Author: Germán Holguín
Organizations: Misión Salud; LAC-Global Alliance for Access to Medicines (Regional Organization); Ifarma Foundation; Colombian Commission of Legal Experts; Latin American Bishops’ Council (CELAM – Regional Organization); Committee on Oversight and Healthcare Cooperation (CVSC – Colombia); Brazilian Interdisciplinary AIDS Association – ABIA (Brazil); Gestos – Positive Sorology, Communication and Gender; National Network of Individuals Living with HIV/AIDS – São Luis/Maranhão Nucleus; IDDA Group of Rio de Janeiro; Rio+ Youth Network (Brazil); Positive Effect Group Foundation (FGEP – Argentina); Latin American Network for Access to Medicines (RedLAM – Regional Organization); Argentine Network of Positive Individuals (Redar Positiva – Argentina); International Action for Health (Regional Organization)
Abstract
The lack of medicines is not a natural, inevitable and irreversible phenomenon, like an earthquake, but rather the result of strategies designed and executed by certain multinational pharmaceutical companies, with the support of their governments, to take over the pharmaceutical markets and impose high monopoly prices on them.
This situation occurs because there is no political clarity as to the right to health’s priority over commercial interests, and due to ignorance of the fact that models to promote innovation, such as intellectual property, are only valid if they benefit the population as a whole.
We identify three specific causes of this problem:
i. The current incentive model for medical technology R&D;
ii. High prices of medicines, particularly pioneer medicines; and
iii. Blocked access to generic medicines.
Since countries have the obligation both to take measures to gradually enforce the right to health, and to respect, protect and comply with this right, specifically guaranteeing access to the necessary medicines, we propose:
1. Abolishing pharmaceutical patents on medicines necessary for health and life.
2. Full use of public health safeguards applied in international regulations to counteract harmful effects on patients.
3. Promoting the legal classification of blocking of generic medicines as a Crime Against Humanity subject to prosecution in domestic and international courts.
Successful implementation of these proposals necessarily requires putting into effect a reform of the current model of healthcare innovation R&D.
The solution for the current lack of alignment between public health, innovation and trade starts with complete willingness by the players involved to prioritize the right to health over commercial interests.
Submission
As announced in the High-Level Panel’s invitation to accept contributions, there is a “lack of alignment between the rights of inventors, international human rights law, trade regulation and public health if it impedes innovation in healthcare technology and access thereto.”
In our opinion, this lack of alignment has its origin in:
i. The incentive model for medical technology R&D;
ii. High prices of medicines, particularly pioneer medicines; and
iii. Blocked access to generic medicines.
First cause: Incentive model for medical technology R&D.
With respect to medium- and low-income countries, addressing the diseases to which they are subject, including forgotten tropical diseases, requires significant efforts both to prevent them, through healthcare policies that systematically use cost-effective tools, such as mosquito nets, water purification, etc., and to develop and improve healthcare technologies appropriate for prevention, timely diagnosis and treatment of patients.
As diagnosed by the Consultative Expert Working Group (CEWG) established by the World Health Assembly (WHA) in its Resolution WHA63.28, the reason for the lack of healthcare R&D to address these diseases is the current system of incentives for this activity, which is based on inventors’ expectations of patenting their inventions and charging high monopoly prices for their products, allowing them to recoup their investment and frequently earn exaggerated profits.
As is obvious, this system of incentives causes resources intended for medical research to be concentrated in the development of business medicines, ignoring actual healthcare needs. In the words of a Bayer™ senior executive,
“We do not develop medicines for Indians. We do it for Western patients who can pay for them."
To reverse this situation, the CEWG recommends creating an alternative incentives system, severing the link between patients and high prices, for example, a public international fund, financed by a small percentage of the GDP of all countries, which would award significant economic premiums to inventors of technology intended for diseases prevalent in medium- and low-income countries. Innovations financed this way would be considered “public goods,” i.e., free of intellectual property obstacles.
Although it might seem impossible, the truth is that the failure of the patent-based R&D model is also clear in high-income countries, where high medicine prices due to patents are placing in check the financial sustainability of their healthcare systems. This is the case, for example, with cancer medicines, medicines for treating hepatitis C and biotechnology medicines, the unaffordable prices of which we cite further below.
It is clear that implementation of this initiative by the CEWG needs to be reestablished to include these clear phenomena in high-income countries and will require negotiation of a Global Agreement on Healthcare R&D. This has not been possible due to a lack of will in some leading countries. It is necessary to reverse this situation in a manner parallel to implementation of the proposals we raise here for addressing the other two causes.
Second cause: High medicine prices, especially for pioneer medicines.
The reason for their existence is primarily pharmaceutical patents which, by granting monopoly privileges, afford the opportunity to set product prices higher than those which would obtain in a competitive market, in order to recoup expenses incurred in the R&D process and obtain a reasonable profit.
The downside is that those who claim this privilege do not always exercise it responsibility, with a structure of production costs plus a rational profit margin, but rather apply completely speculative criteria. This practice results in scandalous prices, unaffordable both for the healthcare systems without risking their financial stability, and for individuals who must pay for their medicines out of pocket, which is frequently the case in medium- and low-income countries.
