Name of Lead Authors: Richard Laing and Margaret Ewen
Organizations: Boston University, School of Public Health; Health Action International
Country: USA and the Netherlands

Abstract

This submission argues that the focus of the High Level Panel should be on access to existing essential medicines and that governments need to take action (as listed in Section 2) to ensure medicine availability and to bring prices down. New medicines don’t necessarily equate to better health outcomes; more attention is needed to improve access to those essential medicines that do have proven health impacts.

The authors present evidence that nearly all essential medicines are not patent protected. They identify two TRIPS Plus devices, namely patent linkage and data exclusivity, as potentially serious threats to the entry of generics into a national market once patent protection expires.

By providing summary data from WHO/HAI medicine availability and price surveys, the authors make the case that in low- and middle-income countries’ (LMICs) public sector availability is generally low and patients are forced to seek care in the private sector where prices are high. Availability is worse for chronic NCD medicines compared to medicines for acute conditions. When patients receive care in the public sector they may be obliged to pay high prices as well, with the governments profiting from the sale. High prices often lead to catastrophic health expenditures which can cause families to fall below poverty lines. A frequent reason for these high prices is the failure to use generic medicines.

The authors argue that national governments should promote generic medicines, reduce prices by not charging tariffs and taxes on medicines, remove markups on medicines in government facilities and ensure transparency in medicine pricing. Initiatives such as Zero Mark Up in China, Single Exit Prices in South Africa and the Pharmacia Populares program in Brazil are quoted as examples where governments have taken action to ensure universal access to essential medicines. Such approaches convert the right to health into a practical reality that can be evaluated. 

Submission

While many advocates focus on the affordability of new, extremely high priced, patent-protected medicines, the reality is that existing medicines to treat the global burden of disease often are unavailable in the public sector and are unaffordable in the private sector. Prices of existing essential medicines rarely get attention, particularly from the media. But they matter to millions of patients needing treatment, especially in LMICs, and little is being done to address these concerns. Therefore, this submission focuses on the broad range of obstacles that restrict access to existing medicines and health technologies for people living in LMICs and for poor people living in high-income countries.

Patents are not the primary or most important barrier to accessing these medicines. Many other factors, nearly all of which are under the control of national governments, are far more important in adversely impacting access to essential medicines and technologies. We believe that governments’ fail patients by: applying duties and taxes to medicines; charging excessive markups to patients in public facilities; underfunding medicine purchases which forces patients to seek medicines in the private sector where prices are not controlled; and not promoting generics. The lack of transparency in the medicines supply system leaves patients powerless to confront the situation where many people, including governments, private doctors, pharmacists, wholesalers, distributors and manufacturers profit at their expense. Some LMIC countries, including Brazil and South Africa, have confronted these pressures to some extent.

Patents

In reviews of the WHO Model List of Essential Medicines published since 1991 [i],[ii],[iii] patented medicines have only occupied 5-10% of the items. This reflects the reality that Prescrire[iv] has been documenting for decades that very little true pharmaceutical innovation has been occurring. When innovation with immediate public health impact has occurred, as with antiretrovirals for HIV/AIDS, antivirals for avian influenza and Hepatitis C antivirals, the existing flexibilities within TRIPS and voluntary licensing have worked to ensure access.

Other international regulatory barriers to access: patent linkage and data exclusivity.

While most attention has focused on patents as a barrier to access, there has been far less attention on what the authors believe are far greater threats to access i.e. patent linkage and data exclusivity. Unlike patents, these two barriers are enforced by the national Medicines Regulatory Authority (MRA). These institutions are often understaffed, underfunded and are already challenged to prevent falsified or substandard medicines entering or being produced in the country. Pharmaceutical companies and exporting countries frequently argue for these TRIPS + provisions to be included within bilateral or multilateral trade agreements as patent enforcement, through civil law action, can be slow and depend on companies taking action. By placing the responsibility on national MRAs, companies are likely to gain greater exclusivity and monopoly power to charge exorbitant prices.

