It is 1996 and the scene is starting with the plight of HIV hitting the news. By 2000, it was clear for all to see that the medicines available to treat this deadly disease are in the North while the disease is most prevalent in the poorer countries in the South. It was estimated that one in five South Africans was infected.
Yet 39 multinational pharmaceutical companies decided to take Nelson Mandela’s Government to court over an Intellectual Property Bill that tried to prevent patents from hindering access to medicines. Thanks to a global public campaign and patients’ advocacy, the companies were forced to withdraw their case in 2001.
Talk to “big pharma” and they will tell you that the South Africa court case was a landmark in their history. Some even say that such a thing would not happen again. One cannot help a cynical smile when remembering that in 2006 Novartis took the Indian government to court over the claim that India’s intellectual property law is not TRIPS compliant. Needless to say Novartis lost its case. At least this time other companies watched from a distance without giving public support for Novartis.
TAKE 2: CLACKET SECOND TIME OF THE SAME FILM
It is 2014 and the scene is of a world waking up to the growing plight of non-communicable diseases. The latest WHO report estimates that cancer cases are expected to soar by 70% over the next 20 years . Although the big talk is still about prevention (which of course is critical), very few are talking about treatment. In the current debates on post MDGs cancer is hardly mentioned and in the discussions on Universal Health Coverage one rarely hears about how to make detection and treatment (surgery, radiotherapy and medicines) available and affordable.
Roche markets a drug for cancer (Avastin) which was discovered to also cure a type of blindness affecting older people. So Roche patented another form of the drug (Lucentis) as specific treatment for the eye condition. The catch is that one injection of Avastin costs $50 while a Lucentis injection costs $2,000. Another example that recently hit the headlines is that of a new medicine to treat Hepatitis C (made by Gilead) but alas it costs $1,000 per day.
Needless to say that access to affordable medicines for HIV and other infections remains an “unfinished” agenda – the debate on medicine price is just as important today as it was in late nineties and early 2000s.
And now back to South Africa again. In February this year, a leaked document shows that the Innovative Pharmaceutical Industry Association of South Africa (IPASA) and its sister organisation in the US (PhRMA), hired a PR company to conduct a covert campaign against the South African government. The campaign intended to delay and undermine the Government’s new Intellectual Property Bill which seeks to use internationally agreed legal instruments such as the TRIPS flexibilities included in the Indian law, to enhance access to more affordable generic medicines in South Africa.
But the pharmaceutical industry does not want the South African government to take such actions to protect public health. IPASA made a submission to the DTI on the Draft National Policy on Intellectual Property in support of the current status quo.
The South African Department of Health condemned the recently leaked pharmaceutical industry strategy. The Minister of Health described the proposal as a “genocidal conspiracy of satanic magnitude”, accusing pharmaceutical companies of “conspiring against the state, the people of South Africa and the populations of developing countries” – and of planning what amounts to “mass murder”.
SO HAVE PHARMACEUTICAL COMPANIES CHANGED?
I cannot answer this question any better than the honest statement given by Marijn Dekkers, CEO of Bayer who said in reference to Bayer’s medicine Nexavar for the treatment of liver and kidney cancer:
“ .. we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product.”
These simple words tell us the whole story of multinational pharmaceutical companies’ approach to access to medicines: that they are about maximizing profits and not about contributing to advancing public health. All their talk of “putting patients at the front of our business” is just talk for public consumption to improve their PR image. The business model of multinational pharmaceutical companies – founded on maximizing profit – dictates the Research & Development agenda and the pricing and marketing pathways. Companies still refer to compulsory license, a legal instrument under TRIPS, as “essentially theft.”
We must always remember that it was this industry –chiefly Pfizer- which lobbied and succeeded in designing a global Intellectual Property system (TRIPS) and fought hard against the flexibilities and instrument included there for countries to use to protect their citizens. It is pharma that continues to lobby for stricter Intellectual Property rules in free trade agreements that further tie the hands of governments so that companies’ monopoly is extended.
