TRIPS and Public Health: Thailand’s

Compulsory Licenses over Patented Drugs for

Chronic DiseasesDecember 2, 2013

BySakda Thanitcul

I. Introduction

TRIPS and flexibility (Article 31)Public health crisis

Access to essential medicines “Breakthrough (Blockbuster)” patented drugs

- Infectious diseases (HIV/AIDS, malaria, tuberculosis)

- Chronic diseases (Coronary heart disease, strokes, cancers, chronic lung disease, diabetes)

Compulsory licenses

Why there is a problem?

Thailand’s authorization of compulsory licenses for

1. First line HIV/AIDS patented drug

(Efivarenz, Merke)

2. Second line HIV/AIDS patented drug

(Kaletra, Abbot)

3. Heart disease patented drug

(Plavix, Sanofi-Aventis)

“Public non-commercial use” for

1. Civil servant medical benefit scheme

2. Social security scheme

3. Universal coverage scheme

How compulsory licenses work in Thailand

1. Department of Disease Control issues Notification (Shorei) entrusting CL to Government Pharmaceutical Organization (GPO)

2. GPO imports generic drugs from India.

3. GPO sells imported generic drugs to state hospitals.

4. State hospitals dispense drugs to patients.

WHO’s Report on “Double Burden”

35 million annual deaths due to non-communicable diseases in 2005.

41 million in 2015

80% of 35 million were in low-and-middle income country

In 2010, India will have the largest number of diabetics

Double Burden vs. Trade Benefit

Double burden

- 2015, China will lose $ 131 billion

- 2015, India will lose $ 54 billion

Trade benefit

- 2015, China will gain $ 287 billion from free trade

The shrinking trade gain → to put at risk the whole intellectual property right system ??

Thailand

GSP (General System of Preference) vs. Public Health

MOC vs. MOPH?

II. Policy Choices to Bring down Prices of Patented Drugs

1. Use competition laws

- Article 8 (abuse of IPRs; Morton Salt v. Suppiger)

- Article 40 (misuse of licensing agreeement; Microsoft II)

- Article 8 (United States v. Glaxo Group)

- South AfricaHazel Tau et al. v. Glaxo Smith Kline and Boehringer

Ingelheim (settled in 2003)

- Can Thailand use a competition law? Inexperienced, weak institutional arrangement Complicated proceedings The change of facts

- CanadaParadise Pharmacy, Inc. v. Novartis Pharmaceuticals

Canada, Inc.(2004 Comp. Trib. 21)

2. Use price control laws

Sugar, instant noodle, cooking oil or student uniform

Patented drug (ingredient, marketing and R&D)

OECD except the U.S. has price control mechanism on prescription drugs

Thailand removed the “drug patent committee” from its patent law

Canada uses “median price”

2. Use TRIPS’ flexibility (Article 31) and the Doha Declaration

Efavirenze: 1,400 Baht ($40) down to 650 Baht ($18)

(500,000 patients)

Kaletra: down 80%

Plavix: accessibility 6-12 times higher

(300,000 patients) 2007 – 2011

84,000 patients could access 7,000 m. Baht (200 m.) was saved

III. Are the Thai Government Measures TRIPS – Consistent?

Article 31 requirementsChapeau – the national law allows compulsory licensingSpecific (a) Considered on its merit

(b) “National emergency” or “circumstances of urgency” or “public non- commercial use”, the requirements to negotiate with the patent holder is waived

(c) Use as initially authorized(d) Such use shall be non-exclusive(e) Such use shall be non-assignable(f) Such use shall be predominantly for domestic market(g) Such use must be reviewed(h) The rights holder shall be paid adequate compensation(i) Legal validity must be reviewed(j) Compensation must be reviewed

Note:

(1) Paragraph 6 of the Doha Declaration makes (f) and (h) more flexible

(2) Compulsory licensing under Article 31 is an important tool for negotiation (e.g. Brazil)

(3) Mozambique, Zimbabwe, Zambia, Malaysia, Indonesia, Guinee and Eritrea actually used compulsory licensing over HIV/AIDS patented drugs.

Legal problems with “Plavix”

1. Does Thailand have to negotiate with Sanofi-Aventis? GPO is “for-profit” entity (Sanofi-Aventis) Paragraph 5(c) allows WTO members to identify “national

emergency” and “circumstances of extreme urgency” not “public non-commercial use” (Sanofi-Aventis)

Paragraph 4: Article 31 should be interpreted… to protect public health (Thai government)

2. Are chronic drugs included in the Doha Declaration? Paragraph 5(c) specifies HIV/AIDS, tuberculosis, malaria, and other

epidemics (Sanofi-Aventis) The U.S. Representative’s initial position limited solution to

HIV/AIDS, tuberculosis, and tuberculosis (Carlos Correa)

IV. TRIPS and Future Public Health Crisis: Thailand Test China, India behave economically rational in the future

– shake the WTO system?

Test the ability of TRIPS and pharmaceutical industry to adapt to the “double burden” occurring in developing countries

Thailand, export benefit vs. public health

Thank You Very Much for Your Kind Attention!!