1. 1 Patents and Public Health Dr. Eric Noehrenberg Director International Trade and Market Policy, IFPMA WIPO Open Forum on the draft SPLT, Geneva, 3 March 2006

2. 2 R&D Addressing Global Burden of Disease DiseaseHealth Burden (% of global deaths/DALYs) Existing treatments discovered by R&D pharma industry HIV/AIDS4.9/5.7All 21 drugs in 4 different classes Respiratory Infections 6.9/6.3All recent and effective antibiotics Cardiovasc ular disease 29.3/9.9All drugs in 8 different classes Cancer12.5 / 5.1All most effective drugs in 8 classes Depression0 / 4.5All recent drugs in 4 different classes

3. 3 Number of Compounds in Development by Selected Major Disease Categories Source: PhRMA, Medicines in Development Surveys 2003/2004

4. 4 Are We Getting Innovation?

5. 5 R&D Industry addressing Developing Country Health Needs 90% of innovative drugs on the WHO Model Essential Medicines List were developed by the R&D-based pharmaceutical industry Best current treatments for truly “neglected diseases” come from R&D-based industry: – Sleeping sickness – Sanofi Aventis – River blindness – Merck – Leishmaniasis – Merck + GSK

6. 6 Patents NOT blocking access to essential medicines in poor countries Over 95% of drugs on WHO Essential Medicines List off-patent worldwide; 99% in poorest countries Patented drugs on EML are being offered by patent-holders to poor countries at cost, below cost or even for free – Antiretrovirals via AAI, reaching over 455’000 people in developing countries worldwide – Coartem® from Novartis in partnership with WHO

7. 7 Export CL TRIPS Amendment If country sees patents as a barrier and cannot produce domestically via CL, then they can go to foreign suppliers to get alternative supplies via export CL Waiver of TRIPS Art. 31(f) and (h) Solution ensures transparency and non-diversion Humanitarian purposes, non-commercial, non- industrial policy use Non-bureaucratic procedure, simple notifications

8. 8 Who are the authors of the solution? South Africa Kenya India Brazil USA Chaired by Singapore

9. 9 “Flexibilities” are not public health solutions International exhaustion => « parallel trade » Compulsory licensing

10. 10 Parallel Trade Parallel trade is bad for poor countries – their supplies disappear! – Parallel trade moves products from low-price markets to higher-priced markets – Parallel trade will interrupt stable supply chain in importing and exporting countries – Parallel trade will harm ability of companies to distribute differentially priced drugs Price differences may be short lived; parallel trade not reliable over long term Parallel trade can contribute to trade in substandard and counterfeit drugs – African regulators at WHO Conference in Rome two weeks ago

11. 11 Realities in Zimbabwe after Compulsory Licensing Compulsory licenses in 2002 Prices are high = US$1638 per year, about equal to annual salary Access is poor, with fewer than 20'000 Zim residents out of an estimated 1.8 million living with HIV getting ARVs What is the quality of the drugs available?

12. 12 Realities in Zambia and Mozambique after CL Zambia : No patents on the drugs Mozambique : No patents from MNCs; CIPLA’s TRIOMUNE patent affected Access to quality medicines was NOT improved due to CL

13. 13 “Flexibilities” are INDUSTRIAL policy, not “health policy” Beneficiaries are copy companies, not consumers Foreign manufacturers benefit more than local manufacturers Policy choice is: do you prefer to promote an innovative, value-added market model, or an old-fashioned copying model?

14. 14 Effective use of IPR incentives improves public health through innovation 90% of innovative drugs on WHO EML originated from MNCs using incentives of patent system, including for “tropical diseases” PPPs such as Medicines for Malaria Venture address areas where partnerships can best address health research needs

15. 15 IPRs create therapeutic competition In 1987, one antiretroviral Thanks to patents, innovators had to find new ways of attacking HIV Now, over 20 ARVs on the market and over 80 compounds in development Through AAI – over 455’000 patients getting top- quality, triple-ARV therapy “Drug portfolio” important in all areas of health – not everyone responds the same way to the same drug!

16. 16 Second Use and Adaptive Innovation bring health benefits Study shows that circa 25% of drugs on EML are indicated for uses other than the original indication The large majority of drugs on EML are not the first drugs in their class on the market Most drugs on EML are modified formulations of original products

17. 17 Adaptive innovation is patentable Indian generic drug manufacturers have 84 patents pending in Brazil on new salts, esters, polymorphs and similar "incremental innovation” on existing pharmaceutical products – ironically, they cannot get the same protection in India itself; Indeed, patentability of adaptive innovation is limited in India, removing incentives for needed innovations (heat-stable insulin, for example) Thousands of patents applied for in China based on traditional Chinese medicine

18. 18 Cases of adaptive innovation bringing public health benefits Zithromax SR – improving an existing antibiotic into a single-dose form, now used to treat trachoma effectively Neurontin – new production process brought effective epilepsy drug to broader populations Procardia XL – new administration technology for existing drug more than tripled population which could benefit from therapy to treat agina Agenerase – new formulation brought new protease inhibitor in fight against AIDS Effexor – slow-release formulation improved use of antidepressant

19. 19 Conclusions Debate over “flexibilities” in international agreements is an industrial policy debate, not a health policy debate IPRs spur innovation which promotes public health Protection of adaptive innovation and “second use” brings public health benefits, including for developing countries IPR definitions should be harmonized via WIPO to recognize all innovation, including adaptive innovation