Data Exclusivity & Access to Medicines in Guatemala
Doctors Without Borders/Médecins Sans Frontières
Campaign for Access to Essential Medicines
February 2005
HIV/AIDS and Guatemala
According to the World Health Organization (WHO) and UNAIDS, more than
78,000 Guatemalans live with HIV/AIDS, and annual AIDS-related deaths
totaled 5,800 in 2003. Approximately 13,500 of all those living with
HIV/AIDS now are in urgent need of antiretroviral (ARV) treatment. Yet only
3,600 Guatemalans were receiving it in December 2004.
Doctors Without Borders/Médecins Sans Frontières (MSF) has been providing
ARVs to Guatemalans since 2001 and is currently treating more than 1,500
people (approximately half of all those on ARV treatment in the country) in
one clinic and one hospital in Guatemala City as well as clinics in
Coatepeque and Puerto Barrios. Most of the patients in MSF’s treatment
programs are receiving generic medicines, which allows MSF to treat the
largest possible number of people. Our clinical outcomes parallel those
found in the United States and other industrialized countries.
MSF currently pays as little as $350 per person per year for the most
commonly prescribed WHO-recommended first-line regimens. Most ARVs are not
patent protected in Guatemala, and generic competition has been effective
in bringing down prices of originator products despite the fact that the
Guatemalan government is only beginning to open its national drug
procurement system to tenders from generic producers. Access to affordable
medicines is key in making life-extending treatment available to more
people who need it.
Access to Medicines At Risk
Unfortunately, this access is now being threatened. In country after
country, the US is negotiating “free trade agreements” (FTAs) containing
intellectual property provisions that limit generic competition and the
ability of countries to make use of safeguards in their patent laws to
protect public health and ensure access to medicines. These provisions go
far beyond what is required in the World Trade Organization (WTO) Agreement
on Trade-related Aspects of Intellectual Property Rights (TRIPS), and
directly contradict the November 2001 WTO Ministerial Declaration on the
TRIPS Agreement and Public Health (Doha Declaration). By pressuring
countries to accept these provisions, the US is in effect creating a new
“TRIPS-plus” norm that will undermine the right of countries to protect
public health.
The many troubling provisions in US FTAs include extensions of patent
terms, rules that would turn national drug regulatory authorities (NDRAs)
into “enforcers” of patents on medicines, granting of patents for “new
uses” of known compounds, and restrictions on compulsory licensing. But of
particular concern is the US Administration’s attempt to push countries to
accept new obstacles related to pharmaceutical test data (so called “data
exclusivity”), which will delay the availability of generic medicines.
Guatemala is a case in point.
Under extreme pressure from the US, Guatemala has been going back and forth
between proposed legislation that guarantees multinational pharmaceutical
companies monopoly-like exclusivity on the Guatemalan market and amendments
that maintain some degree of public health protection (see Annex 1 for a
full chronology of events). The latest development in this process is the
proposed text for a law (initiative for the amendment of the Industrial
Property Law, Decree 57-2000 of the Congress and its amendments) presented
to the Guatemalan Congress by President Oscar Berger in January 2005.
Data exclusivity: practical consequences for Guatemalans
MSF is concerned that the new draft law will, if enacted, prevent the
Department of Regulation and Control of Pharmaceutical Products from
granting marketing approval to generic medicines in Guatemala for five to
10 years, thereby giving a market monopoly to originator drug manufacturers
and preventing access to affordable medicines for five to 10 years in the
country.
In a worst case scenario, the new legislation will prevent generic
medicines from entering the Guatemalan market during the period of
exclusivity even if the originator medicine is not marketed in Guatemala.
This means that patients may have no access at all to some medicines for
five years – even exorbitantly priced originator versions.
If these data exclusivity provisions had been in effect prior to 2001,
generic ARVs would not have been marketed in Guatemala and MSF would not
have been able to access generics. This would have limited our ability to
expand access to treatment and demonstrate the feasibility of delivering
ART.
GENERICS: TREATING MORE PEOPLE WITH THE SAME AMOUNT OF MONEY
Generic competition on the Guatemalan market has brought down the prices of
originator ARVs, and the Guatemalan government is slowly moving from
purchasing only originator ARVs to including generic suppliers in the
national tender. Still, Guatemala’s social security system spends
significantly more on ARVs – in some cases more than 20 times more than MSF
– because it procures mostly originator drugs. For example, whereas MSF
pays $216 per person per year for a generic version of the “back-bone”
double combination of AZT+3TC, Guatemala’s social security system paid
$4,818 (open tender 2004) for the same combination from the originator,
GlaxoSmithKline. This is 22 times more than what MSF pays.
