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Last year, when Thailand overcame patent barriers that stood in the way of providing affordable medicines to treat HIV/AIDS, health activists stood up and cheered. When the European Commission, the United States, and the drug companies retaliated by threatening to impose trade sanctions or to withdraw any new medicines from Thailand, the activists were up in arms.

As Cancer Patients Aid Association, we too played our part with other health groups. Together we stressed that Bangkok, in delivering compulsory licences that allowed it to import generic versions of the medicines from India, was acting entirely legally. We cried foul over the attempts to undermine a country’s efforts to provide life-saving drugs for its people. In the end, we prevailed.

Why then, such resounding silence barely one year later? Thailand has once again issued compulsory licences that will allow it to import generic drugs from India – to great joy for us at the CPAA, but to what seems like general indifference in wider public health circles, this time its for cancer drugs.

Rumbles of discontent have once again been heard from pharmaceutical companies, and in Western capitals. The new Thai Minister of Health is showing signs of buckling under the pressure and has said he may review the compulsory licences, which were issued by his predecessor. But where are the activists? Where are the protests?

Is it because, this time, it is not antiretrovirals that are to be imported from generic sources in India, but drugs to treat breast and lung cancer? Is the silence due to the fact this is about saving the lives of patients suffering from chronic non-infectious diseases, whose needs are somehow less urgent, less politicised than deaths caused by HIV/AIDS? Is there, with cancer, stigma of a different kind?

The needs are just as acute. Cancer is the sixth leading cause of death in our country and that according to estimates from National Cancer Registry Program, there are approximately 25 lakh cases of cancer in India and nearly 4 lakh Indians will lose their lives to the disease this year. In Thailand, 30 thousand Thais die from cancer annually, while one lakh new cases are diagnosed every year.

These are not just numbers and statistics. On a daily basis, CPAA struggles to support the treatment and overall needs of thousands of cancer patients. Like any other patient, we believe that every cancer patient has a right to the full range of treatment.

Like HIV/AIDS, cancer treatment in developing countries is unaffordable and medical bills force families into poverty. In Thailand, as in India, the government is unable to provide cancer drugs under the public health care system. Thailand’s National Health Security Office, which runs the universal healthcare scheme, does not pay for the treatment of cancer patients. The drugs are only available at private hospitals and are very expensive.

This means, as with HIV/AIDS, that the role of Indian generics is crucial to getting life-saving drugs to patients. The patented version of Erlotinib, a treatment for lung cancer, sells for Rs. 4,800 a tablet. The generic costs Rs. 9,25 a tablet – five times less. Imatinib, a treatment for chronic myeloid leukemia, sells for Rs. 1,20,000 for a month’s treatment in its original version. The generic costs Rs. 8,000 for a month’s treatment– fifteen times less.

For cancer patients across the developing world, accessing affordable medicines will depend on those compulsory licences. The government of India must be willing to issue compulsory licenses so that generic competition can increase, and more affordable drugs be exported. The Thai government must not reverse its decision: for many cancer patients in Thailand, the compulsory licences offer new hope of continuing treatment.

But if Thailand does turn its back on its cancer patients, they are not the only ones who stand to suffer. This could well set a very bad precedent. If Thailand backs down, other countries like India will think twice before issuing compulsory licenses. Compulsory licences are the only way to ensure affordable sources of medicines exist in the future.

Public health activists should take note, and should come out in force to support of cancer patients in Thailand.

Mr. Y.K. Sapru is the chairperson of the Cancer Patient Aid Association (CPAA). CPAA provides support and services to cancer patients and takes up issues that impacts access to affordable cancer drugs.

