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Africa: Health, Patents Clash

AfricaFocus Bulletin
Dec 6, 2005 (051206)
(Reposted from sources cited below)

Editor's Note

In 2001, the World Trade Organization (WTO) approved the Doha Declaration on TRIPS and Public Health which affirms the right of countries to prioritize access to medicines and public health over intellectual property rights. However, this statement did not address the issue of how countries with insufficient manufacturing capacity can make use of these rights. Now developed countries want the WTO to extend a complex interim "solution" to the problem that has not worked.

Although increased use of generic drugs for first-line antiretroviral treatment has significantly lowered the cost of treatment, and the United States has relaxed its opposition to use of selected generic drugs in its AIDS programs, prices are still too high for sustainable treatment of millions in need. And patent restrictions still keep prices prohibitively high for second-line treatments, treatments for children, and many other essential medicines.

This AfricaFocus Bulletin contains a sign-on statement by a group of non-governmental organizations calling on the World Trade Organization to reject the "bad deal" of extending the unworkable interim solution adopted two years ago. Also included are a letter and a press release from Medecins sans Frontieres with additional background on the problems caused by patents on essential medicines.

For previous AfricaFocus Bulletins on health-related issues, see http://www.africafocus.org/healthexp.php

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

WTO Members should reject bad deal on medicines

3 December 2005

Joint statement by NGOS on TRIPS and Public Health

[The letter is online at
http://www.cptech.org/ip/wto/p6/ngos12032005.html To sign the letter, interested parties should contact Thiru Balasubramaniam (thiru@cptech.org).]

The WTO General Council is considering proposals to amend the TRIPS Agreement in order to permit the exportation of generic medicines produced under compulsory license to supply countries with insufficient or no manufacturing capacity.

According to health, in particular AIDS activists, the proposals are flawed, and poor countries should not accept a permanent amendment that has not been shown to work in practice.

In 2001, the WTO signed the Doha Declaration on TRIPS and Public Health (the Doha Declaration), which affirms the right of countries to prioritize access to medicines and public health over intellectual property rights. However, the Doha Declaration left unfinished the issue of how countries with insufficient or no manufacturing capacity can make use of these rights. Indeed, most poor countries are not adequately equipped to do efficient domestic production of medicines, while those which have capacity require the economies of scale of a large, global market in order to reach prices that the poor can afford. However, under the TRIPS Agreement, there are significant limitations on exports of generic medicines made under compulsory license.

On 30 August 2003, the Members of the WTO finally agreed on a mechanism with many procedures for allowing trade in compulsory-licensed medicines. The procedures have been criticized by generic industry experts and activists alike for being too burdensome and unworkable in practice. However, the US and the EU are pressuring developing countries to accept that flawed August 30 agreement be locked in as a permanent amendment to the TRIPS Agreement - despite the fact that the mechanism has not been used since its introduction more than 2 years ago and its workability is uncertain.

Following the August Decision, the Africa Group submitted a formal proposal that removes many of the procedural requirements and this proposal received wide support from civil society as well as developing countries as a basis to rethink the mechanism that was agreed to on 30 August 2003. This proposal is also in accordance with the African Health Ministers' recent call in the Gaborone Declaration on "the Ministers of Trade to seek a more appropriate permanent solution at the WTO that revises the TRIPS agreement and removes all constraints, including procedural requirements, relating to the export and import of generic medicines."

Unfortunately although the Africa proposal enjoyed much support, in the current negotiations, this proposal does not seem to be discussed at all. Instead, developing countries are presently being pressured to agree quickly to an amendment that includes the entire August Decision and a re-reading of the Chairman's statement,(a solution differing significantly from the original Africa Group proposal) just so that WTO members have something to harvest at Hong Kong after four years of negotiations.

In addition, while the discussion in the TRIPS Council and the General Council have mainly been around the legal status of the Chairman's Statement, we feel that a more in-depth focus has also to be shown on finding a mechanism that works to facilitate access to medicines. It must be borne in mind that the lives of millions of people depend on finding a mechanism that works in facilitating access to medicines.

Thus the current 30 August 2003 mechanism needs to be tested and shown to work, before it is turned into a permanent feature of the TRIPS agreement. If the mechanism proves ineffective in achieving its stated goal - enhanced access to affordable medicines for countries with insufficient or no domestic manufacturing capacity - then WTO members should return to the drawing board and agree to a mechanism that is more effective.

For now the 30 August 2003 mechanism is a waiver that according to paragraph 11 only terminates "on the date on which an amendment to the TRIPS Agreement replacing its provisions takes effect for that Member", thus effectively it is a permanent waiver for Members to use.

