Access to Medicines-II

When it comes to reliability of supply systems we need a good distribution system that ensures the availability of all essential medicines at all levels of the health system- primary, secondary and tertiary. And we can have several strategies for this. Firstly we need to integrate medicines in the health sector development. We cannot look at this as a separate problem of a pharmaceutical department which is often not even in the health ministry. And if pharmaceutical production is seen more as a commercial or an industrial activity, divorced from the needs of the health sector there can’t be anything worse than that for universal health coverage. So we need to integrate the whole availability and production and supply of medicines into the health sector development program. We also need to ensure that there is a fairly efficient and well-functioning public-private NGO mix in terms of the approaches to supply delivery. So the supply chain, while it may be driven substantially by the public sector, ought to be able to accommodate the private as well as NGO sectors also because they’re also often very major contributors to supply. We need to assure the quality of medicines through regulatory control. This is absolutely important particularly where we are now seeing a huge need for medicines across the world which are being met by generics, but these generics will have to be quality assured. And this requires appropriate drug testing and regulatory control. We need to explore a variety of purchasing schemes and pool procurement often reduces the overall pricing of medicines. Because if you actually have procurement cooperatives, or pool procurement, you’ll be able to eliminate the middle man and then remove multiple intermediate stages where there is price markup and ultimately get almost directly from the manufacturer a bulk procurement which can be substantially low priced and very close to cost of production, rather than the traditional market price which has multiple layers of markup. So we have to look at pool procurement and procurement cooperatives. At the same time we need to look at also procurement of traditional medicines. We’re not only talking about allopathic medicines here, many countries, especially in low and middle income countries have traditional systems of medicine which form a part of the health system and which are frequently accessed by the people and are often affordable. So we ought to be able to look at the supply of traditional medicines as well in healthcare provision.

Coming to the whole area of stock-outs, you can see this happening not only across countries, but even in health systems within countries. For example, in India where there are multiple states with different health system capabilities. The health system in Tamil Nadu, which is very well-functioning, has a very little problem of stock-out. On the other hand, Bihar has much lower availability and a much higher level of stock-out at any given point in time, though recent improvements are beginning to change that situation. So we need to address this whole problem as an issue of health system capacity for effective functioning.

And that the global level, we actually meet other challenges. We see the whole area of trade coming sometimes as an opportunity but quite often as a barrier to access. Trade in pharmaceutical products has been heavily influenced by international trade agreements, intellectual property rights, and globalization. And pharmaceutical companies have been researching on development of new products which are mostly based on the market expectations of utilization in the rich countries and not by the needs in the developing world which constitutes the majority of the global population. They are looking at who is likely to buy and particularly at a high cost rather than who actually needs them in terms of life-saving medication. And therefore, we find that many of the neglected tropical diseases do not have medicines and some of the medicines available for even common diseases are not often available at affordable cost. Many of these companies are also exploiting patent laws for their own profit. For example, stretching of patents, even when the patents are supposed to be expiring and the drugs are supposed to be coming into common domain for production by other companies, some of the companies are actually resorting to what’s called evergreening, which is a method to retain the patent protection and royalties from products, either by extending patents or buying out competitors, particularly by minor changes in formulation. Or in the manner of delivery in terms of the time of release of the actual drug by minor changes in pharmacokinetics. They’re actually declaring a drug to be a new product and are trying to extend the patent and stretch the patent out. And these are some of the things that actually are becoming barriers in terms of pharmaceutical company practice and challenge to countries which want to really take drugs off patent and then put them in the health system in the form of generics. But trade agreements are not entirely dispensable. Sometimes they may actually provide support to the less developed countries in other domains, like for example, traditional knowledge and genetic resources. So some of these actually by patent protection may help some other low income countries and the middle income countries generate more resources for their own health system. So the challenge of global trade is to ensure- yes, there should be some degree of intellectual property rights being protected, but at the same time, we need to ensure that this does not become a major barrier for access to medicines. And we have to look at the availability of medicines as a social contract between the industry and the wider population in the world in which the need for live-saving essential medicines outweighs commercial considerations. And the whole area of affordable pricing has become a subject matter of TRIPS- the trade related aspects of intellectual property rights. This agreement was first signed in 1995 at the Uruguay Round Agreement of the World Trade Organization. This mandated minimum standards for patent protection for pharmaceuticals. Clearly the pharmaceutical industry, particularly concentrated in high income countries, had an interest in ensuring that their products were patent protected so that they could make profits out of them from their exclusivity of production. But between signing of the TRIPS and the WTO Doha Ministerial Accord, the world witnesses a major crisis in terms of access to the drugs for HIV/AIDS. And especially in Africa and this became a major global issue. When some of the generic antiretroviral drugs were being supplied to South Africa by an Indian generic manufacturer, there was a major challenge from the multinational company which was producing the drugs. Indeed, the Mandela government was sued by this pharmaceutical company, much to the consternation and shock of the rest of the world. But fortunately the public outcry and the revulsion as well as civil society action across the world, including communities in the high income countries compelled not only the pharmaceutical industry to withdraw and permit the utilization of generics, but it also led to the global community to look at how trade agreements ought to be modified in order to protect the interests of patients who most need life-saving drugs. And that is why the WTO Doha agreement then came about. In 2001, in Doha, there was a declaration on the TRIPS agreement and public health. While reiterating our commitment to the TRIPS agreement, that’s what the countries said, we affirm that the agreement can and should be interpreted and implemented in a manner supportive of the WTO members right to protect public health. And in particular, to promote access to medicines for all. So public health could now start trumping to some extent the right to intellectual property which became restrictive on occasions. Especially for public health emergencies. So this was a very important victory for looking at how public health could be still advanced despite some of the drugs being on patent. And in 2003, in Cancun, adjustments and provisions were made in the TRIPS agreement to allow improved access to essential medicines. So we have to really look at the whole area of trade and evolving developments in the trade agreements and trade related treaty discussions from the point of view of global public health. And when we come to chronic therapy, long-term therapies for cardiovascular diseases, cancers and diabetes, these countries are going to be bankrupted if the drugs are high-priced and people are going to be dying prematurely if they do not have access to life-saving medication.

