[Ip-health] Politico EU: Skyhigh drug prices made Romania mull patent break

Andrew S. Goldman andrew.goldman at keionline.org
Wed Mar 16 11:03:31 PDT 2016


Skyhigh drug prices made Romania mull patent break

-- By Carmen Paun
3/16/16, 2:07 PM CET

A Romanian woman with hepatitis C considered selling her house to buy the
€50,000 drug that could cure her.

She died last year before going through with the plan.

The story, confirmed by POLITICO, highlights the difficulty countries have
in affording life-saving treatments that increasingly come with eye-popping
price tags.

Under pressure to reimburse the drugs that could cure the 600,000 people
estimated to be infected with the disease in Romania, the government
considered compulsory licensing, a legal form of patent infringement to cut
prices, according to several people involved in the discussions.

“We were embracing the idea,” former Romanian health minister Nicolae
Bănicioiu told POLITICO.

But then politics intervened.

Social-Democrat Victor Ponta’s government fell in early November following
protests against corruption triggered by a Bucharest club fire that left 64
dead. Bănicioiu was out as health minister and the compulsory licensing
plan was put on ice.

Romania would have been the first EU country to use the strategy to bypass
drugmaker patents for hepatitis C drugs.

Greece is also contemplating the patent-workaround strategy for the
life-saving drugs, Ioannis Baskozos, secretary general on public health in
the country’s health ministry said at a recent Brussels conference.

Portugal has used it as a bargaining chip in negotiations with drugmakers
last year.

Compulsory licensing is enshrined in most countries’ laws, but it’s been
rarely used, said Tahir Amin, co-founder and director of intellectual
property at the U.S.-based NGO Initiative for Medicines, Access and
Knowledge. “It’s a political issue, like anything related to patents,” he

Now, a high-level United Nations panel is studying the very issue: how
intellectual property rights and trade rules impact the affordability of
medicines, medical devices and diagnostics around the world, with a report
expected in June.

Poster child

The Romanian case involves Sovaldi, a widely-hailed treatment that
effectively cures hepatitis C. But the breakthrough is also infamous for
the price tag: U.S.-based Gilead lists it in Europe for around €50,000 for
a 12-week treatment, although countries get discounts, often undisclosed,
in closed-door negotiations.

Many believe it is this price tag that revved up the current debate over
drug pricing.

For Romania, which spends some €1.7 billion a year on health care, about 4
percent of its gross domestic product, the cost of Sovaldi is prohibitive.
Drugmakers and some experts argue that it would save money over the long
term by curing the disease.

Romania has the highest number of hepatitis C patients in the EU, possibly
due to tainted blood transmissions 30 to 40 years ago, according to a
2015report commissioned by the European Liver Patients Association. Many
patients believe they got it from poor hygiene in dentist offices, said
Marinela Debu, president of the Romanian liver patients’ association.

The potential way out

Early last year, Romanian authorities were under pressure to provide the
drug. Vasile Ciurchea, head of the country’s national health fund, promised
negotiations with drugmakers would start as soon as possible.

In spring 2015, Andrew Goldman, working for the access-to-drugs campaigner
Jamie Love’s NGO Knowledge Ecology International (KEI), met with Bănicioiu
and the Romanian National Medicines Agency boss Marius Savu. On the agenda:
A way to get cheaper hepatitis C drugs, using a strategy pursued in the
1990s by South Africa for HIV drugs. Love made a name for himself
advocating for this strategy.

In October, his group was part of a coalition asking the U.K. health
secretary to overthrow patents protecting Roche’s expensive Kadcyla breast
cancer drug, arguing for the manufacture or import of biosimilar versions
of it to reduce the costs.

In Romania, Bănicioiu wanted to get the state-owned generics manufacturer
Antibiotice Iași to produce the treatment locally.

“The process they were proposing was a long-term process, where one had to
see what the possibilities were and make sure things were in agreement with
European legislation,” said Bănicioiu.

