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Middle-Income Countries Flex Muscles to Overcome Patents in Face of Unaffordable Drug Prices

Washington, DC, 25 July 2012 —Middle-income countries are increasingly taking measures to overcome the patents that price drugs out of reach, according to a new report released today from the international medical humanitarian organisation Médecins Sans Frontières (MSF), "Untangling the Web of Antiretroviral Price Reductions". 
» DOWNLOAD & ACCESS on online version of "Untangling the Web" at utw.msfaccess.org
In March, India for the first time issued a ‘compulsory licence’ to override a drug patent on the cancer drug sorafenib tosylate, produced by Bayer. The move sets an important precedent for access to ARVs that are unaffordable. China has also just confirmed its mechanism to override patents.
“Our report shows that the newest HIV drugs are now patented in India, the pharmacy of the developing world, and this blocks the production of more affordable generic versions that we need for some of our patients,” said Nathan Ford, Medical Director of MSF’s Access Campaign. “The power balance has to change as developing countries begin to make use of their rights to overcome patents when monopoly sellers price their drugs out of reach. For this reason, we fully support countries like India that are using their new patent laws to deal with monopoly abuses. If high prices prevent access to life-saving medicines, they override them.”
The newest ARVs are unaffordable: a triple combination of the three drugs raltegravir, etravirine and darunavir boosted with ritonavir for people who have failed a second-line regimen, costs $2,486 per person per year in least-developed countries and sub-Saharan Africa—nearly 15 times the price of a first-line regimen. Meanwhile, middle-income countries pay many times more: MSF’s HIV and TB treatment program in India pays more than $2,147 per patient per year for just the drug raltegravir; in El Salvador the drug etravirine alone costs $6,917, while darunavir costs $8,468 per year in Georgia.
Additionally, over the last two years, lower-middle- and middle-income countries have been locked out of company discount programmes and are forced to negotiate prices on a case-by-case basis, which has lead to higher prices. "Untangling the Web" shows that the patient-friendly one-pill-a-day combination of TDF/FTC/EFV (produced by Merck/BMS/Gilead) for the last five years has remained at $1033 in lower-middle income countries, six times more than the generic first-line combination, and countries locked out of these discounts must pay many times more.
Lower-middle-income and middle-income countries are also increasingly being blocked from accessing medicines produced under voluntary license agreements between multinational pharmaceutical companies and generic manufacturers, where the terms and conditions are largely kept secret. The report finds that there is no voluntary license agreement for ARVs that covers all developing countries.
“Multinational companies are trying to give the impression that with voluntary license agreements, all HIV drug access problems are solved, but our report shows that some countries are deliberately being left out, and there are other terms that restrict competition,” said Michelle Childs, Director of Policy/Advocacy at MSF’s Access Campaign.
Several of the newest ARVs are already priced out of reach because they have been patented in India, blocking the production of more affordable generic versions.
Until 2005, India did not grant patents on medicines which allowed free competition among generic producers. This helped drive prices down by 99% for the first generation of ARVs, from more than $10,000 per person per year in 2000 to roughly $120 today.
While the country had to begin granting patents under WTO rules in 2005, India designed a patent law that is strict about what merits a patent. The law also allows any interested party to oppose a patent before or after it is granted. Such patent oppositions have already led to multiple ARV patents being rejected in India, such as for the drugs tenofovir and lopinavir/ritonavir.
In contrast, South Africa’s law is particularly lax about patenting, with 2,442 pharmaceutical patents having been granted in 2008 alone compared to just 278 in Brazil for the five-year period of 2003 to 2008.
“As more people need access to newer drugs that are priced out of reach, countries should take a close and hard look at their patent laws to make sure that monopolies aren’t being handed out left and right, with dire consequences,” said Childs. “The fact that countries are putting flexible mechanisms into place and are using these is a game-changer.”
MSF provides HIV treatment to 220,000 people in 23 countries. 

Highlights from Untangling the Web, 15th Edition:
• The price of tenofovir-based regimens is now nearly the same (when combined with nevirapine), or lower (when combined with efavirenz), than AZT-based regimens, for countries that can access generic versions because patents do not form a barrier, or where voluntary licences allow access to generic versions.
• The fixed-dose combination of TDF/FTC/EFV (produced by Merck/BMS/Gilead) – which is an adherence-friendly once-a-day pill – has remained priced at $613 and $1033 per patient per year (ppy) for lower-income and lower-middle-income countries, respectively, for the last five years. For middle-income countries, prices can be even higher, as most companies have eliminated their standardised discount programmes for these countries, in favour of case-by-case price negotiations.
• The price of the TDF/3TC/EFV co-pack of two pills to be taken once a day has come down by 20% since last year, to $113 ppy, making it the most affordable option of the WHO recommended first-line regimens, with the added benefit of once-daily dosing.
• Today’s most affordable second-line regimen (AZT/3TC + ATV/r) is priced at $399 ppy, down from $442 for last year’s most affordable combination. This however is still three times more than the most affordable first-line regimen. For countries where generic versions cannot be used because of patent barriers or because they are excluded from the geographical scope of the voluntary licences, the price can be many times higher.
To access the report online, visit utw.msfaccess.org
 
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