[Ip-health] Bill Haddad: Roadblocks to Generic Access

[robert weissman]

Roadblocks to Generic Access
William (Bill) Haddad
Chairman/CEO
Biogenerics, Inc

Dubai, October 21, 2007

Perhaps the title of my discussion this morning should be called =93The
Skunk at the Garden Party=94 because it concerns the mounting barriers to
effective competition. I am not sure our industry takes full note of the
effectiveness or consequences of these barriers on our markets, our
profits and our mission to provide safe, effective and affordable
medicines for use worldwide.

If I were still a journalist and reporting on a famine, or an epidemic,
or a genocide, my conclusion and its consequences would reach you in
every corner of the world. This discussion would seep into your families
at the dinner table and be the subject of reports from institutions,
secular, religious, academic or journalistic.

Today that argument is buried in intrigues of international politics,
with abbreviations such as WTO, TRIPS, TRIPS Plus, the Indian Ordinance,
or obscure clauses in bi-lateral treaties. Often hidden from public view
are the secret discussions and agreements that create the roadblocks to
generic use worldwide. Many of these operations fly the flag of
=93globalization=94 Buried in these abbreviations are consequences not only
for every generic company at this Conference, but for much of the world.
I have tried to sum it up in one paragraph:

=93Two thirds of the world=92s population is being systematically denied
access to safe, effective and affordable essential medicines.=94

You can convert the denial of access to the denial of the generic
medicines you make or will attempt to make in the future.

At the national level generics and their constituencies have made it
more difficult for the multinational pharmaceutical companies to block
generic penetration. In the United States it took us thirty years before
a regulatory pathway was cleared for generic use, a pathway that would
win the confidence of physicians and hospitals that had been
propagandized into believing only the multinationals could make a safe
and effective drug and Americans were warned to look the other way when
they paid the price for a medicine.

Even with that accomplishment, the multinationals have found ways to
increase patent life=85.we went from seventeen years of patent protection
from the time of award to twenty years once the patent is filed=85they
added a six month pediatric exclusivity=85they combine two known medicines
whose patents are about to expire and create a new drug, which by FDA
standards does not offer anything unique or new, call it a discovery,
get a patent and advertise the new meaningless combination on television
forcing physicians to accede to the plea of patients: =93Doc, I want the
sensational drug that I saw on TV last night.=94 They argue for ten or
more years of data exclusivity which legally was the exchange for patent
protection, the other side of the coin so that science could proceed.
They find every excuse to =93evergreen=94 patents by inconsequential change=
s.

And, of course, at this Conference we will hear about the perpetual
patents for biotech products.

Blocked nationally, the multinationals have focused their power on
international arrangements to extend patent life to continue monopolies
which, after all, for them, is =93the name of the game.=94

When the World Trade Organization was created many poor and developing
nations, balked, fearful that, among other issues, their ability to
provide medicines in an emergency would be abolished. Under pressure the
WTO created TRIPS: Trade Related Aspects of Intellectual Property
supposedly to protect these rights. That promise was, stated bluntly, a
flat out lie. What they gave with one voice they took away with another,
creating such a minefield that no nation was able to exercise this right.

 From its inauguration as an issue, ownership of TRIPS in medicines was
conceded to the multinational pharmaceutical companies. The leader of
that band was my country, the United States, serving as a convenient
=93front=94 for the European Union and Japan. Together they conspired to
insure that under no circumstances would the so-called poor and
developing nations be able to utilize their rights to issue a compulsory
license with compensation when a national medical tragedy threatened.

Responding to complaints of these nations and the Non-Governmental
Organizations of the world, the WTO met in Doha in 2001 and heard
evidence that could not be denied=85of the thirty-five million persons in
sub-Sahara Africa afflicted with AIDS that needed a combination of
anti-retrovirals needed to keep the six million who died each alive,
only forty thousand were being treated=85at fifteen thousand dollars a
year. Other diseases for which medicines were available and urgently
needed did not make it through the WTO regulatory minefield.

With the world was watching and listening, the United States capitulated.

Yet on the very day that the United States conceded with a gracious and
powerful acknowledgement of the tragedy, in the United States Congress,
so-called =93Fast Track=94 legislation was passed in our House of
Representatives by a single vote. This so-called =93fast track=94
legislation gave the President full control of trade legislation. The
Congress could vote the law up or vote it down but not make any changes.

