Sunday, February 18, 2007

WTO, TRIPS, and Pharmaceuticals for 3rd World Countries

Drug demands: Protestors shout slogans urging Novartis to withdraw its case against the government .
AP Photo

Novartis challenges Third World’s right to cancer lifeline

The pharmaceutical giant takes the government to court for not granting it the patent for a vital drug, reports Mihir Srivastava

India is the world’s largest supplier of cheap generic medicines to developing countries, supplying approximately 67 percent of it. India’s enormous capacity to produce cheap generic medicines is the biggest stumbling block for the extension of the market for patented drugs manufactured by pharmaceutical giants to developing countries, which are sold at astronomical prices. This has led pharmaceuticals major Novartis to sue the Indian government in the Madras High Court, accusing it of dishonouring its World Trade Organisation (WTO) patent obligations. Novartis is using Section 3(d) of the Patents Act on the pretext that it violates India’s WTO obligations. This case has lead to protests by health groups and patients all over the world

Under patent, Gleevec is sold at $2,600 per patient per month. The generic version is sold at $200 per patient per month.

Huffington Post 02.01.2007

Sunil Chacko

Patents and Public Health Crisis Moves Center-Stage

As activists attempted to deliver a fake coffin to the Washington DC office of the pharmaceutical giant Novartis and large demonstrations are underway in India and other countries over the seeming dichotomy between the rights of patent holders and patients, one has to ask if the predictable, and predicted, crisis could have been averted.

The Indian pharma-industry is a success story. Five hundred thousand people are employed in this sector, in roughly 20,000 firms. In the pre- and post-production sector, a further 2.5 million jobs are thought to be involved. Compared to the general price index, drug prices have risen much less in the last 15 years and remain far below average. 'Worldwide, India is a country of very low ... prices (for) high-quality medicines,' Nihchal H Israni, president of the Indian Drug Manufacturers' Association (IDMA), states proudly. Self-sufficiency with regard to pharmaceuticals is far above 70% - in spite of the policy of a more open economy pursued by India since 1991.

The secret of this success is the Indian patent law of 1970. India had entered independence with the patent system of the British colonial masters. This secured the Indian market for the British industry; pharmaceuticals were largely imported from abroad and local production was minimal. The 'architect' of the patent law of 1970, S Vedaraman, then director of the Indian Patent Office, summarises the principle as follows: 'We are not against patents. And we are prepared to pay decent licence fees. But we in India cannot afford monopolies.' Since then, India has done without product patents for pharmaceuticals, with the exception of production processes that may be patented for seven years. In addition, the law allowed for compulsory licences granted by the state, in the case of a patent holder's not granting voluntary licences on fair conditions. India profited from a large section of well-qualified experts who made good use of the new opportunities.

These moves did not find much favour with the multinational pharma-industry. It should not be forgotten, though, that in many industrial countries, the protection of inventions through patents was only developed in the last 30 years. The Swiss pharmaceutical industry, in particular, fought the enactment of a patent law at the end of the 19th century, in order to be able to imitate foreign drugs, such as Aspirin. In the German Reichstag (Parliament), Switzerland was considered a 'state of robber barons'; in France, it was labelled a 'country of counterfeiters'. Product patents for medical drugs have only been known in Switzerland since 1978. It is very clear whose interest they serve. Technology exporters profit from patent protection, which shields them from low-cost competition. Technology importers - in other words, most of the developing countries - want access to technical innovations as freely and cheaply as possible, i.e., no patent protection which creates monopolistic barriers. Indeed it was in this way that the economies of Japan, Korea and Taiwan were able to thrive, due to the beneficial absence of patents

For those of us who have attempted to alert everyone over many years that a serious problem was brewing, it is little consolation about the accuracy of the forecast. To their credit, a few senior U.S. Senators and Representatives and their aides have worked extensively on this matter, and I and an ex-Senator who was a close personal friend of the late President Ronald Reagan, together, repeatedly alerted top management of a major international agency that there were serious limitations in the assumptions on which the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights (WTO's TRIPS) Agreement was built. Using concrete proposals, we urged this agency chief and his agency, that receives billions of dollars from the U.S. Congress, to take proactive measures to avert this impending crisis through a combination of market and humanitarian compassionate means.