So what has changed apart from adopting new tactics? Well at least some companies remembered – and perhaps did not want to repeat – the old South Africa saga and started to withdraw from the IPASA campaign plan. The Danish company, Novo Nordisk dissociated itself from IPASA and more recently Roche followed suit.
The big question remains though: when will multinational pharmaceutical companies realise the failure of their Intellectual Property-dependent business model and seek alternatives?
Dr Mohga Kamal-Yanni is a Senior Health Policy Advisor at Oxfam GB
The extreme gap between the rich and the poor has become headline news in countries around the world, with consensus from actors as diverse as the Pope, Christine Lagarde and President Obama that we need solutions to reverse the growing divide between the haves and the have nots.
In February 2014, backing a new IMF discussion paper, Christine Lagarde Director of the IMF underlined that ‘making taxation more progressive’ and ‘improving access to health and education’ have a key role to play in tacking inequality. Oxfam has worked for decades to promote universal access to quality health services, and in our new report ‘Working for the Many’ we consider evidence of how public services – especially health and education – impact on economic inequality.
First we consider a 2012 OECD study which quantifies the value of public services – the vast majority of which is health and education – to each quintile of the population, by converting that value into ‘virtual income’. The data shows that in OECD countries public services are worth the equivalent of a huge 76 per cent of the post-tax income of the poorest group, and just 14 per cent of the richest. So whilst public services benefit rich and poor equally in absolute terms, so that everyone is a winner, these services are strongly redistributive and help to mitigate the impact of today’s skewed income distribution by benefiting the poorest far more.
In fact, across OECD countries the virtual income gained from public services reduces income inequality by an average of 20 per cent. Similar calculations across six Latin American countries show the same impact – virtual income from health and education reduce income inequality by between 10 and 20 per cent.
Evidence from studies done across Asia, and more than 70 developing and transition countries shows the same underlying patterns in the world’s poorest countries. A 2007 study of healthcare systems in eight Asian countries and three Chinese provinces and regions shows that in all but one, healthcare had the same equalizing effect through progressive distribution of benefit. The more these governments spent on healthcare, the more progressive the distribution of income was and the more the healthcare system addressed economic inequality. This mirrors findings in the OECD study, that countries that increased public spending on services throughout the 2000s had an increasing rate of success in reducing income inequality. But those countries that cut spending during that time showed a marked decline in the rate of inequality reduction.
Whilst public services provide everyone with ‘virtual income’ and fight inequality by putting more in the pockets of the poorest; user fees and private services have the opposite effect.
User fees take money out of the pockets of the poorest and undermine the inequality-reducing potential of services. Health user fees cause 150 million people around the world to suffer financial catastrophe each year. That is approximately two per cent of the global population. And since Malaysia privatized portions of its health services and introduced user fees in the 1980s, out-of-pocket spending has risen, representing one-third of total healthcare spending in the country in 2009. A recent study in the USA showed that the poorest 20 per cent spend 15 per cent of their income on healthcare, compared to the richest 20 per cent for whom healthcare amounts to just 3 per cent of income. But despite this significant cost to the poorest, they still don’t get all the cover they need.
Private provision of healthcare further skews the benefit towards the richest. In three of the best performing Asian countries that have met or are close to meeting Universal Health Coverage – Sri Lanka, Malaysia and Hong Kong – the private sector is of negligible value to the poorest quintile of the population, and the benefits of private healthcare services are strongly regressive. They serve the richest far more than the poorest. Fortunately in these cases the public sector has compensated and allowed universal and equitable access to be achieved.
More recent and detailed evidence from a 2013 study of the Indian healthcare system finds that amongst the poorest 60 per cent of Indian women, the majority turn to public sector facilities to give birth, whilst the majority of those in the top two quintiles give birth in a private facility. Finally, comparable data from across 15 countries in sub-Saharan Africa reveals that just three per cent of people from families living in the poorest quintile sought care from a private doctor when sick.
