October 14, 2015
Pharmaceuticals: putting profit before patients. Oxfam
An odd one out or part of the same system?
By Mohga Kamal-Yanni, Senior health policy advisor, Oxfam
‘It was a business decision. It was about money. And screw you’
– A journalist said after talking to Martin Shkreh the CEO of Turin, the US-based pharmaceutical company. The company shocked the US when it raised the price of daraprim, a 62 years old medicine by 5000% from $13.5 to $750 per tablet. The US Pharmaceutical companies association (PhRMA) was quick to tweet that ‘@TuringPharma does not represent the values of @PhRMA member companies.’
So is PhRMA right?
In reality Turin represents a typical symptom of the same disease: putting profit before patients. Otherwise how can we explain the escalating price of new (and sometimes old) medicines not only in Europe and US but also in low and middle income countries? Take Gilead’s medicine that cures hepatitis C as an example. Sofosbuvir (marketed as Sovaldi) was launched at $1000/pill/day. Even at the reduced price offered to some countries, the price is too high. We estimated that treating just half patients suffering with hepatitis C would have cost the Egyptian ministry of health nearly two thirds of its budget.
New cancer medicines are reaching the market at exorbitantly priced and thus unaffordable in most countries even in Europe and the US. NICE, the body that advises the UK’s NHS on medicines rejected Roche’s breast cancer medicine trastuzumab emtansine (Kadcyla) not because of ineffectiveness but because of its high price. Needless to say the price is far beyond the dreams of patients in developing countries.
Patients and advocates for access to medicines have been campaigning on access to medicines in developing countries for years. Their success is clear when the price of the anti-HIV cocktail dropped from US$ 10,000/patient/year to around US $100. Now similar actions have started in rich countries too. One of these groups sent a letter to Jeremy Hunt the UK secretary of health urging him to issue a compulsory license that enables the importation of cheaper versions of the same medicine so that women are not denied a life saving treatment.
Having ‘temporary’ monopoly over pricing seems to be not enough for pharmaceutical companies. Pharma lobbyists carry significant influence in the corridors of power pressurising governments to design and enforce rules that exceed what is already agreed at the WTO through the TRIPS agreement.
Intense lobbying to increase intellectual property rules in free trade agreements has created global public anger. Last September a cancer patient was arrested when she was accused of disrupting the negotiation of the Trans-Pacific Partnership (TPP). The recently concluded TPP negotiations were carried out over more than five years in secret and the text will only be available for elected bodies and the public when it is ready for signing.
Free trade agreements (FTAs) like the TPP are notorious for expanding corporate powers at the expense of public health and the public interest. For example, the FTAs allow corporations to sue governments over measures to promote access to medicines (such as price controls, reimbursement decisions, marketing approvals, and drug safety decisions, or stricter patentability standards). Corporations argue that such measures would damage their investments, which they insist must be protected by the FTAs.
This is already happening as Eli Lily has taken the Canadian government to court over government action to make some drugs affordable. Similar damaging FTAs are currently being negotiated ?also behind closed doors- between the EU and Thailand, India and the US.Moreover, when developing countries try to use legal tools to control or decrease prices, they are put under huge pressure from rich countries under the influence of ?big pharma?. When Thailand issued compulsory licensing for key medicines to treat HIV and cardiovascular diseases, ?big pharma? launched intense pressure on the country to revoke the decision.
Under the influence of “big pharma’, the US trade representative put Thailand on the Special 301 ?Priority Watch list? of countries, which subjects countries to extreme pressure from the US government. Pharma’s influence on the EC resulted in pressure from the European Commission on the Thai govt to change its decision.
Recently some Members of US congress wrote to the US administration urging it to put pressure on India to change its national intellectual property law in order to strengthen monopoly protections on pharmaceuticals.
The law had previously been challenged in court by one pharmaceutical company but the court turned the claim down. Changing the Indian law by increasing intellectual property protection will deprive patients from access to needed medicines not only in India but also in the rest of the developing countries. India is considered ?the pharmacy? of developing countries.
The root of the companies’ monopoly power and influence is the current model for funding for research and development (R&D) of medicines. Pharmaceutical companies justify the high prices of medicines by the need to recover the R&D costs. Yet the actual cost of R&D is kept as a big secret by the industry. In reality it is becoming increasingly clear that medicine pricing is not determined by production costs and a profit margin, but by what the market can bear.
Clearly the current R&D system is failing patients and health providers all over the world. It is high time that global leaders work for an alternative system that separates the financing of R&D from pricing the resulting medicines. It cannot be left to the pharmaceutical industry to cater only to those who can afford to pay high prices- practically deciding who lives and who dies.
 Trade Related Aspects on Intellectual Property Rights
Ethiopia Launches 10-Year Strategy and Plan of Action to Increase Access to Medicines by Transforming Local Pharmaceutical Industry
On 14th July 2015 in Addis Ababa, on the side-lines of 3rd Conference on Financing for Development, the Ethiopian Deputy Prime Minister His Excellency, Mr Demeke Mekonnen, officially launched an ambitious 10-year national strategy and plan of action to develop local pharmaceutical manufacturing capacity in order to increase access to locally manufactured, quality-assured, medicines. The World Health Organization worked closely with the Ethiopian Ministry of Health and Ministry of Industry over the last 6 months to help develop this, one of its kind strategy. The event was attended by many global and regional leaders, ministers, ambassadors and high-level government officials.
