Access to Medicine, IP, and Public Health

Access to Medicine, IP, and Public Health

ESSENTIALS OF GLOBAL HEALTH Pharmaceutical Companies and Global Health Weng-Foung Huang, Ph.D. Professor, Institute of Health and Welfare Policy National Yang-Ming University 2012/05/18 Unless noted, the course materials are licensed under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Taiwan (CC BY-N C-SA 3.0) 2012/05/18 YMU/HWF 1 Professional Background Weng-Foung Huang, Ph.D. BS in Pharmacy, National Taiwan University (1972); MS in Pharmacy Administration (1975) and Ph.D. in Social and Administrative Pharmacy, University of Minnesota , USA (1979)

Public service career (1980~1994) - Senior official in DOH: (Senior Specialist, Deputy Director General, and Director General of Pharmaceutical Affairs Bureau, Director General of National Laboratories of Foods and Drugs) Architect of Taiwans drug regulatory reforms (including GMP and clinical trial regulations); Key contributor to Taiwans NHI pharmaceutical reimbursement system 2012/05/18 YMU/HWF 2 Professional Background Weng-Foung Huang, Ph.D. Academic career (1994 ~ present): Associate Professor, Director, Professor ; Institute of Health and Welfare Policy, National Yang-Ming University President, Pharmaceutical Society of Taiwan (1995~1997, 2007~2011.1) Advisor to Taiwans DOH(1999 2000, 2005~2007) Chairman of OTC Committee, DOH (1999 2007) Chairman of Pharmacy Service Quality Committee, DOH (2004 2007)

Fields of Specialization: Health Policy Evaluation, Pharmaceutical Pricing and Reimbursement in Health Insurance, Health Technology Assessment (HTA) , Development Strategies in Health Care Industry 2012/05/18 YMU/HWF 3 Background Significance of Pharmaceuticals in Healthcare Role of Pharmaceutical Industry in International Health Vaccines and International Health Dilemma of Essential Drugs and Choices of Treatment

2012/05/18 YMU/HWF 4 Significance of Pharmaceuticals in Healthcare Pharmaceuticals constitute an essential element of healthcare and disease treatment Pharmaceutical industry is a profit-driven industry but pharmaceuticals are also regarded as social goods Intensive R&D and intellectual right protection are core elements in pharmaceuticals innovation and pharmaceutical industry 2012/05/18 YMU/HWF 5

Significance of Pharmaceuticals in Healthcare In a national health insurance/service (premium based NHI or tax based NHS), government reimbursement influences the operation of healthcare market. When a national health insurance/insurance is not available, the cost of drugs has been a sensitive issue everywhere. Policy decisions in achieving the balance between industrial goals and social goals are complicate, and sometimes very political. 2012/05/18 YMU/HWF 6 International Covenant on Economic, Social and Cultural Rights The right of everyone to the enjoyment of the highest attainable standard of physical and mental health (Article 12.1)

2012/05/18 YMU/HWF 7 Right to Health the right to health means: availability, acceptability, accessibility and quality available in sufficient quantities. acceptable, both in terms of their usability and their appropriateness, given cultural and other factors. effective and of good quality. the lowest possible cost to facilitate access. 2012/05/18 YMU/HWF 8 BBC

2012/05/18 YMU/HWF 9 12 Largest Pharmaceutical Companies by revenue as of July 2009 in the Fortune Global 500 2012/05/18 YMU/HWF 10 Top 10 Global Generic Companies, 2008 (Representing 47% of Global Market Share) Company Country Teva

Israel Sandoz Revenue (US$100M) Growth Rate 110.8 17.8% Switzerland 75.6 5.4% Mylan U.S.A.

