A major timepoint has arrived in the implementation of the World Trade Organization’s (WTO) policy on the patenting of pharmaceuticals; this year, countries defined as “developing” (middle-income, as opposed to “developed” or “least-developed” nations) will be required by the WTO to implement national laws that enforce stringent 20 year patent protections on pharmaceuticals, as defined in the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
The patent protections are based on economic theory that has assumed that providing monopolies for selling a good will spark return on research investments, thereby reimbursing inventors. But the pharmaceutical industry rarely requires two decades to recoup costs on its research and development (R&D) for new medications. In fact, 85% of the basic and applied research for the top five selling drugs on the market were produced through taxpayer funding. According to the patent-based drug industry’s own tax records (obtained from the Securities and Exchange Commission), Merck last year spent 13% of its revenue on marketing and only 5% on R&D, Pfizer spent 35% on marketing and only 15% on R&D, and the industry overall spent 27% on marketing and 11% on R&D. Meanwhile, all of sub-Saharan Africa constitutes only 1.3% of the pharmaceutical market, so as one former pharmaceutical executive put it, donating drugs to the entire market would result in a profit loss to the patent-based industry equivalent to “about three days fluctuation in exchange rates” (http://www.zmag.org/content/showarticle.cfm?SectionID=13&ItemID=5181).
Given these facts, the manufacturing and distribution of generic pharmaceuticals should be considered a legitimate exercise, and has dramatically assisted in inserting competition into a monopolistic markets–thereby lowering the price of public health goods for poorer patients. Of course, patents are not the exclusive reason for why persons fail to receive proper healthcare in poor countries; but to indicate that healthcare system infrastructure and adequate insurance coverage are also blockages in the pipeline from research to better health outcomes is not to say that patents are not also an important blockage. Indeed, the patents on key malarial medicines are providing obstacles to the dissemination of the best anti-malarials in the tsunami-struck region of Asia, causing physicians there to use second-line, inferior drug regimens.
India has, at least since the late 1970s, provided a key base for the production of generic alternatives to higher-priced drugs from the U.S. and Europe. Numerous countries depend on Indian generic manufacturers; not only for crucial antiretroviral AIDS medications, but also for both basic and molecularly-advanced public health goods. Unfortunately, due to the WTO TRIPS Agreement requirements, India must now pass stringent patent protections for pharmaceuticals, and this could cut off the future supply of generic medicines to poor countries, particularly those who lack their own manufacturing capacity. In addition, India and other “developing” (middle-income) countries were required to institute a “mailbox” in the period between 1995 and 2005, during which pharmaceutical companies could register their products for patent protection once the 2005 WTO deadline was reached and the “mailbox” was opened for patenting approvals. Generic companies in India will have to stop their production of these “mailboxed” drugs if India does not pass flexible patent laws during its current parliamentary session.
Fortunately, the WTO TRIPS guidelines do provide a number of public health protections, and the Indian parliament must make use of these as it continues its current session on the President’s Patent (Amendment) Ordinance of December 2004 (the proposed TRIPS implementation strategy). Indian policymakers must enforce a number of protections, some of which the President’s policy proposal excludes. In particular, policymakers must make use of the WTO’s Doha Declaration on TRIPS and Public Health, which allows countries like India to use “compulsory licenses” for exportation of drugs to poorer countries without manufacturing capacity. These licenses grant generic manufacturers authority to produce drugs without the principal patentholder’s permission, under the premise of public health need.
To prevent illegitimate patenting (patenting applications that have been put forth to slow entry of generic pharmaceuticals onto the market), the parliament must adopt a policy of allowing opposition to a patent claim prior to its approval (a “pre-grant opposition”). Similarly, pharmaceutical test data must be kept public, rather than being listed as private company data. Patent-based companies have often claimed that their clinical trial data is proprietary; in reality, this is a measure to slow the entry of generic drugs onto the market. If a patent-based company shows that compound A is effective against disease A, then a generic company need only show that their compound B is the exact same molecule as compound A. There is no need to re-test compound B in a series of clinical trials; indeed, such an act would waste resources and needlessly endanger clinical trial subjects. Finally, the Indian parliament must prohibit the use of patent “evergreening” policies, in which a company claims a “new use” for a drug near the date of the drug’s patent expiration, in order to get a new patent on the same compound.
These measure will assist in ensuring that Indian generic manufacturing capacity can continue to supply many poor nations with crucial stocks of much-needed medicines. At the least, the Indian parliament will prevent compounding existing public health problems with new obstacles to proper medication delivery.
For further information, see http://www.msf.org
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