background and follow-up of the drug court case in south africa dr wilbert bannenberg who technical...
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Background and follow-up of the drug court case in South Africa
Dr Wilbert BannenbergWHO Technical Adviser Pharmaceuticals
“The goal of the National Drug Policy is to ensure an adequate and reliable supply of safe, cost-effective drugs of acceptable quality to all citizens of South Africa and the rational use by prescribers, dispensers and consumers”
1996: NDP implementation strategy
Technical support (WHO/SADAP) Legislation (Act 90 of 1997) Standard Treatment Guidelines,
Essential Drug Lists Training, capacity building programmes Transformation of Medicines Control
Council
WHO access framework
1. Rational
selection
4. Reliablehealth and
supplysystems
2. Affordable
prices
3. Sustainable
financing
ACCESS
What Act 90 was to achieve...
Parallel import (15C) Generic substitution Preventing perverse incentives
(bonusing, sampling) Licensing dispensing doctors Pricing Committee
Why did Industry block Act 90?
South Africa sets dangerous precedent: 1st TRIPS compliant developing country
“TRIPS does not allow parallel import” “Unfettered powers of the Minister are
unconstitutional” Perverse incentives = marketing tool Delay generic substitution (R 2m / day)
1. Selection
1. Rational
selection
ACCESS
Good selection practices
priority for essential drugs evidence based standard treatment
guidelines provide objective information accompanying training systems consult widely
mostly accepted by industry
New drugs needed!
big needs:– growing resistance problems (MDR-TB)– new diseases (HIV/AIDS)
limited progress:– R&D geared towards developed countries– few drugs for diseases of poverty
if invented, drugs are patented, and often unaffordable
2. Affordable prices
2. Affordable
prices
ACCESS
1998: Affordable prices?
HAART: R 70,000 / year Cryptococcus: R 13,500 pp / year MDR-TB: R 25,000 pp / year CMV retinitis: R 12,000 / 2 weeks
1998 data
Discount for public sector?
124
29
1.80
20
40
60
80
100
120
140
SA private SA public Thai generic
Fluconazole, Rands
Patents keep drugs expensive!
5.59
0.4
0
1
2
3
4
5
6
SA public Indian generic
Ciprofloxacin, Rands
What can the public sector afford? Preventive care: yes Testing, counselling: yes Opportunistic infections: almost all Palliative care: yes Needlestick injuries: yes MTCT: yes Antiretrovirals for AIDS: needs further price
reductions (generics) and additional drug budget < Trevor Manual
Can the private sector afford ARVs?
up to 37% of health expenditure already spent on drugs & medical supplies
14,000 AIDS patients receive ARVs from “Aid for AIDS” project in SA
After recent price reductions, ARVs are affordable (USD 900 pp/yr) and cost-effective.
Politics of competition: d4T pricing
0
50
100
150
200
250
300
Oct2000
Nov Dec Jan2001
Feb March April
US$
d4Tbrandd4Tgeneric
BMS: $274
Brazil: $197
BMS: $55
Cipla: $69Hetero:
$47
Other price reduction strategies
Information service - UNICEF/WHO/UNAIDS negotiation: equity pricing for poorer
countries: based on need and ability to pay - tiered vaccine prices a model?
reduction of taxes and duties application of TRIPS “health safeguards”:
– early working / Bolar, – compulsory licenses, – parallel imports
Impact of TRIPS on drugs
Higher prices for new drugs Generics competition delayed Weaker local pharmaceutical industry in
developing countries Drug production concentrated in a few
rich countries (17 countries 84%)
Parallel import
World-wide shopping for same drug Cause: differential pricing by industry Principle not (yet) enabled in Patent Act Act 90, 15C allows parallel import Private sector: 5% savings (R400m?) Public sector: modest saving (R 20m?)
Compulsory licenses
Limits to exclusive rights in case of:– public health emergency– non-commercial government/public use– excessively high prices (abuse)
Savings 10-97% (depends on pricing) Was always legal under SA Patent Law Bilateral trade pressures prevented its
use; court case reversed this!
Early working (Bolar provision)
Testing, registering generics (before patent expiry) currently illegal in SA
but not outside SA (competitive advantage foreign companies!)
Unnecessary delay 1-2 years Early working provision agreed by DTI
and DOH (amendment Patent Act?)
