[Ip-health] March 8, 2007 Geneva Q&A Session on Thai White Paper

[James Packard Love]

http://www.keionline.org/index.php?
option=3Dcom_content&task=3Dview&id=3D31&Itemid=3D1

Knowledge Ecology International: Q&A Session on Thai White Paper
(Facts and Evidences on the 10 Burning Issues Related to the
Government Use of Patents on Three Patented Essential Drugs in Thailand)

Geneva, Switzerland
8 March 2007

Thiru Balasubramaniam

On Thursday, 8 March 2007, Knowledge Ecology International (KEI)
convened a briefing on the Thai White Paper entitled "Facts and
Evidences on the 10 Burning Issues Related to the Government Use of
Patents on three Patented Essential Drugs in Thailand", a 96 page
government document (www.moph.go.th/hot/White Paper CL-EN.pdf)
detailing the public policy rationale behind the Royal Thai
Government's actions in issuing non-voluntary licences for efavirenz
(Stocrin), lopinavir+ritonavir (Kaletra) and clopidogrel (Plavix).

The main discussant in this meeting was Dr. Suwit Wibulpolprasert,
Senior Advisor on Health Economics, Ministry of Public Health,
Thailand.  Twenty-two participants attended the briefing including
officials from Belgium, Bolivia, Brazil, China,the European
Commission, France, Thailand and the United Kingdom, international
civil servants from the World Health Organization (WHO) and the World
Trade Organization, representatives from non-governmental
organizations including the International Centre for Trade and
Sustainable Development (ICTSD), Knowledge Ecology International
(KEI), M=E9decins san Fronti=E8res (MSF) and Third World Network (TWN),
publication IP-Watch and the pharmaceutical industry.  This session
was chaired by KEI Geneva Representative, Thiru Balasubramaniam.

Dr. Suwit kicked-off the meeting by underscoring the importance the
Government of Thailand attached to providing their citizens universal
access to treatment, an inalienable right enshrined by the Thai
National Security Act (2002).  At the heart of Thailand's actions in
issuing non-voluntary licences for efavirenz, lopinavir+ritonavir and
clopidogrel lay the goal of providng these medicines to all Thai
citizens in need of thes products.  Efavirenz and lopinavir+ritonavir
are anti-retrovirals and clopidogrel is an "anti-platelet drug which
is at least as effective as or more effective than Aspirin in
preventing coronory obstruction" (Thai White Paper, 2007).  Under the
National Security Act of 2002, Dr. Suwit outlined that 62 million
Thais enjoyed universal access to drugs on Thailand's essential drug
list through one of three public health insurance schemes, i.e. (1)
the Civil Servant Medical Benefit Scheme,  (2) the Social Security
Scheme, and (3) the Universal Coverage Scheme (the gold card
scheme).  The Civil Servant Medical Benefit Scheme covers 5 million
civil servants,  the Social Security Scheme covers 8.5 million people
and the gold card scheme covers 48.5 mission people.

Dr. Suwit noted that currently, only 2 million people in Thailand can
afford to pay out of pocket for expensive medicines that are often
patented. He stressed that the issuance of non-voluntary licenses for
Stocrin, Kaletra and Plavix for government use applied only to people
covered by three government-backed health insurance schemes; prior to
the compulsory licences, people on the government schemes who needed
access to Stocrin, Kaletra or Plavix could not access them as the
government could not afford to pay for these patented medicines.
Thus, Dr. Suwit noted, that the compulsory licences opened up a new
market for these 3 drugs among a huge pool of 62 million people.  In
theory he noted that the compulsory licences should not affect the
market of 2 million people who could afford to pay out of pocket for
the three patented medicines.

Dr. Suwit reminded the audience that on 29 November 2006, Thailand
issued its first compulsory licence for efavirenz.  Prior to the
compulsory license, the price per tablet of efavirenz was $1.35; the
new price is 60 cents a tablet.  Thailand placed an order for 66,000
bottles of efavirenz from the Indian company Ranbaxy.  The first
batch 0f 16,000 bottles arrived in late January.  According to the
Thai White paper, the new price (reduced by by more than half) will
permit the government to provide efavirenz to 20,000 more patients in
Thailand living with HIV/AIDS.

After the Thai announcement of a compulsory licence for efavirenz,
Merck announced a global price reduction from $1.35 per pill to 72
cents a pill.  Dr. Harvey Bale Jr., Director-General, International
Federation of Pharmaceutical Manufacturers and Associations (IFPMA)
cautioned however that the Merck announcement should not be perceived
as a direct cause and effect of the Thai decision but as part of a
more gradual series of 3 price reductions offered by Merck. Dr. Suwit
noted that whatever the case, since the issuance of 3  compulsory
licences, his phone was "ringing off the hook" due to companies
willing to negotiate price reductions on their products including
Sanofi-Aventis (which markets clopidogrel) and Abbott (which markets
lopinavir+ritonavir).  One company offered Thailand a "buy 1 get 9
free" deal.

Eric Sayettat, Counsellor from the French Mission to the WTO, noted
that his country "favoured dialogue over measures such as a
compulsory licensing which were viewed like nucleur deterrants".  He
then posed the question to Dr. Suwit as to whether Thailand could
have achieved the same results (i.e. price reductions) without the
issuance of compulsory licensing.

