PrivatePatentsandPublicHealthChangingintellectualpropertyrules

foraccesstomedicinesAccesstoMedicinesintheBaltics,Riga,13October2017

Ellen‘tHoen,MedicinesLaw&Policy

www.medicineslawandpolicy.org@ellenthoen

HighMedicinesPricingaGlobalIssue

Essential Medicines for Universal Health Coverage

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Patent• Righttoexcludeothersfrommaking,using,offeringforsale,selling,andimportingthepatentedproduct(oraproductmadewithapatentedprocess)

• Rightgrantedbyanationalorregionalauthorityforacertainperiodoftime(minimum20years)whencertainconditionsaremet

• Patentsarenational– globalpatentapplicationproceduresexist(WIPOPCT)butaglobalpatentdoesnotexist.

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Functionofpatents…toencourageinventorstomakeaninvestmentintimeandmoneyinresearchanddevelopmentbyprovidingexclusiverightsforalimitedtimeinexchangeforanearlypublicdisclosureoftheinvention.

Patentsystemisasocialpolicytoolmeanttocreatebenefitsforsociety.

But,itcomeswithaprice…

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…anindustryviewofpatents

“…akeyelementofanylifecyclemanagementstrategyistoextendpatentprotectionbeyondthebasicpatenttermforaslongaspossible,byfilingsecondarypatentswhichareeffectivetokeepgenericsoffthemarket”

Burdon, Michael, and Kristie Sloper. "The art of using secondary patents to improve protection."

Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical Marketing 3.3 (2003): 226-238.

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IndustrialProfitMargins

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21%averagepharmaprofitmargin53%GileadSciencesprofitmargin

WHYDOWEHAVEPATENTS?

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1995WorldTradeOrganization(WTO)TradeRelatedAspectsofIntellectualPropertyRights(TRIPS)

� TRIPSsetsoutminimumrequirementsfortheprotectionofintellectualproperty(IP)obligatoryforallWTOmembers

� Mostrelevantforaccesstomedicines:◦ minimum20yearpatents◦ protectionofdata(article39.3)

� TRIPSFlexibilities

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PatentsandMedicines• Patentsmaybeusedtodelaycompetitionofgeneric

medicinesandcreatemarketexclusivity/monopoly• Withoutgenericcompetitionmedicinespricesremainhigh

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PatentsandMedicines:costofproductionandpriceofpatented

productsinUS$(TyrosineKinaseInhibitors)

* India is generic priceA.Hill, 18th ECCO - 40th ESMO European Cancer Congress, 27th September 2015, Vienna, Austria [abstract number: 1203]http://bmjopen.bmj.com/content/6/1/e009586.full.pdfSource UK Lapatinib: https://www.theguardian.com/business/2015/sep/23/uk-cancer-patients-being-denied-drugs-due-to-inflated-prices-say-experts

Medicine USA Latvia UK India* Targetimatinib(Gleevec-Novartis) 106.322 31.867 790 159erlotinib(Tarceva-Roche) 78.797 36.176 29.241 1.906 236sorafinib(Nexavar-Bayer) 137.232 66.953 57.232 1.313 1.387lapatinib(Tyverb-Novartis) 75.161 50.660 36.000 n/a 4.022dasatinib(Sprycel-BMS) 135.679 56.970 33.739 n/a 334

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CostofproductionandpriceNewWHOEssentialMedicines

Medicine Originator priceintroUS Costofproduction1

bedaquiline $30,000 (6month) $48 -101

sofosbuvir(SOF) $84,000(12week) $68-136

SOF+ledipasvir $95,000(12weeks) $193

simeprevir $ 66,360(12weeks) $130- 270

daclatasvir $63,000 (12weeks) $10 - 30

imatinib $30.000- >$100,000(1y) $119-159

trastuzumab $54,000 (1y) $242

1. http://cid.oxfordjournals.org/content/early/2014/02/13/cid.ciu012.full (cost of production of HCV medicines) | Hill A. etal.,Target prices for mass production of Tyrosine Kinase Inhibitors (TKIs) for global cancer treatment access - Presented at 18th ECCO -

