Transcript Presentation - Treatment Action Campaign

Background and follow-up of
the drug court case in South Africa
Dr Wilbert Bannenberg
WHO Technical Adviser Pharmaceuticals
“The goal of the National
Drug Policy is to ensure an
adequate and reliable
supply of safe, costeffective drugs of
acceptable quality to all
citizens of South Africa and
the rational use by
prescribers, dispensers
and consumers”
1996: NDP implementation strategy
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Technical support (WHO/SADAP)
Legislation (Act 90 of 1997)
Standard Treatment Guidelines,
Essential Drug Lists
Training, capacity building programmes
Transformation of Medicines Control
Council
WHO access framework
1. Rational
3. Sustainable
selection
financing
ACCESS
2. Affordable
prices
4. Reliable
health and
supply
systems
What Act 90 was to achieve...
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Parallel import (15C)
Generic substitution
Preventing perverse incentives
(bonusing, sampling)
Licensing dispensing doctors
Pricing Committee
Why did Industry block Act 90?
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South Africa sets dangerous precedent:
1st TRIPS compliant developing country
“TRIPS does not allow parallel import”
“Unfettered powers of the Minister are
unconstitutional”
Perverse incentives = marketing tool
Delay generic substitution (R 2m / day)
1. Selection
1. Rational
selection
ACCESS
Good selection practices
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priority for essential drugs
evidence based standard treatment
guidelines
provide objective information
accompanying training systems
consult widely
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mostly accepted by industry
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New drugs needed!
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big needs:
– growing resistance problems (MDR-TB)
– new diseases (HIV/AIDS)
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limited progress:
– R&D geared towards developed countries
– few drugs for diseases of poverty
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if invented, drugs are patented, and
often unaffordable
2. Affordable prices
ACCESS
2. Affordable
prices
1998: Affordable prices?
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HAART: R 70,000 / year
Cryptococcus: R 13,500 pp / year
MDR-TB: R 25,000 pp / year
CMV retinitis: R 12,000 / 2 weeks
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1998 data
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Discount for public sector?
140
120
124
100
80
Fluconazole, Rands
60
40
29
20
0
SA private
SA public
1.8
Thai generic
Patents keep drugs expensive!
6
5.59
5
4
3
Ciprofloxacin, Rands
2
1
0.4
0
SA public
Indian generic
What can the public sector afford?
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Preventive care: yes
Testing, counselling: yes
Opportunistic infections: almost all
Palliative care: yes
Needlestick injuries: yes
MTCT: yes
Antiretrovirals for AIDS: needs further
price reductions (generics) and
additional drug budget < Trevor Manual
Can the private sector afford ARVs?
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up to 37% of health expenditure already
spent on drugs & medical supplies
14,000 AIDS patients receive ARVs
from “Aid for AIDS” project in SA
After recent price reductions, ARVs are
affordable (USD 900 pp/yr) and costeffective.
Politics of competition: d4T pricing
300
250
BMS: $274
US$
200
150
Brazil: $197
100
BMS: $55
50
Cipla: $69
Hetero: $47
0
Oct
2000
Nov
Dec
Jan
2001
Feb March April
d4T
brand
d4T
generic
Other price reduction strategies
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Information service - UNICEF/WHO/UNAIDS
negotiation: equity pricing for poorer
countries: based on need and ability to pay tiered vaccine prices a model?
reduction of taxes and duties
application of TRIPS “health safeguards”:
– early working / Bolar,
– compulsory licenses,
– parallel imports
Impact of TRIPS on drugs
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Higher prices for new drugs
Generics competition delayed
Weaker local pharmaceutical industry in
developing countries
Drug production concentrated in a few
rich countries (17 countries 84%)
Parallel import
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World-wide shopping for same drug
Cause: differential pricing by industry
Principle not (yet) enabled in Patent Act
Act 90, 15C allows parallel import
Private sector: 5% savings (R400m?)
Public sector: modest saving (R 20m?)
Compulsory licenses
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Limits to exclusive rights in case of:
– public health emergency
– non-commercial government/public use
– excessively high prices (abuse)
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Savings 10-97% (depends on pricing)
Was always legal under SA Patent Law
Bilateral trade pressures prevented its
use; court case reversed this!
Early working (Bolar provision)
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Testing, registering generics (before
patent expiry) currently illegal in SA
but not outside SA (competitive
advantage foreign companies!)
Unnecessary delay 1-2 years
Early working provision agreed by DTI
and DOH (amendment Patent Act?)
