[Ip-health] NYT story: China and India Making Inroads in Biotech Drugs

Jamie Love james.love at keionline.org
Sun Sep 18 22:04:38 PDT 2011


Today Gardiner Harris has a long story in today's New York Times, which in
part discusses the UN negotiations on non-communicable diseases:
http://www.nytimes.com/2011/09/19/health/policy/19drug.html

The story discusses the UN negotiations on non-communicable diseases, and
CIPLA's plans to introduce biogeneric drugs.  It makes some mistakes
discussing the IPR issues.

Here are a few quotes from the story:

<======
* Already, the Obama administration has been trying to stop an effort by
poorer nations to strike a new international bargain that would allow them
to get around patent rights and import cheaper Indian and Chinese knock-off
drugs for cancer and other diseases, as they did to fight AIDS. The debate
turns on whether diseases like cancer can be characterized as emergencies,
or “epidemics.”

* United States officials repeatedly declined to explain the American
position, though Mark Toner, a State Department spokesman, said Friday,
“Regardless of what you call it, this is clearly such a pressing challenge
globally that world leaders are gathering in New York next week to discuss
ways to confront this threat.”

*  The United States government has a long history of pushing for strong
patent protections in international trade and other agreements to protect
important domestic industries like pharmaceuticals and ensure continued
incentives for further inventions.

* Dr. Hamied said in a telephone interview last week that he and a Chinese
partner, BioMab, had together invested $165 million to build plants in India
and China to produce at least a dozen biotech medicines. Other Indian
companies have also built such plants. Since these medicines are made with
genetically engineered bacteria, they must be tested extensively in patients
before sale.

* Once those tests are complete, Dr. Hamied promised to sell the drugs at a
third of their usual prices, which typically cost tens of thousands of
dollars for a course of treatment.
======>

Unfortunately, the story repeats some well known myths about trade
agreements and patent laws. For example, the story asserts that compulsory
licenses cannot be used for exports "except under dire circumstances" or
"emergencies."  This is an unfortunate mistake that will likely lend
creditability to lies the White House uses to bully developing countries on
this issue.  Of course, the legal issues are complicated, and it is hard to
describe them accurately in a newspaper story.

The U.S. itself issues compulsory licenses that permit exports, in the
absence of extreme circumstances -- such as the recent compulsory license on
patents to Medtronic for the export of a heart disease device (
http://keionline.org/node/1218), or the Microsoft multiple compulsory
licenses on its Microsoft Office software, to mention just a few.

The core disputes in the UN IPR negotiation were (1) the resistance by the
Obama Administration and DG-Trade to make references to the Doha Declaration
(not mentioned specifically by the NYT), and (2) efforts to block references
to NCDs as an epidemic (mentioned). Trade rules are complicated, and it is
hard to capture the nuances, but it is important to note that the issues in
dispute, while related, are not the exactly the same.  The Doha Declaration
is important for all sorts of medicine IPR issues, including but not limited
to the export issue.   (see: http://www.keionline.org/node/1267)  As a
practical matter, the failure to reference the Doha Declaration was the more
important omission.  References in the UN resolution about epidemics go to
two important but fairly narrow issues in the granting of compulsory
licenses.

The first area where the term epidemics would be important concerns the case
where there is "a national emergency or other circumstances of extreme
urgency."   In such cases, the WTO allows countries to waive obligations to
have prior negotiations for patent licenses on "reasonable commercial terms
and conditions" before granting a compulsory license.  This itself is not
that important, because compulsory licenses are often issued after such
negotiations, and in any event, there are at least three additional cases
where such prior negotiations can be waived.  These include, (i) cases of
public non-commercial use, (ii) remedies to anticompetitive practices, and
 (iii) cases where the compulsory license is done under Article 44 of the
TRIPS, as a limit on a remedy for infringement (such as the Medtronic and
Microsoft cases).