Fees take more away from the actual income of the poorest people, and private services benefit the richest first and foremost. If governments are serious about closing the gap between rich and poor, and achieving Universal Health Coverage, the evidence points them towards free public services.
Read the full paper, ‘Working for the Few: Public Services Fight Inequality’
Emma Seery is Head of Inequality Policy and Campaigns for Oxfam GB
Giorgi’s shy innocent face stares out of a billboard in Tbilisi. The words ‘I have a right to live’ are printed across the frame. A famous Georgian journalist tenderly holds Giorgi’s hand, urging the country to hear their urgent call to action. 13-year-old Giorgi has just a few critical months to find a bone marrow donor to save his life.
Giorgi is part of a campaign run by leading Georgian journalists, and supported by Oxfam, to ask the Government to urgently invest in the healthcare sector, and save the lives of children affected by leukaemia. For Giorgi, the journalists’ crusade is his last hope. Giorgi’s mother, Jakhia, explains,
“We have no money. We only receive 125 lari (£48) per month from the state, which is barely enough to feed my family. We have nothing to sell, and I don’t know how we’ll cope,” she says wiping away tears.
Although the Georgian government provides chemotherapy and medicines to children affected by leukaemia, there are currently no facilities in the country to facilitate bone marrow transplants and no database to find donor matches. Giorgi’s mother may be forced to seek refugee status abroad to pay for her son’s transplant which costs around 100, 000 euros (£85, 000)– an insurmountable amount for the majority of Georgia’s population.
Giorgi’s story is representative of hundreds of people across Georgia who are struggling to access affordable health care. The health system in Georgia requires families to take drastic measures to save their children’s lives.
In Gori, the former home of Stalin, Maya, a young single working mother largely dependent on social benefits, is unable to afford the cost of her post cancer treatment. Rising food prices are also having an impact on her family and pushing health care even further out of reach. Maya looks sadly out of the window of her small dilapidated ex Soviet apartment, which she shares with fourteen other families “Sometimes I go to bed hungry at night so I can pay for medicine for my daughter.”
Elsewhere, people like Elguja, who used to be an actor, have no choice but to buy low quality cheap medicines. Elguja who turned blind at 22, says, “My pension is 125 lari (£48) each month but medicine costs 100 lari (£38). I have to buy cheap medicines but it makes my asthma worse. You can’t imagine what it’s like when you can’t breathe, especially at night.” Elguja often has pain in his eyes but cannot afford the high costs of eye medication. “I miss being able to see people’s eyes on stage,” Elguja wistfully remembers, “The eyes are the window to the soul,” he waves his walking stick like a wand as if he is playing the part of a blind man in a play.
For Giorgi, Maya, and Elguja, the new Government’s pledge for universal free healthcare for Georgia’s population, and the promise to establish a transplant centre for children affected with leukaemia offers hope. Oxfam is working to raise awareness amongst young people about their health rights and have a say in the future health care system. For young Madea, who is taking part in the project, it gives her a chance to have a voice, “Healthcare is the most important thing, especially for children as they are the future of the country. We often have meetings with municipality representatives to have a say in the healthcare system and lobby for changes.”
Meanwhile, Giorgi’s message ‘I have a right to live’ remains on billboards across the capital, a stark reminder of the urgent need for healthcare reform in Georgia. I hope that Oxfam’s campaign gives Giorgi, Maya and Elguja a second chance.
Caroline Berger is the Oxfam Regional Digital Media Coordinator for the CIS
As world leaders prepare to gather for the 66th World Health Assembly on May 20, social movements are questioning the market-friendly version of universal health coverage (UHC) it is promoting.
One organization, Jan Swasthya Abhiyan (JSA), is denouncing India’s emulation of this UHC strategy, as contained in the country’s 12th Five Year Plan, which uncritically endorses the private medical sector and focuses on health insurance schemes. In a recent paper – JSA proposes an alternative UHC model.
Public financing for whom?
