[Ip-health] The dirty motivation behind Gilead's hepatitis C agreement

Priti Radhakrishnan priti at i-mak.org
Sun Nov 23 08:58:09 PST 2014

> http://america.aljazeera.com/opinions/2014/11/pharmaceuticals-gileadhepc.html
> The dirty motivation behind Gilead's hepatitis C agreement
> It's not about increasing medicine access, but about ensuring market
> control
>  November 21, 2014 2:00AM ET
>  by Tahir Amin <http://america.aljazeera.com/profiles/a/tahir-amin.html>
> Up to 150 million people worldwide suffer from chronic hepatitis C, which
> attacks the liver and, if left untreated, can lead to cirrhosis and cancer.
> Complications related to hepatitis C claim 500,000 lives annually.
> A major hurdle to treating the disease is the outrageous cost of new hep C
> drugs. In the United States, sofosbuvir, branded Sovaldi by Gilead, sells
> at $1,000 a pill, or $84,000 for a 12-week course of treatment. Harvoni,
> Gilead’s combination of sofosbuvir and ledipasvir, sells for $94,500 for a
> 12-week course. These medications offer a 95 percent cure rate — much
> higher than older treatments and with far fewer side effects. But their
> high prices mean that few patients can access the drugs in the United
> States, let alone in poor countries around the world, where the majority of
> hepatitis C patients live.
> Gilead’s price gouging has generated international outrage. In response,
> the company signed an agreement in September with seven Indian
> pharmaceutical producers, allowing them to sell generic versions of
> sofosbuvir and ledipasvir in 91 countries. It is hoped that competition
> among the Indian companies will result in downward pressure on price so
> that more people can access the medicines.
> While many health advocates, patient groups, media outlets and academics
> have championed the agreement, it may actually do more harm than good.
> Gilead portrays itself as a leader in medical innovation, but its real
> advance is in developing a creative business strategy of managing the
> competition — and gaining a public-relations boost while doing so.
> Specifically, Gilead’s agreement quietly undermines India’s patent laws and
> controls the country’s generic producers. This in turn threatens to reduce
> competition needed to keep medicine prices low and could ultimately shrink
> the global supply of affordable medicines.
>  Managing the competition
> Gilead’s maneuver stems from its worry over India’s strong generic
> medicine industry. Compared with Western countries, India has a stringent
> patent law that is intended to ensure that only medicines that are truly
> innovative receive patent protection. The government may revoke patent
> rights in order to promote generic competition in times of public need.
> This is legal in the eyes of the World Trade Organization, but India has
> nonetheless faced significant pressure from the U.S., the European Union
> and multinational pharmaceutical companies to weaken its patent standards.
> India’s production of the majority of the world’s generic medicines is a
> thorn in the side of brand-name pharmaceutical companies, the majority of
> which are in the U.S. and Europe.
> These factors make India a gigantic challenge for pharmaceutical giants
> such as Gilead, which are increasingly threatened by the rise of generics.
> These multinationals are focused less on discovering new science than on
> tweaking existing compounds and drugs and calling them new — a practice
> that is common in Western countries but that India’s patent law is designed
> to prevent. This has been particularly frustrating for Gilead, which has
> seen many of its patent applications for its various HIV drugs, as well as
> sofosbuvir and ledipasvir, vulnerable to rejection under India’s strict
> patent law. (A patent on sofosbuvir has already been rejected by Egypt,
> which did not consider the medicine scientifically innovative.)
>   Gilead gains a controlled, divided market in which it keeps the most
> lucrative countries for itself while getting monopoly protection in other
> countries.
> Recognizing this threat, Gilead has begun pre-emptively signing agreements
> with key Indian producers rather than face true competition on the open
> market. This strategy was first deployed in 2006, when the company’s patent
> application for its HIV drug, Viread, was rejected. This decision should
> have paved the way for companies to sell generic versions in India as well
> as other countries where patents on the drug hadn’t been granted. But
> Gilead appealed the case (a final outcome is still pending) and in the
> interim offered several Indian companies the right to sell generic versions
> of the drug in India and a number of other developing countries. By hanging
> over the heads of Indian generic companies the threat of litigation if the
> outcome of the case favored Gilead, it was able to lock in the agreements.
> The companies were allowed to make generic versions despite the lack of a