With phenomenal and consistent economic growth rate of more than 10% for more than last 10 years Ethiopia aims to graduate as a middle income country by 2025. The economic growth is being directed at human development. The strategy reflects Ethiopian aspiration to become a leading manufacturer in the continent and it uniquely combines the national policy vision for universal health coverage and industrial development, a framework that WHO has been advocating since 2011: http://www.who.int/phi/publications/local_production_policy_framework/en/
Speaking on the occasion the Deputy Prime Minister said that the strategy is going to be a flagship program of the next 5 year Growth and Transformation Plan (GTP-II) i.e. national development plan.
African Union Chairperson, Dr Nkosazana Dlamini-Zuma, commended the Ethiopian government for launching this strategy, which is a translation of the African Union Pharmaceutical Manufacturing Plan for Africa at country level: http://sa.au.int/en/content/business-plan-pharmaceutical-manufacturing-plan-africa
“Access to medicines is an integral component of universal health coverage,” said WHO Director-General, Margaret Chan. Dr Chan invited all development partners to join WHO in supporting the implementation of this strategic action plan over the next 10 years.
Dr Kesetebirhan Admasu, Ethiopia Minister of Health said, “The new strategic plan will not only improve access to essential medicine, but will also contribute to building a knowledge economy and harnessing research and development…., exerting a positive pressure on the country’s educational system.”
Through strong political commitment and effective leadership Ethiopia’s increased investment in the health sector in recent years that has resulted in an impressive 95% health coverage. This has tremendously increased local demand for health commodities. With a second largest population, 93 million, in Africa, Ethiopia offers a good internal market although it also aims to grow regional and global exports.
The Strategy and Action Plan is envisioned to help advance local pharmaceutical companies, through tailored and time-bound government incentives, along the value chain and it is built around following seven strategic objectives with well-developed targets and indicators of performance:
1. Improve access to medicines through quality local production – implementing GMP roadmap
2. Strengthen the national medicines regulatory system
3. Create incentives designed to move companies along the value chain
4. Develop human resources through relevant education and training
5. Encourage cluster development and production of active pharmaceutical ingredients (APIs)
6. Create a research and development platform
7. Attract foreign direct investments (FDIs) in the pharmaceutical sector
By 2020 the Strategy aims to meet 50% of the local needs for essential medicines through fully GMP complaint local manufacturing; set up at least one API manufacturing unit; 8 new joint ventures; at least 10 bioequivalence studies at a local bioequivalence centre; produce at least 200 graduates in industrial pharmacy and regulatory affairs – to name a few targets.
The abridged version of the strategy is available at: http://www.who.int/phi/publications/nat_strat_plan-action_pharm-manuf-dev_ethiopia/en/
Some high profile speakers and participants at the launching event included: UNOPS Executive Director Ms. Grete Faremo, GAVI CEO Dr Seth Berkley, World Bank Senior Director of Health, Nutrition and Population Dr Timorthy Grant Evans, Global Fund Against AIDS, TB and Malaria Executive Director Mr Mark Dybul, African Development Bank Vice President Mr Steve Kayizi Mugerwa, UNIDO Director General Mr LI Yong, UNDP Administrator Mrs Helen Clark, UNFPA Executive Director Dr Babatunde Osotimehin, UNAIDS Deputy Executive Director Luiz Loures, UNICEF Deputy Executive Director Ms Yoka Brandt, US Ambassador Ms Patricia M Haslach, India Ambassador Mr Sanjay Verma, Brazil Ambassador Mrs Isabel Cristina de Azevedo Heyvaert, and Cuba Ambassador Mr Pedro Luis Pedroso Cuesta.
A new Lancet Commission on Essential Medicines
www.thelancet.com Vol 384 November 8, 2014
Access to essential medicines globally is a highly charged political issue that is often about trade, policies, and protest. Essential medicines are crucial if countries are to achieve universal health coverage, and access will be a major goal for the post-2015 development era. ….
It is time to take stock of essential medicine’s policies and to reaffirm access to essential medicines as part of the progressive fulfilment of the right to health. This Lancet Commission has the opportunity to raise global awareness of the relevance of essential medicine’s policies to achieve broader global health and sustainable development goals, especially universal health coverage. Read more
Improving patient safety in Malaysia
Associate Professor Mohamed Azmi Ahmad Hassali
School of Pharmaceutical Sciences
Universiti Sains Malaysia, Penang
With the transformation of healthcare services being planned, it is perceived that the integration of services between the public and private sector is very much needed, at a cost the people can afford.
The major question that arises with the planned integration of services relates to the issue of who will bear the cost of services because, at present, there is no national health insurance scheme in place.
