Lifting the veil on drug pricing and trade agreements

In November, United Nations secretary general, Ban Ki-moon, launched a high-level panel to investigate access to medicine globally. A large part of the work focused on how to balance the economic interests of governments and manufacturers keen to, for instance, retain patent protection on drugs with public health needs.

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“Governments seek the economic benefits of increased trade. On the other hand, the imperative to respect patents on health technologies could, in certain instances, create obstacles to the public health objectives and the right to health,” Ruth Dreifuss, panel co-chair and former president of the Swiss Confederation, explained in a statement. Dreifuss chaired the group alongside former Botswana president, Festus Mogae.

In 10 months, the UN body gathered more than 6,000 contributions from governments, the private sector and civil society. It also held international consultations in Johannesburg and London.

In a report, the group called for far-reaching changes to increase transparency about not only how drug prices are set but also how countries such as the United States negotiated free trade agreements that often put patent protection in the spotlight.

What companies spend on research and development and how much this contributes to drug prices often remain closely guarded secrets. The report notes that the average cost of a 12-week course of the hepatitis C drug Sofosbuvir costs about $42,017, according to a survey of 26 countries. But the study also found wide variations in national prices for the drug, with US patients paying about 70% more for the drug than those in Japan.

The panel notes that without access to information about how drug prices are set, countries have varying success in negotiating affordable drug prices.

It argues that governments should require manufacturers to disclose not only how much of drug prices are driven by the need to recoup costs but also how public funding, including tax incentives, contribute to drug development.

Report comes as South African patent reform drags on

In 2011, South Africa was able to halve the price of HIV treatment after it required that companies tendering to supply HIV drugs submit detailed breakdowns of drug costs, listing the proportion of costs associated with production — from active ingredient purchases and drug formulation to shipping.

Following testimonies made in Johannesburg from patients, the panel has also recommended that patent laws be amended to prevent abuse, in particular instances in which older drugs are given new patents in a process called evergreening.

Babalwa Malgas told the panel that when she was diagnosed with an aggressive form of breast cancer, medical aid denied her treatment with the recommended drug, Herceptin because of its high costs.

Doctors Without Borders (MSF) has argued that South African patents on the drug expire at least 10 years later than they do in the United Kingdom or the US as a result of unmerited patent extensions in South Africa.

After more than four years reviewing its patent policy, South Africa’s department of trade and industry released what it is calling a consultative framework for public comment on Friday. Although the document is not a policy, it does say that adopting a more rigours patent examination is crucial. It also notes that making the process more transparent — and allowing third parties to contest patents before they are issued, as is done in India — would help the country ensure awarded patents were merited.

Further UN action urged

In April, MSF also raised the alarm over what it believed was calls by the European Union for India to tighten its patent regime during bilateral trade talks. With a long history of generic medicine production, India provides many of the affordable antiretrovirals that HIV-stricken countries in Africa depend on.

While the European Union and India remain in negotiations, the new UN report has slammed tactics and threats it says have been used in such trade talks to elicit patent protection gains that run contrary to international intellectual property laws that protect public health interests.

MSF has welcomed the report.

“(The report) puts forth actionable recommendations to help overcome the challenges that our medical teams have faced for decades – being left essentially empty-handed when the medicines, vaccines and diagnostics we need for our patients don’t exist, or are too expensive," said Rohit Malpani, director of policy and analysis for the organisation's Access Campaign.

"The report’s global scope recognises that today all countries face challenges in ensuring availability and affordable access to the medical tools that people need to live healthy and productive lives."

The panel has called on Ban to establish an independent review body to monitor progress in access to medicines and the implementations of recommendations made in the report. It has also asked that a special UN session on the topic be held by 2018.