accordingly, it is worth asking if the Indian model should be followed by other developing nations. In order to address this concern, Indian experience using compulsory licenses should be analysed.

Although the grounds for granting compulsory licensing were established in 1970 by the Section 84 of the Patents Act[13], India enforced this provision for the first time on the 9th of March of 2012 in Natco vs Bayer.

Bayer owns the patent over the drug sorafenib tosylate sold under the brand named “Nexavar” and that is used for the treatment of advanced stages of kidney and liver cáncer. Natco applied for voluntary licencing to produce this drug at a significantly lower price but Bayer refused[14]. Consequently, in March 2012 the Controller General of Patents, Designs and Trademarks of the Indian Patents Office (Controller) granted compulsory licensing. The authority based its decision on the first two grounds provided by Section 84 of the Patents Act: when reasonable public requirements have not been satisfied and the patented invention is not available at an affordable price.

Bayer appealed this decision at the Indian Intellectual Property Board (IPAB), arguing that the concept of “reasonable price” shall be interpreted not only from consumer´s perspective but also from pharmaceuticals´ capacity to afford certain costs. However, in March 2013, the IPAB upheld the Controller´s decision and clarified that a “reasonable price” is determined according to consumers´ capacity to afford the purchase of the medication[15].

Accordingly, this case might offer developing countries further guidelines to control refusals to licence and to analyse justifications based on “reasonable prices” given by the licensors. It is worth noting that this case is not only an important source of lessons for developing countries but also for developed nations. In fact, since the case concerned a ¨life enhancing and not a life saving drug¨[16] it opens the scope of compulsory licensing beyond public health emergencies and extends the options available for developing countries.

Although the Indian experience using compulsory licences has shown that this measure can help to resolve access problems, there remain some arguments against it. For instance, developed countries have argued that drugs could be purchased at low prices in developing countries, and sell them at excessively high prices in developed regions of the world. Moreover, compulsory licences might be seen as a disincentive to foreign investment. These arguments may demonstrate some drawbacks generated by compulsory licensing; nonetheless it remains one of the most important tools developing countries may count on. Besides, further analysis is needed in order to determine if given the current health situation in the world, compulsory licensing may be used also to ensure access to treatments developed for other ailments such as cancer. Recently in the context of the Trans-Pacific Partnership (TPP), some developed countries such as the United States argued that compulsory licenses should only be applied for infectious diseases. This point remains unresolved.

Some have argued that affordability issues may be resolved by creating different pricing levels. In other words, it may help to charge differently in certain low-income countries that do not have sufficient acquisitive capacity. Furthermore, developing countries may need further guidelines covering all anti-competitive conducts that hinder the availability and affordability of drugs for their populations. These may allow them to use more efficiently all the flexibilities provided in TRIPS and to consider possible impositions in Free Trade Agreements (FTA´s).

Additionally, the strict standards required by certain governments regarding generic companies have negatively affected not only medicine prices but also their quality. For instance, as has been informed by the Economist[17], the Federal Drug Administration (FDA) has significantly increased the pressure over the Indian generic industry, which has undermined the generic companies´ capacity to sufficiently meet the poorest countries´ needs. In fact, a great proportion of the industry has invested its efforts on meeting the elevated requirements imposed by the FDA, causing what has been called a “two-tier system of controls”[18]. In other words, while most of the economic resources are invested to attend those safety requirements, the remaining industry produces low quality medicines to export to poorest countries. Even though, safety requirements are important to ensure access to high quality medicines, controls should be fairly regulated in order to guarantee greater access to safe medicines worldwide. According to this, it is important to bear in mind questions raised by the article published by the Economist, such as the following: “Why should, for instance, Africans get lower-quality drugs than Americans?”[19]

[1] Jonathan Berger, “Advancing Public Health by other means: Using Competition Policy” in Pedro Roffe, Geoff Tansey and David Vivas (eds), Negotiating Health. Intellectual Property and Access to Medicines (Earthscan, 2006)

