Martin Shkreli, an American entrepreneur and hedge fund manager, hogged global headlines last year when he suddenly hiked the price of Daraprim, a life-saving drug used in the treatment of AIDS and cancer, from $13.50 to $750 a pill. Daraprim features in the World Health Organisation’s (WHO’s) list of essential medicines. The drug was “woefully underpriced”, he later said in an interview to the Financial Times.

That Skhreli regularly uses an anti-depressant called Effxor, which costs him only 17 cents a pill and that he claims has made him “invincible”, is a only an inconvenient fact in his “price-gouging” narrative.

Impax Laboratories, which sold Daraprim to Shkreli’s company, sells a two-pill threadworm treatment for $800. This is 200 times more than what the treatment would cost in the UK – these are sold for £3.50 per pill in British pharmacies.

The case of Gilead’s Sovaldi, costing $1,000 a day, for the treatment of hepatitis C is well-known.

An independent academic analysis by pharmacologist Andrew Hill of the UK’s University of Liverpool showed that Americans pay about 600 times more than the manufacturing costs to access modern cancer drugs. A Reuters report says that to work out the drug costs for his research, Hill used the Indian government’s data on the cost of pharmaceutical ingredients, allowing for a 50-percent profit margin but assuming no investment in research.

Also read: Interview with Dr Peter Ghys, interim director, strategic information and evaluation, UNAIDS
 

“On this basis, he found that Novartis’ leukemia drug Glivec actually cost $159 for a year’s treatment, against the $1,06,000 charged in the United States,” the report says. “Roche’s Tarceva for lung cancer cost $236, against a US price of $79,000, and Novartis’ Tykerb cost $4,000 against a price of $74,000.”

Clearly, access to affordable medicines is not an exclusive concern of the poorer countries. One would have hoped, therefore, that the traditional North-South dividing line – conspicuous in multilateral forums – is blurred in this case. But arguments offered by developed economies like the US and the EU in negotiating rooms that delineate the intersections between intellectual property (IP), trade and right to health would dash any such hope.

Access to medicines and the UN

The discussion around IP-related barriers, specifically as elucidated in the UN Secretary General’s (UNSG’s) High-Level Panel on Access to Medicines (HLP), was one of the most heated among the agenda items discussed in the India room of the WHO at the 39th session of the Programme Coordinating Board (PCB) of the Joint United Nations Programme on HIV/AIDS (UNAIDS) held during December 6-8.

The meetings were closed to the press. Knowledge Ecology International (KEI), the award-wining international NGO that works in the field of social justice and IP policy, reported that there was a three-and-a-half-hour discussion on the “Synthesis report of existing research and literature on intellectual property-related and other factors impacting the availability, affordability, and accessibility of treatment and diagnostics for HIV and co-infections in low and middle-income countries”.

Two of the recommendations in the ‘Synthesis report’ were: that UNAIDS should follow the HLP’s recommendations and produce reports on how countries and regions are using IP rules, including the use of flexibilities as provided by the World Trade Organisation (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

For the uninitiated, the UNSG established the HLP in November 2015 with 15 eminent experts, comprising academics, jurists, politicians and representatives from the pharmaceutical industry, to explore policy incoherency when legitimate economic, social and political interests and priorities are misaligned or are in conflict with the right to health, and recommend measures to close the gap between health innovation and access. The report was published in September 2016.

The salient recommendations of the report are: asking WTO to take immediate steps for preventing countries being pressured when using their TRIPS flexibilities, delinking the costs of innovation from the end prices for drugs, vaccines and tests; the protection of the right to establish compulsory licences, when necessary, to protect the right to health of citizens of vulnerable countries; transparency, which includes disaggregated data showing investment by pharmaceutical companies in innovation separated from marketing, advertisement and promotion costs; establishing a database that clearly shows the price of generic, patented, and biosimilar products and where they would be available and an independent review body to be established by 2018 to track innovation and access to healthcare. Additionally, the UN General Assembly (UNGA) should have a special session in 2018 dedicated to access issues and examine the implementation of the HLP and member states’ use of Doha flexibilities.

References to the HLP during the UNAIDS PCB meetings were the most controversial, with discussions dragging on for hours. While developing and middle-income countries like India, Brazil, Iran, Ecuador and Netherlands supported the recommendations in the HLP, developed countries like the UK and the US balked at its mention.

“…we welcome the report of the UN Secretary General’s High Level Panel on Access to Medicines and appreciate UNDP and UNAIDS in supporting their work. As the main initiators, UNAIDS and its co-sponsors should now work with all relevant stakeholders to implement the recommendations of the High-Level Panel,” India said.

