Thailand Takes On Drug Industry, And May Be Winning

[ThaiGoon]

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Thailand Takes on Drug Industry, and May Be Winning

Apr 12, 11:09 AM

By Thomas Fuller

When Thailand announced earlier this year that it was breaking patents on drugs to treat HIV and heart disease, Western pharmaceutical companies reacted with fury. Abbott Laboratories, the maker of the AIDS drug Kaletra, took the radical step of withdrawing all of its new products from Thailand, depriving Thais of access to new drugs for rheumatoid arthritis, kidney disease, heart disease and high blood pressure.

But two months after the uproar began, there are signs that Thailand has gained the upper hand. Its aggressive stance could be paving the way for other developing countries to extract lower drug prices from pharmaceutical giants in Europe and the United States.

Abbott announced Tuesday that it would cut the price of Kaletra in low-and medium-income countries, including Thailand, to $1,000 a patient per year. That is less costly than any generic on the market and 55 percent less than the current price, the company said.

The Swiss drug company Novartis offered an effective 75 percent price reduction this week in its leukemia medicine, Glivec, after Thai officials said they were studying a compulsory license on the drug, which would have allowed the government to produce it in its own factories and distribute it on a nonprofit basis.

Merck, the U.S. drug maker, has also offered to cut the price of its HIV drug, Efavirenz, here after the Thai government announced it would break the patent for that drug last November.

To bring drug companies to the negotiating table, Thai officials used as a bargaining chip a World Trade Organization rule introduced in the 1990s. The rule, part of the Agreement on Trade-Related Aspects of Intellectual Property Rights, or Trips, gives countries the right to break a patent and either produce the drug themselves or import generics from other countries.

Many countries, including Brazil, Indonesia, Malaysia, Mozambique and Zambia, have broken or have threatened to break patents on drugs for HIV and other infectious diseases.

"People told us, 'It's useless to negotiate with them unless you start to announce that you want to go for compulsory licensing," said Suwit Wibulpolprasert, a senior adviser on disease control at the Thai Ministry of Public Health. "Then they start to talk to you.' "

"We learned that lesson," Suwit added. "After we announced our intention to implement compulsory licensing they knocked at our door almost every day."

After breaking the patents, Thai officials received support and plaudits from many global health organizations, including Medecins Sans Frontieres, the Clinton Foundation and Unaids, the UN agency charged with helping tackle the disease. People from these organizations say Thailand is taking advantage of an underused provision in international law that could help save lives.

Support and sympathy for Thailand among health advocates also rose after Abbott announced its partial boycott in March. Medecins Sans Frontieres called the decision to withhold new drugs "appalling."

Some of Abbott's investors also protested the move. Christian Brothers Investment Services and members of the Interfaith Center on Corporate Responsibility, who together own $35 million in Abbott shares, said they were concerned that the company's actions might damage its reputation.

"To our knowledge, no pharmaceutical company has before withdrawn AIDS drugs in response to a pricing or licensing dispute," the groups said in a statement. "By keeping life-saving medicines like Kaletra off the shelves in Thailand, Abbott Labs is threatening the health of Thais who need access to these drugs for survival."

[Mid]

Good News ,

and some deservedly red faces at Abbott's no doubt ,

lot to be said for ethical shareholders

[onzestan]

Proves to me that taking an aggressive stand for what you truly believe in works.

Well done Thailand, I hope others follow.

Onzestan

[Begbie]

Just more propaganda from the non-elected military junta govt.

"We're doing a great job".

Sure you are boys.

[ColPyat]

http://feed.insnews.org/v-cgi/feeds.cgi?fe...tory_id=2830470

Thailand Takes on Drug Industry, and May Be Winning

It's a dangerous move, but if they win, and the pharma-giants compromise in the end, then Thailand has my applause in this.

[taxexile]

anything that can put affordable drugs into the hands of poor patients has to be a good thing ,

[PeaceBlondie]

The socially responsible investment funds get criticized for only investing in companies that do business responsibly (ethically), but by owning large blocs of shares in drug companies, they can put some capitalist, moral pressure on the board of directors. Note the sentence from the news release: "Christian Brothers Investment Services and members of the Interfaith Center on Corporate Responsibility, who together own $35 million in Abbott shares, said they were concerned that the company's actions might damage its reputation." When a CEO of a big MNC gets a phone call from somebody like Amy Domini, he doesn't leave her on hold.

[Maizefarmer]

No sympathy for drug giants - get this figure: North American sales of perscription drugs account for something like 5-6% of total sales world wide, but the profits from the same geo-region accoutn for near close on 40% of total drug profits!!!

I've just come out of hospital in the USA - the bill for 4months was U$D 681 394, of which 377 412 was meedication (no I bloody didn't pay - insurance paid, else I'd now standing on the cnr of Sukhumvit/Soi whatever with cap in hand). My wife done some calc's - she reackons the medication over the same period of time in Thailand would have come to around $12K.

I have no sympathy for mul;ti-national drug giants - yes, they are entitled to a profit, but when they can sell certain drugs in Thailand for Baht 212 (e.g. Lovenox), and still make a profit, but then charge people around Baht equiv of Baht 1900 in the USA for the exact same thing - quite right the government should tell them to go to hel_l.

