Access to Medicines

Poorer Countries Demand More

By | Updated March 26, 2015 2:01 PM UTC

Not long ago, being poor in a poor land meant having little or no access to the most advanced medicines. That’s slowly changing. After pharmaceutical companies were compelled to provide discounted HIV drugs to low-income countries, it was no longer a given that the ability to pay determined who got drugs. Developing countries are asserting a right to medicines at a reasonable cost and using licensing laws and patent regimes to enforce it. Drugmakers, accustomed to keeping prices high initially, in part to recoup research and development costs, are having to adjust. Global health experts disagree about what pricing mechanisms would best meet the needs of both sides.

The Situation

The latest debate over access to medicines revolves around Gilead’Sovaldi, a cure for hepatitis C that in the U.S. costs $84,000 for a full treatment. Since September 2014, the California company has awarded 11 generic-drug makers in India rights to make copies and sell them there and in 91 low-income countries for a cut of the sales. While the licences could put a generic version of the treatment within the reach of half the world’s hepatitis C sufferers, critics note that it left out middle-income countries such as Thailand, Morocco and Brazil, which have high rates of hepatitis C. Gilead’s effort to sell brand-name Sovaldi to prosperous Indians, for about $900 a course, is under challenge by a non-profit group of lawyers and scientists. In the case of Bayer’s cancer drug Nexavar, India’s government awarded a patent but then issued a compulsory license in 2012, permitting local production without the company’s consent.

Source: World Health Organization

The Background

Drugmakers have little incentive to invest in therapies for diseases that thrive mainly in the poorest countries. As a result, many such ailments, for example dengue fever and sleeping sickness, lack good treatments. Moreover, the World Health Organization estimates that a third of the world’s people have no regular access to existing medicines. This deprivation was starkly illustrated when effective but costly anti-HIV treatments became available in 1996, sharply reducing AIDS deaths in rich countries but not poor ones. In light of this, changes were made to the World Trade Organization’s intellectual property agreement in 2001. These changes, called the Doha clarifications, gave poor countries the right to address public-health needs by issuing compulsory licenses if they had drug-manufacturing abilities and, if they didn’t, by importing generics. Soon, a price war with generic makers combined with pressure from AIDS activists forced Big Pharma to offer affordable HIV drugs to poor countries. From 2001 through 2013, 15 developing countries used compulsory licensing, the threat of it and rejection or revocation of patents to gain access to medicines. These included all available HIV drugs as well as seven medicines for influenza, cancer, heart disease, hepatitis and erectile dysfunction.

The Argument

Pharmaceutical companies, which produce controversially high profit margins, argue that they need healthy returns to bankroll the development of future medical advances. They nevertheless are responding to the demand for improved drug access for the poor. Apart from donating medicines, one option is setting tiered prices according to a country’s development level or income. According to a 2011 study, this can result in prices in developing countries that are within the reach of the upper and middle classes but not the poor. Tiered pricing can also create a backlash against manufacturers. After Gilead offered courses of Sovaldi for $900 in Egypt and India, two U.S. senators asked the company for detailed information on how it arrived at its prices amid a U.S. debate over which patients would qualify for it. Voluntary licensing to low-cost manufacturers could bring prices down. Still, critics of this practice, such as Doctors Without Borders, don’t like that it allows the originator to limit where discounted drugs are sold. Doctors Without Borders advocates alternative ways of funding drug development to keep prices low, such as through not-for-profit groups and prizes that cover research and development costs.

The Reference Shelf

  • The 2014 report of the Access to Medicine Foundation rates how the 20 largest research-based drug companies address drug access.
  • A paper in the Chicago Journal of International Law on barriers to drug access.
  • A paper in Developing World Bioethics on the role of patents in determining drug access.

 

First published March 26, 2015

To contact the writer of this QuickTake:
Ketaki Gokhale in London at kgokhale@bloomberg.net

To contact the editor responsible for this QuickTake:
Lisa Beyer at lbeyer3@bloomberg.net