THAILAND RECONSIDERING ITS POSITION ON THE ISSUE OF COMPULSORY LICENSES UNDER U.S. AND BIG PHARMA PRESSURE (Briefing Document- February 08)

Access to essential drugs for hundreds of thousands of cancer patients under threat. In late 2006 and early 2007, Thailand took active steps to promote access to medicines for its people, when it issued critical compulsory licenses on two HIV drugs and one heart disease drug (see chronology in annex). Compulsory licenses (CLs) overcome the barriers posed by patents in accessing life-saving medicines, as they enable the procurement of more affordable generic drugs. Although these are entirely legal measures, backed up by international trade law, Thailand subsequently came under intense political pressure to withdraw the compulsory licenses (see below).

Nevertheless Thailand stood firm, encouraging other countries such as Brazil to pursue more ambitious measures to
secure access to medicines for its people. Today though, nearly a year later, a rollback of the Thai policy of using compulsory licenses seems imminent. On 4^th January 2008, Thailand issued compulsory licences for cancer drugs – the country is once again facing political and commercial pressure. Since the CLs were issued, the country’s health minister has changed. The new health minister has announced that he will review his predecessor’s action, and may withdraw the CLs.

Compulsory licenses on medicines are necessary when medicines, which are patented, are unavailable or unaffordable. Under a product patent regime, governments are increasingly feeling the need to issue licenses, particularly where they are directly involved in providing treatment to their citizens. A compulsory license for generic importation or local production is often the only solution to solve procurement problems, increase local availability of drugs and save on costs for patients and the national health budget.

The first set of Thai CLs were issued after protracted negotiations with patent holders for affordable prices failed. Detailed evidence on the price negotiations and their failure was compiled by the Thai Government in ’ Facts & Evidence: the 10 burning issues related to the Government use of patents on three patented essential drugs in Thailand.’

As a result of the CLs, Merck immediately cut the price of first-line anti-retroviral efavirenz from 1,400 baht per bottle to 767 baht per bottle in Thailand, and slashed prices for other developing countries as well. Abbott Laboratories cut the price of second-line drugs lopinavir/ritonavir and a heat-stable form of the same drug that does not require refrigeration, to $1,000 per month from $2,200 per month for 45 lower and middle-income countries.

Thailand is not alone in its issuance of CLs to ensure access to medicines. When negotiations failed in the case of efivarenz, Brazil issued a CL in 2007. CLs have also been issued by Indonesia and Malaysia for AIDS drugs.

As in the case of the first set of compulsory licenses, the Thai government has compiled significant evidence in favour of its decision to issue compulsory licenses on four important cancer drugs.

According to its paper, ‘The 10 burning questions on the Government Use of Patent on the 4 anti-cancer drugs in Thailand,’ cancer causes the death of 30,000 Thais annually, with lung and breast cancers topping the list. More than 100,000 new cases are reported each year. The paper notes, “This is not less serious than the problem from HIV/AIDS.”

The paper noted that most new anti-cancer drugs are patented and priced too high to be included in the National List of Essential Drugs, as the National Health Insurance system cannot afford to provide such expensive treatment to Thais eligible for government healthcare. The only option for Thais living with cancer is to pay out of their own pockets.

The risks for patients are evident – and include driving their family to bankruptcy, or having to abandon treatment because of financial constraints. These problems prompted the National Health Security Board to overcome the financial barriers that prevented them from providing universal access to essential medicines.

The impact on prices of – and access to - cancer drugs

According to the Thai Ministry of Health, the impact of compulsory licences on the prices of, and access to, the four cancer drugs would be considerable:

Thailand has finally issued three compulsory licences on Docetexel, Letrozole and Erlotinib to allow universal access to essential medicines for all the beneficiaries of the publicly financed National Health Security System. Novartis made a last minute offer to the Thai government to provide Glivec free to all patients under the universal healthcare scheme as a trade-off for not seeing its patent overridden.

When Thailand first issued its compulsory licences in 2006 and early 2007, it came under fire from Western governments. This included the threat of trade sanctions from the United States (Thailand was placed on the Priority Watch List reserved for countries that don’t respect trade rules), and direct criticism from the European Commission.

This time is no different: Thailand’s lawful use of compulsory licensing, predictably, has once again come in for sharp criticism from the United States Trade Representative.