MF

Edited April 13, 2007 by Maizefarmer

[Naam]

I've just come out of hospital in the USA - the bill for 4months was U$D 681 394, of which 377 412 was meedication (no I bloody didn't pay - insurance paid, else I'd now standing on the cnr of Sukhumvit/Soi whatever with cap in hand). My wife done some calc's - she reackons the medication over the same period of time in Thailand would have come to around $12K.

Maize,

don't forget that the hospital must have reaped in more profit than the drug company. i spent twice time in a hospital in the USA and was horrified what the hospitals have charged for different small items. penny items were charged 3-5 dollars, a single 5mg valium pill was $ 8.95 and that was FIFTEEN years ago. as in your case my insurance did not wink an eye and paid. they must be used to it.

off topic; i followed your case and wish you and your family best health for the future!

[JimmyTheMook]

I am glad Thailand did this, the drug companies and their political clout needed this smack in the face.

[weary]

It's a bit of a dilemma if taken to the extreme. Research is very costly. Cut the profit margins and mess with the patent rights, and the incentive for the drug companies to research new drugs decreases considerably.

Nevertheless, it is a great victory for people whose lives might otherwise end prematurely for economic reasons.

Edited April 13, 2007 by weary

[Dakhar]

I look forward to the documentary "Sicko" by Micahael Moore. I hope he rapes the health scare industry right on back.

I had a compund fracture some time ago. The first thing I thought was.... Dam, I have got to go to a physician no... no avoiding it this time. The bill, 28K. I believe I was in the hospital 2.5 days, and you can bet the insurance company wanted me out in 2 hrs after surgery.

[GuestHouse]

anything that can put affordable drugs into the hands of poor patients has to be a good thing

Indeed, but anything that stops the development of drugs is not good news is it.

The drug companies, we all love to hate them don't we. "They have the cures to save babies from dieing and the b@stards charge money for these cures".

As has been noted above, this is simply a 'good news' story to remind the public what a great job the Junta is doing.

The question to be asked, is how much of the money that might be provided for medical treatments (or any other good cause) is being bled away in the corruption that the Junta claims to be sorting out? How many treatments could have been bought with the money being spent on fighter aircraft?

Where is Thailand's pharmaceutical industry? Why is Signapore able to attract investments in pharmaceutical development while Thailand cannot?

The pharmaceutical industry is hugely profitable, not just for the companies that are in the business, but also for the nations that attract and encourage the business to develop within their borders. Ask Ireland!

Will Thailand get a piece of that action?

The answer to that lies in the need to a) protect Pharmaceutical intellectual property and import the foreign expertise.

If Thailand gets the first right, it will always struggle with the idea of the second.

[sbk]

It's a bit of a dilemma if taken to the extreme. Research is very costly. Cut the profit margins and mess with the patent rights, and the incentive for the drug companies to research new drugs decreases considerably.

Nevertheless, it is a great victory for people whose lives might otherwise end prematurely for economic reasons.

Drug companies might find they have more money for research if they spent less of it on advertising for the public. You cannot watch tv or pick up a magazine in the US without finding many many advertisements for prescription drugs. I understand the US and New Zealand are the only countries that allow such ads of prescription drugs but when you look at the amount drug companies spend on advertising in the US it is kind of hard to feel sorry for their profit margins being cut by Thailand.

From CBS news:

Drug firms increased their spending on television advertising to consumers seven-fold from 1996 to 2000, but the spots still accounted for only a small fraction of promotional expenditures, according to research published in Thursday's New England Journal of Medicine.

Overall advertising spending aimed at ordinary people tripled between 1996 and 2000 to nearly $2.5 billion a year.

.....Drug companies spent $1.6 billion in 2000 on television advertisements for Viagra, Claritin, Allegra and other brand-name drugs that have become household names, the team, led by Meredith Rosenthal of the Harvard School of Public Health, found.

They collected data from independent consulting firms and found in 2000, the latest year for which reliable data were available, television and prints ads accounted for some 16 percent of the $15.7 billion spent by the industry on drug promotion. The firms spent $1.6 billion spent on TV ads and $900 million for print ads.

In contrast, 80 percent of the money was devoted to visits to doctors by drug company representatives, free sample distribution and medical journal advertising.

[TAWP]

People say that removal of patents would remove incentive for R&D: <deleted>.

The most important discoveries in medicin in our time was done without the goal of selling an overpriced cure under a patent-protection.

And since a lot of R&D is done with federal grants the people shouldn't be ripped off, instead the research ends up in private hands.

[weary]

The most important discoveries in medicin in our time was done without the goal of selling an overpriced cure under a patent-protection.

Partially true, but the world looked different back when Fleming invented penicillin. To be sure, drugs and health care is an area where the laws of the market and business concerns clash with humanitarian concerns.

Can we expect the pharmaceutical companies to provide drugs needed by the Third World for free, or at different prices than they charge in the West? Surely you can see the implications of doing so? Smuggling would skyrocket to make up for the differentiated pricing.

What would happen if they were forced to sell at the same low rate all over the world?

Should all countries follow Thailand's example then? It's easy to just say 'screw those corporate [insert insult]' but harder to see how to create a system that allows for more efficient research, availability and affordability.