This issue is too important for countries to quickly agree to an amendment just to be able to claim that the WTO system still works and can deliver for development. The developed countries, in particular the US and EU are desperate to deflect attention from their lack of movement in agriculture and their anti-development proposals in NAMA and Services. If the price of making that claim is the lives of people living with treatable but deadly diseases, then developing countries should not pay it.

*Initial Signatories*

Oxfam International
Christian Aid
Consumer Project of Technology (CPTech)
Ecumenical Advocacy Alliance (EAA)
Health Action International-Asia Pacific
Health-GAP
Act Up Paris
Essential Action
Reseau pour l'Acces aux Medicaments Essentiels (RAME) Institute for Agricultural Trade Policy (IATP)
Essential Inventions
Third World Network


Médecins sans Frontières
Letter on TRIPS and Access to Medicines

http://www.accessmed-msf.org

Mr Pascal Lamy
Director General
World Trade Organization
Rue de Lausanne 154
CH-1211 Geneva 21
Switzerland

20th September 2005

Dear Mr Lamy,

We are writing to you to congratulate you on your appointment as director general of the World Trade Organization and to raise concerns about access to medicines, an issue we know you are very familiar with.

The HIV/AIDS crisis has shown the urgent need to ensure that essential medicines are available at affordable prices. Today approximately half of the one million people in the developing world who receive antiretroviral drugs rely on generic production. The fixed-dose combinations, produced in India, greatly simplify the administration of antiretroviral therapy and have been critical to scaling up treatment in resource-poor settings.

The 2001 WTO Doha Declaration on TRIPS and Public Health was a vital step in increasing access to medicines. It provides unambiguous support to any government that need to protect the health of their people to use the TRIPS flexibilities to overcome the barriers posed by patents, and helps the least developed countries by extending the transition period for enforcing and granting pharmaceutical product patents until at least 2016.

Since then, however, there has been a systematic dismantling of the Doha Declaration through bilateral trade agreements in which much higher levels of intellectual property protection are demanded than required by the WTO.

The impact of patent protection on HIV programmes will become very apparent in the coming years when large numbers of patients currently on treatment will need to switch to newer, second line medicines. These drugs are at least 4-10 times as expensive as first-line treatments, and almost all are patented or are likely to be patented in those countries that have capacity to produce them generically such as India, Brazil and Thailand.

Today MSF is treating 45000 people living with AIDS. Already, this represents a major part of our overall spending. At current projections, we estimate that overall programme costs could at least double in the next few years as significant numbers of patients will require secondline medicines. Obvious, MSF's needs are just a small indication of the problems governments throughout the developing world will face. In addition, the impact of patents is not limited to antiretroviral drugs, but will increasingly be felt across all diseases with all medicines brought to market from now on.

A second critical question for the WTO is how to ensure that innovation meets the health needs of neglected patients in the developing world. The WTO TRIPS agreement came with promises of increased innovation and investment in research and development. As far as the needs of people in developing countries are concerned these promises have not been fulfilled. So far, increased patent protection in developing countries has not contributed to increased innovation.

An R&D system that is driven by patent and profit motives neglects the health needs of the poor. The patent system is intended as a stimulus for innovation, but there is no mechanism for directing that innovation, and as a result many diseases are completely ignored. We face the consequences on a daily basis in our projects, for example to diagnose TB in HIV patients and in children; to treat tropical diseases like leishmaniasis, which affects 12 million people; to monitor HIV patient progress, and to treat HIV in children.

Recently established product development partnerships provide some cause for hope, but all are heavily dependent on philanthropic donations, with negligible contributions by governments. For example, through its funding of the Drugs For Neglected Diseases Initiative MSF is contributing more finances to tackling the problem than the European Union and all European governments combined. The few promising drug development projects that exist lack secure funding to move them into clinical trials.

In view of the above, the WTO should increase its work to support access to medicines. We ask you to take action to stop the erosion of the Doha Declaration on TRIPS and Public Health through bilateral and regional FTAs.

We specifically ask you to hold a meeting to examine whether the current WTO rules on patents and their flexibilities are sufficient to address the needs in developing countries with regard to access to existing products and ensuring the development of new therapies. In particular, the 2003 August 30 decision to allow production of generic medicines for exports needs to be reviewed. This meeting should also address the question how bilateral and regional trade agreements affect access to medicines and how the WTO plans to provide effective technical assistance on the implementation of the Doha declaration in an increasingly TRIPS-plus environment.