Patent linkage occurs when a MRA is required to consider the patent status of a medicine when evaluating an application for market authorization. Conventionally the MRA considers only the quality, safety and efficacy of a product seeking marketing authorization. But some countries, such as the US, require the MRA to consider the patent status when evaluating whether a generic product should be allowed on a national market. MRA staff are unlikely to be competent to assess patent status, and when required to provide this scrutiny less time is available for the vital tasks of ensuring the efficacy, safety and quality of medicines. Some LMICs which joined WTO after the 1995 deadline have been forced to accept such TRIPS Plus requirements and are enforcing completely unnecessary regulations.

Data exclusivity is an even more egregious misuse of trade regulations to create protection for exclusive monopoly marketing. When a patent is granted, the patent owner places in the public domain information about the product and is granted a 20 year exclusive patent protection period. During this time of patent protection, the pharmaceutical company is required to demonstrate to the MRA that the product is of assured quality, is safe to use and is efficacious. Demonstrating efficacy is relatively easy as placebo controlled trials can be undertaken. Such information is submitted to the MRA to receive marketing authorization. With this permission the company has an exclusive right to market their product while they have patent protection. Once the patent has expired, other companies can produce the same medicine and compete once they have received marketing authorization from the MRA. For this they need to demonstrate equivalent quality, safety and efficacy. But to demonstrate efficacy, it would no longer be ethical to undertake a placebo controlled trial as the originator product has already been shown to be more efficacious than a placebo. So the generic company has to undertake a far larger clinical trial to demonstrate that their product is not inferior to the originator product, despite the fact that the efficacy of the now off patent molecule has been proven. Data exclusivity protagonists say such data cannot be used which effectively extends their monopoly and keeps prices high. Many high-income countries do not accept data exclusivity. We urge the High Level Panel to clearly state that data exclusivity should not be used as a barrier to generics entering the market. Patents should determine the period on monopoly market exclusivity not regulatory manipulations.

Availability and price barriers to access in public and private sectors

This section of our submission shows the real access barriers faced by individuals living in LMICs. The vast majority of people in these countries pay out-of-pocket for their medicines[v] and the percentage of people receiving medicines from public sector outlets has fallen between 1995 and 2006. In a series of papers published by Cameron and others the dire situation of people in LMICs has been clearly documented.[vi],[vii],[viii],[ix]

The following figure, published in The Lancet in 20096, shows how availability varies for a core set of essential medicines across 36 LMICs. In the public sector, across all income levels, generic availability averaged about 35% in public facilities.

 Figure 1: Average of country-level mean percentage availability of medicines, by World Bank income group. Data are mean (maximum/minimum).

Figure 1: Average of country-level mean percentage availability of medicines, by World Bank income group. Data are mean (maximum/minimum).

In the private sector, generic availability was about 65% and the availability of originator products increased as the wealth of the countries increased. In 2011, Cameron and others in a  WHO Bulletin7 article showed that acute medicines were far more available than chronic medicines in both the public and private sectors (see table below). So what does a patient in a LMIC do when they need treatment for a chronic NCD?

They are likely to firstly go to the public health facility in the hope that the product is available and affordable. As shown in The Lancet 2009 article, governments usually procure at prices close to the international reference price with some notable outliers. But if the medicine is not provided free-of-charge, the patient will be paying from 3 to 11 times the reference price in the public sector. In the private sector, the patient would pay from 8 to 21 times the reference price for the lowest price generic medicine and far more for originator products. The reasons for high prices of medicines, particularly in the private sector in LMICs, is due to a combination of government actions and inactions and the willingness by the private sector to maximize returns without considering the needs of patients.

Price and affordability

While it may appear intuitive that the price paid for a medicine directly relates to affordability and poverty, it is difficult to demonstrate a direct relationship. Based on prices found in outlets, the WHO/HAI survey method expresses affordability as the number of days’ wages needed by the lowest paid unskilled government worker to buy a standard course of therapy and uses one days’ wages as the cut off for affordability. While this is easy to understand, one Indian survey manager pointed out that 72% of individuals in her state earned less than the lowest paid government worker. Laurens Niens et al9 used two other measurements of affordability, impoverishment and catastrophic expenditure, and showed that for many poor people in Indonesia and elsewhere buying medicines frequently pushed them below poverty levels. A key finding of this groups work was that purchasing originator products, rather than generics, would have a dramatic negative effect on the level of poverty.[i] They quote a finding from the Philippines where purchasing originator brand atenolol (for hypertension) would push an additional 22% of the population below US$1.25 per day, whereas for the lowest priced generic equivalent this demographic shift would only be 7%.