Guatemala has the opportunity to expand access to ARV treatment
significantly, particularly because of a $ 40 million grant from the Global
Fund to Fight AIDS, Tuberculosis and Malaria. In fact, there is no reason
that Guatemalan authorities should not be able to ensure universal access
to ARV treatment. To treat all 13,500 Guatemalans in urgent clinical need
with the first-line ARVs MSF uses, Guatemalan authorities could spend $ 5
to 9 million per year. But if the government is paying 20 times more – or
even two times more – for ARVs, only a small fraction of those in need will
be treated. Treating fewer people means condemning others to premature
death.
In order for the Guatemalan government to expand access to ARV treatment
for all those in need, it will need to retain the right to procure
affordable generic AIDS medicines.
Guatemala, along with other WTO members, signed the Doha Declaration and
thereby committed to putting the health needs of its people before
commercial and trade interests. Guatemalan authorities must not give in to
US pressure. Instead, they should make full use of the flexibilities of the
TRIPS Agreement to protect public health and promote access to medicines,
as acknowledged by the Doha Declaration.
How Data Exclusivity Will Affect an Important ARV: The Example of
Atazanavir
In November 2004, the Congress of Guatemala repealed Decree 9-2003 (see
Annex 2), which provided for five-year data exclusivity. In December, the
Congress replaced Decree 9-2003 with Decree 34-2004, which passed by an
important majority and was seen by Guatemalan civil society groups, MSF,
and others as a positive step forward, and a critical moment for the
government to commit to ensuring treatment for greater numbers of people
with HIV/AIDS in Guatemala. In the roughly 18 months during which Decree
9-2003 was in effect in Guatemala, 25 medicines received “data exclusivity”
protection under the law. Among those medicines affected is the ARV
atazananir. Atazanavir is a protease inhibitor, which is a key part of
second-line therapy for people with HIV/AIDS once they experience treatment
failure on their first-line regimen, and is used widely, in the US, Europe,
and Brazil.
Today, the US price of atazanavir is more than US$10,000 per person per
year – there is no differential price for developing countries and it must
be combined with at least two additional ARVs. There is no generic version
of atazanavir available on the world market because it is a relatively new
drug, but based on experience with other ARVs, it is possible that the
price could drop by approximately 95% with robust generic competition.
If a more affordable generic version of atazanavir is developed, however,
it will not be able to enter the Guatemalan market until 2009 (given that
the original atazanavir of Bristol-Myers Squibb was registered in Guatemala
in February 2004). This means that BMS will have a monopoly during the
entire period of exclusivity (at least five years) and, free from
competition, will be able to charge whatever the market will bear – far
more than what the average Guatemalan will be able to afford. It is
therefore unlikely that the vast majority of Guatemalans who will need this
medicine will be able to access it.
This is just one example of what could happen to all new medicines entering
the Guatemalan market – not only AIDS drugs – if Decree 34-2004 is repealed
and a US-style data exclusivity law is implemented, either through new
national legislation or enactment of DR-CAFTA. And newer medicines will be
crucial to the longer-term survival of people with HIV/AIDS and other
illnesses.
Conclusion
Guatemala has the opportunity and capacity to guarantee universal access to
ARV treatment for Guatemalans with HIV/AIDS and to make other improvements
in public health. However, this will not be possible if Guatemalan
authorities give in to US pressure to relinquish the right to take all
necessary measures to protect public health and promote access to
medicines. The Guatemalan government must not trade away the health of its
citizens in FTAs or any related legislation. Instead, it should uphold its
obligation to put the health needs of its people before commercial and
trade interests by defending Decree 34-2004, which is based on the Doha
Declaration and is in full conformity with the TRIPS Agreement.
ANNEX 1:
What Exactly Is “Data Exclusivity” and How Can It Impact Access to
Medicines?
“Data exclusivity” refers to a practice whereby, for a fixed period of
time, national drug regulatory authorities (NDRAs) cannot use the
pharmaceutical test data from an originator company to register a
therapeutically equivalent (“bioequivalent”) generic version of that
medicine. Data exclusivity is distinct from patents. In fact, the biggest
impact of data exclusivity may be felt on medicines that are not patented,
as competition will be blocked and a patent-like monopoly will be created.
Whereas patent barriers can be overcome through compulsory licensing or
government use, there is no legal “remedy” for data exclusivity. Even if a
generic company is authorized to produce a medicine under compulsory
license, the generic medicine cannot be registered during the period of
exclusivity, and therefore cannot be used.
In order for a medicine to be sold in any country it must first be
registered (in other words, it must get “marketing approval” or
“authorization”) by the NDRA, and in order for an NDRA to approve a
medicine, it must review safety and efficacy data and ensure that the
medicine meets certain quality standards.
Typically, the originator of a drug submits the needed pharmaceutical test
data to NDRAs. When a generic competitor seeks to enter the market, it
must simply prove that its product is of quality and is therapeutically
equivalent to the originator drug. The NDRA can rely on the test data on
safety and efficacy submitted by the originator company to register the
generic medicine, and in this way, generic entry to the market is
facilitated and accelerated.
