Data Exclusivity & Access to Medicines in Guatemala



             Doctors Without Borders/Médecins Sans Frontières

                Campaign for Access to Essential Medicines



                               February 2005



HIV/AIDS and Guatemala



According to the World Health Organization (WHO) and UNAIDS, more than

78,000 Guatemalans live with HIV/AIDS, and annual AIDS-related deaths

totaled 5,800 in 2003. Approximately 13,500 of all those living with

HIV/AIDS now are in urgent need of antiretroviral (ARV) treatment. Yet only

3,600 Guatemalans were receiving it in December 2004.



Doctors Without Borders/Médecins Sans Frontières (MSF) has been providing

ARVs to Guatemalans since 2001 and is currently treating more than 1,500

people (approximately half of all those on ARV treatment in the country) in

one clinic and one hospital in Guatemala City as well as clinics in

Coatepeque and Puerto Barrios. Most of the patients in MSF’s treatment

programs are receiving generic medicines, which allows MSF to treat the

largest possible number of people. Our clinical outcomes parallel those

found in the United States and other industrialized countries.



MSF currently pays as little as $350 per person per year for the most

commonly prescribed WHO-recommended first-line regimens. Most ARVs are not

patent protected in Guatemala, and generic competition has been effective

in bringing down prices of originator products despite the fact that the

Guatemalan government is only beginning to open its national drug

procurement system to tenders from generic producers. Access to affordable

medicines is key in making life-extending treatment available to more

people who need it.



Access to Medicines At Risk



Unfortunately, this access is now being threatened. In country after

country, the US is negotiating “free trade agreements” (FTAs) containing

intellectual property provisions that limit generic competition and the

ability of countries to make use of safeguards in their patent laws to

protect public health and ensure access to medicines. These provisions go

far beyond what is required in the World Trade Organization (WTO) Agreement

on Trade-related Aspects of Intellectual Property Rights (TRIPS), and

directly contradict the November 2001 WTO Ministerial Declaration on the

TRIPS Agreement and Public Health (Doha Declaration). By pressuring

countries to accept these provisions, the US is in effect creating a new

“TRIPS-plus” norm that will undermine the right of countries to protect

public health.



The many troubling provisions in US FTAs include extensions of patent

terms, rules that would turn national drug regulatory authorities (NDRAs)

into “enforcers” of patents on medicines, granting of patents for “new

uses” of known compounds, and restrictions on compulsory licensing.  But of

particular concern is the US Administration’s attempt to push countries to

accept new obstacles related to pharmaceutical test data (so called “data

exclusivity”), which will delay the availability of generic medicines.

Guatemala is a case in point.



Under extreme pressure from the US, Guatemala has been going back and forth

between proposed legislation that guarantees multinational pharmaceutical

companies monopoly-like exclusivity on the Guatemalan market and amendments

that maintain some degree of public health protection (see Annex 1 for a

full chronology of events). The latest development in this process is the

proposed text for  a law (initiative for the amendment of the Industrial

Property Law, Decree 57-2000 of the Congress and its amendments) presented

to the Guatemalan Congress by President Oscar Berger in January 2005.



Data exclusivity: practical consequences for Guatemalans



MSF is concerned that the new draft law will, if enacted, prevent the

Department of Regulation and Control of Pharmaceutical Products from

granting marketing approval to generic medicines in Guatemala for five to

10 years, thereby giving a market monopoly to originator drug manufacturers

and preventing access to affordable medicines for five to 10 years in the

country.



In a worst case scenario, the new legislation will prevent generic

medicines from entering the Guatemalan market during the period of

exclusivity even if the originator medicine is not marketed in Guatemala.

This means that patients may have no access at all to some medicines for

five years – even exorbitantly priced originator versions.



If these data exclusivity provisions had been in effect prior to 2001,

generic ARVs would not have been marketed in Guatemala and MSF would not

have been able to access generics. This would have limited our ability to

expand access to treatment and demonstrate the feasibility of delivering

ART.



GENERICS: TREATING MORE PEOPLE WITH THE SAME AMOUNT OF MONEY



Generic competition on the Guatemalan market has brought down the prices of

originator ARVs, and the Guatemalan government is slowly moving from

purchasing only originator ARVs to including generic suppliers in the

national tender. Still, Guatemala’s social security system spends

significantly more on ARVs – in some cases more than 20 times more than MSF

– because it procures mostly originator drugs. For example, whereas MSF

pays $216 per person per year for a generic version of the “back-bone”

double combination of AZT+3TC, Guatemala’s social security system paid

$4,818 (open tender 2004) for the same combination from the originator,

GlaxoSmithKline. This is 22 times more than what MSF pays.



Guatemala has the opportunity to expand access to ARV treatment

significantly, particularly because of a $ 40 million grant from the Global

Fund to Fight AIDS, Tuberculosis and Malaria. In fact, there is no reason

that Guatemalan authorities should not be able to ensure universal access

to ARV treatment.  To treat all 13,500 Guatemalans in urgent clinical need

with the first-line ARVs MSF uses, Guatemalan authorities could spend $ 5

to 9 million per year. But if the government is paying 20 times more – or

even two times more – for ARVs, only a small fraction of those in need will

be treated. Treating fewer people means condemning others to premature

death.