But just before the government’s resignation, Romania announced it had cut
a deal with AbbVie to introduce two similar drugs to Sovaldi for patients
with the most severe form of the disease and for some with a lesser form,
but who couldn’t tolerate the conventional treatment.

The price is confidential, as in many other countries. Former head of the
Romanian medicines agency Savu said it was cheaper than the conventional
treatment with interferon and ribavirin. That would put the prices for the
drugs, Exviera and Viekirax, somewhere between €11,000 and €13,000 for a
complete treatment per patient, Romanian media outlet Hotnews.ro wrote.

The agreement struck with AbbVie is based on how well patients fare, so the
company would have to repay the cost of the treatment if the patient is not
cured after 12 weeks, Savu said.

But even if the price is lower than the conventional treatment, which has
serious side effects, only the most advanced hepatitis C patients can get
the AbbVie drugs. At the end of last year, some 750 people had received
approval to start treatment.

The deal with AbbVie did not mean however that the compulsory licensing
plan was abandoned, according to Bănicioiu.

“The two processes were parallel, [so] you didn’t have to keep patients
waiting,” he said. The thinking was that the compulsory licensing process
would take two years, as it involved going to court and talking to the
originator companies “to ensure one does not lose billions of euros in
court cases,” Bănicioiu said.

Legal questions

KEI reached out to Gilead and Brystol-Myers Squibb asking them to license
their hepatitis C drugs in Romania before the negotiations with AbbVie
concluded. Both companies responded that they would rather seek access to
the market by directly engaging with the Romanian government.

The government resignation and Savu being transferred to a new position
from the helm of the National Medicines Agency just before the government
fell left things up in the air.

“The compulsory licensing [process] was not finalized; it is a very
sensitive problem at EU level to decide to infringe on a patent,” Savu
said. “When you sign an intellectual property treaty, you have to have a
very solid argument to violate it, because the entire innovation is based
on this.”

But KEI’s Goldman argues there are a lot of misconceptions surrounding
compulsory licensing, that they have tried to fight against. “It can be
used in any way that the national law allows,” based on the Agreement on
Trade-Related Aspects of Intellectual Property Rights. “In practice, many
people in power are concerned about the blowback [from] the industry. There
has to be a political will to do that,” he said.

Even though the Romanians shied away from compulsory licensing, worried
about the reaction from the EU, a Commission official said that the issue
was in the hands of national governments. “We don’t have much competence to
act on this in the EU,” said Alfonso Calles Sanchez, policy officer in the
Directorate General for Internal Market’s unit dealing with intellectual

Some lawyers in Brussels are skeptical about the potential for success of
the Romanian endeavour.

The original drugmakers are willing to sell in Romania and there is
competition on the market between them, so it would be hard for the
government to find a clear legal basis for compulsory licensing, said
Thomas Graf, partner at Cleary Gottlieb. “And the idea of producing the
drugs in Romania could also raise suspicions of protectionism,” he said.

James Killick, partner at White & Case, agreed. “There would be no legal
basis or justification for it. You’re doing it just for savings.”

In the second half of 2016 negotiations will start for a new agreement on a
hepatitis C drug that will be extended to those with less severe form of
the disease,  said Ciurchea, head of the Romanian health fund. “There are
several competitors … We hope to obtain a much better price.”

Some patients cannot wait anymore.

“There are desperate people who go and get generics. It’s not normal that
desperate people have to go to India and Egypt when they as citizens of an
EU country do not have access to medicines,” said Debu, from the liver
patients’ group. “In Romania our people are dying while having the
treatment at their doorstep.”

To view online:

To update your POLITICO Pro notification preferences, visit

Only POLITICO Pro subscribers have access to POLITICO Pro content. If you
are interested in learning more about a POLITICO Pro subscription for your
organization, please contact pro at politico.eu.
Andrew S. Goldman
Counsel, Policy and Legal Affairs
Knowledge Ecology International
andrew.goldman at keionline.org // www.twitter.com/ASG_KEI
tel.: +1.202.332.2670

More information about the Ip-health mailing list