EuropeanHealthForumGastein

Accesstovitalandinnovativemedicines–Addressingchallengesofintellectualpropertyrights

Friday,6October2017

Ellen‘tHoen,MedicinesLaw&Policy

www.medicineslawandpolicy.org@ellenthoen

HighMedicinesPricingaGlobalIssue

Essential Medicines for Universal Health Coverage

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Patent

• Righttoexcludeothersfrommaking,using,offeringforsale,selling,andimportingthepatentedproduct(oraproductmadewithapatentedprocess)

• Rightgrantedbyanationalorregionalauthorityforacertainperiodoftime(minimum20years)whencertainconditionsaremet

• Patentsarenational– globalpatentapplicationproceduresexist(WIPOPCT)butaglobalpatentdoesnotexist.

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Functionofpatents…toencourageinventorstomakeaninvestmentintimeandmoneyinresearchanddevelopmentbyprovidingexclusiverightsforalimitedtimeinexchangeforanearlypublicdisclosureoftheinvention.

Patentsystemisasocialpolicytoolmeanttocreatebenefitsforsociety.

But,itcomeswithaprice…

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…anindustryviewofpatents

“…akeyelementofanylifecyclemanagementstrategyistoextendpatentprotectionbeyondthebasicpatenttermforaslongaspossible,byfilingsecondarypatentswhichareeffectivetokeepgenericsoffthemarket”

Burdon, Michael, and Kristie Sloper. "The art of using secondary patents to improve protection."

Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical Marketing 3.3 (2003): 226-238.

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IndustrialProfitMargins

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CostofproductionandpriceNewWHOEssentialMedicines

Medicine Originator priceintroUS Costofproduction1

bedaquiline $30,000 (6month) $48 -101

sofosbuvir(SOF) $84,000(12week) $68-136

SOF+ledipasvir $95,000(12weeks) $193

simeprevir $ 66,360(12weeks) $130- 270

daclatasvir $63,000 (12weeks) $10 - 30

imatinib $30.000- >$100,000(1y) $119-159

trastuzumab $54,000 (1y) $242

1. http://cid.oxfordjournals.org/content/early/2014/02/13/cid.ciu012.full (cost of production of HCV medicines) | Hill A. etal.,Target prices for mass production of Tyrosine Kinase Inhibitors (TKIs) for global cancer treatment access - Presented at 18th ECCO -

40th ESMO European Cancer Congress, 27th September 2015, Vienna, Austria [abstract number: 1203] | Dzintars Gotham, Joseph Fortunak, Anton Pozniak, Saye Khoo, Graham Cooke, Frederick E. Nytko, III, Andrew Hill; Estimated generic prices for novel treatments for drug-resistant tuberculosis. J Antimicrob Chemother 2017 dkw522. doi: 10.1093/jac/dkw522

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PatentsandMedicines:costofproductionandpriceofpatented

productsinUS$(TyrosineKinaseInhibitors)

* India is generic priceA.Hill, 18th ECCO - 40th ESMO European Cancer Congress, 27th September 2015, Vienna, Austria [abstract number: 1203]http://bmjopen.bmj.com/content/6/1/e009586.full.pdfSource UK Lapatinib: https://www.theguardian.com/business/2015/sep/23/uk-cancer-patients-being-denied-drugs-due-to-inflated-prices-say-experts

Medicine USA Latvia UK India* Targetimatinib(Gleevec-Novartis) 106.322 31.867 790 159erlotinib(Tarceva-Roche) 78.797 36.176 29.241 1.906 236sorafinib(Nexavar-Bayer) 137.232 66.953 57.232 1.313 1.387lapatinib(Tyverb-Novartis) 75.161 50.660 36.000 n/a 4.022dasatinib(Sprycel-BMS) 135.679 56.970 33.739 n/a 334

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AREPATENTSTHELEASTOFOURWORRIES?

