TWN Info Service on Health Issues (Mar11/05)
18 March 2011
Third World Network

Use TRIPS flexibilities to reduce HIV drug prices, urge UN bodies
Published in SUNS #7110 dated 17 March 2011

Geneva, 16 Mar (Kanaga Raja) -- The intellectual property and trade flexibilities contained in the WTO TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health can provide important opportunities for Members of the World Trade Organization (WTO) to reduce prices and expand access to HIV medicines.

"Countries revising their laws should use to the full the flexibilities contained in the TRIPS Agreement", and "WTO Members should in addition carefully consider the public health implications when adopting or implementing more extensive intellectual property protection than in required by the TRIPS Agreement".

These recommendations are in a new policy brief issued on 15 March by the Joint UN Programme on HIV/AIDS (UNAIDS), the UN Development Programme (UNDP) and the World Health Organization (WHO).

Voicing deep concern over the long-term sustainability of access to affordable HIV treatment, the three UN organizations urged countries, where appropriate, to use the flexibilities set out in the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health, to reduce the price of HIV medicines and expand access to people most in need.

"International organizations should advocate for and support their national partners in the use of all these flexibilities and in all other actions consistent with the TRIPS Agreement to promote access to antiretroviral drugs, other HIV medicines and technologies related to HIV treatment," they said in their joint policy brief.

"We are seriously concerned about the future of HIV treatment programmes," said Dr Paul De Lay, Deputy Executive Director, Programmes, UNAIDS, in a press release issued on 15 March.

"Only about one third of people in need have access to treatment. In the current economic climate, even sustaining that over the long-term will be a challenge. Countries must use all the means at their disposal, including the TRIPS flexibilities, to ensure sustainability and the significant scale-up of HIV services to reach people most in need," he added.

At a subsequent media briefing on the same day, Dr De Lay elaborated that TRIPS flexibilities is one tool that can be particularly effective in bringing down the costs of medicines. "However, use of the TRIPS flexibilities to date has been limited," he noted.

Dr Mandeep Dhaliwal, Cluster Leader on human rights, gender and sexual diversities at UNDP, said that employing TRIPS flexibilities and supporting countries' abilities to use the TRIPS flexibilities is critical, not just for scaling up access to HIV treatment and for contributing to more sustainable AIDS financing, but also for the other health-related Millennium Development Goals (MDGs), namely, MDG No. 4 (on reducing child mortality) and No. 5 (on improving maternal health).

Citing the links between the health-related MDGs and development in general, she said: "So, it's a matter of great import to UNDP that countries are supported to use TRIPS flexibilities."

In response to a question, Dr Dhaliwal said: "We are very aware that political considerations often undermine the use of flexibilities."

Elaborating on the subject of political considerations, she said: "We are deeply concerned where bilateral trade negotiations, often conducted with little transparency, lead to TRIPS-plus provisions being adopted in national legislation."

It is not just a question of political considerations in relation to bilateral free trade negotiations, but also of political considerations that underpin excessive intellectual property enforcement, she said, citing examples such as the seizures of generic medicines (at some European Union member states' ports) or the implementation of overly-broad anti-counterfeiting legislation in countries that are receiving generic medicines.

On the issue of "data exclusivity" provisions in free trade agreements, Dr Dhaliwal said: "We are concerned that data exclusivity is a real problem, and that it would limit capacity to increase access to treatment and provide low-cost ARVs (antiretrovirals) to the world."

This is very much at the heart of the discussions right now around the India-EU free trade agreement, she said, adding that "we are very concerned that this might limit India's ability in the future to continue to be a supplier of low-cost ARVs."

Asked to comment on numerous complaints made that the TRIPS flexibilities are flawed and are too burdensome to implement, Dr Dhaliwal said that while the flexibilities may or may not be the easiest thing to use, "the reality is that it is one tool in the armoury right now and we have to use what we can because it is a very urgent situation."

"We recognize that they are not the simplest mechanisms to use," but "it's a tool that we can use and should use to improve access to treatment as much as we can," she added.

Dr Zafar Mirza of the WHO cited several reasons for renewed concern among the UN organizations, among these being that diseases are becoming more difficult to treat and the available health tools, be it medicines or diagnostics, are becoming "increasingly blunt", thus requiring new medicines that are governed by strong and lengthy patent regimes.

He also pointed to more barriers being erected when countries are negotiating new terms of trade among themselves. The intellectual property protection (IP) chapters in different free trade agreements are going beyond the minimal criteria of IP protections set by the TRIPS Agreement, he added.