51.4 92.7% Watson U.S.A 25.3 1.6% Ratiopharm Germany 24.4 5% Stada

Germany 24.2 4.8% Hospira U.S.A. 18 5.6% Actavis Iceland 18 0.6% Ranbaxy

India 17.2 6.5% Dr. Reddys India 13.7 9.5% 2012/05/18 Sources: Scrip IT IS/DCB YMU/HWF 11 2005 20

1 Pfizer 11 Eli Lilly and CO 2 Sanofi-Aventis 12

3 GlaxoSmithkine 13 Bristol-Myers Squibb 4 Novartis Group 14 Johnson & Johnson 5 Merck & Co 15

Abbott Laboratories 6 Roche Group 16 7 AstraZeneca 17 8 Bayer 18

Takeda Pharmaceutical 9 19 10 Wyeth 20 source 2006<< >>

2012/05/18 YMU/HWF 12 Market Values of Big Pharmaceutical Companies and GDP of Selected Countries 2012/05/18 YMU/HWF 13 2012/05/18 Public Citizens Congress Watch YMU/HWF 14

2012/05/18 Public Citizens Congress Watch YMU/HWF 15 Pharmaceutical Market Structure in Taiwan Unit: NT$1M Year 2003 2004 2005 2006 2007 Local companies

24,866 26,923 27,855 27,009 25,561 MNC/Imported 69,680 76,229 76,469 81,028 84,141

Total 94,546 103,152 104,324 108,037 109,702 Market share of local companies 26.3% 26.1% 26.7% 25.0%

23.3% 2007 Market Structure Unit:NT$1M Hospital segment the major market (78%) Drugstores the next (14%), the rest are clinics (8%) Foreign companies: Foreign local companies by values - 7:3 Local Foreign companies: local companies by quantity - 3:7 100% 3021 80% 60%

70843 10249 40% 5916 20% 0% 14716 Hospitals 4957 Clinics YMU/HWF Source 2008 Biomedical industry Almanac 2012/05/18

16 2. Affordable Price 2012/05/18 YMU/HWF 4. Reliable Health and Supply System 3. Sustainable Financing Access 1. Rational Selection Four Elements in Access to Essential Medicines 17 Four Elements

in Access to Essential Medicines 1. Rational Selection 3. Sustainable Financing Access 2. Affordable Price 2012/05/18 YMU/HWF 4. Reliable Health and Supply System 18 WHO: Progress of WHO Member in Developing National Drug Policies and in Revising Essential Drugs Lists Geneva: World Health

Organization, 1998. WHO 2012/05/18 YMU/HWF 19 Structure of Pharmaceutical Industry Multinational Companies (MNCs): Aggressive professional marketing, huge and continuous investment in R&D, Highly profitable industry, Political-economic complex in capital market, Production facilities and network, Intellectual Property Right Protection under WTO framework Containment of MNCs influence in developing countries: Import control, essential drug list, incentives for local production and export, national pharmaceutical companies 2012/05/18

YMU/HWF 20 Issues Related to Pharmaceutical Industry Over-use and misuse Illegal or hazardous distribution: Illicit trade of heroin, cocaine, amphetamine dumping of counterfeit drugs, diversion of philanthropic drugs Role of government (public sector and private sector in production and distribution): manufacture of narcotic drugs, national pharmaceutical companies, protection of domestic manufacturers, restricting operation of foreign investment companies Drug pricing (including international price transfer) Equity, availability and accessibility R&D and profitability Harmonization of regulatory requirements and market approvals TRIPS/WTO 2012/05/18 YMU/HWF

21 Oxfam International & Health Action International 2012/05/18 YMU/HWF 22 Oxfams Criticism on EU IP Measures 1. Introducing TRIPSplus rules (IP rules that exceed obligations under WTO rules) through agreements, especially free trade agreements (FTAs) with developing countries. 2. Exerting bilateral pressure upon developing countries to prevent the use of TRIPS public health safeguards to reduce medicine prices. 3. Leading on a new global framework to enforce IP rules, within which elements of European legislation are resulting in the seizure of generic medicines in transit, intended for developing countries.

2012/05/18 YMU/HWF 23 Oxfams Recommendations 1. The European Commission and EU Member States should honor commitments under the MDGs, the Doha Declaration on TRIPS and Public Health, and relevant World Health Assembly (WHA) resolutions on innovation and access to medicines, including full implementation of the WHO Global Strategy and Plan of Action. 2. The EU should ensure its trade policy is in line with its development objectives, including specifically enhancing access to health care and access to medicines. This includes ensuring that trade rules, whether multilateral, regional, or bilateral, exclude essential public services such as education, health, and water and sanitation from liberalization commitments.19 EU Member States must act to hold the EC accountable when the EC fails to uphold these principles. 2012/05/18 YMU/HWF

