Private Patents and Public Health Changing intellectual property rules for access to medicines

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1 Private Patents and Public Health Changing intellectual property rules for access to medicines Access to Medicines in the Baltics, Riga, 13 October 2017 Ellen t Hoen, Medicines Law & Policy

2 High Medicines Pricing a Global Issue Essential Medicines for Universal Health Coverage 2

3 Patent Right to exclude others from making, using, offering for sale, selling, and importing the patented product (or a product made with a patented process) Right granted by a national or regional authority for a certain period of time (minimum 20 years) when certain conditions are met Patents are national global patent application procedures exist (WIPO PCT) but a global patent does not exist. 3

Function of patents to encourage inventors to make an investment in time and money in research and development by providing exclusive rights for a limited time in exchange for

4 Function of patents to encourage inventors to make an investment in time and money in research and development by providing exclusive rights for a limited time in exchange for an early public disclosure of the invention. Patent system is a social policy tool meant to create benefits for society. But, it comes with a price 4

5 an industry view of patents a key element of any life cycle management strategy is to extend patent protection beyond the basic patent term for as long as possible, by filing secondary patents which are effective to keep generics off the market Burdon, Michael, and Kristie Sloper. "The art of using secondary patents to improve protection." Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical Marketing 3.3 (2003):

6 Industrial Profit Margins 21% average pharma profit margin 53% Gilead Sciences profit margin 6

7 WHY DO WE HAVE PATENTS? 7

1995 World Trade Organization (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) TRIPS sets out minimum requirements for the protection of

8 1995 World Trade Organization (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) TRIPS sets out minimum requirements for the protection of intellectual property (IP) obligatory for all WTO members Most relevant for access to medicines: minimum 20 year patents protection of data (article 39.3) TRIPS Flexibilities 8

9 Patents and Medicines Patents may be used to delay competition of generic medicines and create market exclusivity/monopoly Without generic competition medicines prices remain high 9

10 Patents and Medicines: cost of production and price of patented products in US$ (Tyrosine Kinase Inhibitors) Medicine USA Latvia UK India* Target imatinib (Gleevec-Novartis) erlotinib (Tarceva-Roche) sorafinib (Nexavar-Bayer) lapatinib (Tyverb-Novartis) n/a dasatinib (Sprycel-BMS) n/a 334 * India is generic price A.Hill, 18 th ECCO - 40 th ESMO European Cancer Congress, 27 th September 2015, Vienna, Austria [abstract number: 1203] Source UK Lapatinib:

11 Cost of production and price New WHO Essential Medicines Medicine Originator price intro US Cost of production 1 bedaquiline $ 30,000 ( 6 month) $ sofosbuvir (SOF) $ 84,000 (12 week) $ SOF+ledipasvir $ 95,000 (12 weeks) $ 193 simeprevir $ 66,360 (12 weeks) $ daclatasvir $ 63,000 (12 weeks) $10-30 imatinib $ >$100,000 (1y) $ trastuzumab $54,000 (1 y) $ (cost of production of HCV medicines) Hill A. etal.,target prices for mass production of Tyrosine Kinase Inhibitors (TKIs) for global cancer treatment access - Presented at 18th ECCO - 40th ESMO European Cancer Congress, 27th September 2015, Vienna, Austria [abstract number: 1203] Dzintars Gotham, Joseph Fortunak, Anton Pozniak, Saye Khoo, Graham Cooke, Frederick E. Nytko, III, Andrew Hill; Estimated generic prices for novel treatments for drug-resistant tuberculosis. J Antimicrob Chemother 2017 dkw522. doi: /jac/dkw522

12 2001 WTO Doha Declaration on TRIPS and Public Health "the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health". we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all. TRIPS Flexibilities Compulsory licensing/government Use Extension for LDCs (paragraph 7) Parallel import Patent exceptions Data protection (Not Data exclusivity) Patentability criteria Section 3(d) Indian Patents Act 12

13 Lessons from the past: Access to patented medicines in the UK in 60/70ties Medicines for the NHS bought through international tenders MoH required the supplier to offer at the lowest price regardless of the patent status à Crown Use (Public non-commercial use of patents) Patent holder had a right to remuneration but could not stop generic supply Pfizer vs. MoH

14 Lessons from the past: Access to patented medicines in the UK in 60/70ties Medicines for the NHS bought through international tenders MoH required the supplier to offer at the lowest price regardless of the patent status Although this power of the Ministry of Health to purchase drugs and medicines from sources independent of the patentee has been much criticised by the pharmaceutical industry, it is not likely to be affected by such criticism. Such power will be exercised if the patentee is alleged to maintain à Crown Use (Public non-commercial use of patents) Patent holder unduly high had prices a right for these to products remuneration but could not stop (Stephen generic Ladas,1975). supply Pfizer vs. MoH