[2] Elitza Anyangwe, Getting medicines to the poor: solving the logistics challenge´ The Guardian (London, 11 July 2013) http://www.theguardian.com/global-development-professionals-network/2013/jul/11/global-healthcare-supply-chain-challenge Accessed 19 July 2013

[3] In 1961 the governments of Brazil and Bolivia presented a draft resolution to the United Nations General Assembly stating that “Access to (…) knowledge and experience in science and technology is often limited by patents and similar arrangements designed to protect the right of ownership and exploitation of inventors of new process, techniques and products”. Dutfield, G. & Suthersanen, U., Global Intellectual Property Law (Edward Elgar, 2008)

[4] Stiglitz, cited by Marcellin: “TRIPS was designed to ensure higher priced medicines” and trade ministers signed a “death warrant” for the poor”. Marcellin, S.S. The Political Economy of Pharmaceutical Patents, US Sectional Interests and the African Group at WTO (Ashgate Publishing Ltd, 2010)

[5] Richard D Smith, Carlos Correa, Cecilia Oh, Trade, TRIPS, and pharmaceuticals, Trade and Health 5 Lancet Vol 373 (2009) 684; Available at http://www.sciencedirect.com/science/article/pii/S0140673608617791# Accessed 10 June 2013

[6] World Health Organization, Trade, foreign policy, diplomacy and health, Available at http://www.who.int/trade/glossary/story002/en/ Accessed 24 January 2013.

[7] ibid

[8] Martin Andrew, Life-Saving Medicine, High Costs, and the Intractable Patent Puzzle, March 2014, Available at http://www.businessweek.com/articles/2014-03-05/life-saving-medicine-high-costs-and-the-intractable-patent-puzzle Accessed 20 April 2014.

[9] Carlos Correa, TRIPS Agreement and Access to drugs in developing countries, Available at http://www.surjournal.org/eng/conteudos/artigos3/ing/artigo_correa.htm Accessed 3 July 2013

[10] In Colombia, for instance, the Patent and Trademarks Office was obliged to modify its regulations because it embedded flexible requirements. In fact, the Court of Justice of the Andean community ordered the Trademarks Office to change its guidelines because it was not sufficient strict regarding the industrial application criteria. For more information: http://m.portafolio.co/economia/can-ordena-colombia-reversar-instructivo-patentes

[11] Available at http://judis.nic.in/supremecourt/imgs1.aspx?filename=40212

[12] Gokhale Ketaki, Merck to Bristol-Myers Face Threats on India Patents, Bloomberg Business Week, Available at http://www.businessweek.com/news/2014-01-21/merck-to-bristol-myers-face-more-threats-on-india-drug-patents Accessed 15 April 2013.

[13] Section 84(1), Patents Act, 1970: (i) that the reasonable requirements of the public with respect to the patented invention have not been satisfied; or (ii) that the patented invention is not available to the public at a reasonably affordable price; or (iii) that the patented invention is not worked in the territory of India.

[14] Patralekha Chatterjee, India Battles For Right To Use Compulsory Licences To Make Medicines Affordable, Intellectual Property Watch, 2013, Available at ttp://www.ip-watch.org/2013/01/22/2013 Accessed 5 August 2013

[15] Emmanuel Kolawole Oke, Using the rifht to health to enforce the corporate responsabilities of pharmaceutical companies with regard to Access to medicines, (Journal of Health Diplomacy, 2003) 10 Available at http://www.ghd-net.org/sites/ Accessed 23 July 2013

[16] Naval Satarawala Chopra and Dinoo Muthappa,The Curious Case of Compulsory Licensing in India

Competition Law International, August 2012 Available at http://awards.concurrences.com/business-articles-awards/article/the-curious-case-of-compulsory Accessed 6 August 2013

[17] The Economist, India’s booming drugs industry, On closer inspection, Shumpeter – Business and management, Available at: http://www.economist.com/blogs/schumpeter/2014/02/indias-booming-drugs- Accessed 19 April 2014.

[18] Ibídem

[19] Ibídem