Philippines Trying to Cut Medicine Cost.docx

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Philippines Trying to Cut Medicine Cost

Associated PressPhilippinesJune 14, 2006

Stroke survivor Edmund Lising is supposed to take four

tablets of two medicines each day, including the anti-

hypertension drug Norvasc. But to save money, the 58-

year-old retiree takes only two a day, supplementing

the dose each time with a fervent prayer.

Lising is luckier than most Filipinos. According to

government statistics, 70 percent of the 85 million

Filipinos have no regular access to lifesaving drugs.

Next to affluent Japan, the cash-strapped Philippines

has Asia's second most costly medicines, with some

drugs priced 5 to 45 times higher than the same

medicines sold in India or Pakistan, the data shows.

Fed up with the situation, officials, consumer groups,

health workers and fair trade advocates have teamed

up in Effective Medicine at Affordable Prices, a coalition

targeting multinational pharmaceutical companies with

the aim of cutting the staggering cost of medicines in

the country. The group is supporting legislation that

would make importing cheaper drugs possible and

encourage the production of generic drugs.

The campaign's launch came as the Philippine

government is battling the pharmaceutical giant Pfizer

over plans to import cheaper Norvasc from Pakistan.

In March, Pfizer sued two government agencies -- thePhilippine International Trading Corp. and the Bureau of

Food and Drugs Administration -- for alleged patent

infringement.

It asked a suburban Manila court to order BFAD to

revoke an approved import registration for the anti-

hypertension medicine covered by Pfizer's patent. The

17-year patent expires in June 2007.

PITC head Roberto Pagdanganan said his office

submitted last year to BFAD 80 sample tablets fromPakistan so that the government could be ready to

import the cheaper medicine once Pfizer's patent

expires.

A 5-milligram tablet of Norvasc sells for 86 cents in the

Philippines, nearly five times more than in Pakistan,

where it costs 19 cents, Pagdanganan said. Another

Pfizer brand, the painkiller Ponstan, is priced 14 times

higher in the Philippines than in Pakistan.

Pfizer's case has angered officials and consumers in the

Philippines, where a third of the population lives inpoverty and where hypertension is a major killer.

Government data show multinational drug companies

hold 70 percent of an estimated $1.9 billion Philippines

pharmaceutical market.

Rep. Ferjenel Biron, in a speech in the country's House

of Representatives, recently called for a boycott of all

Pfizer products. He accused the company of

''persecuting millions of Filipinos who simply could not

afford to buy the said medicine and are left with no

choice but just to die.''

Pfizer said its actions upheld the importance of

encouraging innovation by protecting intellectual

property of companies who discover and develop

lifesaving drugs.

''This is simply a matter of protecting our patent for

amlodipine besylate (Norvasc) through its expiration

date of June 2007,'' Pfizer responded in a statement.

''We are seeking legal assurance that there will be no

importation of an unauthorized amlodipine besylate

product for the duration of this patent term.''

Pagdanganan called the Pfizer suit ''a harassment case,''

and filed a countersuit.

''It's greed and arrogance,'' he said.

He said it takes more than a year to get BFAD's import

approval, and by suing, Pfizer was effectively extending

its patent. Every year's delay in the entry of the drug

from Pakistan translates into $23 million in Pfizer sales

of Norvasc, he said.

Pagdanganan said PITC had not sold a single amlodipine

besylate product in the Philippines and has promised

not to do so until Pfizer's patent expires. The only issue,

he said, is whether importing samples of patented drugs

for registration purposes constitutes patent rights

infringement.

The practice is allowed under the ''Bolar Provision'' of

the World Trade Organization's trade-related aspects of

intellectual property rights, known as TRIPS. But the

provision is not spelled out in the Philippines'

Intellectual Property Code.

TRIPS also allows countries to do ''parallel importation''

of a medicine, sold at a cheaper price in another

country, even without the approval of the patent

holder.

Philippine officials blamed the country's high drug

prices on a pharmaceutical marketing and distribution

cartel, the myth that cheaper generic drugs are less

effective, a patent system skewed in favor of

multinational companies and heavy dependence on

imported raw materials.

''The system has been so co-opted, if not corrupted, by

some of these companies that the people are not left

with so much choice,'' said Pagdanganan, whose office

aims to cut in half by 2010 prices of medicinescommonly bought by the poor.