40th ESMO European Cancer Congress, 27th September 2015, Vienna, Austria [abstract number: 1203] | Dzintars Gotham, Joseph Fortunak, Anton Pozniak, Saye Khoo, Graham Cooke, Frederick E. Nytko, III, Andrew Hill; Estimated generic prices for novel treatments for drug-resistant tuberculosis. J Antimicrob Chemother 2017 dkw522. doi: 10.1093/jac/dkw522

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2001WTODohaDeclarationonTRIPSandPublicHealth

"theTRIPSAgreementdoesnotandshouldnotpreventMembersfromtakingmeasurestoprotectpublichealth".…“weaffirmthattheAgreementcanandshouldbeinterpretedandimplementedinamannersupportiveofWTOmembers'righttoprotectpublichealthand,inparticular,topromoteaccesstomedicinesforall.”

TRIPSFlexibilities

• Compulsorylicensing/GovernmentUse

• ExtensionforLDCs(paragraph7)• Parallelimport• Patentexceptions• Dataprotection(NotDataexclusivity)• Patentabilitycriteria

– Section3(d)IndianPatentsAct

http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm

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Lessonsfromthepast:AccesstopatentedmedicinesintheUKin

60/70ties• MedicinesfortheNHSboughtthroughinternationaltenders

• MoH requiredthesuppliertoofferatthelowestpriceregardlessofthepatentstatus

• à CrownUse(Publicnon-commercialuseofpatents)

• Patentholderhadarighttoremunerationbutcouldnotstopgenericsupply

• Pfizervs.MoH 1965

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Lessonsfromthepast:AccesstopatentedmedicinesintheUKin

60/70ties• MedicinesfortheNHSboughtthroughinternationaltenders

• MoH requiredthesuppliertoofferatthelowestpriceregardlessofthepatentstatus

• à CrownUse(Publicnon-commercialuseofpatents)

• Patentholderhadarighttoremunerationbutcouldnotstopgenericsupply

• Pfizervs.MoH 1965

“AlthoughthispoweroftheMinistryofHealthtopurchasedrugsandmedicinesfromsourcesindependentofthepatenteehasbeenmuchcriticisedbythepharmaceuticalindustry,itisnotlikelytobeaffectedbysuchcriticism.Suchpowerwillbeexercisedifthepatenteeisallegedtomaintainundulyhighpricesfortheseproducts(StephenLadas,1975).”

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TRIPSflexibilitiesandlicensing2001-2017

7/9NCD

15

0

10000

20000

30000

40000

50000

60000

70000

80000

USA EU Malaysia LATAM CountriesGileadLicence

Cambodia Egypt India

SOF+DCVpriceexpectedby2020incountrieswith

robustGxcompetition.

PriceavailabletodayinIndia.

US$7,800to71,000 US$900

U$108

US$47,500to56,000

US$180

US$40,000to52,000

US$370

US$74,000to147,000

PricevariationofHCVmedicines

Source:DNDi

2017Malaysiaissuesgovernmentuselicence forSOF

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AREPATENTSTHELEASTOFOURWORRIES?

Non-PatentMarketExclusivity

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Marketexclusivities

• Dataexclusivity• Marketexclusivity• Pediatricextension• Orphandrugexclusivity• PatentsandSupplementaryProtectionCertificate(patentextensionofmax.5yr)

->basedonthepremisethatgrantingexclusiverightsencouragesinnovation

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7of10topsellingmedicineshadFDAorphanindicationordesignation

Drug Globalsales2015(US$Bn)

Company Therapyarea

Humira 14.1 Abbvie Anti-rheumatic

Rituxan 7.6 Roche Cancerantibody

Avastin 7.2 Roche Cancerantibody

Herceptin 6.6 Roche Cancerantibody

Remicade 6 Johnson&Johnson Anti-rheumatic

Revlimid 5.7 Celgene Bloodcancers

Crestor 5.2 AstraZeneca Statin

http://www.cnbc.com/2015/12/01/an-obscure-fda-rule-adding-to-drug-company-profits.html

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TransparencyofR&Dcost

$231

$802

$1,500

$2,500

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1991 (DiMasi) 1993 (OTA) 2003 (DiMasi) 2012(OHE) 2014(DiMasi) 2013(DNDi)

R&DCo

stEstim

ate(in

millions)

$140- $194 $100- $150

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DutchMinisterofHealthandMinisterofForeignTradeonA2M

