Brook K. Baker
Health GAP
Oct. 18, 2005
Government officials in the U.S., Thailand, India, China, and the
Philippines have all expressed interest in issuing compulsory licenses
authorizing generic production of Roche’s antiviral medicines, Tamiflu, one
of the few medicines likely to reduce the body count of an inevitable avian
flu pandemic.
No one doubts the seriousness of a predictable outbreak of an H5N1 pandemic
once the flu strain mutates further to an airborne virus that passes easily
from human to human. Death predictions range from 40-200 million. In the
absence of an effective vaccine, Tamiflu is one of the few measures that
could help contain outbreaks and reduce herd vulnerability of human
populations.
Roche, the holder of a worldwide patent on Tamiflu, has thus far stated
that it intends to fully protect its patent rights to prevent generic
companies from making unauthorized copies of the flu medicine. Instead,
Roche is attempting to maintain its market monopoly and to reap a huge
windfall of supracompetitive profits by outsourcing additional production
to a select but limited group of pharmaceutical manufacturers, whose
identity is being kept secret by Roche. Even with this increased
productive capacity, specialists estimate that Roche and its suppliers will
fall far short of being able to supply global stockpiling needs. Moreover,
Roche’s marketing price, rarely discussed, will make the medicines
virtually unaffordable for mass use in most developing countries.
Roche tries to secure its monopoly advantage not only by refusing to
license Tamiflu to generic producers but also by greatly exaggerating the
difficulty of manufacturing the drug. Roche has estimated that it would
take new producers two-three years to reverse engineer and manufacture
Tamiflu. However, Cipla of India, and manufacturers in the U.S. have
already estimated that they could begin to mass produce Tamiflu in a few
months. If Roche were willing to share its proprietary manufacturing
processes, that time frame might be reduced to as little as one month.
Although these generic producers have not yet estimated the selling price
of generic equivalents to Tamiflu, there is little doubt, based on prior
examples, that generic prices would be a fraction of the cost and that
prices would plummet further as the costs of intermediate products fell and
as economies of scale were realized.
So, the world faces a dramatic confrontation. One the one side is the
financial interest of one major drug company that stands to make billions
of dollars selling Tamiflu to a small proportion of mainly rich consumers
who can afford that limited quantities of Tamiflu that Roche can product.
On the other side are billions of poor people, primarily in developing
countries, who will have little or no access to killer-flu medicines unless
there are many new producers and unless prices fall dramatically.
As a matter of public policy and public health and of human rights, and
human decency the outcome of this confrontation should be relatively
straightforward. Governments should thumb their nose at Roche’s monopoly
and should grant open compulsory licenses on an emergency basis to
qualified generic producers, domestic and international, to immediately
begin production of large quantities of low-cost Tamiflu. Roche, in turn,
would receive royalty payments on the medicines produced by the generic
companies and would still be permitted to sell its own Tamiflu in a now
more competitive market.
This solution is sensible, but it is not actually an option in many parts
of the world both because of arcane patent-law protections and because of
international agreements that restrict countries’ ability to respond to
public health crises with alacrity. For example, some countries with spare
local capacity could begin to issue compulsory licenses to permit domestic
manufacture and use of generic Tamiflu. However, some countries with spare
capacity have failed to enact national legislation allowing them to issue
compulsory licenses and/or they have Byzantine and protracted procedures
for doing so.
Other countries are much less lucky – they lack domestic pharmaceutical
capacity and have limited rights to import needed generic medicines from
abroad. These countries must now use the labyrinth procedures of the WTO
August 30, 2003 Paragraph 6 Implementation Decision. That Decision
requires countries with limited production capacity to file specific
notifications to the WTO, to issue import compulsory licenses for specified
quantities of medicines, and then to rely on foreign producers to seek
export compulsory licenses with multiple notifications as well. These
arthritic procedures are neither fast nor efficient – moreover, many
countries lack national legislation authorizing the required licenses.
How did this procedural mess and these patent-right shackles for developing
(and developed) countries occur? You need look no further than Roche and
other Big Pharma companies like Pfizer, Merck, Bristol-Myers-Squibb,
GlaxoSmithKline, and Boehringer-Ingelheim; you need look no further than
their industry lobby groups, PhRMA and its international equivalent; and
you need look no further than the White House and the office of the U.S.
Trade Representative. These intellectual-property-rights-maximizing forces
have combined to wage a twenty year campaign to prioritize pharmaceutical
profits over human rights and life itself.
The avian flu pandemic is visible on the horizon – much as a storm like
Katrina was on the horizon for an ill-prepared New Orleans. Will
policy-makers watch the approaching viral storm and beg and plead for a
slightly expanded source of supply from a single monopolist? Or will they
act with dispatch, not only to address the impending avian flu/Tamiflu
crisis but to recreate public health priorities that facilitate access to
life-saving medicines.
One last irony of the current, but still unrealized, avian flu crisis is
that it is indeed convincing developing countries and some developed
countries to seriously consider compulsory licenses. Fifty-nine people
have died and that number could be multiplied by a million. However, 40
million people are also living with HIV/AIDS. They too need access to the
latest generations of life-saving medicines and that need is also being
negatively impacted by myopic national legislation and inflexible global
trade rules. The deaths of 3 million people from AIDS this year is not
merely hypothetical – it is already happening.
One reason U.S. decision makers might respond to avian flu is because it
could arrive on our shore with every transcontinental flight and because it
kills so quickly. HIV too has covered the globe, but much more slowly.
And it kills too, but in ten years rather than ten days. Nonetheless,
Roche and its Big Pharma allies have assured a global system that means
that 8000 people will die today of AIDS today – that’s 59 every 10 1/2
minutes.
Let’s organize a global sense of outrage and urgency about HIV, avian flu,
and other public health menaces that require medical intervention. Let’s
speed pills to people by effective governmental policies that prioritize
life over profit.
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