Supplying Drugs To The World's Poor

Last month, India's Cancer Patients Aid Association (CPAA), with the support of several other nongovernmental organizations, began a campaign to lobby the government of India to remove patent protection on about 20 cancer drugs supplied by international pharmaceutical companies. According to CPAA, too many Indian cancer patients cannot afford the patent-protected drugs they need to survive.

"For the first time, we can see that in India patent protection is blocking access to treatments that are essential," says Leena Menghaney, the Indian coordinator of the Access to Essential Medicines campaign organized by the charity Doctors Without Borders, widely known by its French acronym MSF. MSF supports the CPAA campaign, she says, as well as the removal of patent protection for other life-saving drugs.

If the Indian government buckles under pressure from these organizations and frees some drugs from patent protection against the wishes of patent holders, it will be doing something called compulsory licensing.

All members of the World Trade Organization have the right to resort to compulsory licensing of under WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights. In 2001, the U.S. came close to compulsory licensing of the drug ciprofloxacin when it was stymied in its negotiations with Bayer to obtain large supplies at a reduced price. Canada operated a system of compulsory licensing for all drugs from the 1920s to the 1980s but is now in line with international standards.

The world's poorest countries almost never resort to compulsory licensing, even though they are the ones most likely to face health emergencies and the ones least able to pay for expensive drugs. Their reserve in using compulsory licensing is surprising given that the WTO agreements contain special provisions that theoretically make it easier for very poor countries to import patented drugs.

According to Menghaney, poor countries have a pressing need for patent-protected drugs. In the case of HIV/AIDS, for example, she says the first drugs invented to fight the disease may have undesirable side effects. More important, she adds, viral resistance to these drugs often develops. To save patients, it becomes vital after a few years of treatment with one of these earlier drugs to switch to a newer, patent-protected one.

Paragraph 6 of WTO's Doha Declaration—adopted at a WTO conference in Doha, Qatar, in August 2003—specifies how member countries without a drug industry can implement compulsory licensing by importing from other WTO members. The world's poorest countries are deemed not to have a drug industry in order to make it simpler for them to complete the administrative procedures allowing them to import patented drugs.

Rwanda is so far the only country to have successfully implemented paragraph 6. The African nation has satisfied all WTO requirements to import an HIV treatment that is protected by international patents. The drug, named Apo-TriAvir, was developed by the Canadian generic drug firm Apotex, which saw a potentially growing market in compulsory licensing. Apo-TriAvir is a formulation consisting of 300 mg of zidovudine, or AZT; 150 mg of the GlaxoSmithKline drug lamivudine; and 200 mg of the Boehringer Ingelheim drug nevirapine.

Elie Betito, a spokesman for Apotex, says it was a frustrating two-and-half-year ordeal for his company to win the various approvals it needed to qualify as a supplier to Rwanda. Apotex had to comply with Canada's Access to Medicines Regime, a set of regulations Canada adopted in 2005 to harmonize its laws with paragraph 6.

"It's a process that the branded drug companies can stop at any time," Betito says. "We had to deal with three companies, and they had to give approval at every step." Apotex eventually secured approval to ship a fixed quantity of Apo-TriAvir to Rwanda. But it can't ship more of the product even if Rwanda indicates that it needs more, Betito adds.

Apotex, a privately owned firm, plans to sell its drug to Rwanda at cost, Betito says. But even though the firm incurred expenses in developing a formulation that specifically meets Rwandan needs, he says it is not guaranteed to get the order. Now that all the approvals have been secured by Rwanda and Canada, he adds, the order is going through a tendering process despite the fact that Apotex is the only company in the world to make the drug cocktail.

Betito says he finds it incomprehensible that the process enabling Apotex to ship a much-needed drug to a poor country is so complicated. "If 3,000 people per day were dying in Canada from a particular disease, we would not have to go through the rigmarole of lawyers talking to each other seemingly endlessly about getting the drugs," he says. "Government would do something about it."

Jeff Connell, spokesman for the Canadian Generic Pharmaceutical Association, agrees that Canada's Access to Medicines regime is far too restrictive. He says the paragraph 6 provision is already a compromise among stakeholders on the compulsory-licensing issue. But Canada made its own law about exporting patent-protected medicines more stringent than required by its WTO commitments.

"The legislation that Canada introduced was severely flawed, and we told the government that it's unlikely to work," Connell says. He points out that producers of branded drugs are far more influential with the Canadian government than are generics firms because the branded-drug firms represent 80% of all sales of drugs in Canada in dollar terms.

Although the Rwanda case seems to illustrate that it's difficult to export patent-protected drugs to poor countries, the drugs' originators argue that the WTO-sanctioned system works perfectly well. That Rwanda's proposed import of Apo-TriAvir was approved is proof, they say.