Sangeeta Shashikant, a researcher for the Third World

Network, a Malaysia-based non-governmental

organization, said big pharmaceutical companies often

have a monopoly of patents and often, there is not

much innovation to add to the cost, because drug

companies are able to obtain new patents for only

slightly modified versions of a drug -- a practice known


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as ''evergreening.''

A World Health Organization report issued in April said

in developing countries with inadequate technological

capability, the fact that a patent can be obtained may

contribute nothing or little to innovation. ''Patents may

contribute to increasing the prices of medicines needed

by poor people in those countries,'' the report added.

Jim Nibungco, a stroke survivor and officer of the Stroke

Survivors Support Foundation, said he has seen so many

stroke survivors unable to buy needed medicines.

''Once they see the price of the medicines, they just

close their eyes because they could not afford to buy

them,'' he said.

The coalition for cheaper medicine supports a bill that

would amend local patent laws to keep them in sync

with WTO rules, including clearly allowing parallel

importation of drugs. The bill has been endorsed by a

joint Senate committee for plenary approval.

A staffer of the main proponent, Senator Mar Roxas,

said the bill has been supported by majority of the

senators, and it may be sponsored on the floor by July.

The bill also seeks to shorten the period of patent

protection, empower the local generics industry to

experiment on drug formulas even before their patents

expire, and deny new patent protection for slightly

modified versions of a patented medicine.

The PITC said government will put up more ''people's

drug stores'' selling cheaper medicines to provide

competition to big pharmaceuticals. Price controls for

off-patent medicines, and a cap to spending on

pharmaceutical advertising, also are being considered.

Proponents of the bill said it has a good chance of being

passed. A majority of the senators, including Senate

President Franklin Drilon, have already signed the bill as

co-sponsors.

Nibungco, the stroke survivor, said he hopes that with

the passage of the bill, hard-up Filipinos will no longer

need to close their eyes, unable to buy needed drugs.

Copyright Global Action on Aging

Wednesday, 28 May 2008 00:00

An Update On The Developments In ThePhilippines And Thai Pharmaceutical Patent

RegimesPhilippines

The cost of medicines in the Philippines is among thehighest in the world. It was reported that Norvasc, amedicine for hypertension, is sold in the Philippines forUSD1 per 5mg tablet; while in India and Pakistan, thesame drug is priced at around USD0.14 whereas Plendil,also for hypertension, is priced in the Philippines at

USD0.54 per tablet while it costs only USD0.07 in India.A Ventolin inhaler for asthma patients is sold for nearlyUSD8 in the local market while in India it costs onlyUSD3. Other medicines also show the same disparity.Ponstan, a common painkiller, costs only USD0.08 inIndia but costs USD0.60 per pill in the Philippines.Bactrim 400, priced at USD0.40 per tablet in thePhilippines, can be bought for only USD0.02 in Pakistanand USD0.01 in India.

The Filipino lawmakers are bewildered why suchdifferences in prices of the drugs as majority of theFilipinos can barely afford these drugs. Undertremendous pressure from various right groups, thePhilippines Congress reportedly is considering ameasure called the Cheaper Medicines Bill which aimsto lower the cost of medicine by weakening or revokingpatents on pharmaceutical drugs.

The Bill seeks to amend the Intellectual Property Code inorder to allow the parallel importation of more affordablemedicines from abroad; support the generics industry byadopting the early working principle and to disallow thegrant of new patents on grounds of new use and giveample muscle to the government through a frameworkfor government use and compulsory licensing. The Billalso reiterates the president's power, patterned after thePrice Act, to impose drug price ceilings in times ofcalamity, public health emergencies, illegal pricemanipulation and other instances of unreasonable drugprice hikes.

This Bill is expected to be passed by the Congress and itis expected to receive protests from pharmaceuticalcompanies, particularly the innovator drug companies.The arguments that these innovator drug companies willhave is that it costs them USD800 million on average todevelop and introduce a new drug to market. Without thepatent protection, it is unlikely that they can re-coup theinvestment and in fact will discourage further researchand development in pharmaceutical drugs.

Others feel that by simply enforcing the Bill will not lowerthe price of the drugs as the tax slapped on drugs arerelatively high in the Phillippines. The Phillippines arecurrently charging an import tax of 5% and a value-added tax of 12% on drugs. They feel that the best wayof reducing the price is by lowering the taxes orscrapping all together will be a good start.

Thailand

The Thai government is set to continue to override thepatents on three cancer drug treatments, Novartis'Femara, Sanofi-Aventis' Taxotere and Genentech'sTarceva.