Non-PatentMarketExclusivity

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Marketexclusivities

• Marketexclusivity• Dataexclusivity• Pediatricextension• Orphandrugexclusivity• SupplementaryProtectionCertificate(patentextensionofmax.5yr)

->basedonthepremisethatgrantingexclusiverightsencouragesinnovation

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7of10topsellingmedicineshadFDAorphanindicationordesignation

Drug Globalsales2015(US$Bn)

Company Therapyarea

Humira 14.1 Abbvie Anti-rheumatic

Rituxan 7.6 Roche Cancerantibody

Avastin 7.2 Roche Cancerantibody

Herceptin 6.6 Roche Cancerantibody

Remicade 6 Johnson&Johnson Anti-rheumatic

Revlimid 5.7 Celgene Bloodcancers

Crestor 5.2 AstraZeneca Statin

http://www.cnbc.com/2015/12/01/an-obscure-fda-rule-adding-to-drug-company-profits.html

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Councilconclusionsonstrengtheningthebalanceinthepharmaceuticalsystemsinthe

EUanditsMemberStates(17/06/2016)

• AnevidencebasedanalysisoftheimpactoftheincentivesintheseEUlegislativeinstruments,….Amongthoseincentives,particularattentionshouldbegiventothepurposeof:

– supplementaryprotectioncertificatesasdefinedintherelevantEUlegislativeinstrument

– theuseofthe“Bolar”patentexemption[7],– thedataexclusivityformedicinalproductsandthemarketexclusivityfororphan

medicinalproducts.

• Whererelevant,theanalysisofimpactsshouldalsoaddress- interalia -thedevelopmentofmedicinalproductsandtheeffectsofthepricingstrategiesofindustryinrelationtotheseincentives

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TransparencyofR&Dcost

$231

$802

$1.500

$2.500

$-

$500

$1.000

$1.500

$2.000

$2.500

$3.000

1991 (DiMasi) 1993 (OTA) 2003 (DiMasi) 2012(OHE) 2014(DiMasi) 2013(DNDi)

R&DCo

stEstim

ate(in

millions)

$140- $194 $100- $150

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RemembertheDutchMinisters..

“Wecannotachieveanyrealprogresswithoutacknowledgingthatthecurrentpatent-basedbusinessmodelandthewayweapplyinternationalpatentrulesneedtochange.Thesystemisbroken.…Patentandintellectualpropertyexclusivitiesaretheonlycornerstoneofthecurrentmodel.Companiescanaskthepricetheylike.Thiswillnolongerdo.Weneedtodevelopalternativebusinessmodels.Andifpublicmoneyisusedforthedevelopmentofnewmedicines,agreementupfrontisneededaboutwhatthispublicinvestmentwillmeanforthefinalprice.Webelievethatcompaniesmustprovidefulltransparencyregardingthecostsofresearchanddevelopment(R&D).“

NLMinistersE.Schippers (Health)andL.Ploumen(ForeignTradeandDevelopmentCooperation)http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)31905-5/fulltext

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LancetCommissiononEssentialMedicinesPoliciesonDelinkage

TheconceptofdelinkingcostsfrompricesisbasedonthepremisethatcostsandrisksassociatedwithR&Dshouldberewarded,andincentivesforR&Dprovidedbymeansotherthanthroughthepriceoftheproduct.IftheR&Dcostofnewmedicinesdidnothavetoberecoupedthroughhighprices,thosemedicineswouldbefreeofmarketexclusivityandcouldbemademorewidelyavailableandmoreaffordablypricedthroughbettercompetition.

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SomeRecommendations• Governmentstakeactionwhenpatentshamperaccesstoproveneffectivemedicines.

• IncreasetransparencyinpricingandR&Dcost.• ReviewofEUincentivesshouldleadtoproposalsforpolicychange.

• DGcompetitiontoinvestigatehighmedicinesprices.

• EnsureefficientfinancingforR&D=>NewglobalagreementsonsharingcostofR&Dbasedondelinkage principles.

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Thankyou!

@ellenthoen

Pleasevisit:www.medicineslawandpolicy.org

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