What is the crisis? Once the TRIPS agreement was acceded to by most nations and they in turn amended their national laws in conformity with the inter-governmental agreement, it became international law that product patents have superceded process patents. In less technical-speak, product patents i.e. the patenting of the molecule itself, and not the recipe to construct the molecule, became the norm. This is seen as vital to protect the rights of innovators that include individual scientists, companies, universities, government institutions and others that make up the networks of research and development. But what about the rights of several billion patients who live in countries where R&D was not an ingrained part of academic or professional life? Even in the U.S., patients who are able to afford medicines can do so only via multiple healthcare mechanisms such as health insurance coverage. But layers of mechanisms and functions to cover patients like medical insurance, specialized distribution chains etc. hardly exist for some 5 billion people living in the developing countries.

Suddenly, citing product patents and TRIPS, if companies make most new medicines unavailable to those who could previously access them, without any attempt to cover patients through alternate means, what sort of outcry from patients and doctors can one expect? That is the very crisis that is before us.

Former President Bill Clinton's Foundation, among others, procures anti-AIDS medicines from the Indian pharmaceutical industry, that is one of the world's largest as calculated in terms of volume of production, and it supplies an estimated 80% of African AIDS patients on medication with reverse-engineered medicines. And indeed, the vast majority of the world's 40 million HIV/AIDS patients live outside North America, Europe and Japan. Newer generations of more potent medicines against AIDS could be denied to those patients because of the changes necessitated by TRIPS. And, cancer patients who suffer from Chronic Myeloid Leukemia could lose access to Gleevec (imatinib mesylate) because of the patent case filed by Novartis before an Indian High Court, which explicitly attempts to get the Indian judiciary to rule on ensuring that the recently amended Indian patent laws become even more tightly congruent with TRIPS.

A fatal interpretation by many ingrained within TRIPS is the belief that when public health emergencies emerge, countries can issue compulsory licenses to permit any manufacturer to reverse-engineer the medicine needed. First, it takes a lifetime for most bureaucracies to even detect the presence of an epidemic of chronic diseases like cancers and heart diseases because of the paucity of reliable and timely data from across vast nations and continents. Second, contemplating to repeatedly issue compulsory licenses ignores the basic tenants of international finance in today's era. Every time it appears that a country is disrespecting intellectual property rights, capital will flee or take another generation to reappear. Why then did the TRIPS negotiators and framers make such unworkable safeguards the basis of inducing countries to sign on to the Agreement? And what can be done now that the Agreement has become codified into international law?

This should take up the urgent attention of the Congress, among the few parliaments in the world with truly open democratic traditions insisted upon by the founders, that can invite experts and patients to testify and build remedial measures. Because, once this crisis picks up even more steam, it will create yet another jarring roadblock to the duality of free and fair trade that is expected to create opportunities for all.

Bulletin von Medicus Mundi Schweiz Nr. 84, April 2002

*Richard Gerster, Dr. oec., (Richterswil/Switzerland), holds a PhD Econ of the University of St Gall, Switzerland. He is an independent consultant on issues of globalisation, trade, finance, development cooperation. He is author of several books and numerous articles in scientific journals and newspapers. His "Patents and Development. Lessons Learnt from the Economic History of Switzerland" has just been published by the Third World Network

People before patentsThe success story of the Indian pharmaceutical industry

The colonial patent law of 1911 secured the Indian market to British industry. A large majority of drugs were imported from abroad until the Patents Act 1970 brought a turnaround. Early in the 21st century India has a highly efficient pharmaceutical industry, blossoming thanks to the weak patent protection of medicines. It provides essential drugs at affordable prices and creates considerable employment. Today over 90 percent of modern medicine consumed in India are produced locally. By 1 January 2005 India will have to comply with the Trade Related Intellectual Property Rights (TRIPs) of the World Trade Organisation (WTO). The new rules of the game may threaten India’s achievements. During the last 20 years India enjoyed an annual rate of economic growth of six percent on an average. The pharmaceutical industry is part of India’s success story.