The government's compulsory licensing policy has beenconsistently reviewed and the latest report issued inMarch 2008 has revealed that by continuing thecompulsory license policy, will save the government

approximately USD100 million a year and allow cancerpatients access to affordable drugs.

Nevertheless, the Thai government also values itsrelationship with drug manufacturers who are willing toreduce the prices of the drugs. It was evident whenThailand cancelled its compulsory license on a fourthcancer drug, Novartis' Gleevec after Novartis agreed tosupply it free to hundreds of leukemia patients inThailand.


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A senior official of the government said the GovernmentPharmaceutical Organization would now startnegotiations to obtain the three cancer treatments undercompulsory license from generics manufacturers,including Indian firms which are currently supplyingThailand with HIV/AIDS drugs. However, he added that iftalks with the innovator drug manufacturers resulted insignificantly lowered prices, the government coulddecide to purchase these instead.

November 28, 2001

Public healthand drug patents

By Michael L. Tan

"WE agree that the TRIPS Agreement does notand should not prevent Members from takingmeasures to protect public health."

That one line may yet provide the key to moreaffordable medicines in countries like thePhilippines. It appears in a declaration issued atthe conclusion of a World Trade Organization(WTO) ministerial conference held earlier thismonth in Doha, Qatar.

TRIPS refers to the WTOs Agreement on Trade-Related Aspects of Intellectual Property Rights.To become a member of the WTO, a countrymust agree to respect these "intellectual propertyrights," which includes payment of royalties to

inventors, writers, musicians.

All that sounds reasonable; after all, someoneshould be compensated for innovation. Drugcompanies, in particular, have been the mostvocal defenders of patents, arguing that theyhave to recover the investments they put in forresearch and development. Under the presentsystem, when a drug company registers a newdrug in a country that recognizes patents (thatincludes the Philippines), it will have exclusiverights to produce and sell that drug for 20 years.

Unfortunately, because of this exclusivity, manycompanies end up dictating the prices of theirmedicines.

There have been debates surrounding theseintellectual property rights, mainly on what wouldbe reasonable in terms of returns on investmentand on profits. The United States governmenthas tended to be quite dogmatic about thesepatents. Last year, it threatened severalcountries with sanctions because those countrieswere looking into alternatives for procuringmedicines for HIV/AIDS.

Most of the antiretrovirals (drugs that slow downthe reproduction of HIV) are fairly new and arevery expensive. Typically, the antiretroviralswould cost about 10,000 dollars a year in theUnited States, and about 350,000 pesos (7,000dollars) in the Philippines.

Not all countries recognize the same patentsystem that the United States and the Philippineshave, which means drug companies in some

countries are able to produce the new drugs. TheBrazilian government, facing a serious AIDSepidemic, was aware of this and decided to lookfor alternative sources of antiretrovirals. Theywere able to find suppliers that could provide theantiretrovirals at a cost of about 1,000 dollars ayear. Not only that, a large Indian drugmanufacturer, Cipla, announced last year thatthey could provide the drugs for 350 dollars a

year.

When Cipla, a very reputable drug manufacturer,says they can provide the antiretrovirals at 350dollars a year, it means they are already makinga profit on that cost, which makes you wonderhow much is being made on the 7,000-dollar costfor the same drugs in the Philippines.

Similar questions cropped up recently when theUS government itself needed to order a patenteddrug, ciprofloxacin, for anthrax. When they askedBayer to give a quote for producing 100 milliontablets, the drug company said it would cost 1.77dollars each. The American government askedaround and found some drug manufacturers thatcould provide the drug at a lower cost.Eventually, with some haggling, Bayer broughtdown its cost to 95 cents each, with morediscounts for future orders. (I discussed this in acolumn a few weeks ago.)

Consumer groups were quick to capitalize on theUS governments flip-flop with patents. If theywere so ready to go around the patent system for

its own citizens, why couldnt they respect thedeveloping countries needs to lower the cost of

medicines? What happens when people remainuntreated for highly infectious diseases such astuberculosis, which is the case for thePhilippines?

At the Doha meeting, several developingcountries, backed by international non-government organizations such as Mdecins sansFrontires, Oxfam and Health ActionInternational, lobbied for more flexibility withintellectual property rights. The result was the

Doha declaration on the TRIPS agreement andpublic health.