Unknown to anyone in Congress a provision was added to the legislation
that totally negated what had been pledged at Doha. The insert to the
legislation was never seen by anyone in the House of Representatives, no
Member, no subcommittee, and no full committee. None of the negotiators
saw the change, it just appeared. It was discovered by happenstance when
some staffer in the Senate noticed the change and understood what it
meant. Doha was out the door.

In 2003, when the Doha changes were reviewed in Geneva the United States
objected and five nations went into secret negotiations to consider what
they called =93the Pfizer Amendment=94 that limited the rights of
governments to select what medicines and diseases would be covered. When
Doha came to a vote it was 147 to one, but the one vote from the United
States was all that was required; the WTO works by consensus.

Now, as we speak, only two nations have tried to move around this
roadblock and for one of them, Thailand, the United States has applied
sanctions. Thailand is standing tall and refusing to budge. Another
nation, Brazil conducted negotiations with companies outside of TRIPS
and when the negotiations failed, they imposed compulsory licensing and
began to manufacture their own essential medicines as required.

(For some reason, Malaysia also objected but they have been ignored).

Earlier the United Nations working behind closed doors created a formula
to define =93lesser developed nations.=94 TRIPS and WTO used that definitio=
n
to decide who would receive a =93grace period=94 under the law that allowed
certain poor nations until 2016 to comply with the law.

Here, too, someone inserted a mysterious clause=85and I have been
attempting for five years to obtain the supporting documents=85any nation
with a population over seventy-five million was could not take advantage
of the extension.

Why?

Good question.

You don=92t have to travel very far to realize that the two nations over
seventy-five million that were singled out were providing most of the
essential medicine to the third world: India and China.

India qualified for a ten year extension that ended 2005. During that
time India was allowed to maintain its practice of allowing copies of
medicines if they could be produced using a non-patented process. Under
these conditions, India provided the poor nations with essential low
cost medicines. It also provided the United States with many if not most
of the raw materials for production of FDA approved final dosage forms.

The story does not end there.

The multinationals argued in India for a provision to be attached to the
extension. They created a =93locked mail box=94 into which patents could be
filed, to be released when the exemption ended.

That extension ended a few years ago and six thousand patents began to
flow out of the mail box forcing some existing medicines from the market
and all but blocking generic production of all new medicines for twenty
years.

So, generic companies, there we are.

Right now we are at the height of patent expirations with enough
products to fill our plates for the next few years=85but what about the
long time ability to enter a market, domestic or foreign in the face of
these onslaughts?

Right now, all of us are doing far too little. Some organizations, like
the European Generics Association, are waging a battle that goes beyond
their daily requirements. But governments are still being seduced and
the media remains asleep. Just look at what is happening to us in the
biotech market.

While many of us were asleep, the biotech companies were hard at work
insuring that generic competition not start after twenty-plus years, but
permanently. That must be Nirvana for the industry where prices for
medicines range from $3000 to $300,000 a year with peaks at twelve and
fifteen thousand. I know what it costs to make a generic biotech
product=85and it a=92int much. We grow our own raw material and raw materia=
l
content in chemical generic costs is about fifty percent of final
production costs.

As you know, I initiated and helped to negotiate the US generic law, the
Drug Price Competition and Patent Extension law of 1984, Hatch-Waxman
that freed US generic companies of political restraints, a law that
became the basis of regulation elsewhere in the world. Before the law,
we received only a seven percent market share after patents expired.
Under the law we achieve a ninety percent market share within weeks
insuring billions of dollars in savings to patients and the government.

When we developed Hatch-Waxman we were not fully attentive to the eight
hundred pound gorilla in our backyard, biotech. Those miracle drugs were
just making their way to the market and were covered under a separate
law that dated back to the beginning of the nineteenth century.

Now, as you know, and will hear at this conference, it will not be long
before biotech medicines will command a forty percent market share;
today almost a third of the new medicines under development or review
originate from the from the biotech process. Our industry is being
redesigned and we are only a decade or so away from the time when
medicines will be designed for individual patients.