“We would recall that the HLP is not a MS (member state)-driven process and that WIPO remains a MS-driven organisation. The HLP report has not been endorsed by any UN body or agency, nor did the members of the HLP reach consensus on the recommendations contained in the report,” the EU said at a WIPO meeting a couple of days later highlighting its stand on the HLP. “We would also like to recall the important and authoritative contribution of the trilateral WIPO-WTO-WHO study entitled ‘Promoting access to medical technologies’ to discussions on this topic,” it continued.

The resistance by a small number of developed countries, whose pharmaceutical companies stand to benefit from current high drug prices, is neither new nor surprising. This group has been opposing the HLP ever since its establishment last year. During the negotiations on draft resolutions at the World Health Assembly 2016, developed countries worked hard to remove the mention of HLP from the texts. These countries instead try to smuggle in the trilateral study between three agencies of WTO, World Intellectual Property Organisation (WIPO) and WHO – a rather insipid compilation of activities related to the subject and containing no recommendations.

Michael Kirby, eminent Australian jurist who is a member of the panel, made a long and impassioned speech at the PCB meeting. “The WHO is the primary global agency with responsibility for healthcare worldwide. It cannot shirk that responsibility or surrender it to others – trilateral or otherwise,” he said.

Surprisingly, the WHO had rejected a request by India in November this year to include an agenda item from the HLP’s recommendations for discussion at its next executive board meeting in January 2017. A group of reputed civil societies, including KEI and Third World Network, shot off an angry letter to WHO director-general Margaret Chan. The discussion on the subject was then held at the WTO.

“The average ARV (antiretroviral) market price of $10,000 per patient per year in June 2000 was completely unattainable for countries where HIV was at its worst. Had it been left to the global market, millions would have died. It was resolute action and the development of generic copies that put ARVs within a cost that allowed the global initiatives of the past decade,” said Kirby, who was one of original members of WHO’s Global Commission on AIDS established in 1988.

“In effect, India, Brazil and other countries, by their national initiatives under their IP laws, became pharmacies for the needy of the world. The costs of patient treatment fell immediately. Suddenly the world could indeed dream of essential HIV healthcare for millions,” he added.

However, his prudent words did not seem to have made a dent on the stand of this group of rich countries opposing the HLP’s recommendations. A few days later,on December 13, negotiations during WIPO’s Standing Committee on the Law of Patents (SCP) broke down when the EU and some others refused to permit the discussion of HLP in future sessions of the SCP.

“We as well are quite baffled by the resistance of some developed countries to discuss issues that clearly fall within the spectra of this committee,” South Africa complained in a statement.

“We see this failure to reach consensus on future work, particularly on patents and health, as a loss, especially for developing and least developed countries, which continue to grapple with issues of lack of access to essential, life-saving medicines, resulting in senseless deaths,” the statement  rightfully said.

Médecins Sans Frontières (MSF) spoke about the serious IP barriers it faces in accessing affordable medicines and diagnostic tools for patients with HIV as well as co-infections such as TB and hepatitis C. In the absence of generic competition due to patent and regulatory barriers, the lowest cost of providing a third line antiretroviral therapy regimen is about 17.4 times higher than the lowest cost for first line treatment.

“We expect that these barriers will only become more problematic, especially in middle-income countries. By 2020, 80 percent of all people living with HIV will live in middle-income countries. Yet it is these countries that face multiple threats – flat-lining or declining funding; stricter intellectual property rules for medicines and health technologies demanded through free trade agreements, especially by the United States, the European Union and Japan; higher medicine prices charged by drug companies that take advantage of the power granted to them under monopolies; and exclusion from industry-led voluntary measures such as voluntary licensing,” MSF said.

The proliferation of free trade agreements (FTAs) in the past two decades has complicated the access-to-medicines issue further. Quite often, FTAs impose additional duties in terms of IP protection on weaker countries fashionably termed as “TRIPS+”. Countries have found themselves being dragged to court for legislating in favour of  pricing and public health measures that negatively affecting the profits of multinational companies.

“To gain the advantages of freer trade, the poor and vulnerable were commonly required to surrender the powers of self-protection. The flexibilities in TRIPS and the protections in Doha proved inadequate to resist the pressures,” Kirby argued.

After hours of drafting at the PCB meeting, a text that “welcomes” the report had to be changed to a weak “takes note” of the report to accommodate the demands of the rich nations.

The final text of the decision reads as follows: “Takes note of the report of the UN High Level Panel on Access to Medicines (UN HLP) and requests the Joint United Nations Programme on HIV/AIDS to facilitate further discussions on access to medicines bearing in mind, as appropriate, the UN HLP report and other relevant reports, including the trilateral report of WHO/WIPO/WTO Promoting Access to Medical Technologies and Innovation and keep the PCB informed of the matter.”

“Physically and figuratively, it will be a tragedy for the HIV response, and for human healthcare more generally, if those with power simply “note” our report and its recommendations. If they consign it to the dungeon to gather dust, then many will be left behind,” Kirby warned in the meeting.

(This article appears in the January 1-15, 2017 edition)