Licensing for Access: Compulsory and Humanitarian Licenses Cristina de A. Possas Conference FDUSP UAEM The Right to Health: the Role of Universities in the access to medicines São Paulo, August 17, 2010

1. Conference FDUSP UAEM
The Right to Health: the Role of Universities
in the access to medicines
São Paulo, August 17, 2010
Licensing for Access: Compulsory and
Humanitarian Licenses
Cristina de A. Possas
Research and Technological Development Unit
National STD, AIDS and VH Program
MOH - Brazil
Ministério
da Saúde

2. I. The dramatic global scenario
• Data (WHO/UNAIDS, 2007) indicate there are 33
million HIV infected people in the world (70% are
in Africa). Every year 2.5 million people get
infected and 2 million die of AIDS.
• Prospects for the future – The situation tends to
aggravate with the economic crisis. It is estimated
that with the aggravation of this scenario, by 2025
around 67 million people will have died with
AIDS in Africa since the beginning of the
epidemics (UNAIDS AIDS Africa Project, 2004)‫‏‬
Ministério
da Saúde

3. • Challenge:
access to
ARV therapy
A human rights
issue
Ministério
da Saúde

4. III. Access: progress in drug development but
reduced impact on public health
• Contrasting with rapid innovation in ARV
development, 75% of HIV/AIDS patients in the
world still without access to continued treatment.
• Despite several international initiatives to
improve access, this situation tends to aggravate
with the recent economic crisis.
Ministério
da Saúde

5. IV. Price Trends
• TRIPS post-2005 scenario – compliance to
TRIPS with increased patent protection,
higher prices of ARV drugs and obstacles to
access
• Bilateral FTA agreements reducing TRIPS
flexibities
• Spiraling prices of second and third
generations of new patented ARV drugs
Ministério
da Saúde

6. Compulsory and humanitarian
licenses
• Increased patent protection limits the export
of active principles and production of
generics by India and China, the main
exporters to Brazil.
• Developing countries are becoming
increasingly dependant on humanitarian and
compulsory licenseseto reduce the prices of
ARV drugs.
Ministério
da Saúde

7. Another global constraint impacting
on prices: scarcity of API
• API producers remain basically the same,
but international demand is increasing very
fast
• Developing countries: Urgent need for a
strategic supply and for building national
production capacity for API
Ministério
da Saúde

8. Brazil: success of universal access
• 70% decline in mortality and 80% in
hospitalizations from 1996 to 2002
• Prevalence of 0,6% (2006)‫‏‬
• Low levels of resistance to ARV drugs when
compared to other countries (Brindeiro et al.)‫‏‬
• 80% of patients in treatment with undetectable
viral load (SISCEL 2009).
• The role of ARV in prevention
Ministério
da Saúde

9. Brazilian expenditure with ARV
• The annual expenditure by the government with
ARV is US$ 400 million for 195.000 patients in
treatment– 62% of total government expenditure
with the epidemics (2009).
• Increased expenditure with 3rd line drugs – from
2005 to 2008 increased 352% - from US$ 20,4
million to US$ 71,6 million. Participation in total
expenditure increased from 4,1% to 15,7%.
Protected by patents and no generic competition.
Ministério
da Saúde

10. Brazil 2005: attempt for compulsory licenses
4 of the 17 ARV drugs distributed by the Ministry of Health:70% of
expenditure
• Efavirenz (Merck, Sharp & Dome) –US$ 1,575/capsule – average cost
of treatament/patient/year: US$ 574.80
• Nelfinavir (Roche) –US$ 0.468/capsule – average cost of
treatament/patient/year : :US$ 1,537.00
• Lopinavir/ritonavir (Abbott) –US$ 1.30/ capsule – average cost of
treatament/patient/year: US$ 2,847.00
• Tenofovir (Gilead Sci.) -US$ 7.68/ capsule – average cost of
treatament/patient/year: US$ 2,803.00
Ministério
da Saúde

