How America Can Shore Up Asian Order
A Strategy for Restoring Balance and Legitimacy
When is a decision on a patent application not a decision at all? When it runs counter to the powerful commercial and diplomatic forces that protect massively profitable pharmaceutical monopolies. Or at least that is what many advocates for access to medicines are saying is the reason behind Indian patent officials last month reversing their own 2015 decision that denied United States-based Gilead Sciences a patent on its hepatitis C treatment sofosbuvir, commonly marketed as Sovaldi. The new decision holds that Sovaldi meets the Indian patenting requirements of novelty and inventiveness. But the earlier decision by the same agency came to the opposite conclusion, holding that Gilead’s drug was not a significant improvement over an already available compound.
To advocates, only one thing changed in the interim: intense lobbying of Indian authorities by the United States and the pharmaceutical industry. “This was due to political pressure,” intellectual property attorney Tahir Amin, Director of Initiative for Medicines, Access, & Knowledge (I-MAK), told STAT's Pharmalot, a pharmaceutical blog. The timing of the two decisions seems to support that view. The original Sovaldi ruling was handed down in the weeks leading up to a January 2015 visit by U.S. President Barack Obama to India. Obama’s administration has sharply criticized India’s practices of favoring generic medicines, and the first ruling was thought to have put a damper on that visit. The new pro-patent reversal was announced less than a month before Indian Prime Minister Narendra Modi’s arrival in New York on June 6.
There are at least 80 million people worldwide who are infected with the hepatitis C virus, which can lead to liver cirrhosis, liver failure, and cancer if left untreated. The disease’s spread is so vast that the World Health Organization has labeled it a “viral time bomb.” The good news is that Sovaldi represents a new and remarkably effective treatment, known as a direct-acting antiviral, which provides a complete cure in more than 90 percent of the infected patients. The bad news is that Gilead has taken advantage of its patent monopolies, granted despite significant government involvement in the medicine’s development, to price Sovaldi at previously unheard-of levels. In the United States, Sovaldi costs as much as $84,000—amounting to $1,000 per pill—for a recommended 12-week cycle, and $54,000 in Europe, despite manufacturing costs as low as $68 per course of treatment.
The combination of sky-high pricing and significant need has caused state Medicaid programs to ration the drug in the United States. It has also triggered lawsuits and complaints from patient groups, and a U.S. Senate investigation that concluded with a report that was sharply critical of Gilead. Although Gilead does allow Sovaldi to be sold at significantly lower prices in many low-income countries, a recent World Health Organization study showed that the drug’s price exceeded annual per capita income levels in many middle-income countries with high hepatitis C infection rates. For example, the study found that in Poland, Portugal, Slovakia, and Turkey, a course of sofosbuvir costs at least two years of average annual wages.
The significance of the recent Indian patent decision comes from its potential to block that nation’s generic manufacturing industry from supplying sofosbuvir at affordable prices to those middle-income countries. “This is leaving patients in these countries, including our own treatment projects, vulnerable to the prices Gilead chooses to charge,” says Medecins Sans Frontieres/Doctors Without Borders (MSF) intellectual property attorney Leena Menghaney, who also highlighted the role of outside pressure on the Indian patent office.
So far, Gilead has weathered the storm of controversy just fine: its revenue from Sovaldi and its related hepatitis C drug Harvoni was over $19 billion in 2015. The company welcomed the recent Indian decision, saying that enforcement of its patents is necessary to support the drug discovery process.
The unrelenting pressure put on the “pharmacy of the developing world” serves as a cautionary tale.Variations of this same patents-equal-innovation argument have been advanced by the pharmaceutical industry for decades, even as advocates point out that many important medicines—including sofosbuvir—owe their existence to government-funded research. But the corporate side usually wins in national and international venues, in significant part because the United States has long put its global economic might on the pharma side of the scale. And for decades, India has been the target of intense U.S. pharma advocacy.
Until 2005, India’s patent law extended only to the processes for creating medicines, not the chemical formulas of the drugs themselves. That opened the door for that country’s pharmaceutical manufacturers to reverse-engineer patented drugs and then devise different, cheaper production methods. It was Indian companies’ manufacture of generic HIV/AIDS medicines that brought the drugs’ price down by 99 percent, helping halt the pandemic of the 1990s and early 2000s. Now, India performs a similar role in many other disease areas, and is widely known as the “pharmacy of the developing world.”
