francisco viegas neves da silva ¹ ; ronaldo hallal² and andré guimarães ² international...
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Francisco Viegas Neves da Silva¹;
Ronaldo Hallal² and André Guimarães²International Cooperation Unit¹
Care and Quality of Life Unit²Department of STD, AIDS and VH
Secretariat for Health Surveillance Ministry of Health
Compulsory License and Access to Medicines: Economics
Savings of Efavirenz in Brazil
XIX – International AIDS Conference (Washington - July/2012)
Brazilian Health System
• 1988’s Constitution – “Health is a citizens right and a duty of the State”
• Universal Access to ARV Law issued in 1996
• Strong participation of Civil Society in the National HIV response
• Industrial Property Law 1996
Efavirenz background
• Patented in Brazil in 1996. (PP1100250-6 and PI9608839-7). Main patent expires in August/2012. (pipeline)
• 75 thousand patients on EFV in 2007.
• In 2007, after more than 8 price negotiation meetings the patent owner initially offered a price of US$1.59 per pill at the end offered a price reduction of 30% (US$1.11 per pill).
• At the same time the patent owner was supplying EFV to Thailand at the cost of US$ 0.65 per pill.
• Brazil considered this unacceptable.
• Ordinance 886 of the MOH of Brazil (24/april/2007) – public
interest.
• Presidential Decree nº 6.108 (04/may/2007)
–”compulsory license, on the ground of public interest, of
Efavirenz’s patents, for public non-commercial use”
- Duration: 5 years, allowing extension for equal period
- Royaltiy fee for the patent owner (1,5% on the cost of the
finished product)
- Patent owner obligated to transfer knowledge and
information necessary to reproduce the patented medicine
• Renewal of CL by the Decree nº. 7723 (04/may/2012)
Compulsory License legal framework
What is a compulsory license?
Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. A royalty fee is paid to compensate the patent owner. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.
(Source: World Trade Organization)
-
5.000.000,00
10.000.000,00
15.000.000,00
20.000.000,00
25.000.000,00
30.000.000,00
35.000.000,00
40.000.000,00
45.000.000,00
50.000.000,00
2003 2004 2005 2006 2007 2008 2009 2010 20110
20.000
40.000
60.000
80.000
100.000
120.000
Total Cost/US$
Patients per year
EFAVIRENZ 600mg
Year
EFV
600m
g Tot
al Ex
pend
iture
s
Num
ber o
f pati
ents
on
EFV
600m
g
Trends of expenditures and patients per year
CL
National production
Effects of the Compulsory License
US$/Pill
-
0,50
1,00
1,50
2,00
2,50
2003 2004 2005 2006 2007 2008 2009 2010 2011
US$/Pill
Evolution of prices EFV 600mg
CLNational production
Total patients and costs of EFV
-
5.000.000,00
10.000.000,00
15.000.000,00
20.000.000,00
25.000.000,00
30.000.000,00
35.000.000,00
40.000.000,00
45.000.000,00
-
20.000
40.000
60.000
80.000
100.000
120.000
EFV 600mg
EFV 200mg
TOTAL OF P ATIENTS
Year
Efav
irenz
's Co
st (U
S$)
Patie
nts o
n Tre
atm
ent
• EFV 200mg annual cost per patient1999 = US$2,544 (inclusion) 2007 = US$259 (after CL)2012 = US$107 (international suppliers)
• EFV 600mg annual cost per patient2003 = US$772 (inclusion) 2007 = US$158.78 (after CL)2009 = US$279 (national production)2011 = US$294
Explanation
Table
Year* Quantity Total Cost with CL** Total Cost without CL***2007 666.000 150.090,06USD 406.260,00USD 2008 720.000 124.711,02USD 439.200,00USD 2009 - -USD -USD 2010 330.030 57.549,64USD 201.318,30USD 2011 504.000 50.081,72USD 307.440,00USD
TOTAL 2.220.030 382.432,45USD 1.354.218,30USD
Year* Quantity Total Cost with CL** Total Cost without CL****2007 42.989.880 19.576.985,13USD 47.890.726,32USD 2008 31.000.020 13.425.280,19USD 34.534.022,28USD 2009 42.000.000 23.195.580,36USD 46.788.000,00USD 2010 20.775.000 4.175.244,41USD 23.143.350,00USD 2011 21.015.000 12.798.135,00USD 23.410.710,00USD
TOTAL 157.779.900 73.171.225,10USD 175.766.808,60USD
TOTAL 159.999.930 73.553.657,54USD 177.121.026,90USD
* Year of the purchase (contract)
EFV 200 mgTotal savings with CL
28.313.741,19USD
256.169,94USD 314.488,98USD
-USD 143.768,66USD
102.595.583,50USD
Total savings with CL
257.358,28USD 971.785,85USD
EFV 600 mg (national and international suppliers)
21.108.742,09USD 23.592.419,64USD 18.968.105,59USD 10.612.575,00USD
*** EFV 200mg reference price of US$ 0.61 per pill (price of the last purchase in 2006)
103.567.369,36USD
** Includes royalties of 1.5%.
**** EFV 600mg reference price of US$1.11 per pill. Last price of EFV purchased in 2006 (US$1.59 per pill) minus 30% (discount offered by patent owner).
Conclusion
• Total savings from 2007-2011 with the Compulsory License was around US$ 103,600,000. (includes savings of EFV 200mg)
• With the Compulsory License Brazil has saved 58,47% buying from generic suppliers.
• International prices are still lower than the ones offered to Brazil;
• Intellectual property is a significant element of price negotiation;
• It is necessary the full use and implementation of TRIPS flexibilities such as Compulsory Licenses to increase access to medicines.
• Brazil has shown that increasing access is more important than economics.
Challenges and conclusion
