[Debate] The Hindu: Iron grip prised loose - Pharma

[Riaz K Tayob]

[When the rich countries start cutting prices to Big Pharma then poor 
countries can do so without the characteristic "your are breaking the 
innovation system"... and here is a lesson for Africans and civil 
society... the range of options available are vastly improved if there 
is a production centred bias in access to meds movements than if there 
is not one... a virtuous circle of enlightened self interest could be 
created... producing meds while meeting health needs... the (necessary) 
marginalisation of a production centred focus in Africa in the 
remarkable A2M movement is now more visible... lets see what civil 
society does...

http://www.thehindu.com/news/cities/bangalore/article3623839.ece

Published: July 10, 2012 15:08 IST | Updated: July 10, 2012 15:13 IST
Iron grip prised loose

Deepa Kurup

More compulsory licensing of patent-protected medicines coupled with 
state procurement and distribution could be a panacea for the healthcare 
system

The promise of universal access to healthcare and affordable medicines 
is inextricably linked to the ongoing debate on patent regimes. Recent 
months have seen an escalating battle between big business or 
multinationals in the pharmaceutical sector and the government on the 
question of the intellectual property rights of life-saving medicines 
and the impact of such regimes on drug affordability.

In a landmark decision, earlier this year, the Indian Patent Office 
granted a compulsory license of a patented drug in India. Using a clause 
in Indian patent law that allows for compulsory licensing if “reasonable 
requirements of the public with respect to the invention have not been 
satisfied”, the Patent Office authorised an Indian company, Natco 
Pharma, to make and sell a generic copy of multinational pharma 
corporate Bayer’s drug, which is used to treat advanced kidney and liver 
cancer, by paying six per cent of its net sales in royalties.

Priced at an exorbitant Rs. 2.8 lakh (for a month’s dose), Bayer’s pill 
Nexavar was bought by just 200 people in India in 2011. By its own 
submission Bayer supplied to only two per cent of the patient 
population, and thus did not meet these “reasonable public 
requirements”. Natco, which says at least 8,000 patients need it, will 
supply the drug’s generic copy at Rs. 8,800. India now becomes the 
second country after Thailand to enforce compulsory licensing for a 
cancer drug, though both Thailand and Brazil have allowed this provision 
in the case of many other medicines.

Public health experts and activists hope that in a country where access 
to affordable medicines and healthcare has seen a sharp decline, this 
decision will pave the way for compulsory licensing of many more 
critical drugs. With this India becomes the second country after 
Thailand to enforce compulsory licensing for a cancer drug, though both 
Thailand and Brazil have allowed this provision in the case of many 
other drugs.

Only half the battle

Allowing for compulsory licensing is half the battle, but the other half 
cannot be won without increased government spending and state 
intervention in the procurement and distribution of drugs. Take for 
instance, the case of Nexavar. Even after compulsory licensing is 
enforced, the drugs manufactured by the Indian company still have a 
profit component: at Rs. 8,800 for a month's supply, the life-saving 
medicine is still inaccessible to a vast majority of Indians.

The truth is that these battles apart, India, often known as the 
'pharmacy of the global South' as it exports life-saving drugs across 
the world, has failed to provide affordable medicines to a large section 
of its population. This 'duality' has been noted by the High Level 
Expert Group (HLEG), commissioned by the Planning Commission, which in 
its report on 'Universal Health Coverage' points to unreliable supply or 
distribution system, poor system of medicine, skewed priorities in drug 
spending, unaffordable drug pricing and a stringent pricing regime as 
the main factors affecting affordable access to medicines.

Evidence from large sample surveys of households in India suggests that 
impediments to access to drugs have only increased. Over three decades 
the access to free medicines have plummeted from 31 per cent to 8.9 per 
cent (for in-patients) and 17 per cent to 5 per cent (for out-patients), 
according to National Survey Sample Rounds in 2004. Largely uncontrolled 
after the price decontrol policies of the 1990s, the price of drugs that 
were not controlled increased by 137 per cent, and the price of 
essential drugs too grew by 15 per cent from 1996 to 2006, the HLEG 
points out.

Abysmal statistic

Karnataka does not fare too well in terms of access to medicines. The 
HLEG report quotes a study which finds the median availability of 
critical drugs in the public healthcare system was an abysmal 12.5 per 
cent in the State. It trails other States in terms of drug expenditure, 
which has declined from 7.9 to 6 per cent of total health expenditure 
from 1996 to 2006.

Procurement and distribution

However, States such as Tamil Nadu have led the way by procuring drugs 
from companies and giving it free for all those in need at the state-run 
hospitals. Bulk procurements of both patented and generic drugs drive 
down the price point; this variation could range between 100 and 5,000  
per cent, the HCEG report notes. This system is a universal one, not a 
targeted scheme, along the lines of the Union government proposal to 
supply free medicines across disease segments in state-run hospitals.

Coupled with more green signals for compulsory licensing of patented 
drugs, a universal public distribution system-like infrastructure to 
procure and distribute drugs could be the panacea for what ails our 
healthcare system. Shamnad Basheer, IP expert and professor at National 
University of Juridical Sciences, says that the government has a huge 
role to play in realising this. “So far the government is saying that it 
will permit generics to enter the market wherever possible, and that 
there will be a more competitive market. But these drugs are still 
unaffordable. The burden of making it affordable to the common man is 
still with the government.”

Post the Bayer-Natco decision, currently being contested in a patent 
appelate tribunal, global pharmaceutical majors are complaining that the 
Indian patent system does not protect their innovations. Another case 
now pending in the Supreme Court is an appeal by Novartis against the 
denial of a patent for a cancer drug, one that the multinational claims 
has been patent protected in over 30 countries.

Mr. Basheer emphasises that the stance taken by India is significant. 
Significantly, China too recently reportedly too made a statement 
supporting compulsory licensing. He says: “While there is pressure from 
US and EU lobbies, the fact is that under TRIPS (Trade-Related Aspects 
of Intellectual Property Rights), countries are free to decide on 
compulsory licensing. Over the years, the developed world has made it 
difficult to get such licences, but developing countries are now going 
to push for it.”