[Ip-health] Wall Street Journal: Thai Move to Trim Drug Costs Highlights Growing Patent Rift

[Thiru Balasubramaniam]

Thai Move to Trim Drug Costs
Highlights Growing Patent Rift

By NICHOLAS ZAMISKA
January 30, 2007; Page A8

A decision by Thailand's new, military-installed government to increase
access to certain drugs by suspending patent protections highlights an
increasing tension over intellectual-property rights versus
public-health interests.

The decision was criticized by the pharmaceutical industry, which said
Bangkok is considering allowing copycat versions of more drugs in the
near future. The government's move was notable partly because it
included a heart medicine, expanding the realm of drugs over which such
conflicts have typically occurred.

Thailand's Ministry of Health confirmed yesterday that the government
had approved the sale and production of cheap, generic versions of
Plavix, the blood-thinning drug originally developed by Sanofi-Aventis
SA, of Paris, and co-marketed in several countries with Bristol-Myers
Squibb Co., of New York, and the HIV treatment Kaletra, made by Abbott
Laboratories, of Abbott Park, Ill.

World Trade Organization rules allow a government to unilaterally
declare an emergency and make or sell patented drugs without the
permission of the drug companies.

"We do not view [the move] as legal or in the best interests of
patients," said Melissa Brotz, a spokeswoman for Abbott.

The decision "is a matter of serious concern for Bristol-Myers Squibb
and the research-based pharmaceutical industry," said Laura Hortas, a
spokeswoman for Bristol-Myers Squibb, adding that only Sanofi-Aventis
markets Plavix in Thailand. Sanofi-Aventis wasn't available to comment.

Teera Chakajnarodom, president of the Pharmaceutical Research and
Manufacturers Association, an industry group in Bangkok that represents
the large international drug companies, including these three, said he
has heard there are more products for which the government may allow
copycat versions. While he declined to be more specific, he said that
there are cardiovascular and cancer drugs under consideration, as well
as others, made by Swiss and British drug firms.

"After the company does 10 years of research, and then suddenly the
Thai government would like to impose the compulsory license, taking
away their property, their assets -- this is not a good practice," Dr.
Teera said. "They claim that the drug is far too expensive for the Thai
public to have access. But they never approached the companies before.
Everything is negotiable."

In fact, a government's ability to suspend a company's drug patent can
prove a powerful bargaining chip in reducing prices. In July 2005,
Brazil reached an agreement with Abbott that lowered the price of
Kaletra while preserving the company's patent on the drug.

Indian generics makers, which for years have benefited from that
country's lax patent laws, stand to benefit from the Thai decision.
Bangkok is considering making its purchases from Hetero Drugs Ltd. and
Cipla Ltd., both of India, according to Thawat Suntrajarn, director
general of the Ministry of Health's department of disease control.

The ministry said the move was necessary to ensure that sick people had
access to affordable drugs. "They are waiting for these drugs. But the
Thai government does not have enough money to purchase these drugs at
the existing price," Dr. Thawat said. Thailand's government has already
suspended a foreign company's drug patent, announcing late last year
that it would allow domestic production and imports of Merck & Co.'s
AIDS drug Efavirenz.

Dr. Thawat said the government's move will cut the price of the HIV
drug Kaletra in half, reducing the monthly cost per patient to about
3,000 Thai baht ($89.55) or less. At current prices, the government can
afford to provide medicine to only one-fifth of the 500,000 people
living with the HIV virus in Thailand, Public Health Minister Mongkol
Na Songkhla told the Associated Press, adding that the ministry was
willing to talk to the companies about importing their drugs at cheaper
prices.

Kannikar Kijtiwatchakul, a campaigner in Thailand for Doctors Without
Borders, told the AP the government's move was "a brave decision,
despite both anticipated pressure from industry and possible threats to
withdraw investments. The authorities have engaged in dialogue with
companies before, but the discounts have been marginal."


http://online.wsj.com/article/SB117008653444991209.html

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Thiru Balasubramaniam
Geneva Representative
CPTech
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