24 With respect to IP 3. With respect to IP: The EU and Member States should not misuse FTAs to introduce TRIPS plus IP rules in developing countries to extend monopoly protection and introduce new enforcement measures, which limit access to medicines. The European Commission should stop exerting pressure on governments that attempt to introduce safeguards and flexibilities to protect and promote public health. The European Commission should amend its counterfeiting regulation to ensure it does not have a detrimental impact on developing countries, by excluding border measures for violations of pharmaceutical patents, especially for medicines in transit. 2012/05/18 YMU/HWF 25 With respect to IP

The EU should ensure that the AntiCounterfeiting Trade Agreement (ACTA) does not set a new global standard for intellectual property rules (IPR) that impedes access to medicines in developing countries. Therefore, the EU should ensure that patents are excluded from any agreed framework. The European Commission and Member States should identify and support other measures to improve access to generic medicines in developing countries, including the UNITAID patent pool for HIV and AIDS medicines. 2012/05/18 YMU/HWF 26 With respect to IP European donors, including the Commission, should scale up financial contributions to R&D to address diseases that disproportionately affect people living in developing countries, especially through alternative funding mechanisms that promote therapeutic innovation. The EU should also support Product Development

Partnerships (PDPs) that are designed to deliver affordable and effective new products, and it should continue building R&D capacity in developing countries. 2012/05/18 YMU/HWF 27 With Respect to R&D 4. With Respect to R&D The EU should support the implementation of the World Health Organizations Global Strategy and Plan of Action (GSPA) on Public Health, Innovation and Intellectual Property, and support the Expert Working Group in its efforts to explore new models of innovation that increase both innovation and access. The European Commission should take appropriate measures to ensure that specific initiatives such as the Innovative Medicines Initiative (IMI) meet real health needs, and that both the IMI and the EUs regulation on childrens medicines can also be to the benefit of developing countries.

2012/05/18 YMU/HWF 28 Oxfam International & Health Action International 2012/05/18 YMU/HWF 29 Indicative annual per person triple therapy drugs prices - selected developing countries (US $) $10,000 $8,000 UN Drug Access Initiative $6,000 Domestic production

$4,000 Accelerated access initiative $2,000 February-March 2001 offers $0 1996 2012/05/18 1997 1998 YMU/HWF 1999 2000 2001

2002 30 TRIPS and Pharmaceuticals The rules To Create a harmonized global system under which inventors are granted exclusive marketing rights for a minimum of 20 years for new and inventive products. Enforcement of a countrys compliance with TRIPS is ensured through the WTO dispute procedure, which places the burden of proof on the defendant. 2012/05/18 YMU/HWF 31 TRIPS and Pharmaceuticals Countries failing to meet their obligations can be subjected to trade sanctions.

Fully integrates sectors such as biotechnology and pharmaceuticals into the global regime. Prior to TRIPS, approximately 50 developing countries and several developed countries either excluded medicines from being patented, or provided patents only for production processes rather than products. 2012/05/18 YMU/HWF 32 What is TRIPS plus? The US government policy to push developing countries into passing 'TRIPS plus' national legislation. These are laws based on the most restrictive interpretation of TRIPS, purged of the original safeguards, and containing levels of IP protection that go well beyond anything mandated by TRIPS. The aim of the US government is to provide the

longest possible period of effective protection for its corporations. 2012/05/18 YMU/HWF 33 What is TRIPS plus? The threat to developing countries is unilateral trade sanctions, which can be authorised either by Section 301 of the US Trade Act, or by a WTO Dispute Settlement panel in the event of a TRIPS violation. The US government also uses bilateral and regional trade agreements to induce countries into accepting the patent rules sought by US companies, and then binds them into those commitments. 2012/05/18 YMU/HWF 34

How the US TRIPS strategy works The US strategy employs three mutually reinforcing instruments: unilateral US investigation and sanction under Section 301 of the US Trade Act bilateral IP treaties, and bilateral and regional trade instruments containing IP provisions which specify in detail what national laws should be TRIPS, backed by the WTO enforcement mechanisms 2012/05/18 YMU/HWF 35 Section 301 301 requires the USTR annually to identify countries that deny adequate IP protection to US firms and, depending on the perceived severity, to warn those countries to shape up, to present them a plan for progress, or to apply trade sanctions.