Von Richard Gerster *

"These days, when Indian migrants return from their home leave to the United States, you can be sure they carry lots of generic ciprofloxacin tablets with them", told me Ashish Shirsat, marketing manager of Blue Cross Laboratories Ltd. In Mumbai (formerly Bombay), India. The antibiotic Ciprofloxacin is in the US under patent up to 2003 from the German manufacturer Bayer and arrived in the media limelight following the growing anthrax scare and fear about bioterrorism. The returnees know why they do not buy Bayer’s brand "Cipro" but one of 78 Indian brands. Blue Cross Laboratories indicate production costs for a 500mg tablet of 4 cents, a wholesale price of 7 cents, and a consumer price in the Indian drugstores of about 10 cents, depending on the manufacturer. Under political pressure Bayer offered the Cipro tablet at the "discount" price of 95 cents to the US Government. The regular Bayer wholesale price in the US is US$ 3.60, and the US consumer price US$ 6 – 60 times the price in India. Dr. Y.K. Hamied, Chairman of Cipla Ltd., a leading Indian drug manufacturer, called the anthrax/cipro-case "an eye-opener that developing countries cannot afford patent monopolies".
The case of HIV/AIDSCipla gained global reputation in the fight against HIV/AIDS. It was only in 1987 that the first HIV-positive case was registered in India, yet India already shows with officially 3.86 million the highest number of HIV-positive people in the world beside South Africa. Cipla Chairman Y.K. Hamied: "We should face the reality that India adds 3’500 HIV-positive cases every day, and a recent World Bank report says there will be 35 million cases by 2005 in India. This makes something like the recent earthquake in Gujarat look like a tea party." In the red-light districts of the mega city Mumbai and along the truck routes the epidemic is spreading particularly fast. Ignorance and poverty are the most important causes of this. Often, AIDS patients die of tuberculosis, an illness still prevalent in India, because they lack the necessary resistance.
While the term HIV is used to describe the virus, AIDS is the name for the most severe phase of the illness triggered by the virus. There is no cure (yet) for HIV/AIDS. The number of HIV/AIDS deaths has, however, dramatically decreased in the USA and in Europe. Take Switzerland as an example: the number of AIDS deaths annually has dropped from a peak of 686 (1994) to 42 (2000). This must be attributed in the first place to the revolutionary drug combination therapy, which disturbs the life cycle of the HI-Virus. A disciplined taking of a combination of medical drugs can prevent the outbreak of AIDS or at least delay it for years. In particular, the transmission of the virus from a mother to her unborn child can be prevented with suitable medication.
In India, only 500 of 100 000 HIV/AIDS patients at most are getting medical treatment. Sexuality and along with it AIDS are taboo subjects. There is a widespread lack of hospitals and clinics, of personnel, of medical equipment, of medical drugs. There are no compulsory medical insurance schemes in India. AIDS is particularly common in the lower income groups. These people often do casual work only. A monthly income of less than US$ 100 has to cover the basic necessities of life. There are often two infected persons per family but the savings are hardly sufficient for the treatment of one. "Although women and men are equally affected by HIV/AIDS, 85 percent of our patients are men. According to the Indian patriarchal culture they get preference. Second in line are children. Women sacrifice themselves for the others". This is how Dr Subhash K. Hira, director of the AIDS Research and Control Centre (ARCON) in Mumbai, describes the everyday situation.
A few years ago, the costs of an individual AIDS-combination therapy in India were, at US$ 8 500 per year, prohibitively high. But then, in 1993, Cipla Ltd. introduced the AIDS drug Zidovudine. Stavudine, Lamivudine and Nevirapine followed. They are all elements of the successful virus-inhibiting combination therapy. Cipla offered the AIDS drugs significantly cheaper than other companies. This in turn provoked the lowering of prices by the international competitors on the Indian market. In 2001, Cipla offered the anti-retroviral package at US$ 600 per year and patient to all African governments, and at US$ 350 or US$ 1 a day to the non-governmental charity "Doctors without Borders". This compares with annual costs of more than US$ 10 000 in Europe and the US. Even at the low price level, purchasing of anti-retrovirals is beyond the budget of most of the developing countries. In an interview published in the South Bulletin in June 2001, Dr. C. P. Thakur, Minister for Health and Family Welfare in India, said: "If you were going to give anti-retrovirals to 10 per cent of our population affected with HIV/AIDS, you will be spending more than total the health budget of the country".

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