[Ip-health] The Economist: Leaky pharma

Thiru Balasubramaniam thiru at keionline.org
Tue Jan 28 08:48:40 PST 2014


http://www.economist.com/blogs/schumpeter/2014/01/new-drug-war-continued

The new drug war continuedLeaky pharmaJan 27th 2014, 21:26 by C.H. | NEW
YORK

   -


THIS month *The Economist* described a looming war over drug
prices<http://www.economist.com/news/international/21592655-drug-firms-have-new-medicines-and-patients-are-desperate-them-arguments-over>.
Since then, that fight has erupted in South Africa.  The government is
considering broad changes to its patent laws.  The world's biggest drug
companies are in a panic, according to documents leaked this month, and may
launch a broad campaign to fight the reforms. This has infuriated South
African officials. "I am not using strong words, I am using appropriate
words: this is genocide," thundered Aaron Motsoaledi, South Africa's health
minister (pictured), to the *Mail &
Guardian*<http://mg.co.za/article/2014-01-16-motsoaledi-big-pharmas-satanic-plot-is-genocide>
*.*

More than a decade ago, South Africa fought multinational drug companies
over HIV medicines. The case, often dubbed "Big Pharma v Nelson Mandela",
was a low point for the drugs industry. But South Africa's new brawl is
part of a different, larger battle over medicines. Governments in the
developing world want to expand access to health care, including innovative
drugs. As the death toll from infectious disease drops, chronic ailments
are more common, boosting demand for drugs for cancer and diabetes. Yet
governments are balking at the cost. Firms counter that high prices support
the invention of new treatments.

The South African fight concerns proposed reforms to intellectual property
rules <http://www.thedti.gov.za/invitations/36816_4-9_TradeIndustry.pdf>,
published back in September. The plan, if passed, would make it harder for
companies to win drug patents. Other measures include expanding the import
of cheap drugs from other markets. This makes drug companies anxious. The
Innovative Pharmaceutical Association of South Africa (IPASA), the
country's drug lobby, published public
comments<http://ipasa.co.za/wp-content/uploads/2014/01/Copy-of-IPASA-submission-on-the-draft-national-policy-on-IP-final-131016.pdf>
on
the draft policy in October.

But the current kerfuffle is about documents leaked in mid-January. An
e-mail <http://keionline.org/sites/default/files/merck-email.pdf> from an
executive at Merck, addressed to executives at other big pharmaceutical
firms, outlines plans for a campaign to scuttle the patent reforms. The
e-mail explains that IPASA, working with PhRMA, America's drugs
association, had selected an American lobbying firm to lead the campaign,
Public Affairs Engagement (PAE). According to a
proposal<http://keionline.org/sites/default/files/PAE-proposal-RSA-patent-reform.pdf>,
it planned to argue that the patent reforms would reduce investment in
South Africa. The campaign would insist that South African patients suffer
not from high drug prices, but "poor health infrastructure, improper
management, and, ultimately, poverty." Fighting the reform is crucial, PAE
explained, because South Africa's policy may "provide the model for other
developing nations, inside and outside Africa, including such important
aspiring economies such as India and Brazil."

The plans for the campaign are not particularly surprising. Companies are
keen to earn more revenue in emerging markets. IMS Health, a research
outfit, predicts<http://www.imshealth.com/portal/site/imshealth/menuitem.762a961826aad98f53c753c71ad8c22a/?vgnextoid=9f819e464e832410VgnVCM10000076192ca2RCRD&vgnextchannel=a64de5fda6370410VgnVCM10000076192ca2RCRD&vgnextfmt=default>
that
spending on drugs in North America, Europe and Japan will grow by no more
than 1-4% annually until 2017. Spending in emerging markets is due to jump
by 10-13% a year.

But companies will wrestle with governments, as the leak proves. Médecins
Sans Frontières (MSF), a group that treats poor patients and advocates on
their behalf, is livid: "Thanks to leaked documents, we know that South
Africa represents 'ground zero' for the looming legal battles on
intellectual property between pharmaceutical companies and middle-income
countries seeking access to affordable medicines for their people," said
MSF's Manica Balasegaram in a press
release<http://www.doctorswithoutborders.org/press/release.cfm?id=7266&cat=press-release>
on
January 21st. "Nearly 16 years after Merck and 41 other applicants sued
Nelson Mandela and the South Africa government to block implementation of
amendments to its Medicines Law, Merck has emerged as a key figure in an
industry effort to block new reforms," said James Love of Knowledge Ecology
International <http://keionline.org/node/1908>.

Dr Motsoaledi went one step further, telling the *Mail & Guardian, *"this
document can sentence many South Africans to death." On January 23rd
Malebona Precious Matsoso, the director-general of South Africa's health
department, decried the campaign <http://keionline.org/node/1913> before
the World Health Organisation's executive board: "We cannot be side-tracked
or derailed in our course of action of defending public health and the
right to life." Despite the leaked documents, Val Beaumont, IPASA's chief
operating officer, says that IPASA has rejected PAE's
proposal<http://ipasa.co.za/>.
That certainly won't be the end of the fight. The government may vote on
the new policy within the next six months.



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