In the case of medicines, the office of the USTR bases its assessment and grading on information supplied by PhRMA. Section 301 also allows the USTR to act against countries opposing the IP policies of the US government in multilateral organisations. 2012/05/18 YMU/HWF 36 * Prospective impacts of the EU Peru FTA, employing the same methodology, are similar to findings in Colombia. These studies were commissioned during the EUAndean community trade negotiations. After objections by an alliance of Latin American and European civil society,69 and the countries in question, TRIPS-plus rules have been modified to reduce

public health impacts on negotiating partners. Oxfam International & Health Action International 2012/05/18 YMU/HWF 37 Oxfam International & Health Action International 2012/05/18 YMU/HWF 38 Oxfam International & Health Action International 2012/05/18

YMU/HWF 39 Issues in Pharmaceutical Innovation Economic/industrial development Intellectual property protection Regulatory requirement and approval Pricing and reimbursement in health insurance Public assess to pharmaceutical innovation availability, acceptability, accessibility and quality 2012/05/18 YMU/HWF 40 Stakeholders

Biotechnology sector Generic drugs industry Civil society groups, A group of developing countries Universities Governments Non-profit foundations and/or organizations 2012/05/18 YMU/HWF 41 DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) Adopted on 14 November 2001 1.

2. 3. We recognize the gravity of the public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics. We stress the need for the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems. We recognize that intellectual property protection is important for the development of new medicines. We also recognize the concerns about its effects on prices. 2012/05/18 YMU/HWF 42 DECLARATION ON THE TRIPS AGREEMENT

AND PUBLIC HEALTH (DOHA DECLARATION) Adopted on 14 November 2001 .. the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members right to protect public health and, in particular, to promote access to medicines for all. ..the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose. 2012/05/18 YMU/HWF 43 DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) Adopted on 14 November 2001 These flexibilities include:

a) .each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles. b) Each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted. 2012/05/18 YMU/HWF 44 DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) Adopted on 14 November 2001 c) Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.

d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4. 2012/05/18 YMU/HWF 45 DECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) Adopted on 14 November 2001 We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002. . .the least-developed country Members will not be obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to

enforce rights provided for under these Sections until 1 January 2016. 2012/05/18 YMU/HWF 46 Public health, Innovation and Intellectual Property Rights REPORT OF THE COMMISSION ON INTELLECTUAL PROPERTY RIGHTS, INNOVATION AND PUBLIC HEALTH 4/25/2006 WHO 2012/05/18 YMU/HWF 47 WHO

2012/05/18 YMU/HWF 48 Thank you for your attention [email protected] 2012/05/18 YMU/HWF 49 COPYRIGHT DECLARATION PAGE 9 10 WORK

LICENSE AUTHOR/SOURCE BBC http://www.bbc.co.uk/news/health-13751809 Wiki List of pharmaceutical companies http://en.wikipedia.org/wiki/List_of_pharmaceutical_compani es Visited 2012/07/03 13 14 This work is from "Drug Industry Most Profitable Again" Public Citizens Congress Watch April 11, 2001, p4 This work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET. 15

This work is from "Drug Industry Most Profitable Again" Public Citizens Congress Watch April 11, 2001, p5 This work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET. 2012/05/18 YMU/HWF 50 COPYRIGHT DECLARATION PAGE WORK LICENSE AUTHOR/SOURCE 16

NTU Weng-Foung Huang 17 NTU Weng-Foung Huang 18 NTU Weng-Foung Huang 19 WHO p9 http://apps.who.int/medicinedocs/pdf/whozip16e/whozip16e.pdf This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 22 Oxfam International & Health Action International http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf

This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 29 Oxfam International & Health Action International http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 30 2012/05/18 NTU Weng-Foung Huang YMU/HWF 51 COPYRIGHT DECLARATION PAGE

37 WORK LICENSE AUTHOR/SOURCE Oxfam International & Health Action International http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 38 Oxfam International & Health Action International http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 39

Oxfam International & Health Action International http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf This work is used subject to the fair use doctrine of Article 46, 50, 52, 65 Taiwan Copyright Act by GET. 48 WHO http://www.who.int/intellectualproperty/documents/thereport/CIPIH23032006.pdf This work is licensed by WHO for the use of Essentials of Global Health ONLY. The copyright belongs to the above mentioned creator(s) and GET does not have the authorization right. 2012/05/18 YMU/HWF 52

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