Cost Containment Opportunities and Intellectual Property Regulation

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Cost Containment Opportunities and Intellectual
Property Regulation

• PAHO Working Group Consultation
• Access to Essential Public Health Supplies
• Washington, DC, 10-11 June 2004
• (Presentation by
• Jorge Bermudez, MD, PhD, Director, National
  School of Public Health, Brazilian Ministry of
  Health)

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Scope of the presentation

• Access, innovation and cost-containment
  mechanisms
• IPR data in the Region of the Americas
• Ongoing initiatives to scale-up and expand access
  to care, involving IPR

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Dimensions of Access

• Availability
• Accesibility
• Accomodation
• Affordability
• Acceptability
• Source Penchansky Thomas, 1981

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Changing patterns of innovation

• Incrementally modified drugs (IMD) accounted for
  60 of new products launcehd in the USA from 1989
  to 2000
• The mean price per prescription of IMD products
  relating to older drugs had a significant
  increase, approaching the price of more
  innovative drugs
• New incrementally modified versions of brand
  drugs are agressively promoted before patent
  expiry, persuading doctors to switch, thus
  transfering brand loyalty and hindering them from
  generic competition
• Source NIHCM Foundation, 2002

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Cost-containment mechanisms

• Cost-effective medicine selection and supply
  systems
• Price information
• Tendering and adequate procurement
• Voluntary discount agreements
• Voluntary licensing
• Compulsory licensing
• Local state production
• Government price control or regulation
• Reduction of import and other taxes
• Public investment in RD for new medicines
• Adapted from Velasquez, Correa Weissman (EDM
  Series No. 13)

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IP protection effects on Access

• Availability Innovation could be stimulated and
  better therapeutic options may become available
  to the public
• Acceptability New drugs may be perceived by
  users as better therapies (whether they are or
  not)
• Affordability a raising effect on drug prices
  (market exclusivity period)

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Scope of the presentation (2)

• Access, innovation and cost-containment
  mechanisms
• IPR data in the Region of the Americas
• Ongoing initiatives to scale-up and expand access
  to care, involving IPR

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(No Transcript)
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Were TRIPS safeguards included in the patent
legislation of selected study areas?
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Were TRIPS safeguards included in the patent
legislation of selected study areas?
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Compulsory Licensing Under which conditions can
compulsory licenses be granted?

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Compulsory LicensingUnder which conditions can
compulsory licenses be granted?

Governmental Use
(CONTINUA)
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Compulsory LicensingUnder which conditions can
compulsory licenses be granted?

Governmental Use

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Conclusions

• Countries are not taking full advantage of the
  TRIPS safeguards.
• They may still improve their legislation by
  including or expanding the scope of TRIPS
  safeguards in order to achieve better public
  health outcomes (access to medicines).

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Brazil the recent process of price negotiation
for ARV

• Context The Constitution in Brazil ensures
  universal, free and equitable access to the
  Health System (SUS). Law 9.313 of 13/11/96
  established the commitment for free treatment for
  PLWHA. The MOH offers 14 ARV for universal
  treatment, of which 3 medicines Efavirenz
  (MSD), Nelfinavir (Roche) and Lopinavir/ritonavir
  (Abbott) are responsible for R 358 millions in
  2003, that is, 63 of the costs with ARV in the
  country.

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Related actions

• Setting up of the MOH Working Group for
  negotiation
• Identifying the global world capacity for
  manufacturing the medicines
• Visit of professional staff members from
  Far-Manguinhos to the industrial sectors in India
  and China, aiming to discuss the possibilities
  for importation and technology transfer.
• Presidential Decree, changing the IP Law,
  permiting importation (not necessarily from the
  patent owner), in case necessary.
• Presidential Decree declaring situation of
  national emergency, in case necessary.
• (Emission of COMPULSORY LICENSE within the terms
  of the WTO TRIPS Agreement ...)