The pressure on Thailand from the US is evident from the remarks of new health minister – Mr. Chaiya Sasomsab who stated on 13 February 2008 that such price differences detailed above are “not a big deal for the government to spend on the people’s health. We would lose much more than that if the United States decides to impose sanctions or boycott us over the issue.”

The US has not openly threatened trade sanctions, but reports suggest that Thailand’s status on the Priority Watch List may downgraded further, or that the USA may even pursue Thailand at the World Trade Organization for these policies.

In the first round of compulsory licences in 2006-07, Abbott Laboratories, the patent holders of one of the concerned antiretrovirals, had a particularly strong reaction. Abbott took the unprecedented and shocking step of withdrawing its registration applications in Thailand for seven of its medicines. Effectively this meant that Abbott was withholding those medicines from the Thai market. Among the seven is the vital drug used as a second-line in the treatment of HIV – heat-stable lopinavir/ritonavir - that does not require refrigeration, making it invaluable in tropical countries such as Thailand.

With this retributive act, Abbott has not only punished the Thai government for daring to adopt legal measures to access affordable drugs for its people, it has also shown scant regard for the lives of millions of Thai people desperate for life-saving drugs. Most significantly, Abbott has sent out an unequivocal message to developing countries that it will use all of its might to prevent the entry of generic drugs into developing country markets.

The patent holders for clopidogrel, meanwhile, sought to undermine attempts by Indian generic manufacturers to export the drug to Thailand. Sanofi-Aventis, thus strong-armed Indian generic suppliers, by wrongfully threatening legal action, into not exporting the drug to Thailand.

7 Feb 07 WHO DG expresses regrets and acknowledges the decision of the Thai Government to issue compulsory licenses is “entirely the prerogative of the government and fully in line with the TRIPS Agreement”

10 Feb 07 Wall Street Journal publishes editorial titled ‘Theft in Thailand’, claiming that the CLs were “technically” legal, that WTO language was “regrettably vague”, that it was difficult to argue that Thailand had an AIDS epidemic and that the Thai GPO’s “faulty” drugs were likely responsible for HIV drug resistance.

14 Mar 07 Abbott announces its decision not to launch any new medicines in Thailand

20 Mar 07 U.S. Chamber of Commerce, the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region releases a study “showing that Thailand's new economic policies and poor intellectual property safeguards could be jeopardizing international investment.”

23 Apr 07 US Ambassador to Thailand asks Thai government to negotiate with drug companies.

26 Apr 07 Op-ed in Bangkok Post by international law firm, Baker & McKenzie lawyers, (clients include Abbott, Pfizer, Aventis) claims that Thailand has violated TRIPS.

30 Apr 07 Thailand added to the Priority Watch List in annual Special 301 report citing “a weakening of respect for patents” (this had no happened since 1992). USTR in its report says, “In late 2006 and early 2007, there were further indications of a weakening of respect for patents, as the Thai Government announced decisions to issue compulsory licenses for several patented pharmaceutical products.”

7 May 07 Thailies.com and Thaimyths.com - websites attacking the Thai government’s decision are launched by ‘USA for Innovation’ a short lived group with no known history and an Internet address that has disappeared. The ‘group’ reportedly had links with PR firms appearing for drug companies. The two websites reportedly stopped functioning on 18 May.

8 May 07 USTR’s ‘Action Plan for Thailand’ after its downgraded trade status reportedly includes limiting grounds for issue of compulsory licenses.

9 May 07 ‘USA for Innovation’ publishes full page advertisements in the Wall Street Journal, the Nation, the Post Today and the Asia Media titled ‘Will Thailand’s Web of Deceit Cost American Jobs?’ The ad stated that the Thai government violated WTO rules, that other countries seldom issued CLs, that the Thai GPO’s drugs were untested knock offs and that Thailand was stealing intellectual property. Shortly after this, the USA for Innovation website goes silent.

