Abbott Laboratories announced that it will not launch new medicines in Thailand [1] in response to the military-installed government’s decision not to honor the company’s patent for an AIDS drug. On January 29th 2007 the Thai Ministry of Public Health announced that it would issue compulsory licenses for Kaletra and for Plavix, an anti-platelet medication that reduces the risk of unstable blood clots in people with heart disease.
Abbott confirmed that it will not seek licenses for seven new products in Thailand, in retaliation for the Thai government’s decision to issue a compulsory license for the HIV protease inhibitor Kaletra (lopinavir/ritonavir). The products will include a new heat-stable version of Kaletra, called Aluvia, which would be highly desirable in the Thai climate. This will not affect medicines that are already available in Thailand.
Thailand provides antiretroviral medicines for a nominal fee to all HIV-positive citizens who can’t afford to buy the drugs And the compulsory license will allow the Thai government to import generic versions of Kaletra from India in order to save money.
Thailand’s health officials said issuance of compulsory licenses was justified under international trade rules because the drugs’ high cost constituted a crisis for the country’s health sector. More than 500,000 people in Thailand are living with HIV, according to UNAIDS, the United Nations agency that coordinates the global fight against the deadly virus.
According to a statement by the AIDS Healthcare Foundation, Abbott was willing to cut $200 off the $2,200 per patient annual cost of Kaletra. It is estimated that with Thailand’s compulsory license a generic version of Kaletra can be produced for about $1,000 per patient.
This is the first time a government has invoked so-called compulsory licensing to treat an ongoing health problem. The licensing is invoked by the state in the case of a drug being needed to save lives in emergency situations, previously reserved for extremes such as wars and pandemics. Drug companies are concerned the move will set a precedent for other nations.
The real issue is that the TRIPS agreement of 1994 does not require a public health emergency to be declared and does not require the Thai government to negotiate with manufacturers before issuing a compulsory license if the use is not for profit.
The government said it decided on compulsory licensing because it’s concerned about Thai lives and wants to increase the availability of drugs to low-income patients. The reality, however is that this is not a situation that the drug is not available, it’s that the Thai government just doesn’t want to pay full price.
The World Trade Organization’s [2] Doha Declaration on the TRIPS Agreement and Public Health [3], an amendment to the WTO’s TRIPS agreement on trade-related intellectual property rights, adopted by the WTO Ministerial Conference in November 2001, affirms that the TRIPS Agreement should be interpreted and implemented so as to protect public health and promote access to medicines for all. The Declaration gives the right of WTO Members to make full use of the safeguard provisions of the TRIPS Agreement to protect public health and enhance access to medicines.
The WTO Declaration explicitly states that “intellectual property protection is important for the development of new medicines” and member countries made an unequivocal point of “reiterating our commitment to the TRIPS Agreement.” Furthermore, the WTO members agreed to address the HIV/AIDS pandemic while “maintaining our commitments in the TRIPS Agreement.” Article 31 (f) of the TRIPS Agreement stipulates that a compulsory license must be issued predominantly for the supply of the domestic market of the Member granting the license. Anti-retroviral virus treatment for HIV was the main impetus for this initiative.
On its face, this seems like a good outcome for people to access to cheap or free medicines. However, nothing in life is ever free and trying to kill the goose that laid the golden eggs will only bring short-term gain with long-term pain.
Pharmaceutical companies rely on government-granted patents to protect their huge investments in researching and developing new drugs. It takes 10-15 years and costs $800 million on average to bring a new medicine to market. If some countries try to break patents to get out of paying, guess who’s going to foot the bill?
Kannikar Kijtiwatchakul, a campaigner in Thailand for Doctors Without Borders, told the AP the government’s move was “a brave decision, despite both anticipated pressure from industry and possible threats to withdraw investments. The authorities have engaged in dialogue with companies before, but the discounts have been marginal.”
Well, my math may be wrong but Abbott sells a year-long supply of Kaletra to Thai patients for $2,200, less than half the $7,000 that the drug costs patients in the U.S., according to Abbott. Admittedly, Abbott sells the drug at an even-deeper discount, $500 a person a year, in certain countries in Africa, including Malawi and Kenya but offering to drop the price from $7000 to $2000 doesn’t sound like “the discounts have been marginal.”