Promoting generic medicines

In the World Health Report 2010, WHO identified the promotion of generic medicines as a key action that could be taken to improve access by making medicines more affordable. They quoted a recent study of 18 medicines in 17 largely middle-income countries that revealed costs to patients could be reduced by an average of 60% by switching from originator brands to lowest priced generic equivalents.[ii],[iii] Some countries, such as the US, have very high rates of generic uptake (86%) but many other high, middle- and low-income countries have very low rates of generic medicine usage. There are many reasons for this finding but concern about quality is an often quoted issue. However, even in countries such as Austria where medicine quality is assured to EU standards, generic use may be very low due to government inaction. In the US and some other countries, actions are taken to speed the entry of generics into the market when the patent expires, and generic substitution is compulsory.

Government’s involvement in the relatively high price of essential medicines in LMICs

Governments frequently apply duties and taxes on medicines.[iv],[v] This is clearly bad public policy. Governments impose taxes for two purposes; firstly to generate revenue and secondly to achieve social purposes. Thus taxing alcohol or cigarettes aims to reduce harmful health effects. Charging an income tax aims to reduce income inequality, but charging a tax on medicines is clearly regressive as the sick are likely to be poor, elderly and suffering from an illness that may prevent them earning. As mentioned above, governments frequently procure efficiently and then sell to their people at considerable profits. As part of national health reform China introduced a policy of Zero Mark Up in public health institutions to prevent this abuse.[vi]

Governments shirk their responsibilities to protect consumers in other ways, including providing information, to both consumers and health care providers, about the equivalence of generic and originator medicines. The Lancet 2009 article showed that using generics, rather than high priced originator brands, would shave about two thirds off the price and hence improve affordability. Monitoring and controlling medicine prices can protect the consumer. This has been successfully done in South Africa with a Single Exit Price with the banning of discounts and rebates for “good” customers.[vii] Brazil has established Pharmacia Populares which provide a limited basket of mainly NCD medicines for patients who register for access to these schemes through the public and private sector facilities.[viii] The provincial administration in the Western Cape province of South Africa have established a Chronic Diseases Unit which centrally pack and distribute each month individually packed chronic disease medicines for nearly 300,000 patients in more than 216 distribution or dispensing points. This is done with a very low stock out rate and at an affordable cost to the province and no cost to the patient.[ix]

Conclusion

This submission aims to persuade the High Level Panel on Access to Medicines to focus on access rather than innovation. While it may appear that having new medicines available would improve public health, the empirical evidence is that this is generally not the case. We have many good medicines that could effectively treat the vast majority of illnesses but these medicines are not universally accessible. Either they are not available or are priced at a level that makes them unaffordable. The global pharmaceutical market is estimated by IMS Health to be worth $1.4 trillion dollars in 2020. Many people and companies in both high- and lower-income countries profit from these sales. Patients need the protection of their governments against being exploited especially when they lack the necessary information to make informed choices. Governments have obligations to their citizens to ensure that safe, effective medicines are universally available at a cost that will not impoverish the patient or their family when they need treatment. The Right to Health is a meaningless slogan if it does not include guaranteed access to effective essential medicines. If the level of universal access to essential medicines is used as a measure of how well a country ensures the right to health, this right will become measurable in a stable comparable way so progress to achieving it can be tracked.

