It’s Impact on Third World Countries.An analysis of the legal and moral aspect of product and process patenting Group 3 | Section C Presented By: U111125 Shreshtha Rath U111134 Budhadev Nayak U111159 Pratibha Chaudhry U111160 Rohit Basuri U111162 Sampat Patnaik
Pharmaceutical Industry : Evolutiondyestuffs were found to significant new have antiseptic discoveries with TRIPS agreement properties permanent patent enforced protection Late 19th Century 1940-50s 1960s 1970s 1995 2012 Establishment of firm tighter regulatory Present Day R&D units in the controls on clinical pharmaceuticals trials, greatly industry increasing development costs appearance of "generic" medicines
Key Trends• Companies that invested a good amount of money in R&D spending and productivity gradually became industry leaders.• The holy grail of pharmaceutical R&D is the "blockbuster". Like "killer applications" in the software market, blockbuster drugs are genuine advances that achieve rapid, deep market penetration• A blockbuster drug is typically a long-term therapy for a common disease that offers a substantial perceived improvement in efficacy or tolerability and is marketed globally. Annual sales must normally exceed $1 billion for a drug to earn this accolade.• Glaxo went from being a small player at the beginning of the 1980s to the world number one, with a presence in 50 countries, on the strength of a single drug - Zantac for stomach ulcers.
Need for patents Generic drugs are exactly same as their branded counterparts in terms of dosage form, safety, strength, route of administration, quality, performance characteristics and intended use and the only differentiating factor in between them is price. As they do not have to go through product discovery and trials, cost incurred by generic drug manufacturers is notably less and hence high profitability. This caused an uproar among the pharmaceutical companies as they have lowered profits. In order to counter this, pharmaceutical companies have been granted “patent” which essentially means that they own the exclusive right to make, sell, use, import and also offer to sell their product while disbarring others from doing so.
Why MNCs ignore IIIrd World Countries Multinational pharmaceutical companies neglect the diseases of the tropics, not because the science is impossible but because there is, in the cold economics of the drugs companies, no market. There is a market in the sense that there is a need: millions of people die from preventable or curable diseases every week. But there is no market in the sense that medicines for leishmaniasis are needed by poor people in poor countries. Pharmaceutical companies judge that they would not get sufficient return on research investment, so why, they ask, should we bother? Their obligation to shareholders, they say, demands that they put the effort into trying to find cures for the diseases of affluence and longevity—heart disease, cancer, Alzheimer’s. Of the thousands of new compounds drug companies have brought to the market in recent years, fewer than 1% are for tropical diseases.
Pharmaceutical Industry ImprovingProfit ? Health?
Ethics in Pharmaceuticals ??? Pharmaceuticals, they are a commodity. But they are not just a commodity. There is an ethical side to this because they’re a commodity that you may be forced to take to save your life. And that gives them altogether a deeper significance. But they [big pharmaceutical companies] have to realize that they’re not just pushing pills, they’re pushing life or death. And I believe that they don’t always remember that. Indeed, I believe that they often forget it completely. — Dr. Drummond Rennie, transcribed from Dying for Drugs, Channel 4, UK
TRIPS Agreement • TRIPS was introduced with the purpose of universalising the standards of Intellectual Property Rights and frame the rules of the game of the developing countries on par with the developed countries • The Paris convention of 1883 was one of the oldest treaties under which, member countries were free to determine the standards of protection, the subject matter of protection and the period of protection and thus maximum divergence was observed.
TRIPS : Product & Process Patents• While many of the industrially developed countries adopted product patents to promote further innovations, some of the developing countries realised the potential of the process patents in developing the domestic industry and adopted the same. This helped them to take advantage of the innovations made by early innovators• With the implementation of TRIPS agreement, a stronger patent regime or product patents has been uniformly applicable on the pharmaceutical innovations among the member countries of the World Trade Organisation• The Doha Declaration held on November 2001, brought a new dimension to the TRIPS. It allowed a waiver of the patent law to face a national emergency and it was easy for the developing countries to set aside the patent laws (if incase they were facing epidemics)
Impact of TRIPS on Innovation Companies have increased their R&D expenditure to a great extent Overall IOP patent applications increased by more than 10 times compared with less than three times for the FOP increase in the same period Innovative activities of focused on • pharmaceutical, • chemical and • biotechnology sectors
Impact of TRIPS on Exports An increase in a pharmaceutical firms innovative activities enhances its export competitiveness The exports data from the Office of the Directorate General Commercial Intelligence and Statistics (DGCIS) shows that India exported 249 drugs grouped into 309 items under the category of drugs and pharmaceuticals
An Example Of Disparity In 1996, HAART - an effective combination therapy became in rich countries. Within four years, death rates for people with HIV/AIDS in developed countries had dropped by 84 %. At a cost of US$10,000-15,000 per person per year, these antiretroviral drugs were far too expensive for the majority of people infected with HIV in the developing countries. Five years after HAART was introduced in the West, only 2 % of people in developing countries were receiving the life-saving drugs. In order for treatment to reach people living with HIV in the developing world, the price of the drugs clearly needed to come down to an affordable level.