> patent for Viread in India and in most of the countries included in the
> agreements (which even covered countries, such as Togo and the Democratic
> Republic of the Congo, that, according to the World Trade Organization, do
> not have to grant pharmaceutical patents). Because a patent can be
> infringed only after it is granted, Gilead’s access strategy was thus
> tantamount to a landlord offering to rent and receive payment for a
> property for which his ownership has not been determined.
> Further, the agreements meant that Gilead was able to control where its
> competition sold products. Gilead allowed its Indian competitors to sell in
> markets that it knew were not very profitable in exchange for their staying
> out of bigger and more lucrative middle-income countries such as China and
> Brazil. The agreements thus promoted competition controlled by Gilead, not
> open competition between Gilead and manufacturers of generics, which is
> necessary to bring down prices.
>  Déjà vu
> Gilead’s recent hep C agreements are a case of déjà vu. As with Viread,
> Gilead does not have patents on sofosbuvir or ledipasvir that would block
> generic production in India or in many of the 90 other countries included
> in the agreements, most of which are poor. Yet again, Indian generic
> manufacturers are prevented from selling generic versions to more
> profitable middle-income countries, where, according to Doctors Without
> Borders, 73 percent of the world’s hep C patients reside.
> Gilead and some nongovernmental organizations have tried to allay fears of
> exclusion by pointing out legal language in the agreement that could allow
> Indian manufacturers to sell to some middle-income countries. But they
> would be able to do so only if there is no patent granted or pending in
> these countries or India — an extremely unlikely outcome, given that Gilead
> and other multinational pharmaceutical companies routinely file multiple
> patents on a single drug for decades after a medicine comes onto the market
> in order to quell competition.
> So how much does Gilead really sacrifice in such agreements? In the case
> of hep C, it gave up the markets of low-income countries where most people
> can’t even afford to pay a dollar per day for malaria treatment and where,
> in most cases, it didn’t have patent protection in the first place. What
> does it gain? A controlled, divided market in which Gilead keeps the most
> lucrative countries for itself while getting monopoly protection in other
> countries (regardless of whether patents exist or are granted). Most
> important, these agreements essentially allow Gilead to circumvent the
> safeguards that India and other countries have established to protect the
> public against patents that are not deserved or would thwart competition.
> Rather than champion these agreements, NGOs, international public health
> institutions, media and Indian generic manufacturers ought to wake up to
> Gilead’s real strategy. Groups such as Doctors Without Borders have rightly
> been critical of the licenses
> <http://www.msfaccess.org/content/msf-access-campaign-response-gilead%E2%80%99s-deal-generic-companies-sofosbuvir-and-ledipasvir>.
> But there is a deeper issue at play. By dividing the market and culling
> generic competition, Gilead is quietly achieving what the U.S. and Europe
> have long tried to do through coercive trade deals such as the
> Trans-Pacific Partnership
> <http://america.aljazeera.com/articles/2014/4/25/explainer-trans-pacificpartnership.html>
> as well as diplomatic threats: undermine India’s legally legitimate patent
> laws. It is time for governments of all countries, whether included or
> excluded from these agreements, to consider such licenses anti-competitive
> and unenforceable where there are no granted patents. Continuing to support
> such agreements — and encouraging Indian generic companies and other local
> manufacturers to sign them — will eventually reduce competition and
> seriously curtail the supply of affordable medicines worldwide.
> Tahir Amin is a co-founder and the director of intellectual property at
> the Initiative for Medicines, Access and Knowledge (I-MAK). He is a former
> fellow at the Harvard Medical School and has consulted for organizations
> such as the World Health Organization and the European Patent Office.
> --
> *Priti Radhakrishnan*
> Co-Founder and Director of Treatment Access, I-MAK
> Echoing Green Fellow | Pop!Tech Fellow | Asia Society Associate Fellow
> *"Where innovation meets access to affordable medicines"*
> *Website: *www.i-mak.org
> *Skype:* pritiwho
> *Mobile:* +1 917 703 2876
> *E-mail:* priti at i-mak.org

*Priti Radhakrishnan*
Co-Founder and Director of Treatment Access, I-MAK
Echoing Green Fellow | Pop!Tech Fellow | Asia Society Associate Fellow

*"Where innovation meets access to affordable medicines"*

*Website: *www.i-mak.org
*Skype:* pritiwho
*Mobile:* +1 917 703 2876
*E-mail:* priti at i-mak.org

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