It is crucial that the WTO addresses the question how it can contribute to a better mechanism for essential health Research and Development to ensure that health needs of people in developing countries are met. We ask you to initiate a discussion at the WTO about how the failure of the TRIPS Agreement to address essential health needs can best be addressed.

You have announced that the weeks to come will be devoted to internal and external consultations. We would be more than happy to meet with you to discuss our concerns in more detail. Sincerely yours,

Dr Karim Laouabdia
Campaign for Access to Essential Medicines
Medecins Sans Frontieres


Prices of AIDS Medicines in Developing Countries continue to be a concern

28 June, 2005

For more information, please contact
V‚ronique Terrasse, MSF, tel ++41-(0)22-8498 900 or veronique.terrasse@geneva.msf.org

Geneva Tuesday June 28th 2005 - - In a new edition of a pricing guide published today , Medecins Sans Frontieres shows that while generic production has brought down the prices of most first-line antiretrovirals (ARVs) from over $10,000 in 2000 to as little as $150 per patient in June 2005, prices of newer ARVs and formulations for children are up to 12 times higher. Yet access to newer drugs is increasingly critical as the growing number of people with HIV/AIDS currently on treatment will inevitably develop resistance to first-line treatments.

MSF currently provides ARV treatment for approximately 35,000 people in about 30 countries. Approximately 70% of the patients in MSF's projects are on World Health Organization (WHO)-recommended three-in-one combination pills as first-line therapy.

"But we are already beginning to confront the 'second-line crisis' that newer treatment programmes may not feel for several years," said Dr Felipe Garcia de la Vega, AIDS specialist with MSF's Campaign for Access to Essential Medicines. "Although our clinical outcomes are good so far the average survival rate in our projects is 80% after 12 months on treatment some of our programmes have been operating for more than five years now and we are have naturally started having to switch some of our patients to second-line treatments as they have developed resistance to first-line drugs."

"Today, MSF pays less than $250 per person per year for WHO-prequalified first-line treatments sourced from Indian generic manufacturers. This has only been possible because there have not been patents on pharmaceuticals in key manufacturing countries like Brazil and India, and because there has been robust generic competition," said Fernando Pascual, pharmacist and one of the authors of the MSF report. "But when we switch to second-line treatments, the price increases six- to 12-fold. Treating a child can be four times more expensive than treating an adult," Pascual said.

January 1st 2005 saw the implementation of the World Trade Organization's Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) in India, one of the main sources of generic ARVs today. India must now recognise product patents on medicines. This may lead to there only being one producer the patent holder for newer drugs. In the absence of competition, this sole supplier can set a monopoly price.

In MSF's AIDS projects, for instance, the number of patients taking lopinavir/ritonavir and other second-line ARVs is small, but the organisation pays exorbitant prices for the drug. "In Guatemala, where MSF provides ARV treatment for 1,700 people with HIV/AIDS, Abbott charges $2.66 per capsule," said Fernando Pascual. "Although MSF is treating just 11 patients with lopinavir/ritonavir, we pay more than $5,800 per person per year for the one drug alone."

According to the MSF report, the current pricing system based on companies giving voluntary discounts to developing countries is not sufficient to guarantee affordability of medicines, now or in the future. The problems with this mechanism, known as differential pricing, fall into three broad categories. First, some single-source drugs are simply very expensive. For instance, the differential price for abacavir announced by GlaxoSmithKline is over $800 per patient per year in developing countries. Second, prices announced by pharmaceutical companies are not available in reality because manufacturers have not registered or are not marketing their drugs in countries. This is the case not only for certain originator products in Mozambique and Cambodia but also some generics in Latin America. Third, some companies do not offer discounts to middle-income countries.

WHO estimates that out of the 6.5 million people needing ARVs in developing countries today, approximately one million are receiving them. Most of them are currently taking first-line treatments. But many of them will need access to second-line drugs within the next few years. The consequences are already felt in countries like Brazil, which has been running a nationwide AIDS treatment programme since 1996: the country today spends 63% of its total AIDS drug budget on three products (Abbott's lopinavir/ritonavir, Gilead's tenofovir and Merck's efavirenz).

"It is urgent to address how high the final drug bill is in a few years' time, and who will foot it to meet patients' needs," said Dr Garcia de la Vega. "G8 countries and other donors are discussing universal access to ARVs, but this will remain an impossible goal if prices continue to soar. It is vital that governments and international organisations such as WHO take and encourage immediate steps - such as compulsory licensing - that allow countries to make or import more affordable generic medicines."


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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