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Scope of the presentation (3)

• Access, innovation and cost-containment
  mechanisms
• IPR data in the Region of the Americas
• Ongoing initiatives to scale-up and expand access
  to care, involving IPR

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WTO Agreements relevant for Health purposes

• TRIPS (Trade-Related Aspects
• of Intellectual Property Rights)
• TBT (Technical Barriers to Trade)
• GATS (General Agreement on Trade in Services)
• SPS (Sanitary and Phytosanitary Measures)

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Official USA position in the FTAA
(http//www.ustr.gov/regions/whemisphere/intel.htm
l)

• Limits the circunstances in which FTAA countries
  can use a patented product or process (...)
• Addresses the limited situation in which generic
  pharmaceutical or agricultural chemical
  manufacturers can make, use or sell a patented
  product or process(...)
• Narrows the cathegories of products or processes
  for which, under the TRIPS Agreement, patents may
  be refused (...)
• Proposes that the grounds for revoking a patent
  be limited to the same grounds that would have
  justified a refusal to grant a patent.
  Furthermore, proposes to extend the term of a
  patent to compensate for unreasonable
  administrative or regulatory delays that ocurring
  while granting the patent.

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Recent and relevant initiatives

• Política de Medicamentos para el MERCOSUR,
  Bolivia y Chile (Acuerdo N.5/00), 2000.
• G-15 Brasilia Declaration, June 2002 (Venezuela
  Chairman pro-tempore).
• India-Brazil-South Africa (IBSA) Dialogue Forum
  Trilateral Commission meetings 2003/ 2004.
• UNDP, Brazil Project IPR and Development of
  capacity to increase access to medicines.
• Technical assistance for national responses to
  HIV/AIDS in Latin America Latina and the
  Caribbean (GCTH, WHO and UNAIDS).
• PAHO Working Group, Managua, NICARAGUA, 14 to 16
  April 2004.
• PAHO Access to Medicines Working Group convened
  Washington, USA, 10 to 11 June 2004.

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Acuerdo N.5/00 MERCOSUR (Patentes)

• Se prevé (...), un impacto significativo en los
  costos (...), en decorrencia del monopolio
  patentario ...
• Se propone
• El estudio, en cada Estado Parte, sobre el
  impacto del reconocimiento de patentes en el
  acceso a los medicamentos
• El estudio de las legislaciones actuales en la
  perspectiva de alternativas viables para un mejor
  abastecimiento de los medicamentos bajo patente,
  considerados esenciales a la población de la
  región
• La acción conjunta de los Estados Partes y
  Asociados en el sentido de la flexibilización de
  las exigencias patentarias, en casos de alta
  relevancia para la salud.

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IBSA Trilateral Commission Meeting. New Delhi,
4-5 March 2004

• 45. In the course of discussions, which followed
  the presentations, the following points of
  agreement emerged-
• The national statutory frameworks of the three
  countries should reflect all the flexibilities
  allowed for by the WTO TRIPS Agreement, Doha
  Ministerial Declaration ...
• The bilateral/multilateral trade agreements,
  which are TRIPS Plus should be opposed.
• To take all steps (...) to strengthen indigenous
  manufacturing capacities ...
• To leverage the opportunity provided by the
  setting up of the WHO Commission on IPR,
  Innovation and Public Health (WHA56.27) to put
  across the commonly agreed point of view of the
  three countries ...

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Expanding the IBSA Trilateral Forum (57th WHA
meetings)

• Preliminary proposal for the establishment of a
  network of technical cooperation on HIV/AIDS
  among 6 countries (South Africa, Brazil, PRC,
  India, Russia and Thailand)
• A joint Declaration of Commitment to be signed in
  Bangkok, July 2004 (XV International Conference
  on AIDS), followed by bilateral agreements
  involving PPP
• Preparing interventions for the 114th WHO
  Executive Board Session (24 to 27 May 2004)

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HIV/AIDS Scaling up treatment and care within a
coordinated and comprehensive response to HIV/AIDS

• The Fifty-seventh WHA (proposal agreed),
• URGES Member States, as a matter of priority
• (6) To encourage that bilateral trade agreements
  take into account the flexibilities contained in
  the WTO TRIPS Agreement and recognized by the
  Doha Ministerial Declaration on the TRIPS
  Agreement and Public Health

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In conclusion keep awareness in Regional,
multilateral and bilateral trade agreements
(mantaining IPR within WTO and reaffirming the
Doha Ministerial Declaration on the TRIPS
Agreement and Public Health)

• IPR and Drug registration (linkage?)
• Data exclusivity blocks competition
• Extension of patent protection
• New use restricting access
• Compulsory licensing limitations

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Health right as a human right

• The warranty of such a right involves access to
  health services, health prevention, health care
  and health therapies that includes access to
  drugs (UNHCHR, 2000/7)