Special 301 and Access to Medicines: The Case of Guatemala Ellen R. Shaffer PhD MPH, Joe Brenner MA Center for Policy Analysis on Trade and Health (CPATH) October 2010

October, 2010 CPATH 2 Crisis in Access to Medicines in Guatemala “No hay dinero,” Jakelin Johana Cucyan Sosa, a Guatemalan woman living with HIV. Deepening crisis for sick Guatemalans. US- Central American Free Trade Agreement (CAFTA) and Special 301 have pushed the cost of medicine out of their reach.

October, 2010 CPATH 3 Access to Medicines Reduced for People Living With HIV/AIDS Sosa is one of an estimated 59,000 people in Guatemala living with HIV Guatemalans are one-sixth of Central America’s HIV infected population. (USAID) Cost of managing HIV/AIDS for Sosa and for other women and families in Guatemala has increased dramatically since CAFTA and as a result of Special 301.

October, 2010 CPATH 4 CPATH Case Study - Guatemala 3 Questions to Determine: 1. Whether CAFTA IP rules are limiting access to generic and lower price medicines in Guatemala. 2. The influence of data exclusivity on pricing in Guatemala. 3. The price implications of introducing data protected drugs to the market, and conferring data protected status to drugs already offered in Guatemala.

October, 2010 CPATH 5 Case Study – Methodology Identified several drugs used for conditions that are common causes of morbidity and mortality, and also for HIV/AIDS.

October, 2010 CPATH 6 Tug of War Data Protection in Guatemala TRIPS (WTO) Protects data against unfair commercial use Guate 1999 DE, exceptions for access Guate years DE Guate years DE 5 years DE Guate 2004 DE repealed Guate years DE 5 years DE CAFTA years DE 5 years DE

October, 2010 CPATH 7 Data Exclusivity 77 brand-name drugs have data protection for either 5 or 15 years, including 5 protease inhibitors for HIV/AIDS DE 15 years: Kaletra – HIV/AIDS

October, 2010 CPATH 8 Case Study Finding Compared prices for a sample of 5- and 15-year data protected drugs with non-data protected drugs listed on the Open Contract, for statins, insulins, antibiotics, oncology drugs, and protease inhibitors. Data-protected drugs are significantly more expensive compared to non-protected drugs in the same therapeutic class. Health Affairs, 28, no. 5 (2009): w957-w968

October, 2010 CPATH 9 Case Study Finding (continued) Examples: Data protected Insulin Lantus costs 846% more than isophane insulin Data protected anti-fungal Vfend costs 810% more than the non-data protected amphotericin B Data protected intravenous antibiotic Invanz costs 342% more than the non- data protected meropenem (Meronem).

October, 2010 CPATH 10 Medicines $ vs. Lives Drug Data- Protected No DP Diff: Cost Diff: Lives Insulin$50$5846%9 Antibiotics (IM) $85$10810%7 Antibiotics (IV) $58$17342%2

October, 2010 CPATH 11 Guatemala’s Ministry of Health – Strategies to Lower Drug Costs Donors such as PAHO and the Clinton Fund have offered HIV/AIDS medicines at lower prices. Guatemala’s Decree permitted waiving import taxes on AIDS drugs and other benefits.

October, 2010 CPATH 12 Special 301 Submission - PhRMA Responds (2008) “…Ministry of Economy’s failure to act upon proposals developed by the Ministry of Health.. “…Guatemala has not corrected the tax discrimination caused by Decree against R&D products that has been in force for more than four years.” “PhRMA members recommend that Guatemala remain on the Watch List in 2008…”

October, 2010 CPATH 13 Result: Guatemala on Special 301 Watch List for 2008 Implication: Guatemala could be penalized with U.S. trade sanctions for non-compliance

October, 2010 CPATH 14 Guatemala Gets the Message Ministry of Health instructed to purchase HIV/AIDS drugs directly from brand-name originator drug companies at full price. Drug purchases from PAHO and the Clinton Fund, which offered lower prices, cut off.

October, 2010 CPATH 15 Prices for HIV/AIDS Drugs Increase Sharply In 2009, prices increased in some cases by a factor of 13, forcing the Ministry of Health to sharply curtail the medicines and services it was able to provide. [CPATH] In Jan. – March, 2010, Guatemala bought (ARVs) at elevated prices in the local market. This resulted in a loss of $3 million and put the lives of hundreds of people at risk, due to delayed delivery by local providers. [Agua Buena] The rapid growth in the number of people receiving antiretroviral therapy is challenging the country’s ability to sustain its treatment program. [UNGASS] UNGASS Report – Guatemala, Available at : UNGASS Report – Guatemala, Available at : Agua Buena: Comparison of ARV prices in 9 countries in Central and South America (2006). Available at: Agua Buena: Comparison of ARV prices in 9 countries in Central and South America (2006). Available at:

October, 2010 CPATH Effect on HIV/AIDS Drugs Prices ($US) Vs. Lives, 2010 (Agua Buena) MedicineLocalPAHO Diff $ Diff LIVES Efavirenz 600mg 30649$2575 Lopinavir- ritonavir 200/50mg $10702 Abacavir 300mg $ Tenofovir 300mg 20578$1272 Didanosina 100 mg 80689$7178

October, 2010 CPATH 17 Impact on Access Jakelin Johana Cucyan Sosa manages her illness, and is caregiver for her husband, who is also HIV positive and bedridden. She cares for her two daughters, Frida 11, and Sabrina, 7. She had received free treatment though Hogar Marco Antonio Clinic, a small,donations-based clinic. Unable to get funding for the suddenly more expensive drugs, Sosa’s healthcare facility lost the ability to provide adequate treatment.

October, 2010 CPATH 18 Crisis Deepens Lack of treatment causes demand for 2 nd -line and 3 rd line drugs, often unavailable in Guatemala 2 nd -line and 3 rd line drugs, often unavailable in Guatemala

October, 2010 CPATH 19 CAFTA and Special 301- Medicine More Expensive CAFTA grants greater monopoly rights to brand name pharmaceutical companies Special 301 List makes medicines more expensive and less available for women and families in Guatemala Local distributors also benefit: JI Cohen was chosen even when bids more costly than competitors [Agua Buena]

October, 2010 CPATH 20 Civil Society Response Media and health professionals are critical The Global Fund has demanded that purchases be made through transparent and efficient mechanisms, such as the PAHO Strategic Fund or the Global Fund’s Voluntary Pooled Procurement (VPP). However, this restriction only applies to purchases made with Global Fund resources, which means that unless an effective system of oversight is put into place, there still exists the possibility of “tossing public money out the window”.

October, 2010 CPATH 21 Policy Recommendations Remove Guatemala from the Special 301 List Ensure that Special 301 is not used to promote TRIPS- plus restrictions on access to medicines Adopt a policy guideline banning USTR from using Special 301 to punish nations which take regulatory action to promote public health and access to medicines Prioritize public health in U.S. trade policy. Include health experts and advocates in all levels of trade policy development, effective immediately Indicate support for Guatemala’s Decree , and the Guatemalan government’s legal authority and obligation to purchase medicines at the most affordable price in order to treat the largest number of people.

October, 2010 CPATH 22 Protect Global Health Center for Policy Analysis on Trade and Health (CPATH) Ellen R. Shaffer Joseph Brenner Phone: Fax: