March 8, 2007 Geneva Q&A Session on Thai White Paper

Knowledge Ecology International: Q&A Session on Thai White Paper (Facts and Evidences on the 10 Burning Issues Related to the Government Use of Patents on Three Patented Essential Drugs in Thailand)

Geneva, Switzerland
8 March 2007

Thiru Balasubramaniam

On Thursday, 8 March 2007, Knowledge Ecology International (KEI) convened a briefing on the Thai White Paper entitled “Facts and Evidences on the 10 Burning Issues Related to the Government Use of Patents on three Patented Essential Drugs in Thailand”, a 96 page government document ( Paper CL-EN.pdf) detailing the public policy rationale behind the Royal Thai Government’s actions in issuing non-voluntary licenses for efavirenz (Stocrin), lopinavir+ritonavir (Kaletra) and clopidogrel (Plavix).

The main discussant in this meeting was Dr. Suwit Wibulpolprasert, Senior Advisor on Health Economics, Ministry of Public Health, Thailand.  Twenty-two participants attended the briefing including officials from Belgium, Bolivia, Brazil, China,the European Commission, France, Thailand and the United Kingdom, international civil servants from the World Health Organization (WHO) and the World Trade Organization, representatives from non-governmental organizations including the International Centre for Trade and Sustainable Development (ICTSD), Knowledge Ecology International (KEI), Médecins san Frontières (MSF) and Third World Network (TWN), the publication IP-Watch and the pharmaceutical industry.  This session was chaired by KEI Geneva Representative, Thiru Balasubramaniam.

Dr. Suwit kicked-off the meeting by underscoring the importance the Government of Thailand attached to providing their citizens universal access to treatment, an inalienable right enshrined by the Thai National Security Act (2002).  At the heart of Thailand’s actions in issuing non-voluntary licences for efavirenz, lopinavir+ritonavir and clopidogrel lay the goal of providng these medicines to all Thai citizens in need of these products.  Efavirenz and lopinavir+ritonavir are anti-retrovirals and clopidogrel is an “anti-platelet drug which is at least as effective as or more effective than Aspirin in preventing coronory obstruction” (Thai White Paper, 2007).  Under the National Security Act of 2002, Dr. Suwit outlined that 62 million Thais enjoyed universal access to drugs on Thailand’s essential drug list through one of three public health insurance schemes, i.e. (1) the Civil Servant Medical Benefit Scheme,  (2) the Social Security Scheme, and (3) the Universal Coverage Scheme (the gold card scheme).  The Civil Servant Medical Benefit Scheme covers 5 million civil servants,  the Social Security Scheme covers 8.5 million people and the gold card scheme covers 48.5 mission people.

Dr. Suwit noted that currently, only 2 million people in Thailand can afford to pay out of pocket for expensive medicines that are often patented. He stressed that the issuance of non-voluntary licenses for Stocrin, Kaletra and Plavix for government use applied only to people covered by three government-backed health insurance schemes; prior to the compulsory licences, people on the government schemes who needed access to Stocrin, Kaletra or Plavix could not access them as the government could not afford to pay for these patented medicines.   Thus, Dr. Suwit noted, that the compulsory licences opened up a new market for these 3 drugs among a huge pool of 62 million people.  In theory he noted that the compulsory licences should not affect the market of 2 million people who could afford to pay out of pocket for the three patented medicines.

Dr. Suwit reminded the audience that on 29 November 2006, Thailand issued its first compulsory licence for efavirenz.  Prior to the compulsory license, the price per tablet of efavirenz was $1.35; the new price is 60 cents a tablet.  Thailand placed an order for 66,000 bottles of efavirenz from the Indian company Ranbaxy.  The first batch 0f 16,000 bottles arrived in late January.  According to the Thai White paper, the new price (reduced by by more than half) will permit the government to provide efavirenz to 20,000 more patients in Thailand living with HIV/AIDS.

After the Thai announcement of a compulsory licence for efavirenz, Merck announced a global price reduction from $1.35 per pill to 72 cents a pill.  Dr. Harvey Bale Jr., Director-General, International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) cautioned however that the Merck announcement should not be perceived as a direct cause and effect of the Thai decision but as part of a more gradual series of 3 price reductions offered by Merck. Dr. Suwit noted that whatever the case, since the issuance of 3  compulsory licences, his phone was “ringing off the hook” due to companies willing to negotiate price reductions on their products including Sanofi-Aventis (which markets clopidogrel) and Abbott (which markets lopinavir+ritonavir).  One company offered Thailand a “buy 1 get 9 free” deal.

Eric Sayettat, Counsellor from the French Mission to the WTO, noted that his country “favoured dialogue over measures such as a compulsory licensing which were viewed like nuclear deterrents”.  He then posed the question to Dr. Suwit as to whether Thailand could have achieved the same results (i.e. price reductions) without the issuance of compulsory licensing.