In order for the Guatemalan government to expand access to ARV treatment

for all those in need, it will need to retain the right to procure

affordable generic AIDS medicines.



Guatemala, along with other WTO members, signed the Doha Declaration and

thereby committed to putting the health needs of its people before

commercial and trade interests. Guatemalan authorities must not give in to

US pressure. Instead, they should make full use of the flexibilities of the

TRIPS Agreement to protect public health and promote access to medicines,

as acknowledged by the Doha Declaration.



How Data Exclusivity Will Affect an Important ARV: The Example of

Atazanavir



In November 2004, the Congress of Guatemala repealed Decree 9-2003 (see

Annex 2), which provided for five-year data exclusivity.  In December, the

Congress replaced Decree 9-2003 with Decree 34-2004, which passed by an

important majority and was seen by Guatemalan civil society groups, MSF,

and others as a positive step forward, and a critical moment for the

government to commit to ensuring treatment for greater numbers of people

with HIV/AIDS in Guatemala. In the roughly 18 months during which Decree

9-2003 was in effect in Guatemala, 25 medicines received “data exclusivity”

protection under the law. Among those medicines affected is the ARV

atazananir. Atazanavir is a protease inhibitor, which is a key part of

second-line therapy for people with HIV/AIDS once they experience treatment

failure on their first-line regimen, and is used widely, in the US, Europe,

and Brazil.



Today, the US price of atazanavir is more than US$10,000 per person per

year – there is no differential price for developing countries and it must

be combined with at least two additional ARVs. There is no generic version

of atazanavir available on the world market because it is a relatively new

drug, but based on experience with other ARVs, it is possible that the

price could drop by approximately 95% with robust generic competition.



If a more affordable generic version of atazanavir is developed, however,

it will not be able to enter the Guatemalan market until 2009 (given that

the original atazanavir of Bristol-Myers Squibb was registered in Guatemala

in February 2004). This means that BMS will have a monopoly during the

entire period of exclusivity (at least five years) and, free from

competition, will be able to charge whatever the market will bear – far

more than what the average Guatemalan will be able to afford.  It is

therefore unlikely that the vast majority of Guatemalans who will need this

medicine will be able to access it.



This is just one example of what could happen to all new medicines entering

the Guatemalan market – not only AIDS drugs – if Decree 34-2004 is repealed

and a US-style data exclusivity law is implemented, either through new

national legislation or enactment of DR-CAFTA.  And newer medicines will be

crucial to the longer-term survival of people with HIV/AIDS and other

illnesses.



Conclusion



Guatemala has the opportunity and capacity to guarantee universal access to

ARV treatment for Guatemalans with HIV/AIDS and to make other improvements

in public health. However, this will not be possible if Guatemalan

authorities give in to US pressure to relinquish the right to take all

necessary measures to protect public health and promote access to

medicines. The Guatemalan government must not trade away the health of its

citizens in FTAs or any related legislation. Instead, it should uphold its

obligation to put the health needs of its people before commercial and

trade interests by defending Decree 34-2004, which is based on the Doha

Declaration and is in full conformity with the TRIPS Agreement.







ANNEX 1:



What Exactly Is “Data Exclusivity” and How Can It Impact Access to

Medicines?



“Data exclusivity” refers to a practice whereby, for a fixed period of

time, national drug regulatory authorities (NDRAs) cannot use the

pharmaceutical test data from an originator company to register a

therapeutically equivalent (“bioequivalent”) generic version of that

medicine. Data exclusivity is distinct from patents. In fact, the biggest

impact of data exclusivity may be felt on medicines that are not patented,

as competition will be blocked and a patent-like monopoly will be created.

Whereas patent barriers can be overcome through compulsory licensing or

government use, there is no legal “remedy” for data exclusivity.  Even if a

generic company is authorized to produce a medicine under compulsory

license, the generic medicine cannot be registered during the period of

exclusivity, and therefore cannot be used.



In order for a medicine to be sold in any country it must first be

registered (in other words, it must get “marketing approval” or

“authorization”) by the NDRA, and in order for an NDRA to approve a

medicine, it must review safety and efficacy data and ensure that the

medicine meets certain quality standards.



Typically, the originator of a drug submits the needed pharmaceutical test

data to NDRAs.  When a generic competitor seeks to enter the market, it

must simply prove that its product is of quality and is therapeutically

equivalent to the originator drug.  The NDRA can rely on the test data on

safety and efficacy submitted by the originator company to register the

generic medicine, and in this way, generic entry to the market is

facilitated and accelerated.



