A New Low in the Pharma Drug Wars - Abbott Withdraws Seven Medicines in Thailand

by Brook Baker

A New Low in the Pharma Drug Wars - Abbott Withdraws Seven Medicines in Thailand
Brook K. Baker, Health GAP
March 14, 2007

How low will drug companies go to protect their intellectual property empire? We knew they would sue South Africa, the epicenter of the global AIDS pandemic, to prevent comparison shopping for cheaper versions of brand name drugs (parallel-importation case 1998-2001). We knew that they would sue Indian the pharmacy of the poor, to try to ease legal standards to make getting pharmaceutical patents for minor variations of existing medicines even easier (Novartis v. India, 2006-2007). And now we know that they will go even lower and withdraw pending registration applications for essential life-saving medicines and boycott sales of all new medicines in Thailand because Thai leaders dared to issue a lawful compulsory license on a crucial, but over-priced AIDS medicine, Kaletra (Abbott, March 13, 2007).

Abbott's abrupt decision to withdraw seven pending registration applications, including one for a new heat-stable form of Kaletra, and its threat to make Thailand a no-drug zone for all new Abbott medicines is a truly appalling example of corporate hubris. (The six other drugs are the painkiller Brufen; an antibiotic, Abbotic; a blood clot drug, Clivarine; the arthritis drug Humira; the high-blood pressure drug Tarka; and the Kidney disease drug, Zemplar.) After touting itself to the be the engine of new life-saving discoveries, Abbott is now willing to withhold medicines altogether in order to extract even greater intellectual property concessions from developing countries.

Abbott falsely claims that Thailand has "broken patents and ignored the patent system" when it issued its compulsory license. To the contrary, Thailand has used a completely lawful flexibility under the WTO TRIPS Agreement to issue compulsory licenses permitting non-commercial use of essential medicines within its public health system. Abbott continues its unfettered, high mark-up sales to rich Thai consumers and to medical tourists who can afford higher price medicines in the private health care delivery system. Moreover, Abbott is scheduled to receive royalties on sales made to the private sector.

Article 31 of the TRIPS Agreement permits Thailand to issue a public, non-commercial use license without prior negotiations, but Thailand had in fact engaged in protracted but fruitless price negotiations with Abbott. Instead of negotiating, however, Abbott has unilaterally offered to sell Thailand Kaletra at its fixed middle-income tiered company price, $2200/patient/year, a price that is 440% higher than the cost price Abbott offers to African countries and more than five times as much as what will be charged by generic producers once there are sufficient economies of scale and competitive generic markets.

In order to provide alterative, life-saving anti-retroviral therapy to the steady stream of patients who develop drug-resistance or suffer undue adverse side effects from first-line therapies, Thailand determined that it would have to find a cheaper source of supply. Thus, it issued a compulsory license on Kaletra, as it had on another AIDS medicine, efavirenz, and on a cardiovascular medicine, Plavix.

Some industry pundits and Pharma allies in Congress wonder whether Thailand is planning a wholesale assault on the patent system by granting compulsory licenses for everything from erectile dysfunction drugs to patented facial creams. Addressing these concerns, Thailand has publicly announced strict criteria that will guide its compulsory licensing policy and has established a Subcommittee to implement the Government Use of Patents. The published criteria would limit compulsory licenses to drugs and medical supplies that are listed on the National Essential Drug List or that are necessary to solve important public health problems, to address emergencies or matters of extreme urgency, to prevent and control the outbreak of epidemics or pandemics, or to save lives. Accordingly to an additional criterion, Thailand will seek government use licenses only when the price of the particular medicine is too high to be affordable.

Applying these criteria, Thailand estimates that it will only consider licenses for fewer than 15% of medicines - hardly a wholesale assault on the patent system.

It would be bad enough if Abbott's product withdrawals affected its innovator products only, especially if there are not therapeutic equivalents available. But, there is the additional risk that by withdrawing the registration packets Abbott will succeed in preventing or delaying the registration of generic equivalents by making it harder for Thai drug regulators to confirm the safety and efficacy of the equivalent. Because drug regulatory agencies often rely upon or refer to originator data to grant marketing approval for follow-on products, this option is now moot. Hopefully, Thai regulator will be able to rely on the original Kaletra registration packet or on published data to support registration of new generic heat-stable versions of Kaletra, but this option is by no means certain.

