[Ip-health] (IP-Watch Inside Views) Interview with Ellen 't Hoen: How to Avert the Coming Drug Access Crisis

[Thiru Balasubramaniam]

http://www.ip-watch.org/weblog/2009/07/10/how-to-avert-the-coming-drug-acce=
ss-crisis/

10 July 2009
How To Avert The Coming Drug Access Crisis

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Interview With Ellen =91t Hoen, Senior IP Advisor At UNITAID

ellen-t-hoenEllen =91t Hoen is the senior advisor on intellectual
property and medicines patent pool at UNITAID, a financing mechanism
for the scale-up of treatments for HIV/AIDS, tuberculosis and malaria,
where she is focused on the development of the group=92s patent pool for
medicines. She came from a decade with M=E9decins Sans Fronti=E8res (MSF)
Access to Essential Medicines Campaign, where she acted as director of
the group=92s policy and advocacy work. =91t Hoen recently published a
book entitled, =93The Global Politics Of Pharmaceutical Monopoly Power,=94
which is available here. The project was financed by the Dutch
Ministry of Foreign Affairs. The book is largely based on her
experience with MSF, and was published before she joined UNITAID.

Intellectual Property Watch: One of the key flexibilities of the World
Trade Organization Trade-Related Aspects of Intellectual Property
Rights - TRIPS - agreement that you mentioned in the book is
compulsory licences. You say in the book that fifty-two countries have
issued them=85 how much of the pharmaceuticals market do these
compulsory licences represent?

Ellen =91t Hoen: You often hear that that compulsory licensing doesn=92t
work and that countries do not make use of the WTO Doha Declaration on
TRIPS and Public Health. When I started to look into the use of the
TRIPS flexibilities a bit more deeply, I actually found that many
countries on a routine basis make use of the Doha Declaration on TRIPS
and Public Health, through compulsory licensing or government use of
patents, and the non-enforcement rights that LDCs [least developed
countries] have under paragraph 7 of the Doha Declaration on TRIPS and
Public Health [Note: paragraph 7 releases LDCs from obligations to
enforce certain parts of the TRIPS agreement before 2016].

In particular, =93government use licences,=94 [which] do not require prior
negotiation with the patent owner. Many countries do this on a routine
basis in their day-to-day procurement activities. So they say =91we
authorise such-and-such to import the following medicines, regardless
of the patent status.=92 Some make reference to a national emergency,
others do not.

So far, compulsory licensing has been predominantly used in the area
of HIV/AIDS and that of course also has to do with [the fact that] =85
there=92s money to procure medicines for HIV/AIDS: there=92s no Global
Fund to pay for cancer or heart disease, or any significant financing
that helps create a market.

Second, the generic versions of certain AIDS medicines were actually
available, and that=92s also in a way the bad news. Because the
countries that currently use the flexibilities to allow the use of
generic ARVs all depend on imports from India.

Indian producers are able to make generic versions of these medicines
because of the 1970 Indian Patents Act which excluded product patents
for medicines. As of 2005, India has to comply with the TRIPS
Agreement and has started to grant product patents on medicines. So
very soon this is going to change. Generic versions of newer drugs
will not become available automatically until after the 20-year patent
term has run out. Unless of course India starts granting compulsory
licences or other mechanisms are put in place to ensure that generic
producers can continue to play this role, such as the patent pool.

IPW: Has India shown an interest in compulsory licences?

EtH: That is at this point not clear. They have legislation that would
allow it, but when are they going to use it?

Looking at Thailand, the question is also will India be prepared to
deal with the controversy that will likely be a result of a compulsory
licence. African countries and in particular the LDCs have largely
been left alone when they take measures to allow the import of
generics. But if India starts giving compulsory licences to its
industries, I think that might provoke much harsher responses.

Those that do not like compulsory licences have always tried to ring-
fence it and limit the use or scope of the flexibilities as much as
possible. You may remember the debates at the WTO on a limited list of
diseases eligible for compulsory licences, that only contained
diseases for which there were either no products or only products that
were off-patent.

Countries such as Brazil and Thailand =96 so called middle-income
developing countries =96 represent an important growth market for
pharmaceutical industry. And the growth potential in their traditional
markets - Europe and North America - is limited, has pretty much come
to a standstill.

So the right-holding industries do not want to see governments on a
routine basis issue compulsory licences and allow a generic industry
to flourish, while that is the terrain they see [as] their new market
opportunities.

IPW: Is there any particular significance to the reaction over
compulsory licences on drugs for non-communicable diseases as opposed
to communicable diseases?

EtH: Well from a medical point of view, of course there isn=92t =96 it=92s
whether you die of AIDS or whether you die of heart disease=85 well,
you=92re dead. It=92s just as serious.

Thailand issues these compulsory licences in the context of its health
and medicines policy. Thailand makes it clear, it separates the
market. The compulsory licences are for supplying the public sector
which would not have access to these drugs had they had to pay the
premium brand name price. The private sector market remains untouched
by the compulsory licence.

If companies are worried about compulsory licensing, the best way to
avoid it is to make sure to offer the drugs at prices that people can
afford. Or you allow others to produce them and join the UNITAID
Patent Pool. You can enter into licence agreements on reasonable terms.

IPW: And can you talk about the August 30th agreement [at the WTO] and
the need for the capacity to manufacture generic medicines?

EtH: Because a compulsory licence is predominately for the domestic
market, a country like India could not export huge amounts of what
they would produce on their compulsory licence. So that would put
countries without production capacity at a disadvantage of making use
of compulsory licensing. If you don=92t have a domestic industry - most
countries don=92t - you would not be able to make use of it in a world
where all medicines may be patented. That was the idea behind the
August 30 decision =96 to take away the limitations on exports of
products produced under compulsory licences.