Although there are many models proposed, the main question that the policymakers need to be aware of is that of equity of access for holistic health services for all Malaysians. It is a mammoth task to implement it in the current context of the socio-economic and political scenario. Read more here
New hepatitis C drugs must be affordable worldwide, say campaigners
We must learn from the HIV epidemic and ensure that affordable prices are in place so that the millions with hepatitis C infection can get new drugs that appear to be a cure. The leader of the pack is Gilead’s sofosbuvir, licensed in Europe in November and the following month in the US. Janssen and Bristol Myers-Squibb are hard on their heels. The complete article is available here
WHO Calls For High-Priced Drugs For Millions With Hepatitis C
by Richard Knox click here
Life-saving Hepatitis C drug costlier than gold
Gopal Dabade, Feb 7, 2015:
Amongst the many diseases that can harm the human liver, Hepatitis C is a major contributor. It is caused by a virus known as Hepatitis C virus (HCV). Once the liver is infected by the virus, over the years the disease may progress to cancer or cirrhosis. Around the world, 3.3 per cent (around 200 million people) are infected with the virus.
In India, it is around 1.5 per cent, while few countries like Egypt have as high a rate as 14.5 per cent. So, it is indeed a global problem. An estimated 10 to 30 per cent of all those who are infected with HCV may develop major liver damage within the next 15 to 30 years. HCV mostly spreads through blood – often by intravenous route used by drug abusers, and very frequently due to needle sharing.
However, there is a great news for HCV infected patients as a new drug has entered the market. The drug known by the name sofosbuvir ensures almost complete cure, and it is here that it totally differs from the treatment that is advocated for HIV and AIDS, where patients need to be under life-long medication. The duration of treatment with this drug varies from 12 to 24 weeks. No doubt, the medicine has attracted media attention not just in India but all over the world. Before the advent of the drug into the market, the options for treating such patients were very poor (mostly consisting of pegylated interferon therapy which is expensive, difficult to tolerate and has a poor cure rate).
But there is huge catch to all this and that is the cost of the drug! The manufacturer of the drug, Gilead, a US-based company, is charging US $1,000 (around sixty thousand rupees) for each pill, meaning the cost of a 12-week course of treatment will amount to US $84,000 (around fifty lakh rupees). The drug is almost forty-five times costlier than gold itself, thus making it unaffordable to most. Why is the drug so costly? Is it because the drug company has invested such huge money in research or is the cost of manufacturing too much? None of this logic is true.
Gilead never spent any money on research because it had simply acquired the assets, along with the drug, from another US company Pharmasset for around US $11 billion. Ever since sofosbuvir has come into the market, Gilead is earning roughly US $200 million every week. Thus, the company totally fails to justify the cost either on research or manufacture. Instead, its justification is that sofosbuvir offers value for money i.e. it is cheaper than liver-transplant. According to a study done by Andrew Hill of Liverpool University, UK, the predicted production cost of this drug would be around US $68 to US $136 (around six to eight thousand rupees). It is obvious that the high cost of this drug is because Gilead has a patent on it which will expire only in 2029.
There is another twist to the story of the drug. In September 2014, Gilead announced ‘voluntary licences’ to seven Indian generic drug companies (Cadila Healthcare, Cipla, Hetero Labs, Mylan Laboratories, Ranbaxy Laboratories, Sequent Scientific and Strides Arcolab). This ‘voluntary licensing’ promises to make the drug at an affordable price in India and export it to 91 countries where the Indian firms will be allowed to sell it, as well. This offer, however, came at a very high cost with these companies agreeing to abandon India’s partners in its fight against Big Pharma for access to affordable medicines. For example, the Indian companies will not be allowed to sell the drug in Brazil, Russia, China, Thailand and many other middle-income countries where the disease burden of HCV is huge.
Strangulation of drug firms
The anticipated ‘voluntary licence’ will set precise terms on which Indian generic companies can make the drug and where all in the world it can be sold. In other words, Gilead makes all the decisions and uses its enormous power, through the license, to decide who does and does not get the life-saving medicines. All these efforts by Gilead were, in a way, aimed to â€œstrangulateâ€ the Indian generic drug manufacturing companies.
One needs to recollect that India is known as the ‘Pharmacy of the Developing Countries’ as Indian generic companies supply medicines to around 200 developing countries all over the world. The ‘voluntary licence’ agreement in India was announced amid protests from activist groups which said that the licence failed to cover key high-burden nations like China, Brazil, Mexico and Thailand. Gilead in its pursuit of profits had patented sofosbuvir in 17 countries including China, Indonesia and Israel, thereby gaining global monopoly. Similarly, it had applied for grant of patents in India as well and the same was opposed by several groups under the Pre-Grant Opposition.
Luckily for patients the world over, the Indian Patent office in Kolkata, in late January this year, rejected the patent claim of Gilead under section 3(d) of Indian Patent Act and opened the door for more Indian drug companies to produce the same. More companies will start manufacturing the drug which will set in greater competition and thus the drug price of sofosbuvir will soon come down. Gilead has announced that it will approach the Supreme Court. And the battle continues…
(The writer,Dr Gopal Dabade, is President, Drug Action Forum, Karnataka)