The second area where the term epidemic would be important concerns cases
where a country imports a drug under the 30 August 2003 decision of the WTO,
implementing Paragraph 6 of the Doha Declaration.  This 2,200 word decision
is a complex system to waive a WTO restriction on exports of products
manufactured under a compulsory license.  Some countries have volunteered to
only benefit from this waiver in "situations of national emergency or other
circumstances of extreme urgency." However, this is just one of several ways
that such exports can be done under the WTO rules.  Countries can also
export when compulsory licenses remedy anticompetitive practices, or when
the compulsory licesnes are a limitation on the remedies for infringement
(this is the approach used in the Medtronic and Microsoft cases), and there
remains also other possibilities under the WTO agreement, relating to the
exhaustion of rights.

Given the complicated nature of arcane areas of trade law, it is a challenge
to explain this to a general audience.  But it is not impossible to get
things right.  Journalists can simply note that the WTO has complicated
rules about patents, and that references to the Doha Declaration on TRIPS
and Public Health or to NCDs as an epidemic would make it *easier* to grant
compulsory licenses and to distribute products manufactured under compulsory
licenses.  There is no need to give the impression that compulsory licenses
or the export of products are limited only to emergencies or epidemics, or
that that the rules for AIDS drugs are somehow different than they are for
cancer drugs.  This is a dispute about access to medicine for the majority
of the world population.

Finally, it was surprisingly and disappointing to read Dr. Piot quoted as
saying, with regard to generic biologic products "I would like to see the
evidence that the quality is good before giving it to my patients or taking
it myself."   What does he think is going on?  And does he know that big
pharma companies oppose allowing the WHO to pre-qualify such products?

Here is the NYT story:

http://www.nytimes.com/2011/09/19/health/policy/19drug.html

China and India Making Inroads in Biotech Drugs
By GARDINER HARRIS
Published: September 18, 2011

Chinese and Indian drug makers have taken over much of the global trade in
medicines and now manufacture more than 80 percent of the active ingredients
in drugs sold worldwide. But they had never been able to copy the complex
and expensive biotech medicines increasingly used to treat cancer, diabetes
and other diseases in rich nations like the United States — until now.

These generic drug companies say they are on the verge of selling cheaper
copies of such huge sellers as Herceptin for breast cancer, Avastin for
colon cancer, Rituxan for non-Hodgkin’s lymphoma and Enbrel for rheumatoid
arthritis. Their entry into the market in the next year — made possible by
hundreds of millions of dollars invested in biotechnology plants — could not
only transform the care of patients in much of the world but also ignite a
counterattack by major pharmaceutical companies and diplomats from richer
countries.

Already, the Obama administration has been trying to stop an effort by
poorer nations to strike a new international bargain that would allow them
to get around patent rights and import cheaper Indian and Chinese knock-off
drugs for cancer and other diseases, as they did to fight AIDS. The debate
turns on whether diseases like cancer can be characterized as emergencies,
or “epidemics.”

Rich nations and the pharmaceutical industry agreed 10 years ago to give up
patent rights and the profits that come with them in the face of an AIDS
pandemic that threatened to depopulate much of Africa, but they see deaths
from cancer, diabetes and other noncommunicable diseases as less of an
emergency and, in some cases, the inevitable consequence of better and
longer living.

The debate has intensified in recent weeks, before world leaders gather at
the United Nations on Monday and Tuesday to confront surging deaths from
noncommunicable diseases, which cause two-thirds of all deaths. It is only
the second global health issue that the United Nations General Assembly has
deemed urgent enough to call a meeting to discuss.

Participants in the negotiations, which include nongovernmental
organizations, described the Obama administration’s position on the issue
and provided e-mails from European diplomats that laid out the American
stance, which has been adopted in the agreement’s working draft.

Although the draft agreement for this week’s meeting at the United Nations
offers no support for poor nations seeking freer patent rules to fight
cancer and other noncommunicable diseases, their advocates have vowed to
continue fighting to loosen those restrictions not only this week in New
York but in continuing international trade negotiations around the world as
well.

United States officials repeatedly declined to explain the American
position, though Mark Toner, a State Department spokesman, said Friday,
“Regardless of what you call it, this is clearly such a pressing challenge
globally that world leaders are gathering in New York next week to discuss
ways to confront this threat.”

The United States government has a long history of pushing for strong patent
protections in international trade and other agreements to protect important
domestic industries like pharmaceuticals and ensure continued incentives for
further inventions.

