[Ip-health] Bridges Weekly Trade News Digest: Thailand Authorises Generic Production of Two More Patented Drugs

[Thiru Balasubramaniam]

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[ Picked text/plain from multipart/alternative ]
http://www.ictsd.org/


  BRIDGES Weekly Trade News Digest - Vol. 11, Number 3 31 January 2007

THAILAND AUTHORISES GENERIC PRODUCTION OF TWO MORE PATENTED DRUGS

Thailand's government has issued compulsory licences for two medicines,
one for HIV/AIDS and the other for heart disease, in order to reduce
healthcare costs by allowing the production and import of cheaper
generic versions of the patented drugs.

Confirming the government's decision on 29 January, Public Health
Minister Mongkol na Songkhla said that suspending patent protections on
the drugs was necessary to enable the country's universal healthcare
scheme to provide treatment to those who need it. "We have to do this
because we don't have enough money to buy safe and necessary drugs," he
explained.

The drugs in question are Kaletra, an advanced HIV/AIDS treatment
patented by US-based Abbott Laboratories, and Plavix, a blood thinner
jointly marketed by Bristol-Myers Squibb, also of the US, and France's
Sanofi-Aventis. The move comes two months after the military-installed
regime in Bangkok issued a compulsory licence for a another HIV/AIDS
drug, Merck's efavirenz (see BRIDGES Weekly, 13 December 2006,
http://www.ictsd.org/weekly/06-12-13/story2.htm). Public health
officials have indicated that the country will import generics from
India until domestic production by the state-owned Government
Pharmaceutical Organisation comes on line, according to Thai press
reports.

Particularly notable is the fact that Plavix is used to treat a
non-communicable heart disease. Governments have generally focused on
using compulsory licences to promote competition and reduced prices for
drugs used to treat epidemics such as HIV/AIDS and tuberculosis, even
though the World Health Organisation says that non-communicable
conditions such as heart disease and diabetes cause far more deaths in
many countries.

Thai health officials say that only 20 percent of the 200,000 patients
that need Plavix currently receive it, reports the Associated Press.
Generic production would cut the price per tablet more than ten-fold
from 70 baht (about USD 2.06) to less than six baht (18 cents), making
it affordable to extend treatment to more people. Switching to generic
copies of Kaletra is expected to more than halve the monthly cost of
treatment to the 20,000 people who no longer respond to 'first-line'
HIV/AIDS drugs, and need the more advanced treatment to survive.
Although Abbott Laboratories already sells Kaletra to the Thai
government at a substantially discounted rate of USD 2200 per patient
per year, generic equivalents could cost USD 1080 or less.

Public health groups have lauded Bangkok's recent policy, saying that
dramatically-reduced drug costs will make it possible for the
government to provide treatment to thousands more people. "We've been
dreaming of this kind of action for years," M=E9decins Sans Fronti=E8res'
Paul Cawthorne told the Financial Times. He said that the government
was effectively telling drug companies "'if you won't give us a price
that we can begin to afford, we are going to get this stuff from a
generic company and use it in our public health services.'" Following
the government's compulsory licence for efavirenz late last year, MSF
had urged it to do the same for Kaletra, arguing that it was
unaffordable.

Industry groups, on the other hand, have been critical, warning that it
could lead to decreased investment in the country and weakened
incentives for research. They also expressed anger that the government
had not adequately negotiated with them before issuing the compulsory
licences.

Abbott Laboratories went so far as to a statement saying "we do not
view [the decision] as legal or in the best interests of patients."

Nevertheless, compulsory licences such as those issued by Thailand are
well within the limits of WTO rules, says Frederick Abbott (no relation
to the pharmaceutical company), a professor of international law at
Florida State University. The 2001 Doha Declaration on the TRIPS
Agreement and Public Health explicitly confirms that governments have
the "right to grant compulsory licences and the freedom to determine
the grounds upon which such licences are granted."

In a nod to the licence for the heart medicine Plavix, Professor Abbott
emphasised that the notion that there was a 'scope of diseases'
limitation on the medicines for which compulsory licences could be
issued was spurious. "The idea that compulsory licensing of patents is
limited to treatments for HIV/AIDS or ebola, as opposed to treatments
for coronary disease and diabetes, is flat wrong," he said.

Complaints about a lack of negotiation are also unjustified, he added.
Article 31(b) of the TRIPS Agreement explicitly waives the requirement
for governments to try to negotiate with patentholders "in the case of
a national emergency or other circumstances of extreme urgency or in
cases of public non-commercial use." And the Doha Declaration on TRIPS
and Public Health makes clear that it is up to Members "to determine
what constitutes a national emergency or other circumstances of extreme
urgency." The Thai government has stressed that the generic drugs
obtained under the licences will be used for its non-commercial public
health programmes.

"Without doubt," the law professor concluded, "there is room to grant
compulsory licenses, without prior notification to or negotiation with
the patent holder, in situations which the government considers, in its
judgment, to constitute public health emergencies or for 'public
non-commercial use'. A great deal of time was spent between the years
2001 and 2005 at the WTO to make sure that all concerned parties are
clear about these rules."

The Bangkok Post reports that the compulsory licence for Kaletra will
last for five years. Public health officials said that the licence for
Plavix would remain in effect until a suitable replacement for the
anti-clotting agent could be found. As per the terms of both, the
patentholders will receive a royalty fee worth 0.5 percent of total
sale value of the generic copies.

Public Health Minister Mongkol has indicated that the government is
considering further compulsory licenses. He specified that this would
not be done indiscriminately, according to Thai daily The Nation. "We
are not simply going to [issue compulsory licences] on more and more
drugs, but only the drugs in critical need that the state cannot afford
to buy." He added that these would not normally be new medicines, but
rather those that the state had bought at the patented price for years.

As for the earlier compulsory licence issued to HIV/AIDS drug
efavirenz, Mongkol said that the first shipments of Indian generics are
set to arrive on 10 February.

ICTSD reporting; "Cheaper generic drugs will help ease health crisis,"
THE NATION, 25 January 2007; "Thailand backs patent drug copies," BBC
NEWS, 29 January 2007; "Thailand confirms switch to generic drugs,"
FINANCIAL TIMES, 29 January 2007; "Thailand approves generic versions
of two drugs," BANGKOK POST, 30 January 2007; "Thai government allows
generic production of HIV and heart drugs," ASSOCIATED PRESS, 29
January 2007; "Thai Move to Trim Drug Costs Highlights Growing Patent
Rift," WALL STREET JOURNAL, 30 January 2007; "Top drug firms delay
investing here," BANGKOK POST, 26 January 2007.

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Thiru Balasubramaniam
Geneva Representative
CPTech
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@cptech.org
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