In the past five years there has been an impressive roll out of government-funded insurance schemes in India that are supposed to improve the country’s public health system. In theory, treatment covered under these schemes can be provided by any accredited facility. But in practice the majority of providers are found in the largely unregulated private sector which already accounts for 80% of outpatient and 60% of in-patient care according to the National Sample Survey Organisation (NSSO), making India one of the most privatized systems in the world. India’s healthcare system is increasingly dominated by big hospitals chains (e.g. Apollo Hospitals) with an infamous track record of expensive services and unethical practices. As it is, health insurance schemes mostly channel public monies for private profit. For example, from 2007 to 2013 the state of Andhra Pradesh allocated a total Rs.47.23 billion to facilities accredited under the Arogyasri scheme, of which Rs.36.52 billion went to private facilities.
Getting it right
Health is a right, and priorities should be based on citizens’ needs. What the majority of Indians lack is comprehensive primary care, but current health insurance “packages” only insure beneficiaries for ailments that require hospitalization. They cover a very small portion of the burden of disease, excluding out-patient treatments for tuberculosis, diabetes, hypertension, heart conditions, and cancer among others. Evidence from the first such scheme in India – Arogyasri – suggests that it consumed 25% of the state’s health budget but addressed only 2% of the burden of disease.
Who inverted the pyramid?
This situation ends up distorting the very structure of the health system by starving primary care facilities to the benefit of more profitable secondary and tertiary care. In 2009-2010, direct national government expenditure on tertiary care was slightly over 20% of total health expenditure, but if one adds spending on the insurance schemes the total would be closer to 37%. In Andhra Pradesh, following the implementation of Arogyasri, the proportion of funds allocated for primary care fell by 14%.
A good health system is like a pyramid: the largest numbers should be treated at the primary level where people live and work. We need to flip the inverted pyramid that has been created and offer a new roadmap predicated on public funding and provisioning of a public system that reprioritizes primary health care, and is comprehensive, integrated and accessible to all.
The health insurance schemes in place fail to address another key issue: access to medicines. Paradoxically, India is the largest producer of drugs in the developing world and at the same time the country where the WHO estimates the greatest number can’t afford the medicines they need. Since the Patent Act was amended in 2005, domestic pharmaceutical companies can’t produce cheaper versions of new drugs, which are now sold by multinationals at prices well beyond the reach of most patients. Poor regulations also means more than 50% of the average family spending on medicines is on irrational or unnecessary drugs and diagnostic tests according to the NSSO. Clearly, the pharmaceutical sector must be reigned in, and all essential drugs should be made available, free of cost, at all public facilities.
Addressing public health gaps
The task of achieving health for all in India will not be easy. Current public health services are marked by poor access, low quality and limited choice. Besides rampant corruption, poor management results in mismatches between demand and supply of services: facilities aren’t distributed optimally; equipment and funds fall short of requirements and don’t flow efficiently. Labour shortages can be partly explained by disinvestment in medical education and flawed deployment mechanisms. Although programs such as the National Rural Health Mission have made some inroads to improve services, much remains to be done. The problem is largely one of unresponsiveness to citizens coupled with unreliable technical estimates of costs and disease burden, leading to ill-informed prioritization.
It is necessary to recast the UHC debate and propose alternatives to strengthen the public health systemto address these problems and to build integrated, comprehensive services with strong mechanisms of accountability. Key to these changes are the following:
Over the short term, we also need to explore alternate ways of harnessing private resources for public health goals. Given the sheer size of the private sector, it is not possible to entirely ignore it while planning for equitable access to public services. It’s not a monolithic entity either; some segments such as charitable, faith-based and other not-for-profit healthcare facilities that work in less developed parts of the country can fill certain critical gaps in the public system. Under clear terms and conditions, other private providers such as general practitioners or small and medium-sized hospitals could be in-sourced to complement available public health services. Importantly, there should be no transfer of assets and resources into private hands and kickback statutes should be put in place to ensure there are no referrals with conflict of interests.
All the possible mechanisms for harnessing the private sector should be seen as supplementary (and often interim) measures, and not as a substitute for very significant scaling up and strengthening of the public system both in terms of quality and accessibility.