The new biotech copycats are likely to stir sharp debate among advocates for
the poor. Already, some contend that the billions spent to treat AIDS have
crowded out cheap and simple solutions to other afflictions of poverty, like
childhood diarrhea.

The copycats will be less expensive than the originals, but they will never
be cheap. It is unlikely that many African nations will be able to afford
such a costly medicine for breast cancer, when far cheaper ones for colon
and testicular cancer are going wanting.

Dr. Yusuf K. Hamied, chairman of the Indian drug giant Cipla Ltd.,
electrified the global health community a decade ago when he said he could
produce cocktails of AIDS medicines for $1 per day — a fraction of the price
charged by branded pharmaceutical companies. That price has since fallen to
20 cents per day, and more than six million people in the developing world
now receive treatment, up from little more than 2,000 in 2001.

Dr. Hamied said in a telephone interview last week that he and a Chinese
partner, BioMab, had together invested $165 million to build plants in India
and China to produce at least a dozen biotech medicines. Other Indian
companies have also built such plants. Since these medicines are made with
genetically engineered bacteria, they must be tested extensively in patients
before sale.

Once those tests are complete, Dr. Hamied promised to sell the drugs at a
third of their usual prices, which typically cost tens of thousands of
dollars for a course of treatment.

“And once we recover our costs, our prices will fall further,” he said. “A
lot further.”

Dr. Peter Piot, a former director of U.N.AIDS, the United Nations AIDS
agency, said the parallels between the current dilemma over cancer drugs and
the one 10 years ago over AIDS medicines were striking. “Without a major
reduction in the prices of the essential oncology drugs, there’s no way we
can really improve survival from cancer,” said Dr. Piot, currently the
director of the London School of Hygiene and Tropical Medicine.

But he also said he was more cautious about the promise of generics this
time, because biotech medicines were not easy to copy. “I believe these
medicines will make a huge difference, but I would like to see the evidence
that the quality is good before giving it to my patients or taking it
myself,” he said.

Having suffered global opprobrium 10 years ago when they were seen as
blocking efforts to save the lives of millions of poor AIDS patients,
executives for branded drug makers are far more cautious this time about
insisting that high prices are necessary. Sara Radcliffe, a spokeswoman for
the Biotechnology Industry Organization, said companies supported copycat
versions of biotech medicines as long as “countries do not abuse the
flexibilities in international law with respect to compulsory licensing in
true public health emergencies.”

Patents generally provide inventors rights to 20 years of exclusive sales,
but international law allows countries to force companies to share those
rights with competitors under a variety of circumstances, including to
protect public health. Even then, countries are generally not allowed to
export the products that result from forced patent sharing except under dire
circumstances.

But the only way poor countries can get drugs that result from shared patent
rights is if another country exports those medicines to them under emergency
exceptions.

In retrospect, the battle 10 years ago over AIDS medicines was a small
skirmish compared with the one likely to erupt over cancer, diabetes and
heart medicines. The AIDS drug market was never a major moneymaker for
global drug giants, while cancer and diabetes drugs are central to the
companies’ very survival. Roche Holding Ltd. earns $19 billion annually, or
half its annual drug sales, selling Rituxan, Avastin and Herceptin. And
sales of Herceptin have been rising faster in the developing world than in
richer nations — making the developing world a crucial market. For
middle-income countries straining to provide the best medicine possible, the
new copycat biotechs will almost certainly be warmly received.

Mexico alone spends about $120 million buying Herceptin to treat women with
breast cancer, which is nearly one-half of 1 percent of all government
spending on health care, said Dr. Alejandro Mohar, general director of the
Mexican National Cancer Institute. In 2007, Mexico guaranteed access to
Herceptin for all women with breast cancer through a public insurance
program.

“We would love to have better access to better drugs,” Dr. Mohar said. “This
debate is going to heat up.”

Hermillia Villegas, a 47-year-old mother of two in Jalisco, Mexico, recently
learned that she had a virulent form of breast cancer that responded well to
treatment with Herceptin. Her husband is a janitor, and her doctor initially
told her that each of 17 treatments with Herceptin would cost her more than
$3,000.

“I don’t have that kind of money,” she said in a telephone interview. The
new health insurance program, which pays for the whole cost of the drug, has
saved her life, she said.


-- 
James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.
twitter.com/jamie_love



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