So access to effective non-communicable disease related drugs remains a high priority for the rest of the world, especially those in the low and middle income countries who do have access at the moment to drugs produced by pharmaceutical industry in the high income countries, mostly for those markets. Even when we look at generic drugs, there is a disparity across the world in terms of international generic drug pricing. There is really no consensus on how generic drugs should be priced. There is a fair amount of opportunistic pricing which is being employed by different manufacturers. If we look at the potential for lowering of the pricing of generic drugs by domestic manufacture as opposed to internationally available generic drugs, we see a huge disparity. Like for example in South Africa or Kenya or other countries or Brazil, the domestically manufactured generic drugs are far lower than the internationally branded products or the internationally sold generic products.

We therefore need to ensure that in as many countries as possible, at least in the middle income countries, we ought to be able to increase the capacity for domestic production of quality assured, low priced generic drugs. When we look at improving access, we can look at seven major strategies. First is enhancing capacity for generic substitution and the specific solution there is to expand the scope of the WHO prequalification project and build capacity of local regulatory, drug regulatory authorities to fast-track registration of generics. Secondly is to expedite generic availability by overcoming legal barriers related to patents and licensing. This we can do by increasing the use of compulsory licensing under Article 31 of TRIPS. Compulsory licenses are where countries in extraordinary situations, where public health needs are to be prioritized, can actually issue license to other companies, even for a drug which is still under patent protection. Optimizing local procurement practices in the public sector is absolutely important and this is done by recruiting local support for better supply chain management and using mobile and information technology to map stock-outs. We have the capacity now to use information technology to forecast the needs, to track the availability, to spot where the stocks are diminishing and readily replenish them and we ought to use that technology much more effectively than is presently being done.

We also need to broaden global procurement where third party price negotiations. As we said, pool procurement at the national level can be very effective in reducing costs, especially for the public sector, or for networks of private sector hospitals. But even at the global level pool procurement is possible because agencies – whether they are WHO or other international agencies, or a community of countries can actually negotiate jointly to try and obtain drugs directly from the manufacturer at a much lower cost by assuring a very large market size, When it comes to engaging the private sector to differentially price medicines in low and middle income countries, there is a movement in that direction. Many of the large companies are now looking at the market size in the developing countries and saying, okay, we will differentially price medicines for high income countries and for low income countries. And we will ensure that people who need it in low and middle income countries can get it at a different tiered pricing arrangement.

We can regulate retail markups in the supply chain by use of government controls to restrict markups. Price control is an important mechanism that countries must utilize judiciously in order to reduce unnecessary markups. Finally, we must eliminate tariffs on medicines. We must adhere to international treaties to eliminate import tariffs and preferably eliminate national sales taxes. These are not luxury goods. These are goods required for saving people from death and disease. And therefore, to have import tariffs and sales taxes is absolutely improper because we are playing with people’s lives. So by adopting a variety of strategies to provide access to drugs of assured quality, preferably generic drugs, preferably obtained through pool procurement with affordable prices, and ensuring regular, predictable distribution through a supply chain that eliminates stock-outs, we can ensure access to drugs. But this cannot be done only for high income countries, or even for middle income countries, it has to become a globally assured supply of drugs which are needed. And this can only be done if universal health coverage becomes not only a national aspiration, but a shared global value.

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