But the August 30 decision is really a decision gone wrong. It=92s a
very good example of diplomatic compromise with little practicality.
The mechanism put in place is difficult to operate, because it is
based on a case-by-case, drug-by-drug, country-by-country process. You
cannot maintain a generic drug industry based on an order-by-order
supply decision making process.

You may in the future see the occasional shipment - since 2003 we have
seen one from Canada to Rwanda. That required an enormous amount of
mobilisation, involvement and money put up front by organisations such
as MSF to make it happen. And even then it took four years. The
company involved has since then stated never to want to do it again.

IPW: And can you answer the pharmaceutical industry=92s argument that
too much focus on developing the generics industry might damage
innovator company interests in developing nations and limit the supply
of future medication?

EtH: In the past pharmaceutical companies have en masse abandoned
research into neglected diseases. That=92s why they became neglected
diseases. Much of the innovation for tropical diseases comes from
military research and government research that comes out of the old
colonial systems: the tropical disease centres and the Vietnam War,
which gave for example a number of malaria drugs.

So I don=92t quite see that argument. I don=92t think that if we close
down the generic industry in the developing world that big pharma will
spontaneously start reinvesting in tropical neglected diseases.

If anything, looking at the history of the European pharmaceutical
industries, they were not interested in having very strong patent
protection until they actually reached the level where they could
become innovators themselves. We=92re probably going to see similar
developments in developing countries. But that will not automatically
provide a solution for neglected areas of R&D.

IPW: So then let=92s talk about solutions. You mentioned several
different ideas for changing the innovation or incentive landscape,
can you talk about or expand on these ideas?

EtH: One of the core principles which was a theme at the negotiations
of the intergovernmental working group on public health, innovation
and intellectual property (IGWG) is looking at separating =85 the cost
of the R&D from the price of the products. The World Health Assembly
resolution 60.30 asks the WHO to develop proposals along those lines.

If you maintain a system in which innovation is dependent on being
able to charge high prices through patent monopolies, you=92ll obviously
have the problem of high prices. But also an R&D agenda setting that
will go [in the] direction of those areas that represent profitable
markets. Such a system will never deliver a product for, say, sleeping
sickness.

Some of the product development initiatives, such as the DNDi, have
the principle of separating the cost of the R&D from the price. That
doesn=92t mean that there isn=92t any profit to be made. Obviously, the
commercial partners of these PDPs [product development partnerships]
are companies that keep a commercial interest, but in this model you
don=92t have to charge premium prices to finance the cost of your R&D.

IPW: How about the idea of patent pooling, especially as UNITAID has
launched a patent pool initiative last year, and do you know about the
status of that patent pool?

EtH: We are working on establishing a patent pool, it=92s not going to
be a UNITAID patent pool; it will likely be run by a separate
licensing agency.

Initially, we focus on HIV/AIDS, on the newer molecules to stimulate
the development of fixed-dose combinations, including for children. If
you look at the first line fixed-dose combinations that we have today
for US$ 85 per patient per year, they were developed and are produced
in India and they could do that because the individual compounds
making up the three-in-one pill were never patented in India, so there
were no barriers to put the products together.

But to do the same with the newer medicines is going to be much more
difficult because you have multiple patents and multiple patent
owners. And some of these new medicines are likely to be patented in
India. This raises the question: where are the fixed-dose combinations
of newer treatments going to come from?

The HIV medicines patent pool will be a royalty-based system, so we=92re
not asking patent holders to just give up their IP =85 and it will be a
needs-driven one. Together with the WHO we have identified the lists
of =91missing ARVs=92 - a kind of wish list for the patent pool to pursue
- We are holding informal consultations with the rights holders and
with the generic industries to find out what are the conditions under
which collaboration is possible and those consultations are going very
well.

The next steps will be to bring different stakeholders together and to
develop an implementation plan, possibly based on different scenarios.
We want to set it up as a model so similar IP issues in other disease
areas can be addressed following this model. But we want to start with
HIV to see whether we could make it work =96 it is of course an
experiment.

The patent pool that we are proposing will solve certain problems.
There will be lots of other problems that are not solved by a patent
pool. It=92s certainly not an answer to all of the R&D needs that
currently exist.

But I think it will be an answer to the situation we=92re entering into
now, where increasingly these important medicines are patented, more
and more widely. And the question is where are the generics going to
come from, where are fixed-dose combinations going to come from, where
are paediatric combinations going to come from - those are the
questions that the patent pool aims to answer. And if we get it right,
we can. I=92m convinced of that, but it requires all the players to want
to come to the table.

IPW: What are the major issues you=92d like people to take away from the
research you did on this?

EtH: I think the main messages are: [First] the Doha Declaration has
been much more important than people have recognised. Second: if we
don=92t now put additional international systems in place, we are going
to run into a second drug-price crisis, because of the more widespread
patenting.

Third, we have to recognise that research and development is very
costly, we have to recognise that it has to become much more health-
needs driven, and that we need to define alternative financing
mechanisms to the patent-only model we=92re in now to make that happen.

The final message is perhaps that there are good proposals on the
table - just look at the richness of the IGWG process - that can get
implemented, patent pool being one, and it would be a lost opportunity
not to do that.

Categories: Education/ R&D/ Innovation, Enforcement, English, Human
Rights, Inside Views, Patent Policy, Public Health, Technical
Cooperation/Technology Transfer, WHO, WTO/TRIPS


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997