THAILAND AUTHORISES GENERIC PRODUCTION OF TWO MORE PATENTED DRUGS

Thailand's government has issued compulsory licences for two medicines, one for HIV/AIDS and the other for heart disease, in order to reduce healthcare costs by allowing the production and import of cheaper generic versions of the patented drugs.

Confirming the government's decision on 29 January, Public Health Minister Mongkol na Songkhla said that suspending patent protections on the drugs was necessary to enable the country's universal healthcare scheme to provide treatment to those who need it. "We have to do this because we don't have enough money to buy safe and necessary drugs," he explained.

The drugs in question are Kaletra, an advanced HIV/AIDS treatment patented by US-based Abbott Laboratories, and Plavix, a blood thinner jointly marketed by Bristol-Myers Squibb, also of the US, and France's Sanofi-Aventis. The move comes two months after the military-installed regime in Bangkok issued a compulsory licence for a another HIV/AIDS drug, Merck's efavirenz (see BRIDGES Weekly, 13 December 2006). Public health officials have indicated that the country will import generics from India until domestic production by the state-owned Government Pharmaceutical Organisation comes on line, according to Thai press reports.

Particularly notable is the fact that Plavix is used to treat a non-communicable heart disease. Governments have generally focused on using compulsory licences to promote competition and reduced prices for drugs used to treat epidemics such as HIV/AIDS and tuberculosis, even though the World Health Organisation says that non-communicable conditions such as heart disease and diabetes cause far more deaths in many countries.

Thai health officials say that only 20 percent of the 200,000 patients that need Plavix currently receive it, reports the Associated Press. Generic production would cut the price per tablet more than ten-fold from 70 baht (about USD 2.06) to less than six baht (18 cents), making it affordable to extend treatment to more people. Switching to generic copies of Kaletra is expected to more than halve the monthly cost of treatment to the 20,000 people who no longer respond to 'first-line' HIV/AIDS drugs, and need the more advanced treatment to survive. Although Abbott Laboratories already sells Kaletra to the Thai government at a substantially discounted rate of USD 2200 per patient per year, generic equivalents could cost USD 1080 or less.

Public health groups have lauded Bangkok's recent policy, saying that dramatically-reduced drug costs will make it possible for the government to provide treatment to thousands more people. "We've been dreaming of this kind of action for years," Médecins Sans Frontières' Paul Cawthorne told the Financial Times. He said that the government was effectively telling drug companies "'if you won't give us a price that we can begin to afford, we are going to get this stuff from a generic company and use it in our public health services.'" Following the government's compulsory licence for efavirenz late last year, MSF had urged it to do the same for Kaletra, arguing that it was unaffordable.

Industry groups, on the other hand, have been critical, warning that it could lead to decreased investment in the country and weakened incentives for research. They also expressed anger that the government had not adequately negotiated with them before issuing the compulsory licences.

Abbott Laboratories went so far as to a statement saying "we do not view [the decision] as legal or in the best interests of patients."

Nevertheless, compulsory licences such as those issued by Thailand are well within the limits of WTO rules, says Frederick Abbott (no relation to the pharmaceutical company), a professor of international law at Florida State University. The 2001 Doha Declaration on the TRIPS Agreement and Public Health explicitly confirms that governments have the "right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted."

In a nod to the licence for the heart medicine Plavix, Professor Abbott emphasised that the notion that there was a 'scope of diseases' limitation on the medicines for which compulsory licences could be issued was spurious. "The idea that compulsory licensing of patents is limited to treatments for HIV/AIDS or ebola, as opposed to treatments for coronary disease and diabetes, is flat wrong," he said.

Complaints about a lack of negotiation are also unjustified, he added. Article 31(b) of the TRIPS Agreement explicitly waives the requirement for governments to try to negotiate with patentholders "in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use." And the Doha Declaration on TRIPS and Public Health makes clear that it is up to Members "to determine what constitutes a national emergency or other circumstances of extreme urgency." The Thai government has stressed that the generic drugs obtained under the licences will be used for its non-commercial public health programmes.

"Without doubt," the law professor concluded, "there is room to grant compulsory licenses, without prior notification to or negotiation with the patent holder, in situations which the government considers, in its judgment, to constitute public health emergencies or for 'public non-commercial use'. A great deal of time was spent between the years 2001 and 2005 at the WTO to make sure that all concerned parties are clear about these rules."

The Bangkok Post reports that the compulsory licence for Kaletra will last for five years. Public health officials said that the licence for Plavix would remain in effect until a suitable replacement for the anti-clotting agent could be found. As per the terms of both, the patentholders will receive a royalty fee worth 0.5 percent of total sale value of the generic copies.

Public Health Minister Mongkol has indicated that the government is considering further compulsory licenses. He specified that this would not be done indiscriminately, according to Thai daily The Nation. "We are not simply going to [issue compulsory licences] on more and more drugs, but only the drugs in critical need that the state cannot afford to buy." He added that these would not normally be new medicines, but rather those that the state had bought at the patented price for years.

As for the earlier compulsory licence issued to HIV/AIDS drug efavirenz, Mongkol said that the first shipments of Indian generics are set to arrive on 10 February.

ICTSD reporting; "Cheaper generic drugs will help ease health crisis," THE NATION, 25 January 2007; "Thailand backs patent drug copies," BBC NEWS, 29 January 2007; "Thailand confirms switch to generic drugs," FINANCIAL TIMES, 29 January 2007; "Thailand approves generic versions of two drugs," BANGKOK POST, 30 January 2007; "Thai government allows generic production of HIV and heart drugs," ASSOCIATED PRESS, 29 January 2007; "Thai Move to Trim Drug Costs Highlights Growing Patent Rift," WALL STREET JOURNAL, 30 January 2007; "Top drug firms delay investing here," BANGKOK POST, 26 January 2007.