1997: TRIPS-plus pressures
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TRIPS = minimum agreement
USA: 301 Watch list; bilateral pressure
for more patent protection
– patent extensions (USA: 23 years)
– no compulsory licensing
– no parallel import
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EU: trade pressure
– no Bolar
1999: International opinion shifts
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AIDS activists follow Al Gore
Clinton “allows” parallel import for AIDS
crisis in Africa (if TRIPS compliant)
USA stops bilateral trade pressures
EU also reverses trade pressures
2000: Accelerating access (?)
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10 May 2000 UNAIDS announcement
Few hard data - bilateral negotiations
Senegal, Uganda, Kenya, Rwanda:
less than 2000 HIV+ people benefit
from 75-90% price reductions
SA: industry offers, but politicians not
interested in ARVs
SA: private sector prices down (USD
900 pp/year)
2001: Why drop the court case?
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AIDS is a crisis beyond proportion
Moral outrage on profits drug companies
Parallel import accepted by WTO
USA, EU changed position
Legal arguments are weak
Bad PR: “stop case whatever it takes”
Multinationals press local PMA
Donations
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Pfizer: fluconazole for cryptococcal
meningitis, oesophageal candidiasis (2
years)
Boehringer Ingelheim: nevirapine for
MTCT (5 years)
prevent loss of control at any cost
(compulsory licensing)
more profitable to donate than to sell
cheap!
Compulsory license or price reduction?
Compulsory License
 Patents Act
 SA controls
 non-exclusive
 allows generics
 clear procedure
 prices cheaper?
 Conditions, royalties
Reduced price offer
 voluntary offer
 international control
 exclusive
 brandname only
 terms not yet clear
 prices higher?
 Conditions?
Current Patent Acts in Africa?
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Many African countries have no preTRIPS patent Act
– <2006: free import of all generics
– >2006: free import of all drugs patented
before 1995
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Is the drug patented? (e.g., ddI in SA)
Namibia, Mozambique: ARVs not
patented (bus trips, Internet pharmacy?)
3. Financing
3. Sustainable
financing
ACCESS
Sustainable financing?
Public
Private
Turnover
R 2 billion
R 8 billion
Per capita
R 64
R 952
Drugs % of
Health
9%
36-43%
Health spending in Africa
1977-1997 (% of GDP)
4
3.5
3
2.5
Private
2
1.5
Public
1
0.5
0
1977
1987
1997
Financing: sustainable?
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Declining total public health funding in
Africa, changing public and private shares.
Substantial out of pocket spending
Four principal sources of finance for health:
out of pocket, tax-funding, insurance
contributions, external support (donations,
loans (debt?)).
National “pooling” strategies recommended
by WHR2000. Public finance offers greatest
pooling potential in LDCs; rarely achieved
ARVs for SA’s public sector?
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250
200
150
100
USD
(millions)
50
0
ARV
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Prices have dropped
90%, but...
Big farma USD 600/yr
Generics USD 250/yr
500,000 AIDS cases
needing ARVs
cost >>USD 125m /
year (and increasing!)
need additional drug
budget!
Botswana example?
drug budget
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4. Health infrastructure
ACCESS
4. Reliable
health and
supply
systems
Infrastructure, supply, training
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new ARV drugs need more than $$:
– more, better trained doctors
– dedicated infectious disease nurses?
– VCT, laboratory services (CD4, VL?)
– informed patients
– COTS, FOTS, NOTS?
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controlled distribution
95% adherence needed…
pilot projects, then scale up?
Court case follow-up
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Act 90 Regulations to be gazetted
(December?)
Sections of Act 90 to be promulgated by
President
Pricing Committee?
Political climate more conducive for
voluntary (and compulsory?) licensing
Pricing Committee
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Minister to appoint members
Committee’s tasks:
– draft Regulations
– study Pricing Systems (public+private)
– monitor prices
– recommend action where needed (PI, CL,
negotiations, etc)
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Pharmaco-economic evaluation
Licensing Dispensing Doctors
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NDP objectives:
– Separate prescribing / dispensing
– Remove financial incentives for Rx
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Licenses for services in rural areas and
where there is no pharmacy
License requires training, inspection
Emergency administration allowed
So what?
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The TRIPS compliance debate is over
Doha to review health issues TRIPS
Country support needed to include
public health safeguards into law
Drug prices will drop to prevent CL
Access to ARVs = next debate
– private sector (SA): cost-effective
– public sector: Botswana test case?
Thank you!