Lead Author: Sergey Golovin
Additional Authors: Aleksey Mikhailov, Andrey Skvortsov, Georgy Giakonia, Gregory Vergus, Ksenia Babikhina, Natalia Egorova, S Natalia Khilko, Tatyana Khan,  Julia Dragunova
Organization: ITPCru
Country: Russia


This presentation examines arguments supporting the statement that patent monopolies have extremely negative impact on affordability of medications even given the existence of the flexible provisions of the Agreement of Trade Related Aspects of Intellectual Property Rights (TRIPS) in national statutory regulations. The analysis of the market for anti-retrovial therapy for treating HIV (hereinafter – the ART) and the direct-acting antiviral medications (DAA) for treating hepatitis C (hereinafter (HCV) in the Russian Federation (RF) is used as an example.


The drug manufacturers’ monopoly status on the market that is due to exclusive ownership of Intellectual Property rights continues to directly impact the availability of vital therapy to patients and to a large extent contributes to the spread of epidemics on the global scale. Even if there are legislative mechanisms in any given country that allow balancing the interests of patent-holders and interests of public healthcare (the so-called flexible provisions of Agreement on Trade-Related Aspects of Intellectual Property Rights, TRIPS), in real life their use is made difficult by a number of significant barriers. Among various problems, the lack of clearly defined procedures and criteria for using the TRIPS mechanisms should be noted, as well as numerous related regulations that prevent their use.
This presentation examines arguments supporting the statement that patent monopolies have extremely negative impact on afffordability of medications even given the existence of the flexible provisions of the Agreement of Trade Related Aspects of Intellectual Property Rights (TRIPS) in national statutory regulations. The analysis of the market for anti-retrovial therapy for treating HIV (hereinafter – the ART) and the direct-acting antiviral medications (DAA) for treating hepatitis C (hereinafter (HCV) in the Russian Federation (RF) is used as an example.
The HIV infection epidemic continues to grow in the Russian Federation and many experts, including those representing official institutions, describe the epidemiological situation as critical. According to the information of the AIDS Federal Center, over 900 thousand patients are currently registered with HIV infection diagnosis in the RF, and the annual growth of new HIV cases is approximately 10% [1].
Official figures show that approximately 200 thousand patients [3] receive ART; that said, according to independent estimates, this number may be lower in real life (around 160 thousand according to the data for 2015 of the Treatment Preparedness Coalition, to be published in March 2016). It must be noted that both official and unofficial estimates agree that the number of those who need ART exceeds the number of those who receive it by several times. In October 2015 the Minister of Health of the RF Veronika Skvortsova stated that the number of those who receive ART is only 23% of the total number of those who need it [2]. Taking into account the new HIV infection treatment protocols adopted by the World Health Organization (hereinafter – the WHO), according to which therapy should be prescribed when the number of CD4 cells is 500 or lower (this threshold used to be 350 cells), the need for medications may be even greater.
Besides the obvious negative implications to the health of those who live with HIV, this problem directly contributes to further growth of the epidemic. As the results of the HPTN052 study [4] show, the decrease of the viral load to an unmeasurable level as a result of having ART reduces the risk of viral transmission by 96%. It follows that extensive coverage by treatment programs should promote the halting of the epidemic, while a shortage of treatment, on the contrary, will significantly increase the risk of further expansion of the HIV infection.
Starting in 2010, regular shortages of anti-retrovial medications have been recorded in the RF, and recently more and more situations occur when, in the context of limited resources, AIDS Centers in a number of constituent territories of the RF do not prescribe therapy to new patients due to lack of funds for medications [5]. In the course of unofficial discussions with representatives of AIDS centers, public organizations receive information that the reason for this problem is the excessively high prices for a number of clinically significant medications, for which there are no counterparts on the market.
