Global Trends by Martin Khor

Monday 31 March 2008

Fighting for cheap heart, cancer drugs

Malaysia started the trend of compulsory licensing that enables the supply of cheaper generic medicines. Then Thailand extended its use by giving licenses for drugs treating heart ailments and cancer, as well as AIDS. But will the new Thai government continue this policy?


First, it was Malaysia that issued a “compulsory license” to allow three cheaper generic medicines to be imported from India to treat AIDS patients.

That was at the end of 2003.  According to the Health Ministry, the government was able to treat many more patients because the medicines cost on average only one seventh the prices of the patented and branded products.

In fact, Malaysia was the first country to implement compulsory licensing since the Doha Declaration on the TRIPS Agreement and Public Health was adopted at the World Trade Organisation’s Ministerial meeting in Doha in 2001.

That Declaration said that the TRIPS Agreement does not and should not block access to medicines.  The WTO rules allow countries the “flexibility” to issue compulsory licenses to produce or import cheaper generic versions of medicines that are patented.

Compulsory licenses can be given for medicines treating all sorts of ailments – not only AIDS – and there is no need for a country to declare a “medical emergency” before issuing such licenses.

Following Malaysia’s example, other countries -- Indonesia, Thailand, Zimbabwe, Ghana, Brazil – have issued compulsory licenses. The list keeps growing. 

If Malaysia pioneered compulsory licensing after Doha, Thailand pioneered its onward progress. In November 2006 to January 2007, it issued licenses for two AIDS drugs and one to treat heart ailment.

In January 2008, the then Health Minister Dr. Mongkol na Songkhla issued licenses for four other drugs  -- all of them to treat cancer.

Thailand also set up a sophisticated system under its universal health system to examine what are the major diseases; for which of these are treatment costs prohibitively high; which drugs are patented; and which drugs can be supplied more cheaply if generic versions are available.

From this exercise, involving many committees, a list of drugs is drawn up for which compulsory licensing is needed.

The health authorities then negotiate with the companies to see if they can bring prices of their patented drugs down.  If the talks are not successful, the licenses proceed.

In the case of the four cancer drugs, the compulsory license for one of the drugs was dropped after the company decided to make its drugs freely available to almost all patients under the public health insurance scheme.

Compulsory licenses were implemented for the other three drugs just before Dr Mongkol left office.

The drugs were Docetaxel, used to treat breast and lung cancer (sold as Taxotere); Erlotinib, used to treat lung cancer (sold as Tarceva);  and Letrozole, used to treat breast cancer (sold as Femara).

The license for Imatinib (sold as Gilvec) was not implemented after the company agreed on terms that would cover free access to almost all patients under the main public health insurance scheme. 

On taking office, the new Health Minister Chaiya Sasomsab said he was reviewing the licenses because they may affect the country’s business climate.   One of the key officials who ran the compulsory license exercise, and who headed the Food and Drugs Authority, was transferred to another post.

The foreign drug industry campaigned vigorously for the licenses to be dropped.  The United States government and the European Commission also urged a change of policies.

But the new Minister’s move also angered patients’ groups, health-related and consumer NGOs, opposition leaders and members of parliament.

Finally, Chaiya announced on 10 March that the compulsory licenses for the three cancer drugs would be retained.  It was a victory of sorts for the public interest groups. 

Cancer has become the main cause of death in Thailand. An official study showed that Thailand could save almost 4 billion baht (US $125 million) in 2008-2012 through the use of generic drugs which are 4 to 30 times cheaper than the branded products, that are enabled by the compulsory licensing.

A white paper issued by the Health Ministry justifying its actions said it had arranged for over 12 rounds of negotiations with the patent-holding drug companies, with only limited progress, before the decision to issue the compulsory licenses.

It added that the cost of 80 mg injection of the patented drug Docetexel (trade name Taxotere) was 25,000 Baht, while the generic equivalent was offered to Thailand for 4,000 Baht, or six times cheaper, and then later even more cheaply.

Letrozole (trade name Femara) was priced by the patent holder at 230 Baht for one tablet of 2.5 mg, while the price of the generic drugs are 6-7 Baht, representing a price differential of 30 times,

The patented drug Erlotinib (trade name Tarceva) was priced at 2,750 Baht for one tablet of 150 mg, while the generic drug costs only 735 Baht, or 4 times less.

For these three drugs, the patent holders made offers to reduce the cost of supply to the government, but the offers were not enough.

The last patented drug Imatinib (trade name Glivec) was available at 917 Baht per 100 mg tablet, while the generic is available for only 50-70 Baht -- a difference of almost 20 times.  In the negotiations, the company agreed to conditions enabling almost all patients under the universal health insurance scheme to have free access to Imatinib.  Thus it was not necessary to implement the compulsory license.

Although the new Minister was pressured by public opinion to retain existing compulsory licenses, it is uncertain he will issue more licenses or even maintain the system that assesses the need for compulsory licensing.

Last Friday, an alliance of groups of patients suffering from AIDS, cancer and kidney ailments, backed by the Aids Access Foundation, Foundation of Consumers, Rural Doctors Society and Rural Pharmacists Society, submitted a statement of intent to the Senate Speaker to start impeachment proceedings against Chaiya for trying to reverse the compulsory licenses, for acting contrary to government policies on equal access to healthcare and for reassigning health officials without justification.

This shows the frustration of patients, consumers and health workers over what they see as the new Minister’s lack of appreciation of the compulsory licensing system.  Chaiya however said he was not afraid of losing his job as Health Minister.