Dr Suwit responded by saying that 2 years of prior negotiations with the pharmaceutical companies had failed.  After the issuance of the 3 compulsory licenses, however, offers from the industry for voluntary price reductions had been pouring in non-stop.  Dr. Suwit stressed that that from the Thai perspective, less than 15% of patented drugs marketed in Thailand would be considered candidates for government using noting that many patented drugs are “me too drugs” that do not offer much therapeutic improvement over “existing low priced non-patented drugs”.  With respect to the issuance of further non-voluntary licences, he noted that further candidates for government use would have to past the muster of the joint “Subcommittee for Implementing the Government Use of Patents on Essential Patented Drugs” comprising of 21 members which met strict public helath criteria.

According to Dr. Bale (IFPMA), there was a perception that there was no “serious discussion between governments and the research-based pharmaceutical industry” noting that second line ARVs were often priced below the generic price.  Mr. Sayettat (France) further reiterated that the pharmaceutical industry offers differential pricing for products based on countries’ respective incomes.

Dr. Suwit responded by saying that Thailand was a developing country with a national health insurance scheme.  He asserted that everyone in Thailand is entitled to access to essential medicines noting “we have a polticial and social obligation”.  He stressed that contrary to popular opinion, the major impetus behind the compulsory licences were not to save money in the health budget but rather to “increase patient access to essential drugs”.  He noted that the Thai government spent 40 million baht alone for its 5 million civil servants.

Riaz Tayob from Third World Network (TWN) asked Dr. Suwit as to how he perceived the effects of the compulsory licences on mortality and morbidity as a result of increased access. Dr. Suwit responded by stating that data still need to be collected and analyzed in order to provide answers to the queries on morbidity and mortality.  Sangeeta Shashikant (TWN) emphasized that in the Malaysian context, prior negotiations clearly did not work before Malaysia issued compulsory licences for AZT, ddI and combivir in 2004.  The compulsory licences achieved an 81% reduction in the price of these ARVs.  She noted that the TRIPS Agreement was quite clear that the requirement for prior negotiation contained in Article 31 (of the TRIPS Agreement) was waived for cases involving government use.  She also noted that compulsory licenses were routinely employed in industrialized countries.

Guilherme Patriota, Counsellor from the Permanent Mission of Brazil the United Nations, took the floor noting that Brazil was “to a great extent supportive and understanding” of Thailand’s recent decisions.  He underscored that the fact that “Thailand made use of an instrument that was part and parcel of the IP system”.  He noted that if one looked back a few decades, one could observe that some countries (developing and industrialized) excluded pharmaceuticals from patenting.  Mr. Patriota state that after the advent of TRIPS, developing countries accepted the 20 year term for patented inventions including pharmaceuticals with the understanding that compulsory licensing operated in concert with patent monopolies to achieve a balanced system.  He stressed that the demonization of countries that employed compulsory licensing was unacceptable concluding with this phrase, “stick to the bargain!”

David Vivas (ICTSD) thanked the Thai government for its initiative in writing up the 96 page White Paper noting it as a model of gentleness and transparency.  Mr. Vivas reminded the participants that compulsory licensing has been part of the international architecture of industrial property law since the Revision of the Paris Convention of 1925.  He pointed to a study by Professor Jerome Reichman of Duke University which found that the United States was the largest user of compulsory licences with around 1000 compulsory licences issued.  Mr. Vivas noted that a compilation of national experiences with compulsory licensing would be helpful to the debate.  Dr. Bale from IFPMA characterized the KEI Research Note “Recent examples of the use of compulsory licenses on patents”  as biased because of its numerous references to non-health related patents including hybrid transmissions and computer technologies.  Thiru Balasubramaniam (KEI) countered by noting the numerous references to pharmaceutical licences in the report, in particular, the French amendment to its patent law in response to the high prices of the breast cancer diagnostic tests charged by Myriad over the BRAC1 and BRAC2 genes.  He further noted that the inter-governmental organizations represented at the briefing including WHO and WTO be requested to do a compilation of national examples of the use of compulsory licenses on patents.

Fernando Antezana Araníbar, Chair of the WHO Executive Board (Bolivian national), emphasized to participants that “Thailand did not have to present the 96 page White Paper, but it chose to which spoke not only of transparency but to Thailand’s generosity and courage”

Thiru Balasubramaniam (KEI) concluded the meeting by thanking Dr. Suwit Wibulpolprasert for briefing the Geneva community and noted that “Thailand was a shining example and embodiment of the spirit of the Doha Declaration which called upon WTO Members to protect public health and promote access to medicines for all”.