Bibliography and References

[1] Howard, N.J., Laing, R.O., "Changes in the World Health Organization Essential Drug List," The Lancet, Vol. 338, pp. 743-745, Sept. 21, 1991

[2]Laing R, t’Hoen E, Waning B, Ford N Twenty Five years of the WHO Essential Medicines List Lancet 361 1723-1729 2003

[3] The World Medicines Situation 2011 - Selection of Essential Medicines available at http://apps.who.int/medicinedocs/en/m/abstract/Js18770en/

[4] Prescrire available in English at http://english.prescrire.org/

[5] The World Medicines Situation 2011 - Medicine Expenditures
(2011) available at http://apps.who.int/medicinedocs/en/m/abstract/Js18767en/ See Figure 1.9 page 15

[6]Cameron A, Ewen M, Ross.Degnan D, Ball D, Laing R Medicine Prices, availability and affordability in 36 developing and middle income countries: a secondary analysis Lancet published on line December 1, 2008 DOI+10.1016/S1040-6736(08)61762-6 Print version Lancet. 2009 Jan 17;9659:240-249 available at http://apps.who.int/medicinedocs/documents/s17061e/s17061e.pdf

[7] Cameron A, Roubos I, Ewen M, Mantel-Teeuwisse AK, Leufkens HGM & Laing RO,  Differences in the availability of medicines for chronic and acute conditions in the public and private sectors of developing countries Bulletin of the World Health Organization 2011; 89:412-421. doi: 10.2471/BLT.10.084327 available at http://apps.who.int/medicinedocs/documents/s18066en/s18066en.pdf

[8] van Mourik MSM, Cameron A, Ewen M and Laing RO Availability, price and affordability of cardiovascular medicines: A comparison across 36 countries using WHO/HAI dataBMC Cardiovascular Disorders 2010, 10:25doi:10.1186/1471-2261-10-25

[9] Niëns LM, Cameron A, Van de Poel E, Ewen M, Brouwer WBF, Laing RO. (2010) Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-Country Comparison of the Affordability of Medicines in the Developing World. PLoS Med 7(8): e1000333. doi:10.1371/journal.pmed.1000333

[10] Niëns, L. M., Cameron, A., Van de Poel, E., Ewen, M., Brouwer, W. B., & Laing, R. (2010). Quantifying the impoverishing effects of purchasing medicines: a cross-country comparison of the affordability of medicines in the developing world. PLoS Med, 7(8), e1000333. Available at http://apps.who.int/medicinedocs/documents/s17402e/s17402e.pdf

[11] WHO World Health report 2010 Chapter 4 Available at http://www.who.int/whr/2010/10_chap04_en.pdf?ua=1

[12] Cameron, A., Mantel-Teeuwisse, A. K., Leufkens, H. G., & Laing, R. O. (2012). Switching from originator brand medicines to generic equivalents in selected developing countries: how much could be saved?. Value in Health, 15(5), 664-673.Available at http://apps.who.int/medicinedocs/documents/s19556en/s19556en.pdf

[13] Olcay M and Laing R. Pharmaceutical Tariffs: What is their effect on prices, protection of local industry and revenue generation? 2005. Available: http://www.who.int/intellectualproperty/studies/tariffs/en/index.html

[14] Sales taxes on medicines by Andrew Creese (2011) WHO/HAI Review Series on Pharmaceutical Pricing Policies and Interventions. Working paper 5: available at http://www.haiweb.org/medicineprices/05062011/Taxes%20final%20May2011.pdf

[15] Mao Wenhui, Chen Wen (2015) The Zero Mark-up Policy for essential medicines at primary level facilities  China case study WHO reference number: WHO/HIS/HGF/CaseStudy/15.2 WHO Available at http://www.who.int/health_financing/documents/Efficiency_health_systems_China/en/

[16] South Africa Medicine Price Registry Available at http://www.mpr.gov.za/

[17] Bertoldi, A. D., Helfer, A. P., Camargo, A. L., Tavares, N. U., & Kanavos, P. (2012). Is the Brazilian pharmaceutical policy ensuring population access to essential medicines?. Globalization and health, 8(1), 1.

[18] Magadzire, B. P., Marchal, B., & Ward, K. (2015). Improving access to medicines through centralised dispensing in the public sector: a case study of the Chronic Dispensing Unit in the Western Cape Province, South Africa. BMC health services research, 15(1), 1.Available at http://bmchealthservres.biomedcentral.com/articles/10.1186/s12913-015-1164-x