[Ip-health] Submission to mailing list - Procurement and patent information
patnaik.reporting at gmail.com
Fri Nov 22 01:25:04 PST 2019
On procurement and patent information - International Health Policies
*Drug procurement & patent information: “Do your own due diligence”? *
By By Priti Patnaik
on November 19, 2019
Drug procurement is “big money”. Naturally information follows money. But
information also enables negotiations. This is particularly vital if you
are a health ministry official trying to negotiate prices of medicines
based on their patent status while procuring drugs. Although it exists,
information around if and where a specific drug has been patented is
surprisingly hard to find. But as we know, in global health, what is
available may not always be accessible.
Though procurement is an important “health systems function”, experts
believe that as a function it has been underappreciated. But there is much
at stake here. It is interesting that something seemingly as routine as
government procurement can become contentious, when you bring in
transparency around patent information.
Remember, that the 2016 UN High Level Panel on access to medicines
say that “Transparent patent information can be an important determinant of
health outcomes. When the status and details of intellectual property
protections are easily accessible, competitors can confidently release
cheaper health technologies similar to out-of-patent products.”
On a recent autumn evening in Geneva last month, experts gathered at an
IFPMA sponsored event
discuss how better access to patent information can facilitate medicines
FACTORS THAT ARE SHAPING THE COSTS OF PROCURING DRUGS
The event took off from a recent report by the Center for Global
Development – “Tackling the Triple Transition in Global Health Procurement
<https://www.cgdev.org/better-health-procurement>” that examines a number
of factors that impact procurement costs for countries.
According to the report, transitions in epidemiological burdens mean that
as countries get wealthy, populations witness more non-communicable
diseases than infectious diseases. As a result, countries will buy
different kinds of drugs to address changing disease patterns. In addition,
with rising income levels donor aid will not always pay for medicines
procurement in such countries even as countries struggle with limited
experience and capacity for making procurement decisions. Many low-income
countries depend on donors for health products procurement. Finally,
countries are moving towards Universal Health Coverage, and away from
spending on disease-specific programs. Strained budgets already mean that
countries need to get efficient in procuring a range of medicines.
So why is drug procurement big money? According to the report, health
product purchasing in low- and lower-middle-income countries makes up a
sizeable share of overall health spending, with spending on health products
amounting to $50 billion per year for nearly 45 countries
The report points out that procurement is essential to the missions of
global health entities like the Global Fund, Gavi, UNICEF, UNFPA, and
PEPFAR. “In the case of the Global Fund, health product procurement
accounts for $2 billion per year, or almost half of its 2017
disbursements,” it found.
Further, donors account for half of all expenditure on health products in
low-income countries. But in lower-middle-income countries, where people
pay for medicines from their own pockets, 80 percent of health products are
procured through the private sector. This means that such expenditure, now
borne by the people, does not yet reflect in the health budgets of these
CHALLENGES IN PROCUREMENT
A combination of market failure, institutional inefficiencies and
unorganized demand results in poor procurement in many countries, the
Center’s report said.
Citing the example of Ukraine, one of the speakers said that according to
an estimate in 2015 by the Anti-Corruption Action Center, over 40% of the
Ministry of Health (MOH) medicines budget was estimated to be lost to
corruption. Christine Jackson of Crown Agents, who is a Project Director
for Ukraine’s Ministry of Health offering procurement support, said that
challenges included lack of competition, with the supply of medicines for
central funded programmes sourced from only a handful of distributors and a
centralized supply chain resulting in both stock-outs and stock wastage.
Presenting the findings, Janeen Madan Keller, Senior Policy Analyst and
Assistant Director of Global Health, Center for Global Development said
that there were high and highly variable prices even for generic products
and little competition in the supply of essential medicines. In addition,
there were big markups along the supply chain.
The Center’s study found that in low and middle-income countries, prices
for basic generic medicines can vary and far exceed wealthy-country prices
– sometimes as much as 20 to 30 times a minimum international reference
price for basic generic medicines including common pain relievers.
It also found that low and middle-income countries disproportionately
purchase expensive branded generic drugs rather than cheaper unbranded
generics. (It was pointed out that people who pay from their pockets might
prefer off-patent branded drugs, since they trust agencies as opposed to
governmental due-diligence. In addition, for some drugs, it was possible
that the generic drug in question may not have filed for registration, as a
result people continue to buy branded drugs.)