However, the US Administration and the multinational pharmaceutical

industry are pushing strongly to impose “exclusive rights” over

pharmaceutical test data for a specific period of time, usually a minimum

of five years.  In some agreements, such as “DR-CAFTA” – the US free trade

agreement with the Dominican Republic and five Central American countries

(Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) – the US is

even seeking what could be described as “data exclusivity-plus.”  If an

original manufacturer of a drug has not been registered it for use in a

given country, then the data exclusivity period can start running from the

date of approval in another country that is party to the agreement (in this

case usually the US). Neither five nor 10 yeas of data exclusivity is

required in the TRIPS Agreement.



The concrete practical outcome of data exclusivity, whether it is

implemented through specific national legislation or enactment of FTAs such

as DR-CAFTA, is that originator companies have a patent-like monopoly for

at least five years and can determine the price, which invariably leads to

artificially high prices that are unaffordable to most. A five- to 10-year

delay in access to affordable medicines for Guatemalans with HIV/AIDS and

other illnesses can be a  death sentence.





ANNEX 2:



Chronology of Events in Guatemala:  One Step Forward, Two Steps Back on

Data Exclusivity



In April 2003, the Guatemalan government, which was under pressure to adopt

US standards for protection of pharmaceutical test data, modified its

national intellectual property (IP) bill by passing a national decree

(Decree 9-2003) that gave originator pharmaceutical companies five years of

data exclusivity.  Civil society groups in Guatemala mobilized to urge the

government to repeal the Decree and abolish data exclusivity in order to

promote generic competition and improve access to affordable quality

medicines. In November 2004, the Congress finally repealed Decree 9-2003,

and replaced it with Decree 34-2004, which was approved by a large

majority.



This was seen by Guatemalan civil society groups, MSF, and others as a

positive step forward, and a critical moment for the government to commit

to ensuring treatment for greater numbers of people with HIV/AIDS in

Guatemala.



Decree 34-2004 regulates the protection of pharmaceutical test data and

other undisclosed tests in a way that protects “public health and promotes

access to medicines for all” and is in full conformity with the TRIPS

Agreement.



In particular, Decree 34-2004 establishes that Guatemala’s NDRA, the

Department of Regulation and Control of Pharmaceutical Products, should

protect these test data against “unfair commercial use,” as required by the

TRIPS Agreement. The main paragraph of Decree 34-2004 is an exact copy of

Article 39.3 of the TRIPS Agreement on “undisclosed tests and other data.”



However, since the passage of Decree 34-2004, the US Administration has

exerted tremendous pressure on Guatemala to repeal the Decree and ensure

passage of a new law that reverses Decree 34-2004 before ratification of

DR-CAFTA.  In a January 10, 2005, “Fact Sheet” on “CAFTA, Data Protection

and Generic Drugs” the US Embassy to Guatemala stated that:



   “This law [Decree 34-2004] gives the U.S. Congress the impression that

   Guatemala is not serious about complying with commitments it made in the

   CAFTA. This could result in CAFTA not being ratified by the U.S.

   Congress, where a close vote is expected.”



In response to US pressure, the Guatemalan government first enacted a

regulation in January 2005, Government Agreement No. 3-2005 of 5 January

2005, published in the “Diario de Centro America” of 7 January 2005. which

was originally supposed to regulate the implementation of Decree 34-2004,

but in effect reintroduced data exclusivity, in contradiction with Decree

34-2004.  It seems even this initiative was not good enough for the US.  On

February 1, 2005, the leading Guatemalan daily newspaper Prensa Libre,

published an article saying:



   “In order to reduce the pressure [exerted by the U.S.], the regulation

   for 34-2004 was published explaining the protection, but this did not

   fully satisfy the U.S.  Now, Oscar Berger’s government sent to Congress

   new legislation which has ‘saved’ the situation.  ‘We no longer have any

   problem,’ assured Ryan Rowlands, U.S. Embassy spokesperson in

   Guatemala.”



The new draft law to completely repeal Decree 34-2004 will, if enacted,

prevent the Department of Regulation and Control of Pharmaceutical Products

from granting marketing approval to generic medicines in Guatemala for five

to 10 years, thereby giving a market monopoly to originator drug

manufacturers and preventing access to affordable medicines for five to 10

years in the country (Article 1).



In a worst case scenario, this legislation will prevent generic medicines

from entering the Guatemalan market for five years, even if the originator

medicine is not marketed in Guatemala. This means that patients may have no

access at all to some medicines for five years – even exorbitantly priced

originator versions.



Moreover, the proposed law “clarifies” that no authorization or

registration will be given to generic manufacturers for medicines

containing a new chemical entity that are under patent in Guatemala. This

dangerous detail inappropriately links regulatory approval with the patent

status of a drug, and renders compulsory licensing useless.



In a supposed effort to balance the negative impact on access to medicines,

the new proposed law includes a number of exceptions to data protection.

However, only one of those may indeed have such an effect, and only if

implemented in good faith.



This proposed law protects the interests of owners of pharmaceutical test

data to the detriment of public health and access to affordable medicines

and should be strongly opposed.


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