KEI Intervention at SCP20 on Patents and Health28 January 2014
Thank you Chair.
As the SCP considers the relationship between patents and health, it is timely and relevant to reflect on the recent statement made by Marijn Dekkers, the CEO of the pharmaceutical company Bayer on December 3rd, 2013. The drug company is in the middle of a dispute in India over the pricing of the cancer drug Nexavar. Bayer set the price of Nexavar at $65 thousand dollars per year in India, and in response, the India government granted a compulsory license. Competition from two generic drug companies led to a 97 percent decrease in the price of this drug. Dekkers described the compulsory license as “essentially theft,” and then went on to say, “We did not develop this medicine for Indians. We developed it for western patients who can afford it.”
In setting the price on a drug for a deadly disease like cancer, Bayer determined that the company was better off excluding nearly all patients in India. This is why governments need to have the authority to break patent monopolies — to protect health and, “in particular, to promote access to medicines for all,” an obligation of the 2001 Doha Declaration on the TRIPS Agreement and public health.
During roughly the same period, Merck and a number of other large drug and medical device companies proposed an extensive public relations and lobbying campaign to undermine patent reform in South Africa. Also during the same period, Gilead received US FDA approval for an important new drug that can cure hepatitis C, and announced it would charge $1,000 per pill, and a total of $84,000 for a course of treatment.
Concerns about patents and health are not only a developing country issue.
Since 2011, drug companies have registered a record number of new cancer drugs with the US FDA. Most of the new cancer drugs are priced at more than $60,000 per year. More than 10 are priced at more than $100,000 year, and some are nearly $400,000. Doctors, reimbursement authorities, patients and employers in high income countries like the United States are shocked at these aggressive prices, and are struggling to control costs and protect access.
Greece and Spain are considering the use of compulsory licenses on patents for super expensive cancer drugs.
Germany, the United States, Belgium, Canada and France have all issued or considered compulsory licenses of patents on medical devices and diagnostics.
In considering the work program on health and patents, the SCP needs to identify specific activities that are relevant to the challenges governments face, including those with aging populations, budget deficits and escalating healthcare costs.
The African Group and the Development Agenda Group have proposed a series of studies, meetings, research projects and technical assistance activities which collectively strengthen the ability of states to negotiate and manage some of the challenges directly relating to patents and health.
Some government delegations at seem intent on blocking any work that could weak drug company monopolies. This is wrong — wrong for developing countries, and also wrong for countries with developed economies.
The US proposal (SCP/17/11) at the SCP, first made in 2011, is basically a defense of the worst abuses of the patent system in the field of health — even as courts in the United States have issued compulsory licenses on at least four medical devices in recent years and recently abolished patents on certain gene patents. In addition, the Congress has created an automatic compulsory licensing program for undisclosed patents on biologic drugs as part of the Affordable Care Act.
The United States should abandon its proposal, and delegates should negotiate a work program using as its starting point the Africa Group/DAG proposal.
If the patent system is going to survive and thrive, it will have to be seen as an instrument to benefit society, and not as a weapon of mass destruction. Reforms that moderate the worst abuses of the patent system are good for the patent system, because these reforms protect the patent system’s legitimacy and role in promoting social welfare.