War between Branded & Generic Drugs At the beginning of the new millennium there was a breakthrough in treatment provision for resource poor areas when an Indian pharmaceutical company started to produce generic anti-retrovirals that were exactly the same as those made by large pharmaceutical companies, but significantly cheaper. This sparked a price war between branded and generic drug makers, which forced the large pharmaceutical companies to lower the price of their AIDS drugs. This competition, coupled with pressure from activists, organisations - such as the Clinton Foundation - and governments of poor countries with severe AIDS epidemics, dramatically reduced the price of ARVs for developing countries. By the middle of 2001, triple combination therapy was available from Indian generic manufacturers for as little as $295 per person per year.
Differential Pricing Drug companies adopt a policy of price differentiation, setting price levels "according to what the market can bear". In a country where alternative or generic medicines are available, a companys branded product is usually priced lower due to the competition it faces from lower- priced alternatives. The same brand may sell at higher prices in other countries where there is no competition from generic producers.**Surveys show that 100 tablets (150mg) of Zantac were sold for US$2 in India, $3 inNepal, $9 in Bangladesh, $30 in Vietnam, $37 in Thailand, $41 in Indonesia, $55 inMalaysia, $61 in Sri Lanka, $63 in Philippines, $183 in Mongolia,$150 in South Africa and $97in Tanzania.
Compulsory Licensing• Licenses granted without the consent of the patent holder either to remedy anti-competitive practices or in situations of national emergency. A compulsory license limits the enforcement of a patent vis-à-vis the person(s) being granted such a compulsory license.• It does not revoke or invalidate the patent concerned.• Compulsory licenses are generally subject to time and geographical restrictions.• In addition, the patent holder is also entitled to compensation taking into account the economic value of the compulsory license.
Parallel ImportsParallel imports involve the import and resalein a country, without the consent of the patentholder, of a patented product that was put onthe market of the exporting country by thepatent holder.
THE WAY AHEAD: PATENT POOLS• In patent law, a patent pool is a consortium of at least two companies agreeing to cross-license patents relating to a particular technology. The creation of a patent pool can save patentees and licensees time and money, and, in case of blocking patents, it may also be the only reasonable method for making the invention available to the public. 1856 • Sewing machine manufacturers - Grover, Baker, Singer, and Wheeler & Wilson 1917 • Airplane manufacturers - the Wright Company and the Curtiss Company 2005 • 20 companies active in the RFID domain
THE WAY AHEAD: PATENT POOLS (CONTD.) Countries like Thailand, Brazil and India have found innovative ways of securing cheaper second-line drugs but such options are constrained to countries having political clout and financial stability. A solution is “Patent Pool” which will hold licences on various patented medicines, that generic companies can then produce at a lower cost for poor countries. The production of generic versions can then be more easily negotiated and hence faster and more efficient. in July 2011, the pharmaceutical giant Gilead agreed to license four separate antiretroviral drugs and one combination drug to the pool which were pipeline products that is, they were undergoing clinical trials. In October 2011, Aurobindo Pharma and MedChem, became the first producers of generic antiretroviral drugs to join the Medicines Patent Pool. Under the new agreement, the pharmaceutical companies are licensed to produce a number of generic antiretroviral drugs, which should lead to these anti retrovirals becoming cheaper and easier to access Prices have thus been driven down substantially over the years.
Conclusion Developing countries have successfully stopped the US and the pharmaceutical lobby from excluding many important diseases of the third world from the deal, which is an important achievement. However no matter how desperate the health need, a poor country without the capacity to produce a needed drug—which is virtually all of them—will have to ask another government to suspend the relevant patent and license a local company to produce and export it. The bottom line is that many poor countries will still have to pay the high price for patented medicines or most probably, doing without. The World Trade Organization has failed to live up to the Doha pledge to put people’s health before profits.