There is a need to reclaim public systems, to strengthen and expand them. Moving toward health for all requires major transformations in health care, but also in a wide range of social determinants of health – food security and nutrition, water supply, sanitation, working conditions, housing, environment, education and more. We need to build broad-based alliances for social change to redefine the relationship between people and their public systems.
Amit Sengupta is a Research Associate with the Municipal Services Project and Associate Global Co-ordinator with the People’s Health Movement, a global network of 18 national chapters that includes India’s Jan Swasthya Abhiyanfor which he acts as National Co-convenor.
Madeleine Bélanger Dumontier is Communications Manager for the Municipal Services Project, a global research initiative that explores alternatives to the privatization and commercialization of service provision in the electricity, health, water and sanitation sectors.
Photo: Rajeev Chaudhury
On 1st April patients in India celebrated a victory in the battle for affordable medicines. The Indian Supreme Court rejected a patent on B crystalline form of Imatinib Mesylate (Glivec®/Gleevec®), a cancer treatment developed by the pharmaceutical company Novartis. This decision enables patients suffering chronic myeloid leukaemia to access generic versions of Glivec at $175 per month – nearly fifteen times less than the $2,600 charged by Novartis. As the court handed down their verdict, it became clear that India chose to prioritise protecting the health of citizens above the commercial interest of pharmaceutical companies.
Novartis has been trying to challenge the Indian Intellectual Property law since 2006 when its patent application for Glivec was first rejected. Novartis claimed that Indian Patent Law did not conform to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). It is worth noting that no other company or country has ever sought to make this claim against India to the World Trade Organisation – the body responsible for settling such disputes. After much debate, the court turned down the Novartis case.
The case rests on the way the India intellectual property law makes use of many of the flexibilities of the TRIPS agreement, including how the patentability criterion defines innovation. Section 3D of the Indian law, which is condemned by Novartis and other pharmaceutical companies, prevents patents on new forms, uses, doses, formulations and combinations of known medicines or substances. Instead, to be granted a patent, the revised medicine must show significantly enhanced therapeutic efficacy.
In the Novartis case, although the company provided evidence of improved physical features of the medicine, it did not demonstrate improved therapeutic efficacy. Novartis presented some late evidence of increased bio-availability of the revised medicine but even that was based on comparison with the original molecule of imatinib which is actually no longer marketed as treatment. Moreover, increased bio-availability does not automatically mean enhanced therapeutic efficacy.
The claim by pharmaceutical companies that Indian patent law will stop innovation is without foundation. On the contrary, Section 3D encourages innovation (incremental or otherwise) by preventing companies like Novartis securing patent extensions for making trivial changes to their products – a practice known as ‘Evergreening’. Allowing companies to secure patents, and therefore profits, by making trivial changes to existing products acts as a disincentive for much needed R&D investment in new products to treat and prevent diseases.
Novartis, along with other companies are also claiming the court ruling will put an end to R&D investment by companies in India. They argue that the unlikelihood of securing patents removes any incentive for R&D investment. The reality is that other scientific and economic factors have proven much more important for R&D investment including the availability of a strong science base in a country, appropriate infrastructure and an industry-friendly tax system.
In short the court resolution means that more people suffering chronic myeloid leukaemia can be treated now. Novartis says that its patent on Glivec is protected in 40 countries. That means the rest of the world can now use generic versions of Glivec without worrying about patent issues. Developing countries need to learn from India in promoting the use of high-quality generic medicines so that patients can access treatment at affordable prices.
The story highlights the urgent need to review the dysfunctional intellectual property system and find new ways of stimulating R&D to produce new medicines that have real therapeutic value. In the interim, pharmaceutical companies should stop spending millions of dollars on litigation in their effort to secure patents for evergreening their products. Instead they should invest in R&D for new products that could make a real difference to people’s lives.
Mohga Kamal-Yanni is a Senior Health and HIV Policy Adviser at Oxfam GB