At least some of the challenges in procurement stem from the lack of
information on the patents of medicines.
The much-debated 2016 Report of the United Nations Secretary-General’s
High-Level panel on access to medicines
had said: “Procurement decisions and generic manufacturing are often
delayed by the absence of clear, accurate and up-to-date information on
existing and expired patents…..Transparency can ensure fairness during
negotiations that take place between biomedical companies and procurement
It had noted that patent information is often confusing, incomplete and
fragmented. “A single product may be protected by hundreds of patents and
compounds may appear under a brand name or an international non-proprietary
name (INN). Patents pile up over time, with no indication as to which ones
the holder plans to enforce and extend. These factors, as well as excessive
patenting, can impede scientific progress and legitimate competition,” the
report had said.
CAN PATENT INFORMATION BE NEUTRAL?
While it cannot be disputed that in general, greater information can
potentially improve procurement practices, not “all” kinds of information
will serve governments better. Experts at the event diverged on the
“quality” of information on patents available to make procurement decisions.
Two patent information databases were discussed – Medspal of Medicines
Patents Pool and Pat-Informed of WIPO.
Medicines Patent Pool’s MedsPal database provides free access to
information on patent and licensing status of selected HIV, hepatitis C,
tuberculosis and other patented essential medicines included in the WHO
Model List of Essential Medicines in low and middle income countries. It
includes patent status data on more than 8000 national patent data from 130
different LMICs, covers over 100 priority medicines. It also features
information on 40 licenses and other access agreements in such countries
and has data exclusivity information from 15 countries.
Speaking on MedsPal <https://www.medspal.org/?page=1>, Esteban Burrone,
Head of Policy, Medicines Patent Pools (MPP) said at the event, that there
were challenges in collecting patent information. MPP began collecting
patent status information on priority medicines in low and middle income
countries (LMICs) for its licensing work. He said that it was difficult to
identify relevant patents. Many LMIC patent offices did not have searchable
online databases, while some only allowed searches with patent number,
others allowed searches in local language only and some published patent
applications/grants but not legal status. (Also, searches by International
Non-proprietary Name (INN) did not yield relevant results)
MPP set out to collect such information from patent offices and with help
from WIPO, local patent attorneys, national patient groups among others.
Soon it started getting calls from public health stakeholders for such
information and requests to make it public.
It collects data from sources such as the USFDA Orange book, Health Canada
patent register, publicly available licences, published patent landscapes
such as by WHO or UNITAID. In addition, it also checks on patent family
information from INPADOC Patent family, WIPO Patentscope, patent holder
disclosures. Finally to keep updated, it reviews patent status by referring
to online national and regional registers, national patent collections on
WIPO PatentScope, direct communications with patent offices, local experts
and working with patent offices.
WIPO’s Pat-INFORMED <https://www.wipo.int/patinformed/> (The Patent
Information Initiative for Medicines) also helps pharmaceutical procurement
agencies determine the patent status of a medicine. The database is a
result of the partnership among WIPO, IFPMA and 20 global pharma companies.
(WIPO has in the past worked with the private sector on other areas
including initiatives such as WIPO Green.)
As a part of the WIPO Development Agenda, WIPO has been mandated by
member-states to improve access to publicly available patent information.
Pat-INFORMED follows this mandate. The database of Pat-INFORMED includes
information on 20 Companies, 224 INNs, more than 19000 Patents and 600
Members of the civil society present at the event, raised questions on
conflict of interest, and meaningful transparency around patent information
with respect to Pat-INFORMED.
They were of the view that there is a conflict of interest since WIPO’s
database furnishes information provided by the pharmaceutical industry.
Experts said that there were risks that this information provided by one
set of stakeholders could become a reference.
Civil society members called for meaningful transparency on patents. “Poor
quality information can for example, delay the entry into generics,” a
representative from MSF said. Higher and stringent requirement of
disclosures on patent information is necessary, the expert added.