The HIV infection treatment program funded by the national budget began in Russia at the end of 2010’s. For the last five years the International Treatment Preparedness Coalition in partnership with other organizations has been independently monitoring procurement and provision of ART medications and HCV medications in Russia and a number of other countries in the Eastern Europe and Central Asia (EECA) region. According to the available information, the prices of medications, for which there are no counterparts on the market due to patenting, remain persistently high for a number of years, while prices for medications for which counterparts have been registered, go down tens of times [6]. Among expensive patented medications without counterparts, the protease inhibitors lopinavir/ritonavir (which is included in the preferred program for continued anti-retrovial therapy under the WHO protocols, patent EA011924B1, expires in 2024), atazanavir (patent RU2186070C2, expires in December, 2018), as well as the combination of nucleoside/nucleotide inhibitors for reverse transcriptase tenofovir/emtricitabine should be noted. This combination is part of the preferred program for early anti-retrovial therapy under the WHO protocols. Because of the registration policy of the company holding the patent, tenofovir/emtricitabine was not available on the RF market until 2012. The existence of the patent (EA015145B1, expires in 2024, there are also other patents) did not allow generics manufacturers to register on the RF market. As a result, the weighted average cost of this medication is approximately USD 3,700 per patient per year [6], which exceeds many times the minimum world price according to information of Doctors Without Borders [7]. The number of patients who receive this medication is less than 1% [6].
It is important to note that the medication tenofovir/emtricitabine/efavirenz in one pill is not registered on the RF market. That is why not a single patient in Russia receives the preferred program for early anti-retrovial therapy under the latest version of the WHO protocols (tenofovir, emtricibine or lamivudine and efavirenz as a combined medication with a fixed dosage, to be taken as one pill once a day) funded by the federal budget. We believe that in this case there is a flagrant violation of human rights to high quality, affordable healthcare services. The combined medication tenofovir/emtricitabine/efavirenz is patent-protected (patent EA015145B1, expires in 2024) and its generic counterparts are not registered in Russia.
Recently, the problem of limited access to medications due to patent barriers has also been actively discussed in the context of hepatitis C virus. According to approximate estimates, up to 5 million people with HCV [8] live in Russia. Therapy is provided to a limited number of patients as part of various federal and regional programs. According to market analysis, the number of people who receive therapy based on direct-acting antiviral medications (DAA ), which is the current world standard for treating HCV, is around one thousand patients (analysis information of the Treatment Preparedness Coalition, to be published in March 2016). The average cost of DAA therapy is around USD 10,000 [8], which is significantly higher than average income per person. That said, the medication sofosbuvir, which is found in most preferred programs for treating HCV according to recommendations of AASLD and EASL, is still not registered in Russia. Due to existence of patents, which patient organizations are currently trying to oppose, manufacturers of generics cannot register sofosbuvir in the RF at this time.
According to the World Bank classification, the Russian Federation is a country with a high level of income and it is to a large extent for this reason that it is systematically excluded from volunteer programs for improved accessibility practiced by pharmaceutical companies and other organizations, including the Medicines Patent Pool. Thus, Russia was not included in any licensing agreements entered into by the Medicines Patent Pool with manufacturers of medications for treatment of HIV infection and hepatitis C virus. Nor is Russia a part of geographical coverage of the agreement entered into by Gilead with a number of Indian companies for the right to manufacture and deliver medications for treatment of hepatitis C virus sofosbuvir, ledipasvir, and velpatasvir [9]. These facts, in conjunction with a large number of medication patents in the RF, mean that one of the few options to provide most access to medications is the use of the TRIPS regulatory mechanisms that allow removing patent barriers, which limit people’s right to healthcare.
The current legislation of the RF contains a number of similar mechanisms, including provisions for issuing compulsory licenses in cases of threat to national security and for opposing already granted patents (post-grant opposition) or patent applications (pre-grant opposition). However, until now, the opportunities for opposing patents have been used to a very limited extent, and the option for compulsory licensing of medications has never been used. Furthermore, key attempts to implement these mechanisms in the area of socially significant diseases (HIV, hepatitis C virus) were made by patient organizations. A recommendation of the option to issue compulsory licenses (hereinafter – CL) for medications to treat HIV infections was made by public organizations back in 2012. Subsequently, this recommendation was included in several reports on monitoring procurement and delivery of ART medications and anti-hepatitis medications in Russia, and in late 2015 nineteen public organizations sent a letter to the Government of the RF requesting considering  the option of issuing CLs due to deteriorating epidemiological situation and policies of pharmaceutical companies. This letter was supported by a number of interested parties and is still under review by the Government. In the answer to the letter, the Ministry of Health of the RF cited positive global experience of compulsory licensing, however it noted certain risks: a possibility of reduced co-operation by foreign manufacturers, as well as cessation of supply to the RF market of original medications for which CL mechanisms would be used [11]. Review of the option to issue CLs in Russia has been taking place for half a year now, despite the fact that provisions of the Civil Code of the RF (Article 1360 and Article 1362) allow using a simplified administrative procedure (a Government decree) in cases of national security threat (HIV infection is included in the list of national security threats under the 2012 National Security Strategy [12]).