According to the joint UNAIDS/UNDP/WHO policy brief, antiretroviral therapy significantly reduces morbidity and mortality among people living with HIV. As of December 2009, an estimated 5.2 million people living with HIV in low- and middle-income countries were receiving antiretroviral therapy, a 12-fold increase since 2003.

"Despite progress, nearly 10 million of the estimated 15 million people needing antiretroviral therapy are without access to treatment, making it absolutely critical to accelerate programme delivery to reach universal access goals," says the policy brief.

It notes that the increased availability of sources for generic medicines has drastically reduced the annual price of first-line antiretroviral drugs from over US$10,000 per person in 2000 to less than US$116 for the cheapest WHO-recommended first-line antiretroviral regimen in the first quarter of 2010, a reduction of nearly 99%. For the first-line stavudine-containing regimens - mostly used by low- and middle-income countries until 2009 - the procurement price dropped to between US$64 and US$122.

"Despite these substantial price reductions, prices of first-line regimens that include zidovudine or tenofovir and of second-line regimens are still too high for many least developed countries, representing major challenges for antiretroviral therapy programmes."

The policy brief further notes that in low-income countries, the annual price per person for first-line regimens ranges from US$136 to US$243, and in lower-middle-income countries, the price ranges from US$116 to US$667.

For second-line regimens, the annual price per person ranges from US$572 to US$803 in low-income countries and from US$818 to US$1,545 in lower-middle-income countries. In upper-middle-income countries, annual prices of first-line regimens range from US$161 to US$1,033 and second-line regimens range from US$3,393 to US$3,647.

India is particularly important for the production of generic medicines, as it has a strong generic drug manufacturing sector and produces a high percentage of the medicines currently used for HIV treatment in low- and middle-income countries. For instance, in 2006, India supplied 70% of generic antiretroviral drugs, while South Africa supplied 7%, the United Kingdom supplied 6% and the United States supplied 4%.

"TRIPS flexibilities continue to be important, including for first-line antiretroviral drugs that are still under patent protection. The revision of WHO treatment guidelines in November 2009 will increase the number of people needing treatment, which could lead to serious financial constraints," the three UN bodies stress.

Another result of the recent revision of the treatment guidelines is the recommendation to substitute stavudine with the less toxic tenofovir or zidovudine in first-line regimens, but first-line regimens that include tenofovir cost up to three times more than stavudine-based regimens, says the policy brief.

"This, coupled with the need for second- and now third-line regimens, makes it even more important for countries to take all available measures to reduce prices and increase treatment access, including the incorporation of TRIPS flexibilities into domestic legislation and the use of these flexibilities where necessary and feasible."

The brief adds: "The challenge of maintaining patients on treatment has been exacerbated by the global economic crisis, which is expected to decrease donor funding for HIV and to put current treatment programmes under increased strain because of reduced budgets and competing priorities. Lower prices are essential if governments and donor agencies are to meet commitments to keep patients on lifelong antiretroviral therapy while ensuring the sustainability of treatment programmes as the number of people in need of treatment increases."

The policy brief cites several instances in which the use of TRIPS flexibilities has led to reduced prices of drugs.

In South Africa, it says, treatment activists successfully used competition law to increase the number of antiretroviral drug suppliers, resulting in increased competition and a lowering of essential medicine prices.

In a recent court case, the Competition Commission of South Africa found two pharmaceutical companies guilty of excessive pricing and referred the matter to the Competition Tribunal for ruling. Before a decision was rendered by the Competition Tribunal, both companies entered into a number of agreements with the Commission and the complainants, which allowed for the increased supply of more affordable generic versions of antiretroviral drugs still under patent in the country.

Another example cited by the policy brief is the use of the 30 August 2003 Decision of the WTO by Rwanda.

(In the said Decision, WTO Members agreed that the obligations of an exporting Member under Article 31(f) of the TRIPS Agreement shall be waived with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) in accordance with the terms set out (in the Decision). Article 31(f) states that production under compulsory licensing shall be predominantly for the supply of the domestic market of the Member authorising such use.)

In July 2007, Rwanda became the first country to announce its intention to use the WTO 30 August 2003 decision to import a generic fixed-dose combination of zidovudine, lamivudine and nevirapine from a Canadian generic manufacturing company. The compulsory licence issued under the Canadian Access to Medicines Regime authorized the delivery of enough of this fixed-dose combination for 1 year's treatment of approximately 21,000 people living with HIV at the most affordable price globally of US$0.19 per tablet.

According to the policy brief, to date, Rwanda is the only country to have used this flexibility.

"The practicability and usefulness of the WTO 30 August 2003 decision as a long-term solution to increasing access to patented medicines is currently the subject of debate in the WTO TRIPS Council."

