14 Drugmakers Accept Ecuador Policy On Patents
3 CommentsBy Ed Silverman // October 29th, 2009 // 7:55 am
The move involves bypassing on 2,000 drugs in order to produce them locally or buy cheaper versions elsewhere, AFP reports. Among them is GlaxoSmithKline, Bayer and Pfizer. “We accept the democratic decision… to legally implement this extraordinary measure,” the drugmakers announced through their local pharmaceutical industry association. “No legal right is superior to the requirements of public health, especially in such serious circumstances.”
Last week, Ecuador’s socialist government issued a new policy on patents and compulsory licensing, setting up a review of an untold number of patents on medicines (UPDATE: Earlier we mentioned 2,214 patents would be broken, but sources say this is incorrect). According to a report from research firm Intercontinental Marketing Services (IMS), foreign drugmakers control about 82 percent of the Ecuadoran pharmaceutical market valued at some $720 million annually.
Ecuadoran authorities, who have not indicated how much compensation would be disbursed, said the de facto monopoly enjoyed by some brands led to inflated drug prices. As an example, the president of Ecuador’s Intellectual Property Institute cited the case of a local lab requesting a license in 2002 to produce a Glaxo antiretroviral, which prompted the drugmaker to slash its to $60 from $350.
Outside the Box
Ed, I’m not sure the companies “let” Ecuador break the patents given that they have a legal right to issue the compulsory licenses. This is an issue that was significant 10 years ago, became serious and still needs a solution. Pharma needs to find a sustainable solution to the public health / affordability issues otherwise counterfeiting will continue to be a massive problem - in some countries counterfeit product represents over 30% of the total drug market (and that’s $ billions a year).
Paul
What will happen if this same thing starts taking place in more and more countries?
Nathan
This is yet another reason that pharma is shifting to biological drugs rather than small molecule drugs. Small molecule drugs are “easy” to reproduce - legally or illegally. Biologic drugs, by their very nature, are very difficult or even impossible to replicate. Hence, the major problem with “generic biologics”. Even if the laws are passed to allow it, the science isn’t quite there in many cases to actually DO it. I can almost guarantee that equador isn’t “breaking the patents” of drugs like herceptin, enbrel, and remicade. These protein-based drugs simply can’t be reproduced without a massive investment in R&D.