For the purpose of removing patent barriers that prevent access to therapy for treatment of HCV, in May 2015 the Treatment Preparedness Coalition and Humanitarian Action Fund have submitted to the Patent Dispute Chamber an application to oppose a patent for the sofosbuvir prodrug – patent No. 2478104 “Nucleosite phosphoramidates as anti-viral agents” in the name of Gilead Pharmasset LLC. Due to the specifics of procedure for reviewing applications to oppose patents, no decision has yet been made on this issue. The Treatment Preparedness Coalition has sent a letter to the Intellectual Property Ombudsman with the Human Rights Commissioner, in which it has expressed concern regarding the specifics of the existing procedure for submitting applications to oppose granted patents. Among others, it refers to the absence of regulations with a clearly defined review timeframe, which makes the opposing procedure practically endless. This situation deliberately favors patent holders, actually limiting the right to protection against unfounded claims for violations of exclusive rights to an object whose patentability is doubtful.
The letter also says that according to the information in the 2014 statistical reports of Rospatent [Russian Federal Agency for Intellectual Property, Patents and Trademarks] the Patent Dispute Chamber reviewed 162 oppositions to patents for inventions and utility models. As a result of their review, 69 patents, including designs, were held invalid (in full or in part). This gives reason to believe that the decision to grant a patent may be subjective and the quality of examination – low. Under these circumstances, the probability is high that secondary and evergreen patents will significantly delay the entry to the market of cheaper generic medications (see the case of the Eurasian patent for abacavir); that is, will limit the access of patients to treatment and will adversely affect the healthcare budget.
Based on the results of the letter, a number of recommendations were formulated for optimizing patent legislation in the RF, namely:
1. To create Regulations with a clearly defined timeframe for reviewing and adopting decisions on opposition to granting patents for inventions, utility models, and designs;
2. To match the timeframe for reviewing and adopting decisions on opposition with the timeframe for judicial settlement of disputes at general jurisdiction courts and commercial courts;
3. For the purpose of improving the quality of decisions, to insure access by the Rospatent examiners to full-scale search systems of non-patent literature and foreign scientific publications databases;
4. To amend the Regulations in the part of mandatory inclusion in the patent application of clear proof of achieving technical results as compared to all previously known or obtained substances (for inventions on medications). The results of examination must be published in open sources within 6 months of adopting a decision or earlier;
5. To create a separate judicial authority, independent of Rospatent and Intellectual Property Courts (IPC) to review patent validity disputes pursuant to the Administrative Procedure Code, as follows from the very intention of the administrative procedure reform or to submit the cases of patent opposition to the jurisdiction of IPC in the first instance;
6. To define liability, including financial liability, for each party to the process of review and decision on the opposition: for Rospatent for granting invalid patents; for the Patent Dispute Chamber for delaying opposition review; for the patent holder in case of patent opposition; for the party filing opposition in cases the patent is deemed valid;
7. To remove liability for patent violation from the area of criminal liability, at least for cases related to public healthcare.