11. Economy of public ressources
• Economy of US$ 154,8 mi after
compulsory license of Efavirenz in 2007
(drastic reduction of the price of the capsule
from US$ 1,59 to US$ 0,45).
• After the oppostion to Tenofovir´s patent in
2009 the economy was US$ 23,7 mi
• Price negotiations from 2003 to 2010:
economy was 154,8 mi
Ministério
da Saúde

12. Political impasse: compulsory
licensing is complex
• It is a flexility of TRIPS, but an exception
instrument (public interest, emergency), cannot be
a routine for all ARV drugs.
• In many developing countries, local governments
are often paralised by economic and political
pressures, legal uncertainties , in the compulsory
licensing process
• Brazil: several attempts of compulsory licensing
of ARV drugs before Efavirenz
Ministério
da Saúde

13. The issue of sustainability of
universal access to ARV in Brazil
• Concern: in spite of significant economy of public ressources
with compulsory license of Efavirenz in 2007 and more recently
the refusal of Tenefovir´s patent, the issue of sustainability
remains.
• Government expenditure with third line ARV drugs protected by
patents, consummed by only 3% of patients, is increasing
exponentially and is now equivalent to expenditure with first line
drugs consummed by 50% of patients.
Ministério
da Saúde

14. 1.The need to conceive and implement
alternative incentives to innovation
• The main argument of multinational pharmaceutical enterprises is that more
flexible IPR and compulsory licenses will undermine their long term
investments in R & D and innovation
• R & D Funds: divided between direct payment to patent owner and
investiment in R & D Fund (Love, 2005). From a royalty of 3.5 per cent
– 2 per cent for patent owner
– 1.5 per cent for R & D Fund
– Patent owner would have participation in the Fund
• Patent pools for licensing – collaborative strategy for collective assessment of
property rights – needs the involvement of industry
• A new system to pay for innovation – market for products separated from
market for innovations: health products would be available to the consumer at
generic prices, while innovators would benefit from a separated system
(Medical Innovation Prize Fund)‫‏‬
Ministério
da Saúde

15. 4. R & D Networks: South to
South Cooperations
• Friends of Development - WIPO
• Network for Technological Cooperation set by Brazil with several
developing countries in XV AIDS Conference in Bangkok 2004
• Network for IPR Research - Portuguese Speaking Countries
• IBSA – India, Brazil and South Africa – HIV Vaccine and other
areas of health research
Ministério
da Saúde

16. International trends
• On one hand, pressures from developing countries
for a more flexible IPR regime
• On the other hand, international movements led
by developed nations towards more strict IPR
regimes: bilateral commercial agreements signed
by U.S. with developing countries (TRIPS Plus)
such as Singapore, Morocco, Jordan
• Question: Which of these trends will prevail?
Ministério
da Saúde

17. The main issues
• How to conceive national legal systems tailored to
local needs: IPR and evolving industrial structure
• Maximum use of permitted flexibilities such as
compulsory and humanitarian licenses, freedom to
operate and research exemptions
• Innovation and enhanced technical capacity within
research institutions and universities.
Ministério
da Saúde

18. The impact of IP regimes
• The detrimental impact of dysfunctional IP
regimes is both economic and social, as
they ultimately affect both the pace of
innovation and the public benefits of
research.
• Free circulation of knowledge is crucial to
confront pandemics such as HIV/AIDS.
Ministério
da Saúde

19. The role of the university: topics for a
research agenda
• Alternative incentives to innovation: new
regulatory strategies and new business models
• Clinical Trials: constraints from data exclusivity
related to IP
• HIV Vaccines and IP – how to prevent future
problems of prices and access (HPV and other)
• Harmonization and national specificities
• R & D Networks linking developing countries
• IP, Ethics and Human Rights: the role of civil
society organizations
Ministério
da Saúde

20. Final considerations
• Urgent need to review international IP legislation
and policies and to conceive more flexible IPR
regime and alternative incentives to innovation.
• Need for stronger political pressures and new
networking initiatives connecting developing
countries
• Research Agenda in Universities and Institutes is
key to support local decision making
Ministério
da Saúde