Dr Suwit responded by saying that 2 years of prior negotations with
the pharmaceutical companies had failed.  After the issuance of the 3
compulsory licenses, however, offers from the industry for voluntary
price reductions had been pouring in non-stop.  Dr. Suwit stressed
that that from the Thai perspective, less than 15% of patented drugs
marketed in Thailand would be considered candidates for government
using noting that many patented drugs are "me too drugs" that do not
offer much therapeutic improvement over "existing low priced non-
patented drugs".  With respect to the issuance of further non-
voluntary licences, he noted that further candidates for government
use would have to past the muster of thejoint "Subcommittee for
Implementing the Government Use of Patents on Essential Patented
Drugs" comprising of 21 members which met strict public helath criteria.

According to Dr. Bale (IFPMA), there was a perception that there was
no "serious discussion between governments and the research-based
pharmaceutical industry" noting that second line ARVs were often
priced below the generic price.  Mr. Sayettat (France) further
reiterated that the pharmaceutical industry offers differential
pricing for products based on countries' respective incomes.

Dr. Suwit responded by saying that Thailand was a developing country
with a national health insurance scheme.  He asserted that everyone
in Thailand is entitled to access to essential medicines noting "we
have a polticial and social obligation".  He stressed that contrary
to popular opinion, the major impetus behind the compulsory licences
were not to save money in the health budget but rather to "increase
patient access to essential drugs".  He noted that the Thai
government spent 40 million baht alone for its 5 million civil servants.

Riaz Tayob from Third World Network (TWN) asked Dr. Suwit as to how
he perceived the effects of the compulsory licences on mortality and
morbitidy as a result of increasted access. Dr. Suwit responded by
stating that data still need to be collected and analyzed in order to
provide answers to the queries on morbidity and mortality.  Sangeeta
Shashikant (TWN) emphasized that in the Malaysian context, prior
negotations clearly did not work before Malaysia issued compulsory
licences for AZT, ddI and combivir in 2004.  The compulsory licences
achieved an 81% reduction in the price of these ARVs.  She noted that
the TRIPS Agreement was quite clear that the requirement for prior
negotiation contained in Article 31 (of the TRIPS Agreement) was
waived for cases involving government use.  She also noted that
compulsory licenses were routinely employed in industrialized countries.

Guilherme Patriota, Counsellor from the Permanent Mission of Brazil
the United Nations, took the floor noting that Brazil was "to a great
extent supportive and understanding" of Thailand's recent decisions.
He underscored that the fact that "Thailand made use of an instrument
that was part and parcel of the IP system".  He noted that if one
looked back a few decades, one could observe that some countries
(developing and industrialized) excluded pharmaceuticals from
patenting.  Mr. Patriota state that after the advent of TRIPS,
developing countries accepted the 20 year term for patented
inventions including pharmaceuticals with the understanding that
compulsory licensing operated in concert with patent monopolies to
achieve a balanced system.  He stressed that the demonization of
countries that employed compulsory licensing was unnacceptable
concluding with this phrase, "stick to the bargain!"

David Vivas (ICTSD) thanked the Thai government for its initiative in
writing up the 96 page White Paper noting it as a model of gentleness
and transparency.  Mr. Vivas reminded the participants that
compulsory licensing has been part of the international architecture
of industrial property law since the Revision of the Paris Convention
of 1925.  He pointed to a study by Professor Jerome Reichman of Duke
University which found that the United States was the largest user of
compulsory licences with around 1000 compulsory licences issued.  Mr.
Vivas noted that a compilation of national experiences with
compulsory licensing would be helpful to the debate.  Dr. Bale from
IFPMA characterized the KEI Research Note "Recent examples of the use
of compulsory licenses on patents" (NEEDS url reference) as biased
because of its numerous references to non-health related patentes
including hybrid transmissions and computer technologies.  Thiru
Balasubramaniam (KEI) countered by noting the numerous references to
pharmaceutical licences in the report, in particular, the French
amendment to its patent law in response to the high prices of the
breast cancer daignostic tests charged by Myriad over the BRAC1 and
BRAC2 genes.  He further noted that the inter-governmental
organizations represented at the briefing including WHO and WTO be
requested to do a compilation of national examples of the use of
compulsory licenses on patents.

Fernando Antezana Aran=EDbar, Chair of the WHO Executive Board
(Bolivian national), emphasized to participants that "Thailand did
not have to present the 96 page White Paper, but it chose to which
spoke not only of transparency but to Thailand's generosity and courage"

Thiru Balasubramaniam (KEI) concluded the meeting by thanking Dr.
Suwit Wibulpolprasert for briefing the Geneva community and noted
that "Thailand was a shining example and embodiment of the spirit of
the Doha Declaration which called upon WTO Members to protect public
health and promote access to medicines for all".



----------------------------------------------
James Packard Love
Knowledge Ecology International
http://www.keionline.org
james.love@keionline.org
Washington, DC +1.202.332.2670

"If everyone thinks the same: No one thinks." Bill Walton"