Almost 50% of the African people live on less than $1 a day – the highest rate of extreme poverty in the world. Click here for more information Indeed 32 out of the 48 poorest countries are located Sub Saharan Africa. Accordingly their purchasing power is quite low. While the continent is home to 11% of the world’s population, it bears 25% of the world’s disease burden. In addition, per capita public health spending is very low, often less than $100 in many SSA countries .This compares unfavorably to countries such as the US where per capita health spending hovers around $7000 per person. In Norway it is about $5000 while in the UK it is about $4000. Considering the heavy burden of diseases and the low public health spending, it is critical that the meager resources be stretched as far as possible.
One of the ways this has been possible is the through the use of cheap generic drugs instead of the expensive brand names. For example, within the last decade, the price of AIDS treatment per person fell from $10,000 to $100 per year due to the availability of generics which ushered a public health revolution that enabled millions of poor people access to these lifesaving drugs.
Recently, the Obama administration placed India in its trade black list after some of India Courts made rulings allowing some generic versions of expensive drugs. The Office of the US Trade Representative in its Special 301 Report objected to some aspects of India’s Patent system. Although placement on the list may not attract much attention and may have little impact, it is a bullying tactic that has a chilling effect on any nation that seeks to produce generics.
Indian courts ruled in one of two cases that the production of a generic alternative (compulsory licensing) to Nexavar, a cancer drug that is patented by Bayer AG, the German maker of the drug: it costs over $5000 a month for a standard dose, way too high to be affordable to almost all Indians. The generic version costs $157, although under the new ruling by the Courts Bayer still gets 6% of the royalties on the sales of the generic drug.
In July 2012, a representative of the U.S. Patent and Trademark Office called this decision an “egregious” WTO violation as Nexavar was not being manufactured in India. It is worth noting that compulsory licensing of generic versions is protected by WTO treaties when its goal is to improve public health.
While it is understandable that Research & Development for new drugs is expensive as are the regulations, pricing the drugs at $5000 a month puts them out of reach for too many people, causing an expected push for inexpensive generic drugs. Considering the generics are available at $157 a month in India, there should be room for a reasonable middle ground.
In a second case, Indian courts ruled against a patent filed for an updated version of a cancer drug Glevec manufactured by Swiss pharmaceutical Novartis. The court argued that the newer version did not constitute a new breakthrough worthy of monopoly pricing power. This is one of the strategies that some Big Pharma uses, known as “Evergreening”, where they make minor upgrade to an existing drug, such as changing one molecule, and then make a request for patent that extends monopolies beyond the standard 20 year period. The Obama administration objected to the ruling saying that it “may have the effect of limiting the patentability of potentially beneficial innovations”. As a result of the India’s court’s ruling Glevec costs ten times less in India as it costs in South Africa.
Incredibly, some African countries are being pushed to pass anti-generic drugs laws, making it harder to produce or import them into their countries despite the obvious need of these low priced versions for resource poor settings. For example, Kenya has already ratified an anti-generic drug law that will force its people to buy drugs that are 10 times more expensive but not more effective than generics. Camouflaged as an anti-counterfeit law, it makes it possible for generic drugs exported from any country which are patented anywhere else, other than Kenya, to be classified as counterfeit if the patent holder raises an objection. Uganda and Zambia are also under pressure to pass similar laws. Indeed, India has been sensitizing African health ministers to resist pressure from Big Pharma to prohibit generic versions of drugs.
Considering the fact that Non-communicable Diseases (NCDs), such as cancer, are becoming a major problem in Sub-Saharan Africa and will surpass communicable diseases (such as malaria and AIDS) as leading causes of death in the next decade, availability of affordable treatment for NCDs such as cancer are of immense importance to the continent. In addition the fate of India is linked to that of African countries which have limited capacity to produce generics of their own. South Africa is the only country that produces active pharmaceutical ingredients mostly of non-specialty drugs.
It is to be noted that India’s generic drug industry has been a major factor in increasing access of various treatments to the poor. In the early 2000s treatment for AIDS was totally non-existent in poor countries until the Indian Generic drug manufacturing came into existence, resulting in the US President’s Emergency Plan for AIDS Relief and other major players, to expand their treatment greatly through the use of cheaper generic drugs.
However, some pricing obstacles still remain especially for second line treatments. For example, the combination treatment Lopinavir + ritonavir manufactured by Chicago-based Abbott which is a key component of many AIDS treatments is priced at $400 in poor countries and as much as $1000- $4000 in Middle income countries. This has meant that prices of second line treatments remain beyond the reach of many.
It is worth noting that the US and Big Pharmaceuticals are pushing for stricter intellectual property laws in WTO specifically in the Doha Round of talks. In Paragraph 6 of the “Doha Declaration on TRIPS and Public Health” adopted by WTO members signed in 2002, it was agreed that the poorest countries should have access to generics of life saving drugs.
However, the eventual “diluted” Paragraph 6, agreed to in July 2003 due to delays occasioned by the US government’s inflexibility on the subject, the conditions were such that the amendment did not provide the anticipated feasible solution. Efforts to amend Article 31 of TRIPS (Trade related Aspects of Intellectual Property Rights) in 2005 to offer a straight forward solution met resistance. Enforcement of TRIPS standards through the WTO and the Doha round due in Bali in December 2013 would remove the ability to resort to generics. no wonder many advocates for Africa’s Health hope that the coming Doha round will fail.
While it is important to have policies that address medical innovation ,important global health challenges must also be addressed through a vibrant generic drugs market. While the Obama administration emphasizes consumer affordability in its domestic posture such as in relation to the Affordable Care Act, it seems to be turning the other eye when it comes to its posture abroad. Its laudable goal of an “AIDS Free Generation” may not be realized if patent monopolies and high treatment costs continue to erode poor people’s ability to access life saving treatment.