This new tactic by Abbott in Pharma's war for profits exceeds all previous tactics. It directly violates the universal human right of access to essential medicines. It directly violates both the letter and the spirit of the Doha Declaration. It directly violates any conceivable norm of corporate responsibility. It is in fact the equivalent of a tactical nuclear device dropped into the middle of 580,000 people living with HIV/AIDS IN Thailand. How low is too low - Abbott has let us see the Pharma abyss.

Standing Up To Abbott's Decision to Withhold Registration and Marketing of Life-Saving Medicines - A New Variant of Pharmaceutical Apartheid

by Brook Baker

Brook K. Baker, Health GAP
March 13, 2007

Abbott is now doing what drug companies have long threatened to do when developing countries use lawful flexibilities to access more affordable generic medicines - it is threatening to take its marbles and go home. Unfortunately, however, Abbott is not playing marbles, it is playing a deadly game of Pharmaceutical Apartheid, where drug companies withhold access to affordable life-saving medicines in a perverse effort to preserve intellectual property rights at all costs.

Abbott is upset because Thailand has lawfully issued a compulsory license on an important antiretroviral medicine, Kaletra. According to Abbott (and its think-tank apologists and Wall Street Journal defenders), Thailand issued this license without prior negotiations for a price discount or for a voluntary license. However, contrary to Abbott's claim, both international law (the WTO TRIPS Agreement, Article 31) and the Thailand Patent Act permit Thailand to issue compulsory licenses for governmental, noncommercial use without prior negotiation. Moreover, contrary to Abbott's claim, Thailand, like many other developing countries, had long engaged in fruitless negotiations with Big Pharma for deeper price discounts, but Abbott used its monopoly power to unilaterally determine the price points for its tiered-pricing "access" program.

Because Thailand has not caved into to threats and entreaties from Abbott, the USTR, certain members of Congress, and the international business press, Abbott has now raised the stakes further by withdrawing registration applications for the new heat stable form of Kaletra, an important AIDS medicine, and for six other medicines that it had submitted for marketing approval. (The meltrex, heat stable form of Kaletra is especially important in warm country climates like Thailand were maintaining a cold-supply chain and ensuring that poor patients have access to refrigerators to store their medicines is virtually impossible.)

This withdrawal is profoundly cynical and immoral. A company which has been subsidized through NIH and university research for most of its discoveries, which gets huge taxes breaks for its research and development expenditures, and which earns monopoly profits on all its sales in rich country markets that collectively comprise 90% of global pharmaceutical sales, now determines that it will withhold marketing of life-saving medicines when a country seeks to exercise its lawful, TRIPS-compliant rights to access more affordable generic medicines.

This withdrawal will make it much more difficult for Thailand to grant marketing approval for generic versions of Kaletra and other Abbott medicines because the Thai drug regulatory authority will not simply be able to compare the generic version against the innovator version to confirm that they are therapeutically equivalent. In the worst case scenario, generic companies will now have to repeat costly, time-consuming, and ultimately unethical clinical trials to prove something that is already crystal clear - equivalent generic medicines are safe and efficacious. Even if Thailand decides to forego reliance on new clinical trials, it may instead have to amend its law so that it can rely on WHO pre-qualification and/or the fact of registration by a stringent regulatory authority elsewhere. (Note: The U.S. is trying to block Thailand's future right to legislate such reliance in its free trade agreement negotiation where it seeks five-years of data exclusivity.)

However, even though Abbott will not necessarily by able to completely block registration of follow-on generics by its market withdrawals, its withdrawals will have devastating effects for those medicines for which there is no generic alternative at present.

Thus, to prove its point, and to maintain its market and intellectual property hegemony, Abbott is willing to make Thailand and its patients a "no drug zone." The predictable, inevitable consequence of this cynical power play will be the deaths of innocent patients.

Drug companies like Abbott have all kinds of lame excuses for their murderous policies. Novartis defends its patent law lawsuit in India because it wants to maintain its right to sell Glivec to middle-income patients, even though India represents only 1.3% of the global pharmaceutical market and even though 99% of Indians are not middle class. Pfizer wants to maintain its patent monopolies in the Philippines by filing frivolous lawsuits against government officials and generic companies which seek to permit lawful early registration of generic medicines. And now Abbott, pulls a new "troop-surge" weapon from its arsenal - wholesale market withdrawals.

Once again activists and thought leaders need to rally to the support of Thailand's lawful effort to access more affordable medicines and to condemn this latest variant of pharmaceutical apartheid. One hopes fervently that Thailand will stand firm, that it will find alternative ways to grant marketing approval/registration of generic versions of Pharma products, and that even more developing countries will stand up and fight for the human right of access to essential medicines.