In cancer, for example, “among the 12 treatments approved in 2012 by the FDA, 11 cost some 100,000 US dollars per year,” making them unaffordable.
Sofosbuvir, used to treat chronic hepatitis C, currently has a price of USD$ 1,000 per day in the US, while its production cost is between USD$ 58 and USD$ 136. The private sector’s investment cost in R&D for this product has been estimated at USD$ 300 million, while sales were USD$ 10.3 billion in only one year (2014).
The situation is even more alarming in the case of biotechnologies used for treating acute diseases such as cancer, rheumatoid arthritis and diabetes, among others, the average prices of which range from 50,000 to 250,000 dollars/patient/year. There is also the additional factor that, according to a study by the University of Utrecht, the production cost/ sales price ratio is an average of only 2.3%.
Given the out-of-control increase in prices and healthcare spending, many countries have been forced to implement strategies to control this expense and improve affordability levels. The strategy that has proven to be the most effective is the stimulation of generic competition.
Third cause: Blocked access to generic medicines.
This is the set of intellectual property standards and practices by large pharmaceutical multinationals and their governments designed to block the supply of affordably priced generic medicines, to only those that can access
both the population and the healthcare systems without sacrificing the provision of other essential services.
Ironically, the reason for the existence of this blocking lies in the two essential attributes of generic medicines: good quality, as attested to by studies carried out in several countries, and affordable prices. Regarding the latter, in the international scenario, generics cost an average of one half to one third the cost of pioneer medicines, and in some cases almost 50 times less.
These qualities have opened the doors of the pharmaceutical markets to generics, with the consequent benefits in terms of public health, while at the same time unleashing the pharmaceutical multinationals’ strategies to block them. The following quote from a senior executive of a pharmaceutical multinational summarizes this attitude:
“We are not in the business of saving lives, but rather of making money. Saving lives is not our business.”
According to this principle, certain companies that manufacture pioneer medicines resort to every mechanism available to them, both legal and illegal, to retain and strengthen their monopoly, without regard to the consequent impacts on public health and the wellbeing of the people.
Among the most effective legal mechanisms are pharmaceutical patents, which offer their holders a nominal monopoly of 20 years and an effective monopoly of 10 to 15 years. During this period, generic versions may not enter the market, with the consequent effects on access and public healthcare.
We need to keep in mind that pharmaceutical patents have not always existed, as many believe, but rather were only invented a short time ago by the large pharmaceutical multinationals to protect their commercial interests. In England, Germany, Switzerland, Italy and Spain, for example, they were only established between 1949 and 1986; and in medium- and low-income countries in 1994, through the TRIPS [Trade-Related Aspects of Intellectual Property Rights] Agreement.
Countries should never have committed to granting them and should take the necessary steps to abolish them, as medicines are a public social good and not merchandise, and therefore are not subject to patent protection. Assuming the commitment to grant them is a serious violation of the right to health and life.
Contrasting with this reality are the recently concluded negotiations of the Trans-Pacific Partnership (TPP), which is in the process of being approved by the legislative bodies of the 12 signatory countries. Its provisions concerning intellectual property represent a threat to access to medicines that save lives.
Regarding the illegal mechanisms used to block generics, the three most common are:
i. Campaigns to discredit generics
ii. The payment of economic stimuli to physicians to prescribe certain pioneer products of identical quality as generics, but which are much more costly; and
iii. Agreements between manufacturers to delay the entry of generics into the market.
Conclusion
The problem of these three causes is that their effects are not limited to the field of economics, but rather they endanger the health and life of individuals. Because they depend on human intentions, they are an ethically censurable and legally condemnable event. Therefore, taking measures to end them is an imperative of social justice.
International regulation views the right of access to medicines as one of the basic elements for progressively achieving full exercise of the right to health. Countries have the obligation both to take measures to gradually achieve this right, and to respect it, protect it and comply with it, by specifically guaranteeing access to the necessary medicines.
PROPOSALS
1. Abolition of pharmaceutical patents on medicines necessary for health and life.
Keeping in mind the intense harm that pharmaceutical patents have caused to global public health since they were invented, in terms of the concentration of pharmaceutical innovation on “business medicines,” the setting of high monopoly prices
and the blocking of access to existing treatments, the time appears ripe to abolish them, at least for necessary medicines.
It is clear that this measure involves entering into a global agreement, the goal of which is to modify the TRIPS Agreement which, as explained above, globalized the commitment to award pharmaceutical patents. It is also necessary to modify regional, bilateral and multilateral commercial treaties in which this is being contemplated.
We are aware that abolition is an extreme measure, although not so much as was its establishment, but we also know that without it, it will not be possible to stop the blocking of affordable generic medicines. As long as there are mechanisms that favor monopolies and giant gains, the beneficiaries will persecute generic competition by all available means because they are not willing to lose their privileges.