The battle over generic biotech has launched a new series of brand name
advertising ventures claiming that not only are the biotech products not
subject to generic competition, but the same applies to many generic
products. The arguments are thirty years old, but, as I have learned the
hard way, I am often talking to a new generation of reporters and Wall
Street analysts who are responding to the propaganda again. These
arguments are once again backed by =93selected=94 academic scientists. The
last time around, we discovered these scientists were often secretly
subsidized by the multinationals. My guess is that we are being
subjected to pseudo-scientific information once again, a process that
ignores peer review, the prerequisite of solid, reliable science.

Let me continue to trace for you the AIDS story because it is the first
time we have what I call a =93body count=94 an awful but descriptive term.
If you don=92t take the AIDS medicines you die.

Let=92s return to Africa which is symbolic of what happened =85and is
happening =85elsewhere.

In a South African court, generic use was being blocked by thirty-two
multinational companies with the help of western governments. It was a
classic situation ranging between hopelessness and calculated delay. A
classic multinational tactic, as you know, is to sue you up one side and
down the other, draining our resources and our resolve.

Quite suddenly one unassuming, courageous man appears to challenge the
multinationals on AIDS: Dr. Yusuf Hamied, a brilliant PhD chemist
educated at Cambridge and now the Managing Director of Cipla, Ltd of
India. Based on his work with Mother Theresa and pleas from the Non
Governmental Organizations, the NGOs, Dr. Hamied developed a combination
of the three most important ARV medicines into one table taken twice a
day, replacing a regime of eight to fifteen tablets and capsules from
three companies=85three profit centers=85taken at various times of the day
and with or without food, a complicated procedure anywhere, but
virtually impossible where AIDS was the most prevalent, in
under-resourced nations. He also reduced the price from fifteen thousand
dollars a year to a dollar a day. But he could not move his product due
to South African legal action.

At about this time I was called down to consumer advocate Ralph Nader=92s
office in Washington. His staff wanted to see if I knew where to find
the APIs, the raw materials, not under multinational company control. I
left the office with four squares, each with a question mark inside. I
called a Member of my Board, Agnes Vares, and a major importer of raw
materials to the United States.

She said I should call Dr. Hamied, =93he is an iconoclast, courageous, not
afraid of the multinationals and a humanitarian. He runs Cipla in India.=94

Candidly, I had never heard of Cipla, a company that supplies medicines
to 140 nations.

My next call was to Dr. Hamied in London. In twenty minutes I knew this
was our man. Three days later, five of us traveled to London; after
hearing what Cipla had accomplished and the =93land mines=94 placed in thei=
r
way and learning of the amazing courage of Dr. Hamied and Cipla, we
volunteered to help for six months if he stayed with the fight=85that was
almost five years ago.

By God=92s good will, or by happenstance, one of the five, Jamie Love, was
in Paris at a social function with Doctors without Borders, MSF=85as you
know MSF had won the Noble Prize. When they talked AIDS, Jamie Love told
them about Dr. Hamied and within the hour they were on the phone with
Dr. Hamied and he agreed to work with MSF to lower the price to a dollar
a day.

The resulting publicity=85every editorial writer in the world compared the
dollar a day with the $15,000=85the Wall Street Journal=85the editorial
bastion of the right wing in my country=85wrote four lead front page
articles. The pressure was too great. The multinationals walked out of
court and dropped their law case.

Within the week, Dr. Hamied, the leader of Doctors without Borders and I
went to the World Health Organization and laid out our case. If WHO did
not create a one-stop approval process, the multinationals would drag us
from one courtroom in one country to another courtroom elsewhere, trying
to wear us out. WHO agreed and Canada, the EU, Scandinavia and South
Africa created an airtight regulatory pathway that was as stringent as
any in the world including FDA=85they and we could not afford a mistake.
My country refused to participate.

Next WHO on the advice of the worldwide scientific community declared
the Cipla =93triple=94 as the recommended first line treatment for AIDS. As
a generic, any generic company was free to clone the product, and they did.

Soon two of the major powerful well financed right wing Institutes=85the
Hudson Institute and the American Enterprise Institute=85 were attacking
us although their usual efforts were political. Why was Hamied=92s
humanitarian effort singled out? Who ordered them to attack us in
forums, in the media and Conferences throughout the world?

I will skip a lot of the other ugly chapters on the way to getting AIDS
medicines to the dying victims but our successful effort finally reached
the White House and to our utter surprise, President Bush in his 2003
State of the Union message cited the Cipla example and said that at our
price the United States could no longer stand on the sidelines and watch
doctors tell patients to go home and die. It was a very emotional, very
personal plea=85or so it seemed to me=85and President Bush asked for and
received fifteen billion dollars over five years.