The document starts out by acknowledging "thegravity of the public health problems afflictingmany developing and least-developed countries,especially those resulting from HIV/AIDS,tuberculosis, malaria and other epidemics." Theministers also acknowledge that intellectualproperty protection "is important for thedevelopment of new medicine" but recognize "itseffects on prices."

The document offers several alternatives toenable countries to respond to their publicproblems. One is the use of compulsory licensing.In this case, a government can declare a nationalemergency because of an epidemic and willrequire a drug company to license thegovernment or other drug companies in thecountry to start producing a patented drug, atlower cost. Under compulsory licensing, thegovernment still has to pay fees to the drugcompanies, but the drug ends up cheaper.


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The Philippines has a law allowing thiscompulsory licensing for pharmaceuticals.Unfortunately, it was issued by the dictatorMarcos and used to his advantage. He assignedexclusive rights for the production of theantibiotic ampicillin to a crony company. BecauseMarcos only shifted the monopoly away frommultinationals to his own crony company, it did

not result in cheaper ampicillin.

In Estradas time, and now under Macapagal, the

Department of Trade and Industry and theDepartment of Health have resorted to parallelimports.

In this case, they import drugs from othercountries subsidiaries of multinationalcompanies. Its really a matter of "shopping

around" for the same product but in differentcountries, and importing the drugs from cheapersources. The government started this with asmall selection of drugs and were themselvesshocked to find the large differences in costs.The multinational drug companies werent toohappy and sued the government.

The Doha declaration now opens the way for thePhilippine government to go full steam ahead.Right now, the government is using parallelimports only for six drugs, which are sold only ina few government hospitals. With Dohas

declaration on public health, its time thegovernment expanded the importations and

made more medicines affordable for Filipinos.

PATENTS FOR PUBLIC HEALTH IN THEPHILIPPINES

Written by Jeifan - Ira C. Dizon

The World Trade Organization (WTO) is the onlyglobal international organization dealing with the

rules of trade between nations. Born in 1995, it is

both a negotiating forum, working highly onconsensus of the Members, and a forum for settling

trade-related disputes. As of July 2008, there are

153 Member-countries.

Central to the functions of WTO are theAgreements negotiated and signed by its Members,

and which cover three broad areas: goods, services,and intellectual property.The WTO Agreement on

Trade Related Aspects of Intellectual Property

Rights (The "TRIPS Agreement") is thus far themost comprehensive on the matter of intellectual

property.

Intellectual property rights, in general, are rights

given to persons over the creation of their minds,

with certain conditions. The areas covered by theTRIPS Agreement are copyright and related rights,

trademarks (including service marks), geographical

indication, industrial designs, patents, lay-out

designs of integrated circuits, and undisclosedinformation, including trade secrets. Intellectual

property protection is not new to most countries, as

there are already domestic laws in set, apart fromthe Conventions existing under the World

Intellectual Property Organization. However, the

extent of protection and enforcement of these rightsstill vary around the world. The TRIPS Agreement

is seen as a way to introduce more order and

predictability.

The Agreement is important for developingcountries like the Philippines because it establishesa multilateral rule of law in the area of intellectual

property, therefore levelling the playing field in the

world economy. In addition, it especially allows for

balance and flexibility in its provisions, whichdeveloping countries can use to their advantage.

The TRIPS Agreement is a "minimum rightsagreement", providing simply a set of minimum

standards of intellectual property protection for each

category of rights, leaving the Members free todetermine the appropriate method of implementing

its provisions. The Philippines has chosen to

exercise this right of flexibility in the area of patentsin public health.

In the Philippines, patented drugs produced by largemultinationals are often inaccessible because of

high pricing. Recognizing that the level of

intellectual property protection afforded to patents

on medicines is a factor for this pricing, law and

policymakers, with the support of the IntellectualProperty Office- Philippines, sought to take full

advantage of the flexibilities allowed by the TRIPSAgreement. In 2008, Congress enacted R.A. 9502,

"The Universally Accessible Cheaper and Quality

Medicines Act", which contains amendments to the

provisions of the old Patent Law (R.A. 8293, TheIntellectual Property Code).

The TRIPS Agreement allows Members to exclude

from patentability inventions in order to protect

human life or health. Thus, the Cheaper MedicinesAct adds to the list of what are notpatentable:

" mere discovery of a new form of a new

property of a known substance which doesnot result in the enhancement of the known

efficacy of the substance

" mere discovery of any new property ornew use for a known substance

" mere use of a known process unless such

known process results in a new product that

employs at least one new reactant

This prohibition is intended to curb "evergreening",

which is a scheme employed to extend patentprotection on a product, i.e., through applying for

multiple patents on a products separate properties.