Along this line of thinking, the document by the UNDP Global Commission on HIV and the Law, “Risks, Rights and Health,” which is part of the reason for convening this High Level Panel by the United Nations General Secretary, established the need to design “a new intellectual property regime for pharmaceutical products,” and states that until this is achieved, “WTO member states must urgently suspend TRIPS as it relates to essential pharmaceutical products for low- and medium-income countries.” That is to say, among other measures, suspend pharmaceutical patents in those countries.
The Special Rapporteur for Health for the United Nations, the WHO, DWB and other important international human rights organization say much the same thing: that is, there are clear indications of an international climate appropriate for the abolition of pharmaceutical patents.
As wisely noted by DNDi Director Dr. Bernard Pécoul:
“Patents are not divine rights. They are tools created to benefit society as a whole, and are not for a handful of pharmaceutical companies to line their pockets.”
It may be said that abolishing pharmaceutical patents is inconvenient because the high prices deriving from them are necessary for large pharmaceuticals to be able to recover the immense resources invested in R&D for products capable of curing diseases and saving lives. This is part of what we might call the myths of the pharmaceutical world. This truth is that:
i. The cost of developing a molecule is not 1.3 billion dollars, as the industry claims, but rather much less: 43.3 million, according to a London School of Economics study.
ii. This cost is not assumed by the pharmaceuticals but largely by governments: 85% in the case of the five most widely sold medicines in the US in recent years.
iii. Starting in the 1980s, when pharmaceutical patents first appeared, only 14 to 16% of new approved medicines were considered innovative. The rest were “me too” medicines, i.e., trivial modifications of known molecules, with therapeutic virtues similar to those of products already marketed but more costly. That is, rather than incentivizing innovation, patents are suppressing it.
iv. The treatment of diseases prevalent in the world requires a system to encourage innovation unrelated to patents, as mentioned above.
The initiative to design and put into place the process of abolishing pharmaceutical patents falls to the governments of every country, as part of their obligation to respect, protect and comply with the basic right to health. The support of international agencies charged with promoting and respecting this right is key for this process to occur and conclude successfully.
2. Full use of public health safeguards contained in international regulation to counteract the harmful effects of patents
Until abolition of pharmaceutical patents is achieved, governments have the task, resulting from the obligation to protect the right to health, to take the necessary measures to mitigate the harmful effects of patents by applying the legal instruments at their disposal, including the following:
i. Strict need to satisfy the established requirements for meriting the privilege of patent: novelty, inventive level and industrial application.
ii. Rejection of new intellectual property barriers or strengthening of existing ones through commercial treaties.
iii. Monitoring of abusive prices of medicines that most heavily affect the healthcare system and implementation of measures to control them.
iv. Full exercise of the right to use public health safeguards deriving from international regulation to counteract the harmful effects of pharmaceutical patents, especially mandatory licenses.
Regarding the last one, several reports from the United Nations’ Special Rapporteur for Health have recommended this measure, given the ability of mandatory licenses to favor competition, break monopoly prices and protect the right of access to necessary medicines.
Unfortunately, only a very few countries have dared to exercise this right, due to pressures from certain pharmaceutical multinationals and their governments.
Consequently, it is necessary to make a great effort on the part of the organizations charged with defending the right to health, to control these pressures and encourage countries to use the aforementioned instruments to the maximum extent.
3. Promoting the classification of blocking generic medicines, as a Crime Against Humanity subject to prosecution by domestic and international courts
Given the social effects of the blocking of generic medicines and the fact that it is not a matter of fate, but rather the result of policies and strategies conceived and executed by man, we have established the working hypothesis that this is a crime against humanity subject to prosecution by domestic and international courts.
In support of our position, there is evidence that the conduct that leads to this blocking results in disease, suffering and disability, and is responsible for the deaths of millions of human beings each year. Thus, in our view, it is first necessary that it satisfy the four essential requirements of crimes against humanity, and second, that it be framed as being among the criminal acts that are subject to such classification under the Statute of Rome.
What we propose in formulating this hypothesis is that the matter be submitted to the highest level of international debate, which would contribute to publicizing the
drama it is causing, open the doors to its inclusion on the policy agendas of international agencies responsible for protecting the right to health and life, and most assuredly unleash both a process of searching for and finding solutions, such as a change in commercial conduct and policies of major players in the international pharmaceutical industry.
To the extent that these three proposals are implemented along with a binding Global R&D agreement, a model will be achieved to promote innovation and the consistent development of healthcare, in which the human right to health is prioritized against profit interests; in which access to technology will not be blocked by intellectual property rights that permit medicine prices to be set based on speculative criteria; and in which there will be no opportunity to engage in practices that illegally block access by the lower-income population to affordable medicines.
The goal is to resolve policy inconsistencies by achieving a new world order in which the right to health is the basis for healthcare policy in every corner of the planet, against intellectual property rights, trade and the race for money.
As Pope Francis said in his Apostolic Exhortation Evangelii Gaudium, “As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world's problems or, for that matter, to any problems. Inequality is the root of social evil.”