14 May 07 PhRMA press release states, “PhRMA is deeply troubled by the recent trend toward the issuance of compulsory licenses for pharmaceutical products. This misguided focus on short-term ‘budget fixes’ could come at a far greater long-term cost, potentially limiting important incentives for research and development that are necessary to positively impact the lives of millions of patients worldwide

22 May 07 PhRMA President and Chief Executive Officer Bill Tauzin meets Thai Public Health Minister, Mongkol na Soghkla.

23 May 07 PhRMA President and Chief Executive Officer Bill Tauzin says that if Thailand continues to issue compulsory licenses for the production of drugs protected by patents, PhRMA could press the administration for tougher action. He specifically mentions the possibility that the U.S. could eliminate trade preferences allowing some Thai imports to enter the country duty-free.

23 May 07 Thai public health minister, Mongkol na Songhkla says his meeting with U.S. Commerce Secretary Carlos Gutierrez was "totally negative." "It's clear he obviously represents the drug companies. There was no sign of friendship left when he started talking," the Bangkok Post quoted Mongkol as saying.

10 July 07 European Trade Commissioner Peter Mandelson expresses concerns about new approach of Thailand Government over the use of compulsory licensing which is detrimental to the patent system.

20 July 07 US Ambassador expresses concerns to Thailand Prime Minister over additional compulsory licences.

25 Aug 07 Sanofi letter ignores Thai CL on clopidogrel (issued on 25^th January 2007) and wrongfully asserting that the generic company Indian manufacturer Bioscience is committing patent infringement if they export the generic version to Thailand and that they must wait until the patent expires in 2019.

4 Jan 08 Thai public health minister, Mongkol na Songhkla signs ministerial announcements for CLs on four cancer drugs.

11 Jan 08 BIO, the trade group for biotechs, writes to USTR urging that Thailand be classified as a Priority Foreign Country as among the worst violators of intellectual property rights. Thailand is already on the rung below, the Priority Watch list.

16 Jan 08 Sanofi Aventis sends a letter to another Indian generic company - Cadila Health Care Ltd and once again states that the “compulsory license for Clopidogrel has not yet been put in place in Thailand” and once again threatens the generic company with legal action if they supply the drug to Thailand.

1 Feb 08 Increasing reports of big pharma lobbying the USTR to classify Thailand a Priority Foreign Country.

2 Feb 08 Outgoing Thai public health minister says the poor would lose if the compulsory licensing policy is reversed by the new ‘pro-business government’ due to take over power.

7 Feb 08 New Thai health minister, Chaiya Sasomsab, says he will review the CLs on the cancer drugs and that the CL policy “has advantages and disadvantages…Decision makers have to weigh patients’ access to medication and patent violation problems.”

13 Feb 08 New Thai Health Minister says the country fears a further downgrade in trade status by the US, which may attract sanctions.

19 Feb 08 WHO mission comprising WTO and UNDP affirms that use of compulsory licensing by Thailand is legitimate.

19 Feb 08 Permanent secretaries of the commerce, foreign affairs and public health ministries conclude that the ministerial announcements on four cancer drugs made by former public health minister Mongkol na Songkhla are legitimate and cannot be lifted.

19 Feb 08 Sources indicate the new health minister will take no further action to operationalise the CLs.

If Thailand goes back on its decision, not only will cancer patients in Thailand face the consequences, but also other countries like India will probably think twice before issuing compulsory licenses for cancer, if they do it at all. This could well set a very bad precedent in limiting CL for diseases such as HIV/AIDS.

Throughout the developing world access to essential medicines are being threatened by the expansion of patent monopolies on drugs. If faced with a crisis of overpriced patented AIDS and other essential drugs, compulsory licenses will possibly be the only viable option for governments.

At this time, when Thailand is reconsidering its use of compulsory licensing and with increasing (indirect) threats of a further downgraded trade status, all organizations, the medical community, public interest groups, PLHA networks must join cancer patients in opposing the review of the compulsory licenses and ensure that affordable medicines are procured under them.