When a patent expires, it is only then that othermanufacturers can produce their generic versions of

the drug, to be made available at a lower price.


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The other amendment under the Act pertains tostrengthening "compulsory licensing", which in the

IP Code refers to a license granted by the IPO

Director General to exploit a patented invention,even without the agreement of the patent owner,

under certain conditions. In the WTO Doha

Declaration on Public Health in November 2001, it

was recognized that some Members with

insufficient or no manufacturing capacities couldface difficulties in making effective use of

compulsory licensing under the TRIPS Agreement.Thus, the "Paragraph 6 System" was devised by the

TRIPS General Council, whereby a Member may

grant a compulsory license to exporta drug ormedicine to an eligible importing Member. This

was an exception carved to the TRIPS rule that

compulsory licenses shall be for a use authorized

predominantly for the supply of the domesticmarket.

Incorporating this Paragraph 6 System in PhilippineIP law, the Cheaper Medicines Act provides for the

grant of "special compulsory licenses" allowing the

importation of patented drugs or medicines,provided adequate remuneration shall be paid to the

patent owner and there are reasonable measures to

prevent the re-exportation of the products imported.Only the Philippine Supreme Court can issue an

injunction to prevent the grant of such compulsory

license. This special compulsory license is intended

to address the problem of local production capacitynot being able to meet the demand of the market.

Indeed, there is a need to balance the protection ofintellectual property rights with the right of the

public to health services at affordable cost. As

enshrined under the Constitution, the State shallprotect exclusive rights to intellectual

property,particularly when beneficial to the people.

Philipines wants Pfizers patent on blood pressure pill cancel led

May 17, 2007: Close on the heels of Brazil and Thailand,

Philippines too is seeking to break the patent monopoly

of a blockbuster drug so that they can avail the anti-

hypertension medicine at affordable costs.

Philippine International Trading Corp. (PITC), a state-

owned company, wants regulators to cancel the patent

held by pharmaceutical giant Pfizer on one of its largest

drug Norvasc.

PITC urged the Intellectual Property Office to cancel the

US-based company's exclusive patents on amlodipine

besylate (the active substance in Norvasc) so that

Filipino pharmaceutical firms can import or produce

cheaper alternatives of the medicine.

The Philippine patent, granted in June 1990 and expiring

next month, is held by its British unit, Pfizer Ltd. UK.

PITC argued that the patent for Norvasc was "neither

new and novel nor non-inventive."

A Norvasc tablet costs about one dollar in the

Philippines but only some 10 cents in India, PITC said

on its website. PITC says multinational drug companies

control around 70 percent of the Philippines'

pharmaceutical market.

The worlds top drug maker has been embroiled in a

series of litigations pertaining to Norvasc of late.

Recently, a federal court in North Carolina upheld

Pfizer's patent covering amlodipine besylate, prohibiting

the US subsidiary of Synthon from launching a generic

version of the drug until September 2007.

The patent covers the besylate salt of amlodipine, its

pharmaceutical composition with a diluent or carrier, and

its tablet formulation consisting of an anti-hypertensive,

antiischemic or angina-alleviating effective amount of the

API.

Before that a federal court jury in Virginia ruled that

Pfizer did not infringe on another patent owned by

Synthon covering a process which Pfizer has been using

for over 15 years for making amlodipine, and found that

patent invalid on multiple grounds.

Synthon unsuccessfully argued that Pfizer's patent is

invalid because of obviousness and the lack of adequate

written description. The court ruling in North Carolina is

subject to appeal.

Norvasc accounts for $4.71bn (3.66bn) of Pfizer's

$51.3bn 2005 revenue.

Recently, Brazil decided to issue a compulsory license

for the import or manufacture of generic versions of

another US firm Mercks efavirenz. Brazil's health

ministry plans to import a generic version of efavirenz

from India, paying about 45 cents per pill, and may also

start making its own copy of the drug after rejecting the

New Jersey-based Merck& Cos offer to cut its $1.59 per

pill price by 30 percent. Brazil wanted to pay what Merck

charges Thailand--$0.65 per pill.

Last year, Thailand had taken a similar decision. Other

countries, including Canada and Italy, have also used a

clause in World Trade Organization rules to flout drug

patents in the name of public health.

BY OUR PHARMA CORRESPONDENT

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