However, the US Administration and the multinational pharmaceutical
industry are pushing strongly to impose “exclusive rights” over
pharmaceutical test data for a specific period of time, usually a minimum
of five years. In some agreements, such as “DR-CAFTA” – the US free trade
agreement with the Dominican Republic and five Central American countries
(Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) – the US is
even seeking what could be described as “data exclusivity-plus.” If an
original manufacturer of a drug has not been registered it for use in a
given country, then the data exclusivity period can start running from the
date of approval in another country that is party to the agreement (in this
case usually the US). Neither five nor 10 yeas of data exclusivity is
required in the TRIPS Agreement.
The concrete practical outcome of data exclusivity, whether it is
implemented through specific national legislation or enactment of FTAs such
as DR-CAFTA, is that originator companies have a patent-like monopoly for
at least five years and can determine the price, which invariably leads to
artificially high prices that are unaffordable to most. A five- to 10-year
delay in access to affordable medicines for Guatemalans with HIV/AIDS and
other illnesses can be a death sentence.
ANNEX 2:
Chronology of Events in Guatemala: One Step Forward, Two Steps Back on
Data Exclusivity
In April 2003, the Guatemalan government, which was under pressure to adopt
US standards for protection of pharmaceutical test data, modified its
national intellectual property (IP) bill by passing a national decree
(Decree 9-2003) that gave originator pharmaceutical companies five years of
data exclusivity. Civil society groups in Guatemala mobilized to urge the
government to repeal the Decree and abolish data exclusivity in order to
promote generic competition and improve access to affordable quality
medicines. In November 2004, the Congress finally repealed Decree 9-2003,
and replaced it with Decree 34-2004, which was approved by a large
majority.
This was seen by Guatemalan civil society groups, MSF, and others as a
positive step forward, and a critical moment for the government to commit
to ensuring treatment for greater numbers of people with HIV/AIDS in
Guatemala.
Decree 34-2004 regulates the protection of pharmaceutical test data and
other undisclosed tests in a way that protects “public health and promotes
access to medicines for all” and is in full conformity with the TRIPS
Agreement.
In particular, Decree 34-2004 establishes that Guatemala’s NDRA, the
Department of Regulation and Control of Pharmaceutical Products, should
protect these test data against “unfair commercial use,” as required by the
TRIPS Agreement. The main paragraph of Decree 34-2004 is an exact copy of
Article 39.3 of the TRIPS Agreement on “undisclosed tests and other data.”
However, since the passage of Decree 34-2004, the US Administration has
exerted tremendous pressure on Guatemala to repeal the Decree and ensure
passage of a new law that reverses Decree 34-2004 before ratification of
DR-CAFTA. In a January 10, 2005, “Fact Sheet” on “CAFTA, Data Protection
and Generic Drugs” the US Embassy to Guatemala stated that:
“This law [Decree 34-2004] gives the U.S. Congress the impression that
Guatemala is not serious about complying with commitments it made in the
CAFTA. This could result in CAFTA not being ratified by the U.S.
Congress, where a close vote is expected.”
In response to US pressure, the Guatemalan government first enacted a
regulation in January 2005, Government Agreement No. 3-2005 of 5 January
2005, published in the “Diario de Centro America” of 7 January 2005. which
was originally supposed to regulate the implementation of Decree 34-2004,
but in effect reintroduced data exclusivity, in contradiction with Decree
34-2004. It seems even this initiative was not good enough for the US. On
February 1, 2005, the leading Guatemalan daily newspaper Prensa Libre,
published an article saying:
“In order to reduce the pressure [exerted by the U.S.], the regulation
for 34-2004 was published explaining the protection, but this did not
fully satisfy the U.S. Now, Oscar Berger’s government sent to Congress
new legislation which has ‘saved’ the situation. ‘We no longer have any
problem,’ assured Ryan Rowlands, U.S. Embassy spokesperson in
Guatemala.”
The new draft law to completely repeal Decree 34-2004 will, if enacted,
prevent the Department of Regulation and Control of Pharmaceutical Products
from granting marketing approval to generic medicines in Guatemala for five
to 10 years, thereby giving a market monopoly to originator drug
manufacturers and preventing access to affordable medicines for five to 10
years in the country (Article 1).
In a worst case scenario, this legislation will prevent generic medicines
from entering the Guatemalan market for five years, even if the originator
medicine is not marketed in Guatemala. This means that patients may have no
access at all to some medicines for five years – even exorbitantly priced
originator versions.
Moreover, the proposed law “clarifies” that no authorization or
registration will be given to generic manufacturers for medicines
containing a new chemical entity that are under patent in Guatemala. This
dangerous detail inappropriately links regulatory approval with the patent
status of a drug, and renders compulsory licensing useless.
In a supposed effort to balance the negative impact on access to medicines,
the new proposed law includes a number of exceptions to data protection.
However, only one of those may indeed have such an effect, and only if
implemented in good faith.
This proposed law protects the interests of owners of pharmaceutical test
data to the detriment of public health and access to affordable medicines
and should be strongly opposed.