The policy brief says that the Government of Brazil demonstrated that legislation that provides for the effective and expeditious use of public health-related flexibilities can be a useful asset in negotiating lower prices for antiretroviral drugs. Using the threat of compulsory licensing, the Brazilian Government negotiated significant price reductions of efavirenz and nelfinavir in 2001, lopinavir in 2003, the combination of lopinavir and ritonavir in 2005, and tenofovir in 2006.

In 2007, after protracted negotiations, a compulsory licence was issued for efavirenz, an important antiretroviral drug used by a third of Brazilians on treatment through the national programme. After the licence was issued, the price dropped from US$1.60 per dose to US$0.45 per dose for the imported generic version of the drug.

"It is estimated that the Brazilian Government's policies, including the use of TRIPS flexibilities, saved approximately US$1.2 billion on antiretroviral drug purchasing costs between 2001 and 2005," says the brief.

In late 2006 and early 2007, Thailand issued compulsory licences for a number of pharmaceutical products: efavirenz, lopinavir/ritonavir and clopidogrel (a drug used for heart disease). In early 2008, the Thai Government issued additional compulsory licences for letrozole (a breast cancer drug), docetaxel (a breast and lung cancer drug) and erlotinib (a drug used for treating lung, pancreatic and ovarian cancer).

The policy brief also draws attention to the patentability criteria that was adopted by India. When revising its patent law to comply with TRIPS requirements that pharmaceutical products should be patentable, India adopted patentability criteria by introducing Section 3d to its Patent Act (Patents Amendment Act of 2005).

According to Section 3d, "the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant" is not considered an invention and is thus not patentable under the Indian Patents Act.

In 2007, the Indian Patent Office, following an opposition filed by a patient organization, relied on this section in its refusal to grant a pharmaceutical company a patent for the cancer drug imatinib mesylate.

The company filed two lawsuits. In one lawsuit, the company challenged the decision of the Patent Office, claiming that imatinib mesylate fulfils the patentability requirements under the Indian Patent Act as it enhances the efficacy of a known substance. In a second lawsuit, the company claimed that Section 3d does not comply with the TRIPS Agreement and violated the Indian Constitution.

According to the policy brief, on 6 August 2007, the High Court in Madras rejected the constitutional challenge, decided that it was not the forum to address questions on compliance with the TRIPS Agreement, and upheld the validity of India's 2005 Patents Amendment Act. On 6 June 2009, the Intellectual Property Appellate Board of Chennai rejected the lawsuit against the decision of the Patent Office. This judgment was appealed by the patent applicant and a decision is pending.

"The decision on whether a new form of a known substance can be patented has major implications for many drugs used in HIV care, now and in the future," the policy brief emphasizes.

Other countries that have used compulsory licences or government use for the local manufacture or importation of generic medicines in recent years include Indonesia, Malaysia, Mozambique, Zambia and Zimbabwe, it notes.

"Despite the opportunities provided by TRIPS flexibilities, many countries have yet to amend their laws to incorporate optimally the flexibilities, which is a precondition for their use."

The policy brief further notes that a number of countries are party to, or are in the process of negotiating, bilateral or regional free trade agreements containing "TRIPS plus" provisions - that is, levels of intellectual property protection that go beyond the minimum standards required by the TRIPS Agreement.

According to the policy brief, provisions that have been included in free trade agreements in the past and that may have an impact on public health or may hamper the use of flexibilities include, amongst others: limiting the grounds and conditions under which compulsory licenses may be issued; providing for the possibility of extensions of terms for patents beyond the 20 years required by TRIPS; and requiring test data protection that restricts the use of clinical test data on pharmaceutical products by drug regulatory authorities for the approval of generic medicines for a certain period of time.

The policy brief recommends a range of actions for high-income, and low- and middle-income governments, as well as international organizations.

On the actions to be undertaken by high-income governments, the policy brief recommends, amongst others, that countries with manufacturing capacity should consider implementing the "Paragraph 6" or "30 August 2003" mechanism in an administratively efficient and effective manner in order to facilitate the export of generic medicines to countries without sufficient or any manufacturing capacity.

High-income governments should also ensure that free trade agreements with middle- or low-income countries comply with the principles of the Doha Declaration.

As for low- and middle-income governments, the policy brief recommends that they should consider revising national intellectual property legislation in order to ensure that TRIPS flexibilities specifically geared to promote access to medicines are incorporated into national laws and regulations without delay. Parliamentarians in these countries should also ensure that new trade agreements are not contradictory to the Doha Declaration.

International organizations should support national governments to increase access to treatment by providing technical assistance to implement TRIPS flexibilities in order to promote access to medicines in accordance with their respective mandates, the policy brief concludes. +