These actions, initiated by the patient community, aim to improve the availability of vital therapy in the RF, which, as has been demonstrated above, remains limited. Limited access to medications violates the right to healthcare and leads to deteriorating epidemiological situation and dire consequences to public health. We believe that the High Level Group for Access to Medications should especially stress in its resolution recommendations for use of mechanisms that allow balancing the interests related to protection of intellectual property with public healthcare interests and the right to health as provided for by international legislation. We believe that these mechanisms should be specified in the national legislation as clearly as possible with the criteria regulating the opportunities for their use, including at the initiative of third parties, such as patient organizations. Currently, the options for using flexible provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) by countries with low and medium levels of income are emphasized; however, the authors believe that active discussion on the subject should be held in countries with high level of income, such as Russia, as well. The High Level Group should recommend developing clear guidelines for countries in this area. First and foremost, we are talking about recommendations for modification of patent legislation as regards the criteria of patentability, integration of opportunities for using the compulsory licensing mechanism, and submission of opposition to the patents (before and after they are granted) to the national legislation. What is especially important is that the High Level Group should give special recommendations for optimal versions of compliance practices. The experience of the RF and other countries in the EECA region, where the compulsory licensing mechanism exists in theory but has never been used (Belarus, Moldova, etc. [13]), shows that the benefit of the hypothetical use of the flexible provisions of TRIPS is cancelled out by the difficulty of their application in real life.

Bibliography and References

1. Fact Sheet. HIV infection in the Russian Federation as of December 31, 2014. Federal Research Guidance Center for AIDS Prevention and Control. Document available online at: http://hivrussia.metodlab.ru/files/spravkaHIV2014.pdf (as of 02.26. 2016).
2. Skvortsova: “At least 21 billion rubles are needed to cover the needs of the HIV infected.” Information portal vesti.ru. http://www.vesti.ru/doc.html?id=2671134 (as of 26.02.2016)
3. UN calls on Russia to copy AIDS medicines. Izvestia. 10.15. 2015. http://izvestia.ru/news/593134

4. HPTN052: A Randomized Trial to Evaluate the Effectiveness of Antiretroviral Therapy Plus HIV Primary Care versus HIV Primary Care Alone to Prevent the Sexual Transmission of HIV-1 in Serodiscordant Couples. A Randomized Trial to Evaluate the Effectiveness of Antiretroviral Therapy Plus HIV Primary Care versus HIV Primary Care Alone to Prevent the Sexual Transmission of HIV-1 in Serodiscordant Couples. http://www.hptn.org/research_studies/hptn052.asp
5. “Immunodeficiency meets medication deficit. HIV infected may have to do without medicine due to inflated prices.” Kommersant. http://www.kommersant.ru/doc/2707768
6. ART medications purchases in 2014: decentralization timeline. Results of ART medication procurement and provision monitoring in the RF. Treatment Preparedness Coalition. St. Petersburg, 2015.
7. Untangling the Web of Antiretroviral Price Reductions. MSF. 17th edition – July 2014. http://www.msfaccess.org/content/untangling-web-antiretroviral-price-reductions-17th-edition-%E2%80%93-july-2014
8. “Hepatitis C treatment in Russia: the old, the new, the unaffordable. Analysis of government procurement of medications for treatment of hepatitis C in the Russian Federation in 2014.” Treatment Preparedness Coalition. St. Petersburg, 2015. http://itpcru.org/wp-content/uploads/2015/08/Analiz_goszakupok_gepatit_2014_FINAL_28.071.pdf
9. Hepatitis C Generic Licensing Fact Sheet. Available at: http://gilead.com/~/media/files/pdfs/other/hcv%20generic%20agreement%20fast%20facts%20101615.pdf
10. International Treatment Preparedness Coalition of Eastern Europe and Central Asia – ITPCru. “Blackbox. Russian HIV policy and its economic effectiveness.” St. Petersburg, 2012. Available at: http://itpcru.org/wp-content/uploads/2014/11/Chernyi_yashchik.pdf
11. Russian Federation Presidential Decree No. 537 of May 12, 2009. Available at: http://www.rg.ru/2009/05/19/strategia-dok.html
12. Health Ministry of the Russian Federation. Letter No. 25-1/3084740-8050. Available at: http://itpcru.org/2015/11/03/obrashhenie-k-ministru-zdravoohraneniya-po-itogam-pravitelstvennoj-komissii/
13. Implementation of flexible provisions of TRIPS for the purpose of expanding access to medications in Belarus, Georgia, Moldova, and Ukraine. Analytical Report. International Bureau of Education. Eastern European and Central Asian PLHIV Association. 2013