Data Exclusivity and Access to Medicines – Empirical Evidence Hearing European Parliament: EU-India Free Trade Agreement: What Future for Patients in Developing Countries Date Presenter 10 February 2011 Katrien Vervoort

2 Data exclusivity? Registration brand medicine: show safety and efficacy throug submission of clinical trial data Registration of a generic medicine: show bioequivalence DE: Forbids use of or referral to clinical trial data of originator company => Administrative barrier to marketing of generic drugs, even when no patent Two choices for generic producer: Repeat clinical tests: unethical + expensive Wait… Monopoly, even when not innovative.

3 Consequences for Access to Medicines: Empirical evidence Jordan: Oxfam 2007: All costs, no benefits: How TRIPS-plus rules in the US-Jordan FTA affect access to medicines. Guatemala: Center for Policy Analysis on Trade and Health, 2009: A trade agreement’s impact on access to generic drugs.

4 TRIPS-plus rules in the US-Jordan FTA 1) Data exclusivity 2) Restricted use of parallel importation 3) Restrictions on the use of compulsory licensing ** Study only examined consequences of data exclusivity

5 US-Jordan FTA The US Government claimed that TRIPS plus rules are beneficial in developing countries. Cited the US-Jordan FTA – particularly: No public health deterioration Increased local R+D Numerous new, innovative product launches Increased foreign direct investment

6 Oxfam study on US-Jordan FTA Oxfam hired three researchers to collect data to either verify or rebut US government assertions. 2 objectives: (1) To measure actual public health consequences of US-Jordan FTA since 2002 (through mid-2006) (2) To measure benefits

7 Overall findings 1) Medicine prices have risen 20% since 2002 and account for an increasing share of overall health care costs. 2) Many new medicines lacking a generic equivalent in Jordan from were due to the imposition of data exclusivity (and not patent protection). 3) Few or no benefits due to US FTA – despite US claims. ** Only looked at data exclusivity, although the FTA restricts use of parallel imports and compulsory licensing.

8 Data exclusivity in Jordan Analyzed 108 medicines launched onto the Jordanian market since 2001 (42% of all new, branded medicines launched and more than 70% of sales). Only 5 medicines (of 108) had patent protection. Of 103 medicines without patent protection, 79% had no generic competitor (despite the existence of generic competition elsewhere) due solely to data exclusivity. => Drug companies relied upon data exclusivity to function as patent protection.

9 Public Health Consequences? – comparison Egypt – Jordan (1) Heart disease and diabetes are serious problems in Jordan and Egypt. Prices for new medicines to treat cardiovascular disease and diabetes are two to ten times higher in Jordan than in Egypt. Country (company) API (dosage)Medical usePrice per Unit (in Jordanian dinars at prevailing exchange rate Jordan price compared to Egyptian price Egypt (local generics manufacturer) Jordan (Merck) Metformin (850mg) Metformin (500mg) Anti-diabetic % Egypt (local generics manufacturer) Jordan (Kleva) Atenolol (100mg) Anti-hypertensive %

10 Public Health Consequences? – comparison Egypt – Jordan (2) Must qualify that other reasons – costs of APIs, currency shifts and surcharges could be responsible for price increases or lack of a greater price differential. These medicines had no patent in Jordan or Egypt – only data exclusivity in Jordan prevented generic competition. => Increased health-care costs and less medical treatment, especially for poor people.

11 Medicine prices and TRIPS-Plus rules Medicine prices increased by 20 percent since the country entered into an FTA in 2001: 2005 National Health Strategy: «the rise in the pharmaceutical bill represents one of the main challenges that face…continuation of health programmes…and sustainability of funding for those programmes. » Many factors: new economies of scale, procurement negotiations, inflation, currency shifts.

12 Medicine prices and TRIPS-Plus rules But also: Introduction of new medicines with no generic equivalent. Many remain unsold, some have captured a large share of the local market. Market share of medicines with no generic equivalent ( ) Market share (%) 3,0%5,3%7,2%9,1%9,4% Sales (USD) Thousands

13 No benefits to TRIPS plus rules 1) Our study found local companies engage only in minimal R&D and are not inventing new medicines; 2) Little or no FDI into Jordan since most new medicines are imported rather than produces locally via licensing agreements with multinational companies. (only 5% via licensing agreements) 3) Egypt – No TRIPS implementation until 2005 yet received 223 million USD of FDI (35% of all output due to licensing agreements with foreign manufacturers)

14 No benefits to TRIPS plus rules (2) 4) There have been new product launches in Jordan, but only a fraction of total product launches in US/EU. 5) Even when launched, mostly unaffordable – IMS data indicates few or no sales of most medicines. 6) Scientific offices: aggressive marketing methods

15 New studies on consequences of TRIPS-plus rules – Guatemala CPATH, 2009 Research question: Do CAFTA IP rules affect access to generic drugs in Guatemala? => 77 brand-name drugs are affected by data exclusivity for either 5 or 15 years: contraceptives, diabetes, hypertension, cancer, HIV/Aids, etc.

16 Main findings CAFTA IP rules affect the price of medicines: Delayed entry of generics; Reduced access to some generic drugs already on the market; Some data protection expires sooner in US than in Guatemala.

17 Guatemala: Brand name vs generic versions

18 Key lessons for EU-India FTA Data exclusivity => Significant price increases, even on the short term. Jordan and Guatemala  India: Pharmacy of the developing world: 70% of all generic medicines in DCs, 80% of ARVs New challenges: 2nd and 3rd line ARVs for HIV/Aids, rise of NCDs in developing countries,… Financial and economic crisis: constrained budgets; decrease of ODA => The world cannot afford the introduction of data exclusivity

19 Link to studies: Jordan: _us_fta _us_fta Guatemala: ilderfiles/cpathhaonline pdf ilderfiles/cpathhaonline pdf

20 Katrien Vervoort Oxfam-Solidarity Belgium Phone: 0032 (0)