[Ip-health] Pharmalot: Orrin Hatch, AbbVie & Lobbying The Global Fund

Thirukumaran Balasubramaniam thiru at keionline.org
Thu Feb 14 07:54:38 PST 2013


Orrin Hatch, AbbVie & Lobbying The Global Fund

By Ed Silverman // February 14th, 2013 // 10:39 am

In a world fraught with clashes over medication prices and intellectual property rights, the many efforts to make AIDS drugs accessible to poor nations is inevitably accompanied by considerable politicking. But the intense, behind-the-scenes maneuvering over affordability and compulsory licenses generally does not land on the public radar, especially when it involves a US Senator, a big drugmaker and an influential non-profit.

However, an interesting episode concerning Orrin Hatch, the Utah Republican, has surfaced in which he appeared to be carrying water for the US pharmaceutical industry, specifically Abbott Laboratories (ABT), or should we say AbbVie (ABBV), since this newly minted spinoff now houses the AIDS drug portfolio. Two years ago, Hatch wrote former US Secretary of State Clinton to complain about the Global Fund To Fight AIDS, Tuberculosis and Malaria.

In his letter, Hatch complained the Global Fund paid more for generic drugs than for brand-name medicines. “It is extremely concerning that US-funded programs, such as the Global Fund, are making inefficient and unnecessarily costly procurement decisions that come with dire consequences… It is unclear how often his occurred, but unfortunately, these actions have likely cost millions of dollars of excessive waste and abuse of the program.”

He also criticized efforts by the Global Fund to remind recipients that they have the right to contract the necessary expertise for issuing compulsory licenses to companies to make lower-cost versions of certain drugs. Hatch maintained that by “advocating for developing nations to disregard” the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, was “an abuse of the system.”

But Intellectual Property Watch, a non-profit that disclosed the letter, points out, TRIPS offers compulsory licensing as an option for “governments to make patented drugs more affordable for their populations in times of need. Countries are permitted to decide for themselves when they wish to use compulsory licences, and have a series of steps to follow if so. This was reinforced in the 2001 Doha Declaration on TRIPS and Public Health.”

Compulsory licensing, you may recall, has been a flashpoint between brand-name drugmakers and a growing number of countries over the last few years. Consumer advocates and non-governmental organizations have lined up with generic drugmakers to charge that the cost of essential brand-name meds are often out of reach to most people in poor or developing countries. For their part, brand-name drugmakers have argued that such moves diminish their intellectual property and have, at times, lowered prices in hopes of convincing goverments not to issue licenses.

Nonetheless, Thailand has issued compulsory licenses for several medications, angering Abbott Laboratories at one point (back story). Last year, India issued a compulsory license for a Bayer med used to treat kidney and liver cancer and, more recently, announced plans to issue licenses for three other cancer drugs (read more here).

Of course, this is a pocketbook issue for drugmakers, although in his letter, Hatch mainatined that an Abbott AIDS drug – which again is now part of the AbbVie product line – was available at either the same price or for less than generics, even though the Global Fund was supposedly promoting generics (look here to read his letter, a presentation by the Global Fund about intellectual property and comparative data on prices of AIDS drugs).

This is not merely a historical matter, apparently. Knowledge Ecology International, a non-profit advocacy group that focuses on intellectual property issues that affect access to medications, reports that, last September, Abbott had approached senior staff at the Global Fund to complain about its ongoing encouragement of recipients to purchase generic Kaletra (read here). At the time, an Abbott staffer was a member of the private sector delegation to the Global Fund board; other drugmakers are also represented.

And both IP Watch and KEI have noted recent changes at the Global Fund. Recently, for instance, Mark Dybul became executive director after the previous director resigned a year ago and several months of transition that IP Watch argues was not transparent (background here). As a result, the watchdog complains that the extent to which the pharmaceutical industry may have influenced the change in leadership is unclear or affected any policy changes at the Fund.

Dybul, by the way, had previously headed the President’s Emergency Program for AIDS Relief, or PEPFAR. IP Watch adds that PEPFAR was the “measure for the complaints in Hatch’s letter, which stated that the PEPFAR legislation carefully spelled out how generics would be purchased for use in certain countries only, and did not require the purchase of generics.” Meanwhile, KEI notes the Global Fund last November appointed a new chief procurement officer who once worked at Abbott (see this).

“It is interesting to note the leadership changes at the Global Fund… following the attacks by Senator Hatch and Abbott on the Global Fund’s procurement and IP policy,” Thiru Balasubramaniam, KEI’s Geneva representative, writes us. “As the Global Fund rolls out its Voluntary Pooled Procurement policy, a policy that will centralize the Fund’s decisionmaking over the purchase of billions of dollars of medicines and other health products, perhaps it is no coincidence that new reports of Abbott’s active engagement in endeavoring to influence the procurement and IP policy of the Fund have emerged.”

We asked Abbott, AbbVie, the Global Fund and Hatch for comment, and will update you accordingly..


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org

Tel: +41 22 791 6727
Mobile: +41 76 508 0997

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