15 TRIPS flexibilities and licensing /9 NCD 15

16 Price variation of HCV medicines US$74,000 to 147,000 US$47,500 to 56,000 US$40,000 to 52,000 SOF+DCV price expected by 2020 in countries with robust Gx competition. Price available today in India USA EU Malaysia LATAM Countries Gilead Licence US$7,800 to 71,000 US$900 US$370 US$180 U$108 Cambodia Egypt India Source: DNDi

17 2017 Malaysia issues government use licence for SOF 17

18 Non-Patent Market Exclusivity ARE PATENTS THE LEAST OF OUR WORRIES? 18

19 Market exclusivities Data exclusivity Market exclusivity Pediatric extension Orphan drug exclusivity Patents and Supplementary Protection Certificate (patent extension of max. 5 yr) -> based on the premise that granting exclusive rights encourages innovation 19

20 7 of 10 top selling medicines had FDA orphan indication or designation Drug Global sales 2015 (US$Bn) Company Therapy area Humira 14.1 Abbvie Anti-rheumatic Rituxan 7.6 Roche Cancer antibody Avastin 7.2 Roche Cancer antibody Herceptin 6.6 Roche Cancer antibody Remicade 6 Johnson&Johnson Anti-rheumatic Revlimid 5.7 Celgene Blood cancers Crestor 5.2 AstraZeneca Statin

21 Transparency of R&D cost $3,000 $2,500 $2,500 R&D Cost Estimate (in millions) $2,000 $1,500 $1,000 $500 $231 $140 - $194 $802 $1,500 $100 - $150 $ (DiMasi) 1993 (OTA) 2003 (DiMasi) 2012 (OHE) 2014 (DiMasi) 2013 (DNDi) 21

22 Dutch Minister of Health and Minister of Foreign Trade on A2M We cannot achieve any real progress without acknowledging that the current patent-based business model and the way we apply international patent rules need to change. The system is broken. Patent and intellectual property exclusivities are the only cornerstone of the current model. Companies can ask the price they like. This will no longer do. We need to develop alternative business models. And if public money is used for the development of new medicines, agreement upfront is needed about what this public investment will mean for the final price. We believe that companies must provide full transparency regarding the costs of research and development (R&D). NL Ministers E. Schippers (Health) and L. Ploumen (Foreign Trade and Development Cooperation)

23 Dutch Minister of Health and Minister of Foreign Trade on A2M We cannot achieve any real progress without acknowledging that the current patent-based business model and the way we apply international patent rules need to change. The system is broken. Patent and intellectual property exclusivities are the only cornerstone of the current model. Companies can ask the price they like. Council This will conclusions no longer on do. strengthening We need to develop alternative the business balance models. in the And pharmaceutical if public money is used for the development of new medicines, agreement upfront is needed about systems what in this the public EU and investment its Member will mean for the final price. We States believe (17/06/2016) that companies must provide full transparency regarding the costs of research and development (R&D). NL Ministers E. Schippers (Health) and L. Ploumen (Foreign Trade and Development Cooperation)

24 Lancet Commission on Essential Medicines Policies on Delinkage The concept of delinking costs from prices is based on the premise that costs and risks associated with R&D should be rewarded, and incentives for R&D provided by means other than through the price of the product. If the R&D cost of new medicines did not have to be recouped through high prices, those medicines would be free of market exclusivity and could be made more widely available and more affordably priced through better competition. 24

25 Some Recommendations Immediate action: Bundle buying power with other European countries Take action when patents hamper access to proven effective medicines. Action at EU level: Increase transparency in pricing and R&D cost. Review of EU incentives should lead to proposals for policy change. DG competition to investigate high medicines prices. International: Ensure efficient financing for R&D => New global agreements on sharing cost of R&D based on delinkage principles. 25

26 Thank Please visit:

27 Delinkage Proposals - Paying for the cost of research and development of new essential medicines through other means than high prices. This means: - No more a rationing of proven effective medicines - Setting RF&D priorities based on need (not on profit prospects) 27

28 Council conclusions on strengthening the balance in the pharmaceutical systems in the EU and its Member States (17/06/2016) An evidence based analysis of the impact of the incentives in these EU legislative instruments,. Among those incentives, particular attention should be given to the purpose of: supplementary protection certificates as defined in the relevant EU legislative instrument the use of the Bolar patent exemption [7], the data exclusivity for medicinal products and the market exclusivity for orphan medicinal products. Where relevant, the analysis of impacts should also address - inter alia - the development of medicinal products and the effects of the pricing strategies of industry in relation to these incentives 28

HIV and co-infection medicines

IP and regulatory barriers in LMICs HIV and co-infection medicines APACC, 2018 Hongkong, June 2018 Monopolies linked to Prices Monopoly No monopoly One supplier Multiple suppliers No competition Competition