Eric Noehrenberg, director of public health advocacy for the Geneva-based International Federation of Pharmaceutical Manufacturers & Associations, says Apotex took a long time to win approval because it failed to provide some required information. "Apotex and MSF, which was ordering the drug on behalf of Rwanda, did not specify who the intended beneficiaries were, which is contrary to both Canadian laws and the WTO accords," he says. Apotex and MSF wanted to make a point about how cumbersome the system is "and were being disingenuous."

In the case of Rwanda, Noehrenberg says, the multinational drug companies were accommodating, and "there wasn't any opposition on their part." He maintains that the Rwandan request went through swiftly, both by Canada's granting of the compulsory license and the approval by Health Canada regarding the quality of drugs for export.

At the same time, Noehrenberg adds, makers of patent-protected drugs are concerned about compulsory licensing being misused to secure cheap copies and ship them elsewhere. "If the drugs are reexported to another country that is richer, nobody wins," he says. "Those who are supposed to get the drug don't get it, and those who are supposed to pay to support the drug being made available in the first place don't do it." He adds that proper safeguards are needed to avoid this scenario.

Indeed, producers of branded drugs are already seeing a kind of slippery slope taking shape in the form of attempts by richer developing countries to use compulsory licensing to secure patented drugs at discount prices. Last year, Thailand issued compulsory-licensing orders for the HIV drug Kaletra, patented by Abbott Laboratories, and the heart disease drug Plavix, patented by Sanofi-Aventis and Bristol-Myers Squibb. And Brazil is considering not recognizing Gilead Sciences' patent on the HIV drug Viread because it finds the price too high.

According to Noehrenberg, companies that bring new drugs to market have set up a global pricing structure in which countries pay for drugs according to their ability to do so. Attempts by relatively well-off countries such as Thailand and Brazil to pay a price as low as countries in sub-Saharan Africa are upsetting the structure, he says.

Menghaney, the Delhi-based MSF campaigner, counters that the pharmaceutical patent system is flawed. Even though the WTO accord protects patents better than ever before, she says, major drug companies are still not coming up with treatments for diseases ravaging poor countries. Companies focus on drugs for developed-world consumers that are only slight modifications of existing treatments, she maintains, while underfunding research into major diseases that affect the developing world.

MSF doctors in the field, Menghaney says, cannot properly treat patients suffering from tropical diseases such as malaria and leishmaniasis, a parasitic disease transmitted by sand flies, because effective drugs simply do not exist. "We do care about innovation very much, but the patent system has not delivered," she says.

Noehrenberg disputes this allegation. At last estimate, he says, multinational companies are engaged in at least 58 research projects to develop new medicines for diseases that especially affect developing countries. He adds that more than 80 compounds for treating HIV infection and related conditions are in various stages of clinical development by multinational companies.

According to Rudolf V. Van Puymbroeck, a senior scholar at the O'Neill Institute for National & Global Health Law at Georgetown University in Washington, D.C., drug availability in very poor countries has improved dramatically in the past five years. He credits programs, such as the President's Emergency Plan for AIDS Relief (PEPFAR) and the Global Fund, that distribute HIV drugs throughout countries where needs are greatest. According to MSF, more than two-thirds of the drugs PEPFAR distributes are sourced from generic manufacturers.

But the improved access to drugs does not mean that the issue of compulsory licensing by developing countries will fade in importance, he says. Van Puymbroeck, who coauthored a book published by the World Bank in July 2005 about the paragraph 6 provision, expects that countries combating the AIDS epidemic will increasingly resort to compulsory licensing to source patented pharmaceuticals. Breaking patents on these drugs, he says, will set a precedent that will encourage the breaking of patents on other expensive drug classes, as Thailand has already done.

"There is a real battle going on between the governments of developing countries, especially the middle-income ones, and innovator pharmaceutical companies," Van Puymbroeck says. "We are going to see greater hostility as a result of this." He notes that Thailand and other middle-income countries that break drug patents may face trade sanctions from the U.S., Europe, and Japan. "Pharmaceutical companies have a tremendous influence on the executive branch in the U.S. and on the legislative branch as well," he says.

As for very poor countries that hope to use the WTO-approved procedure to import patented drugs, the complexity of the process is a big hurdle, Van Puymbroeck says. "It's a procedure that requires knowledge of international trade law" and knowledge of "how countries cooperate with each other in the international trade area. It deals with administrative systems issuing compulsory licenses," he says. "The complexity of the system and its rules are a deterrent."

Even if a drug is made cheaper through compulsory licensing, it still needs to be paid for. And in the world's poorest countries, unless a budget has been provided by an international organization, there is usually no one to pay even for a low-priced generic version of the drug.

Van Puymbroeck sees little prospect that the WTO rules covering the import of patent-protected drugs by poor countries will be modified. The rules may be cumbersome, but because the 2003 international agreement on the matter was so hard to reach, nothing will change soon, he predicts. "There is no appetite among the member countries of WTO to go and review this decision and the specifics of the system," he says.

If Van Puymbroeck is correct, the world's poorest countries will need to hone their knowledge of international trade law if they intend to import patent-protected drugs without exposing themselves to punitive trade sanctions.