Ministério

da Saúde

Cristina de A. Possas

Research and Technological Development Unit

National STD, AIDS and VH Program

MOH - Brazil

Conference FDUSP UAEM

The Right to Health: the Role of Universities

in the access to medicines

São Paulo, August 17, 2010

Licensing for Access: Compulsory and

Humanitarian Licenses

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I. The dramatic global scenario

• Data (WHO/UNAIDS, 2007) indicate there are 33million HIV infected people in the world (70% arein Africa). Every year 2.5 million people getinfected and 2 million die of AIDS.

• Prospects for the future – The situation tends toaggravate with the economic crisis. It is estimatedthat with the aggravation of this scenario, by 2025around 67 million people will have died withAIDS in Africa since the beginning of theepidemics (UNAIDS AIDS Africa Project, ‏(2004

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• Challenge:

access to

ARV therapy

A human rights

issue

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III. Access: progress in drug development but

reduced impact on public health

• Contrasting with rapid innovation in ARV

development, 75% of HIV/AIDS patients in the

world still without access to continued treatment.

• Despite several international initiatives to

improve access, this situation tends to aggravate

with the recent economic crisis.

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IV. Price Trends

• TRIPS post-2005 scenario – compliance to

TRIPS with increased patent protection,

higher prices of ARV drugs and obstacles to

access

• Bilateral FTA agreements reducing TRIPS

flexibities

• Spiraling prices of second and third

generations of new patented ARV drugs

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Compulsory and humanitarian

licenses

• Increased patent protection limits the export

of active principles and production of

generics by India and China, the main

exporters to Brazil.

• Developing countries are becoming

increasingly dependant on humanitarian and

compulsory licenseseto reduce the prices of

ARV drugs.

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Another global constraint impacting

on prices: scarcity of API

• API producers remain basically the same, but international demand is increasing very fast

• Developing countries: Urgent need for a strategic supply and for building national production capacity for API

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Brazil: success of universal access

• 70% decline in mortality and 80% in

hospitalizations from 1996 to 2002

• Prevalence of 0,6% (2006)‏

• Low levels of resistance to ARV drugs when

compared to other countries (Brindeiro et al.)‏

• 80% of patients in treatment with undetectable

viral load (SISCEL 2009).

• The role of ARV in prevention

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Brazilian expenditure with ARV

• The annual expenditure by the government with ARV is US$ 400 million for 195.000 patients in treatment– 62% of total government expenditure with the epidemics (2009).

• Increased expenditure with 3rd line drugs – from 2005 to 2008 increased 352% - from US$ 20,4 million to US$ 71,6 million. Participation in total expenditure increased from 4,1% to 15,7%. Protected by patents and no generic competition.

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Brazil 2005: attempt for compulsory licenses

4 of the 17 ARV drugs distributed by the Ministry of Health:70% of expenditure

• Efavirenz (Merck, Sharp & Dome) –US$ 1,575/capsule – average cost of treatament/patient/year: US$ 574.80

• Nelfinavir (Roche) –US$ 0.468/capsule – average cost of treatament/patient/year : :US$ 1,537.00

• Lopinavir/ritonavir (Abbott) –US$ 1.30/ capsule – average cost of treatament/patient/year: US$ 2,847.00

• Tenofovir (Gilead Sci.) -US$ 7.68/ capsule – average cost of treatament/patient/year: US$ 2,803.00

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Economy of public ressources

• Economy of US$ 154,8 mi after compulsory license of Efavirenz in 2007 (drastic reduction of the price of the capsule from US$ 1,59 to US$ 0,45).

• After the oppostion to Tenofovir´s patent in 2009 the economy was US$ 23,7 mi

• Price negotiations from 2003 to 2010: economy was 154,8 mi

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Political impasse: compulsory

licensing is complex

• It is a flexility of TRIPS, but an exception

instrument (public interest, emergency), cannot be

a routine for all ARV drugs.

• In many developing countries, local governments

are often paralised by economic and political

pressures, legal uncertainties , in the compulsory

licensing process

• Brazil: several attempts of compulsory licensing

of ARV drugs before Efavirenz

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The issue of sustainability of

universal access to ARV in Brazil

• Concern: in spite of significant economy of public ressources

with compulsory license of Efavirenz in 2007 and more recently

the refusal of Tenefovir´s patent, the issue of sustainability

remains.

• Government expenditure with third line ARV drugs protected by

patents, consummed by only 3% of patients, is increasing

exponentially and is now equivalent to expenditure with first line

drugs consummed by 50% of patients.

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1.The need to conceive and implement

alternative incentives to innovation

• The main argument of multinational pharmaceutical enterprises is that moreflexible IPR and compulsory licenses will undermine their long term investments in R & D and innovation

• R & D Funds: divided between direct payment to patent owner and investiment in R & D Fund (Love, 2005). From a royalty of 3.5 per cent

– 2 per cent for patent owner

– 1.5 per cent for R & D Fund

– Patent owner would have participation in the Fund

• Patent pools for licensing – collaborative strategy for collective assessment of property rights – needs the involvement of industry

• A new system to pay for innovation – market for products separated from market for innovations: health products would be available to the consumer at generic prices, while innovators would benefit from a separated system (Medical Innovation Prize Fund)‏

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4. R & D Networks: South to

South Cooperations

• Friends of Development - WIPO

• Network for Technological Cooperation set by Brazil with several developing countries in XV AIDS Conference in Bangkok 2004

• Network for IPR Research - Portuguese Speaking Countries

• IBSA – India, Brazil and South Africa – HIV Vaccine and other areas of health research

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International trends

• On one hand, pressures from developing countries

for a more flexible IPR regime

• On the other hand, international movements led

by developed nations towards more strict IPR

regimes: bilateral commercial agreements signed

by U.S. with developing countries (TRIPS Plus)

such as Singapore, Morocco, Jordan

• Question: Which of these trends will prevail?

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The main issues

• How to conceive national legal systems tailored to

local needs: IPR and evolving industrial structure

• Maximum use of permitted flexibilities such as

compulsory and humanitarian licenses, freedom to

operate and research exemptions

• Innovation and enhanced technical capacity within

research institutions and universities.

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The impact of IP regimes

• The detrimental impact of dysfunctional IP

regimes is both economic and social, as

they ultimately affect both the pace of

innovation and the public benefits of

research.

• Free circulation of knowledge is crucial to

confront pandemics such as HIV/AIDS.

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The role of the university: topics for a

research agenda

• Alternative incentives to innovation: new regulatory strategies and new business models

• Clinical Trials: constraints from data exclusivity related to IP

• HIV Vaccines and IP – how to prevent future problems of prices and access (HPV and other)

• Harmonization and national specificities

• R & D Networks linking developing countries

• IP, Ethics and Human Rights: the role of civil society organizations

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Final considerations

• Urgent need to review international IP legislation and policies and to conceive more flexible IPR regime and alternative incentives to innovation.

• Need for stronger political pressures and new networking initiatives connecting developing countries

• Research Agenda in Universities and Institutes is key to support local decision making