1997: TRIPS-plus pressures
TRIPS = minimum agreement USA: 301 Watch list; bilateral pressure
for more patent protection– patent extensions (USA: 23 years)– no compulsory licensing– no parallel import
EU: trade pressure– no Bolar
1999: International opinion shifts
AIDS activists follow Al Gore Clinton “allows” parallel import for AIDS
crisis in Africa (if TRIPS compliant) USA stops bilateral trade pressures EU also reverses trade pressures
2000: Accelerating access (?)
10 May 2000 UNAIDS announcement Few hard data - bilateral negotiations Senegal, Uganda, Kenya, Rwanda: less
than 2000 HIV+ people benefit from 75-90% price reductions
SA: industry offers, but politicians not interested in ARVs
SA: private sector prices down (USD 900 pp/year)
2001: Why drop the court case?
AIDS is a crisis beyond proportion Moral outrage on profits drug companies Parallel import accepted by WTO USA, EU changed position Legal arguments are weak Bad PR: “stop case whatever it takes” Multinationals press local PMA
Donations
Pfizer: fluconazole for cryptococcal meningitis, oesophageal candidiasis (2 years)
Boehringer Ingelheim: nevirapine for MTCT (5 years)
prevent loss of control at any cost (compulsory licensing)
more profitable to donate than to sell cheap!
Compulsory license or price reduction?
Compulsory License Patents Act SA controls non-exclusive allows generics clear procedure prices cheaper? Conditions, royalties
Reduced price offer voluntary offer international control exclusive brandname only terms not yet clear prices higher? Conditions?
Current Patent Acts in Africa?
Many African countries have no pre-TRIPS patent Act– <2006: free import of all generics– >2006: free import of all drugs patented
before 1995 Is the drug patented? (e.g., ddI in SA) Namibia, Mozambique: ARVs not
patented (bus trips, Internet pharmacy?)
3. Financing
3. Sustainable
financing
ACCESS
Sustainable financing?
Public Private
Turnover R 2 billion R 8 billion
Per capita R 64 R 952
Drugs % ofHealth
9% 36-43%
Health spending in Africa 1977-1997 (% of GDP)
0
0.5
1
1.5
2
2.5
3
3.5
4
1977 1987 1997
Private
Public
Financing: sustainable?
Declining total public health funding in Africa, changing public and private shares.
Substantial out of pocket spending Four principal sources of finance for health:
out of pocket, tax-funding, insurance contributions, external support (donations, loans (debt?)).
National “pooling” strategies recommended by WHR2000. Public finance offers greatest pooling potential in LDCs; rarely achieved
ARVs for SA’s public sector?
Prices have dropped 90%, but...
Big farma USD 600/yr Generics USD 250/yr 500,000 AIDS cases
needing ARVs cost >>USD 125m /
year (and increasing!) need additional drug
budget! Botswana example?
0
50
100
150
200
250
drug
bud
get
AR
V
USD(millions)
4. Health infrastructure
4. Reliablehealth and
supplysystems
ACCESS
Infrastructure, supply, training
new ARV drugs need more than $$: – more, better trained doctors– dedicated infectious disease nurses?– VCT, laboratory services (CD4, VL?)– informed patients– COTS, FOTS, NOTS?
controlled distribution 95% adherence needed… pilot projects, then scale up?
Court case follow-up
Act 90 Regulations to be gazetted (December?)
Sections of Act 90 to be promulgated by President
Pricing Committee? Political climate more conducive for
voluntary (and compulsory?) licensing
Pricing Committee
Minister to appoint members Committee’s tasks:
– draft Regulations– study Pricing Systems (public+private)– monitor prices– recommend action where needed (PI, CL,
negotiations, etc) Pharmaco-economic evaluation
Licensing Dispensing Doctors
NDP objectives:– Separate prescribing / dispensing– Remove financial incentives for Rx
Licenses for services in rural areas and where there is no pharmacy
License requires training, inspection Emergency administration allowed
So what?
The TRIPS compliance debate is over Doha to review health issues TRIPS Country support needed to include public
health safeguards into law Drug prices will drop to prevent CL Access to ARVs = next debate
– private sector (SA): cost-effective– public sector: Botswana test case?
Thank you!