Generic drug companies are dismissive of the needs of India

[Guest guest]

What's Mine is Mine; What's Yours is Negotiable

By Norris Published 08/12/2004

A drug manufacturer in a country that does not recognize drug

patents has pioneered a new concept. The Indian-based pharmaceutical

firm Cipla has now secured a patent… on products already under

patent.

Cipla's Joint Managing Director declared to Reuters in Bombay on

July 19: " the patent has been granted in South Africa … this is our

invention. "

The patent has been granted for a fixed dose combination AIDS drug

called Triomune. Triomune takes three separately patented products --

GlaxoKline's lamivudine, Bristol-Myers Squibb's stuvudine, and

Boehringer Ingelheim's nevirapine - and rolls them into one dose.

The drug firms holding the individual patents on the antiretroviral

(ARV) medicines never cross-licensed a fixed dose combination. Since

they have not done that, Cipla simply stole those companies'

intellectual property, collectivized the theft and brought the new

concoction under one patent: theirs.

Is this some kind of an " invention " or what? (Well, it is some

kind.)

Assisting in this expropriation of private property is the World

Health Organization (WHO). On December 1, WHO announced a plan to

treat 3 million AIDS-infected patients by the end of 2005. Triomune

is the cornerstone of this plan, the drug of choice -- WHO's choice.

Unfortunately for poor patients, WHO found it necessary to announce

on May 27 that one of the products in the fixed-dose combination,

Cipla's lamivudine, had to be de-listed from the WHO's

Prequalification list of medicines it approves for use. The reason?

WHO could not guarantee the copy drug's bioequivalence to the

patented product.

Further assisting Indian companies in the theft of this property is

the Clinton Foundation which has boasted since October 2003 of a

plan to help procure Triomune for less developed countries at $140

per person per year. Despite boasting of having negotiated this

price on behalf of poor countries, not one sale at that price has

been reported. Lest facts get in the way of happy talk, on August

9th at the 3rd Annual Pharmaceutical Awards in Boston, the Award for

Advancement in the Cause of Worldwide Health was given to the

J. Clinton Foundation for having 'announced' agreements with

major companies to reduce prices: a Dream Conferred

Although WHO's Prequalification program lists both patented and

generic drug products, the selection criterion used in procurement

tenders by UN agencies limits them to the purchase of generics. The

reason: none of the pharmaceutical companies making patented drugs

produce generic versions of those same drugs.

Thus far, the only companies Prequalified by WHO to produce generic

knock-offs of patented products are located in India. Other

countries also produce these knock-off drugs, but they have not yet

been Prequalified by WHO.

The current WHO policy, however inadvertent, has bestowed a sort of

Most Favored Nation status on one of its Member States, India, while

imposing non-tariff barriers against competition from other Member

States. Approved manufacturers must sell their products to approved

buyers at the lowest bid price offered by any buyer. Sellers must

sell at the requested price or leave the market. Since sellers of

generic drugs are currently limited to India, WHO has authorized a

de facto cartel to regulate production, selection, pricing, and the

marketing of goods in international commerce.

It is not immediately obvious how WHO policies can help the

development of a viable market, sustain it over time, ensure that

new innovations in therapeutic medicine will continue to benefit the

poor, or how any of this can provide to the poor that essential

ingredient of freedom: choice.

This much is clear, though: South Africa is the current epicenter of

global HIV/AIDS in terms of prevalence rates; but India, with more

than 5 million cases, is rapidly overcoming it. Of the estimated

23,000 Indian nationals under antiretroviral treatment, only 1,000

are being treated by its government, leaving the vast majority to

private providers.

Yet, WHO has endorsed Indian pharmaceutical manufacturers as the

global exemplar in the provision of drugs for AIDS treatment. Why is

it of no consequence to WHO that the Indian cartel is so dismissive

of needs in its own country? Or that once this cartel was elevated

into a competitive position through a WHO-sanctioned dispossession

of others' intellectual property, the leading member, Cipla, quickly

reverted to established procedures in patent law to protect its

commercial interests?

Perhaps a small percentage of Cipla's sales resulting from its South

African patent can be designated to expand AIDS treatment in India.

Norris is Senior Fellow, the Hudson Institute, Washington,

DC.

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