For me that was the light at the end of the tunnel...we needed to
provide medicines for six million people a year in Africa alone and at
one hundred and fifty dollars, our targeted price=85.we could
realistically dream of reaching and prolonging the lives of enough
victims to move the world into action. We needed to put a minimum of two
million patients a year on the medicines to stop the deaths and misery
of the disease. We could begin to curtail the sickening tragedy of
orphans being raised by grandparents in villages without resources or hope.

Unfortunately, that is not the end of the story.

Without warning, the US announced that for their money, companies would
have to start the regulatory process all over again and apply to FDA.
For the triple, it was a new drug application. We could not change that
decision although everyone knew it was made on behalf and for the
benefit of the companies that had walked out of the courtroom in South
Africa.

Although FDA could not have been more supportive, it took us three years
to have the triple approved for sale overseas, the same process that
would allow sale in the United States when patents expired.

During the three years it took for FDA approval, the brand products and
regime were sold at a multiple of the generic price. How many lives cold
have been saved if my government had followed their President? Just
divide $150, our target price, into fifteen billion and you will find
the answer.

When FDA completed their investigations there was not one single change
required from the WHO approval=85not one.

Even with a Democratic Congress, that US requirement for FDA approval
remains. I am looking for allies to have it changed.

At WHO one man, Dr. Lembit Rago, who had developed the pre-qualification
program, fought off attempts to stifle its effectiveness.

But the UN itself was not finished with us. At a press conference the UN
Secretary General, the United States, the multinational pharmaceutical
companies manufacturing AIDS medicines and the Caribbean nations
launched their =93Access to Essential Medicines=94 to make AIDS medicines
available to poor and developing nations. We were not invited to attend
that Press Conference and the resultant price in the Caribbean was ten
times the generic price. They had created a monopoly by treaty.

It took us two years but with the help of another courageous person at
the Pan American Health Organization, the Latin American nations and
Mexico decided to abandon the Access to Medicines program and asked
manufacturers to bid competitively at a meeting in Lima, Peru. The
multinationals balked and walked out, but the generic companies bid $249
for a year=92s treatment with the triple.

Let me share with you one further UN anti-generic action.

The UN=92s highly publicized millennium campaign roused worldwide support.
Included was a Committee on making access to affordable medicine a human
right. I was appointed to that Committee as were three other
pharmaceutical executives from multinational companies. When after many
hearings around the world, the Committee=92s work resulted in a report and
recommendations. Pharma objected and went to the leader of the
millennium group, Dr. Jeffrey Sachs, and urged him to change the report
but as Mr. Sachs set about his work, the Committee rebelled and several
of its Members resigned including the distinguished scholar who had
compiled our findings into the report that Sachs had called him to change.

Although the report stood, when Sachs traveled around the world to
highlight the work of the millennium committees he held press
conferences each dedicated to a special subject=85he cited poverty, water
and a dozen other reports, but not the one on essential medicines as a
human right, one of the goals of the millennium. To be blunt and candid,
he buried our report.

You are right to ask why this recognized vocal champion of human rights
rebelled against publicizing a UN goal, access to medicines as an
essential human right.

Two secret documents revealed in Noble Prize Winner and former Vice
President Albert Gore, Jr.=92s documentary helped me to understand how our
opposition worked and their definition of success. The secret documents
were from lobbyists and strategists to corporations on how to defeat the
campaign to reverse or block the industrial changes required for
reducing global warming. Their definition of success:
=93Victory is not winning, victory is creating doubt.=94

For me, that helped to explain the success of many of the anti-generic
campaigns. Just a few weeks ago I saw that campaign was in full force in
Lebanon where physicians were flooded with propaganda that creates doubt.

I asked myself, why such a major effort in a Lebanon a country of only
four million people, a nation working hard to resolve their political
problems by discussion and not fighting in the streets.

Finally, let me cite a full page advertisement that Cipla placed in
every major newspaper and magazine in the world on AIDS Day. In small
type in the middle of the page it read:

=93What=92s the use of developing life-saving medicines, if you can=92t mak=
e
them affordable to the patients?=94

That is the generic mission and the politicians be damned. Thanks for
listening