In accordance with the terms of reference of the mission, this report provides technical information and policy options on the general rules and mechanisms available to countries for use of the flexibilities contained in the WTO TRIPS Agreement and other international agreements, in order to promote greater access to pharmaceutical products.

The report of the mission is not intended to make any evaluation or assessment of the use of TRIPS flexibilities in Thailand.

Although the mission met with the various stakeholders during its visit to Bangkok, the discussions were aimed at facilitating an understanding of the context and circumstances related to the granting of compulsory licences in Thailand, and identifying the appropriate technical and policy support required on the use of TRIPS flexibilities.

This report has been prepared under the responsibility of WHO. In the context of resolution WHA60.30, resource persons from UNCTAD, UNDP and WTO participated in the mission to provide technical and factual information with regard to the TRIPS Agreement.

Members of the mission:

Germán Velásquez, WHO/HQ (Team Leader)

Bill Aldis, WHO/SEARO

Karin Timmermans, WHO/SEARO

Cecilia Oh, UNDP

Kiyoshi Adachi, UNCTAD

Roger Kampf, WTO

Xavier Seuba, WHO temporary adviser, Pompeu Fabra University, Barcelona

Contents

Terms of reference

Introduction

I. Cost-containment mechanisms for pharmaceutical products

II. Non-voluntary licences for government use: practical aspects and procedures

III. Other important TRIPS flexibilities to promote access to medicines

IV. Information on country experiences with the use of TRIPS flexibilities to protect public health and access to medicines

V. Guidelines and tools on the use of TRIPS flexibilities to promote access to medicines

VI. Final remarks

Terms of Reference

WHO Mission on the use of TRIPS flexibilities

Bangkok, 31 January to 6 February 2008

In the context of resolution WHA60.30, WHO headquarters and the Regional Office for South-East Asia, in collaboration with other relevant competent international organizations, will provide technical and policy support on the general rules and mechanisms available to countries for use of the flexibilities contained in the TRIPS and other international agreements in order to promote access to pharmaceutical products.

The mission will provide relevant materials and guidelines for the implementation of TRIPS flexibilities and suggest possible indicators^[1]for future assessment by the Thai authorities of the measures. It will also advise on the practical aspects and procedures for the use of TRIPS flexibilities: compulsory licensing and government use in particular.

The mission will provide factual information on other country experiences on the use of TRIPS flexibilities to protect public health.

As requested by the Thai authorities, the mission will include visits (or a technical workshop) to: the National Health Security Office, the Food and Drug Administration, the Department of Disease Control, the Government Pharmaceutical Organization, the Department of Intellectual Property, the Ministry of Foreign Affairs, the IHPP (which is doing a study on the compulsory licensing policy process), the nongovernmental organizations, the pharmaceutical industry and some consumer groups, including PLWD, and also discuss with the Minister of Public Health.

Introduction

In the context of resolution WHA60.30, the Minister of Health of Thailand requested WHO, in collaboration with other competent international organizations, to provide technical and policy support on use of the flexibilities contained in the WTO TRIPS Agreement in order to promote access to pharmaceutical products.

WHO, in its Medicines Strategy (2004-2007), identified four key objectives; namely: the strengthening of national medicines policies; improving access to essential medicines; improving the quality and safety of medicines; and promoting their rational use. In order to ensure that national medicines policies are effectively implemented to achieve the objective of improving access to priority medicines, WHO has identified the need to support countries in their efforts to use public health safeguards in international, regional and bilateral trade agreements.^[2]

WHO’s policy perspectives are informed by the following basic principles:

· "Access to essential medicines is a human right

· Essential medicines are not simply another commodity,TRIPS safeguards are crucial

· Patent protection has been an effective incentive for R&D for new drugs

· Patents should be managed in an impartial way, protecting the interests of the patent-holder, as well as safeguarding public health principles