“Wecannotachieveanyrealprogresswithoutacknowledgingthatthecurrentpatent-basedbusinessmodelandthewayweapplyinternationalpatentrulesneedtochange.Thesystemisbroken.…Patentandintellectualpropertyexclusivitiesaretheonlycornerstoneofthecurrentmodel.Companiescanaskthepricetheylike.Thiswillnolongerdo.Weneedtodevelopalternativebusinessmodels.Andifpublicmoneyisusedforthedevelopmentofnewmedicines,agreementupfrontisneededaboutwhatthispublicinvestmentwillmeanforthefinalprice.Webelievethatcompaniesmustprovidefulltransparencyregardingthecostsofresearchanddevelopment(R&D). “

NLMinistersE.Schippers (Health)andL.Ploumen(ForeignTradeandDevelopmentCooperation)http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)31905-5/fulltext

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DutchMinisterofHealthandMinisterofForeignTradeonA2M

“Wecannotachieveanyrealprogresswithoutacknowledgingthatthecurrentpatent-basedbusinessmodelandthewayweapplyinternationalpatentrulesneedtochange.Thesystemisbroken.…Patentandintellectualpropertyexclusivitiesaretheonlycornerstoneofthecurrentmodel.Companiescanaskthepricetheylike.Thiswillnolongerdo.Weneedtodevelopalternativebusinessmodels.Andifpublicmoneyisusedforthedevelopmentofnewmedicines,agreementupfrontisneededaboutwhatthispublicinvestmentwillmeanforthefinalprice.Webelievethatcompaniesmustprovidefulltransparencyregardingthecostsofresearchanddevelopment(R&D). “

NLMinistersE.Schippers (Health)andL.Ploumen(ForeignTradeandDevelopmentCooperation)http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)31905-5/fulltext

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CouncilconclusionsonstrengtheningthebalanceinthepharmaceuticalsystemsintheEUanditsMemberStates(17/06/2016)

LancetCommissiononEssentialMedicinesPoliciesonDelinkage

TheconceptofdelinkingcostsfrompricesisbasedonthepremisethatcostsandrisksassociatedwithR&Dshouldberewarded,andincentivesforR&Dprovidedbymeansotherthanthroughthepriceoftheproduct.IftheR&Dcostofnewmedicinesdidnothavetoberecoupedthroughhighprices,thosemedicineswouldbefreeofmarketexclusivityandcouldbemademorewidelyavailableandmoreaffordablypricedthroughbettercompetition.

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SomeRecommendations

• Immediateaction:– BundlebuyingpowerwithotherEuropeancountries– Takeactionwhenpatentshamperaccesstoproveneffective

medicines.• ActionatEUlevel:

– IncreasetransparencyinpricingandR&Dcost.– ReviewofEUincentivesshouldleadtoproposalsforpolicy

change.– DGcompetitiontoinvestigatehighmedicinesprices.

• International:– EnsureefficientfinancingforR&D=>Newglobalagreementson

sharingcostofR&Dbasedondelinkage principles.

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Thankyou!

@ellenthoen

Pleasevisit:www.medicineslawandpolicy.orgwww.accesstomedicines.org

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“Delinkage”Proposals-www.delinkage.org

Payingforthecostofresearchanddevelopmentofnewessentialmedicinesthroughothermeansthanhighprices.

Thismeans:- Nomorearationingofproven

effectivemedicines- SettingRF&Dprioritiesbasedon

need(notonprofitprospects)

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Councilconclusionsonstrengtheningthebalanceinthepharmaceuticalsystemsinthe

EUanditsMemberStates(17/06/2016)

• AnevidencebasedanalysisoftheimpactoftheincentivesintheseEUlegislativeinstruments,….Amongthoseincentives,particularattentionshouldbegiventothepurposeof:

– supplementaryprotectioncertificatesasdefinedintherelevantEUlegislativeinstrument

– theuseofthe“Bolar”patentexemption[7],– thedataexclusivityformedicinalproductsandthemarketexclusivityfororphan

medicinalproducts.

• Whererelevant,theanalysisofimpactsshouldalsoaddress- interalia -thedevelopmentofmedicinalproductsandtheeffectsofthepricingstrategiesofindustryinrelationtotheseincentives

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