“Procurement agencies with limited knowledge may not be aware that a patent
status on a particular drug might have changed,” a civil society expert
One of the key goals of bringing transparency to patent information is
precisely this – more light will enable governments, generic companies,
researchers and civil society to easily review and oppose questionable
patent applications and grants and monitor whether patent officials are
applying patentability criteria as required by national laws – as discussed
in the UNHLP report.
It was pointed out that it was not always possible to update the change in
legal status of some patents in real-time. Since it is a voluntary
endeavour, it was up to the companies to update the information and hence
there was a possibility for errors in the mechanism, it was said.
However, a rejected or revoked patent must reflect in the database, else it
is potentially problematic. To be sure the WIPO database has disclaimers
spelling out that it does not give the freedom to operate.
Civil society members and others also urged WIPO to review the association
with the industry that provides patent information, in order to reduce
conflict of interest.
It was important for WIPO to “de-emphasize commercialisation”, one speaker
from Third World Network said. While searching for information on
Pat-INFORMED, it is possible to get in touch with patent holders – this
amounted to “furthering the commercial interests of originator companies”,
one expert was of the view.
Thomas Bombelles, Head, Non-Governmental Organizations and Industry
Relations , at WIPO, who was one of the speakers at the event, said,
“Pat-INFORMED is aimed at increasing patent transparency. It offers
practical and accessible information on drug formulations that would
otherwise be available as highly specialized patent information which is
often complex. The participating companies in this program are responsible
for providing updated information. Based on the information available on
the website and in the database, it has been clear since the beginning that
the project’s value is in its provision of clear information. The
simplicity means that it cannot capture every aspect of a complex patent,
and that bona fide procurement authorities can get more detail from the
patent holder. The disclaimers made this point about the patent status of
medicines in a clear and simple way. In this sense, it is clear to all
users that Pat-INFORMED website is not a freedom to operate license.”
Further, there have been calls for WIPO to independently verify the
information on Pat-INFORMED. Speaking at the event, Denis Broun, Director
of public and government affairs for Cipla said “As a generics company,
patent intelligence is crucial for us. We rely on our own patent lawyers
directly. We will not rely on other sources of information as consequences
can be very expensive for us.”
“There cannot be full transparency around the patents if only one side
supplies the information. We would want WIPO to verify the information on
Pat-INFORMED and guarantee its accuracy,” Broun told the gathering.
To be sure, the UN High Level Panel on access to medicines had recommended
that governments should establish and maintain publicly accessible
databases with patent information status and data on medicines and
vaccines. “This information should be periodically updated and consolidated
by WIPO in collaboration with stakeholders to develop an international,
easily searchable database which should include standard international
common names for biological products; international non-proprietary names
for products, either as known at the time of application or after the
granting of a patent; and dates of grant and expiry”.
DUE DILIGENCE ON PATENT INFORMATION
Information can be political, particularly when it comes to something as
high-stakes as drug patents. In the interest of efficiency and lower costs,
governments and procurement agencies should do their own due diligence on
patent information while buying drugs.
Some countries such as Chile have mechanisms to ensure greater efficiency
for procuring drugs. “For countries to procure drugs efficiently, a number
of different approaches need to be considered from different perspectives,
because the medicines market has many intermediaries,” Martin
Correa, Counsellor for the Permanent Mission of Chile to the WTO, WIPO and
other economic international organizations based in Geneva, and former Head
of the Intellectual Property Department of the General Directorate of
International Economic Relations (Direcon) of the Ministry of Foreign
Affairs, Chile, said.
Chile has established an inter-agency cooperation framework to enhance the
communication among different governmental authorities for better
information exchange. Health, trade and patent offices work together, he
added. He said that Chile also has an electronic centralized public tender
process so that there is sufficient competition for generics. In addition,
an observatory for medicines pricing established recently also provides
valuable information to discuss and negotiate better with innovator
companies. In addition, Chilean law also enables procurement drugs at the
lowest prices available globally. The government also makes use of
different international frameworks and initiatives to procure medicines.
Even as diversity in information sources might improve access to patent
information, the quality and neutrality of information should remain a
consideration for procurement agencies and governments.
Priti Patnaik <http://ch.linkedin.com/in/pritipatnaik>
Researcher & Journalist
More information about the Ip-health