Anxiety over bird flu medicines reveals myopia in patent and public health policies

Brook K. Baker
Health GAP
Oct. 18, 2005

Government officials in the U.S., Thailand, India, China, and the Philippines have all expressed interest in issuing compulsory licenses authorizing generic production of Roche’s antiviral medicines, Tamiflu, one of the few medicines likely to reduce the body count of an inevitable avian flu pandemic.

No one doubts the seriousness of a predictable outbreak of an H5N1 pandemic once the flu strain mutates further to an airborne virus that passes easily from human to human. Death predictions range from 40-200 million. In the absence of an effective vaccine, Tamiflu is one of the few measures that could help contain outbreaks and reduce herd vulnerability of human populations.

Roche, the holder of a worldwide patent on Tamiflu, has thus far stated that it intends to fully protect its patent rights to prevent generic companies from making unauthorized copies of the flu medicine. Instead, Roche is attempting to maintain its market monopoly and to reap a huge windfall of supracompetitive profits by outsourcing additional production to a select but limited group of pharmaceutical manufacturers, whose identity is being kept secret by Roche. Even with this increased productive capacity, specialists estimate that Roche and its suppliers will fall far short of being able to supply global stockpiling needs. Moreover, Roche’s marketing price, rarely discussed, will make the medicines virtually unaffordable for mass use in most developing countries.

Roche tries to secure its monopoly advantage not only by refusing to license Tamiflu to generic producers but also by greatly exaggerating the difficulty of manufacturing the drug. Roche has estimated that it would take new producers two-three years to reverse engineer and manufacture Tamiflu. However, Cipla of India, and manufacturers in the U.S. have already estimated that they could begin to mass produce Tamiflu in a few months. If Roche were willing to share its proprietary manufacturing processes, that time frame might be reduced to as little as one month.

Although these generic producers have not yet estimated the selling price of generic equivalents to Tamiflu, there is little doubt, based on prior examples, that generic prices would be a fraction of the cost and that prices would plummet further as the costs of intermediate products fell and as economies of scale were realized.

So, the world faces a dramatic confrontation. One the one side is the financial interest of one major drug company that stands to make billions of dollars selling Tamiflu to a small proportion of mainly rich consumers who can afford that limited quantities of Tamiflu that Roche can product. On the other side are billions of poor people, primarily in developing countries, who will have little or no access to killer-flu medicines unless there are many new producers and unless prices fall dramatically.

As a matter of public policy and public health and of human rights, and human decency the outcome of this confrontation should be relatively straightforward. Governments should thumb their nose at Roche’s monopoly and should grant open compulsory licenses on an emergency basis to qualified generic producers, domestic and international, to immediately begin production of large quantities of low-cost Tamiflu. Roche, in turn, would receive royalty payments on the medicines produced by the generic companies and would still be permitted to sell its own Tamiflu in a now more competitive market.

This solution is sensible, but it is not actually an option in many parts of the world both because of arcane patent-law protections and because of international agreements that restrict countries’ ability to respond to public health crises with alacrity. For example, some countries with spare local capacity could begin to issue compulsory licenses to permit domestic manufacture and use of generic Tamiflu. However, some countries with spare capacity have failed to enact national legislation allowing them to issue compulsory licenses and/or they have Byzantine and protracted procedures for doing so.

Other countries are much less lucky – they lack domestic pharmaceutical capacity and have limited rights to import needed generic medicines from abroad. These countries must now use the labyrinth procedures of the WTO August 30, 2003 Paragraph 6 Implementation Decision. That Decision requires countries with limited production capacity to file specific notifications to the WTO, to issue import compulsory licenses for specified quantities of medicines, and then to rely on foreign producers to seek export compulsory licenses with multiple notifications as well. These arthritic procedures are neither fast nor efficient – moreover, many countries lack national legislation authorizing the required licenses.

How did this procedural mess and these patent-right shackles for developing (and developed) countries occur? You need look no further than Roche and other Big Pharma companies like Pfizer, Merck, Bristol-Myers-Squibb, GlaxoSmithKline, and Boehringer-Ingelheim; you need look no further than their industry lobby groups, PhRMA and its international equivalent; and you need look no further than the White House and the office of the U.S. Trade Representative. These intellectual-property-rights-maximizing forces have combined to wage a twenty year campaign to prioritize pharmaceutical profits over human rights and life itself.

The avian flu pandemic is visible on the horizon – much as a storm like Katrina was on the horizon for an ill-prepared New Orleans. Will policy-makers watch the approaching viral storm and beg and plead for a slightly expanded source of supply from a single monopolist? Or will they act with dispatch, not only to address the impending avian flu/Tamiflu crisis but to recreate public health priorities that facilitate access to life-saving medicines.

One last irony of the current, but still unrealized, avian flu crisis is that it is indeed convincing developing countries and some developed countries to seriously consider compulsory licenses. Fifty-nine people have died and that number could be multiplied by a million. However, 40 million people are also living with HIV/AIDS. They too need access to the latest generations of life-saving medicines and that need is also being negatively impacted by myopic national legislation and inflexible global trade rules. The deaths of 3 million people from AIDS this year is not merely hypothetical – it is already happening.

One reason U.S. decision makers might respond to avian flu is because it could arrive on our shore with every transcontinental flight and because it kills so quickly. HIV too has covered the globe, but much more slowly. And it kills too, but in ten years rather than ten days. Nonetheless, Roche and its Big Pharma allies have assured a global system that means that 8000 people will die today of AIDS today – that’s 59 every 10 1/2 minutes.

Let’s organize a global sense of outrage and urgency about HIV, avian flu, and other public health menaces that require medical intervention. Let’s speed pills to people by effective governmental policies that prioritize life over profit.

Return to: CPTech Home -> Main IP Page -> IP and Healthcare -> Tamiflu Page