But the same patent rules that gave India that title in the public health community made it the nemesis of the multinational drug corporations. Shackling India’s generic drug industry was a major goal of the World Trade Organization’s 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights, known as the TRIPS Agreement. TRIPS was designed to create uniform patent enforcement around the globe, and it featured a required 20-year monopoly for patented medicines. At the behest of the pharmaceutical industry, which is reliably at the top of the U.S. rankings for both lobbying expenses and political campaign contributions, Washington pushed hard for TRIPS. The United States used the threat of trade sanctions to force reluctant governments to sign the agreement, including many nations that had long considered medicines to be a public good immune from many patent rules. India was the final TRIPS holdout, but the United States’ relentless pressure, especially its placement of India on a dreaded “priority watch” list alleging intellectual property violations, finally caused the country to opt in. TRIPS obligations ultimately led to India’s 2005 law change in favor of patent enforcement.
The TRIPS agreement contains significant flexibility for countries to produce or purchase generic medicines when the public interest calls for it, and each country retains its ability to determine when a national medicine patent is justified. Yet when India has attempted to exercise its rights under the agreement, the pre-TRIPS attacks have been renewed. The U.S. government and the Pharmaceutical Research and Manufacturers Association (PhRMA) have filed lawsuits and pulled the levers of global trade to undermine multiple Indian measures to increase access to medicines, including enforcing tight patentability criteria and granting permission for generic manufacture of critical medicines. Members of the U.S. Congress have banded together to express fierce opposition to generic drug manufacturing in India, including demands for multiple U.S. International Trade Commission investigations into India’s practices. In 2016, criticizing what it called India’s weak protection of patent rights, PhRMA asked the United States to keep India on the “priority watch” list that could pave the way to trade sanctions.
A month before the Sovaldi patent reversal, the U.S. Trade Representative assented to PhRMA’s request, keeping India on the watch list that indicates that the country in question has "serious intellectual property rights deficiencies" requiring trade scrutiny. Given all this heat on the Indian government, advocates see no coincidence in the earlier Sovaldi reversal being overturned, nor in Modi convening a U.S.-approved working group on intellectual property issues and a recent restatement of Indian policy that many see as being more conciliatory to pharma interests.
The new Indian patent decision was handed down the same month that accusations that the United States had also threatened Colombia on behalf of the pharmaceutical industry surfaced. Leaked letters from a Colombian Embassy official in Washington reported that top staff members from the U.S. Senate Finance Committee and the U.S. Trade Representative had suggested that Obama’s promised $450 million in aid to “Peace Colombia” would be in jeopardy if Colombia moved forward with a plan to allow the generic production of a critical leukemia medicine. The drug, called imatinib, was patented by Novartis under the name Glivec and is priced in Colombia at over $15,000, nearly double the country’s per capita income. Colombia’s minister of health has called efforts to sharply reduce that cost “a question of survival.” The details of the conversations between U.S. and Colombian officials are murky, and the U.S. Trade Representative has denied directly threatening the loss of peace funds. But advocates say that the message was clear enough. “We always assume that this kind of intervention is happening behind the scenes, but rarely do you get the chance to see it up close," Andrew Goldman, an attorney for the medicine access group Knowledge Ecology International, told the Associated Press.
International healthcare providers such as Medecins Sans Frontieres point out that the problem with this kind of U.S. pressure goes beyond concerns of national sovereignty: lives are at stake. MSF relies heavily on Indian generic drugs in its work—for example, Indian generics make up more than 96 percent of the HIV/AIDS medicines it administers. So the group has created a “Hands Off Our Medicines” campaign to support India’s ability to continue to manufacture generics. During a 2015 visit by Modi to the United States, MSF displayed large billboards outside his hotel and the Indian consulate, featuring the image of the Taj Mahal made out of pills and urging Modi to resist U.S. pressure to curb the production of generic medicines. MSF now supports the appeal of the latest Sovaldi patent decision.
Despite the significant setback dealt by the recent Indian ruling, MSF and other advocates see reason for hope. “No one is taking this decision laying down,” Amin says. Amin’s organization, I-MAK, has successfully opposed patent applications for sofosbuvir in China, Egypt, and Ukraine. And Indian and global health advocates have won similar struggles before, ultimately prevailing in 2013 after a years-long fight to stop the patenting of a much-needed cancer medicine. That victory was enabled by civil society advocacy and the Indian Patents Act’s demand that a medicine demonstrate enhanced therapeutic value before it can be patented.
Perhaps most importantly, countries that face an enormous cost burden for hepatitis C treatment retain the legal right to issue a compulsory license even for medicines that are under patent. That license allows generic manufacturing of the medicine, and the low-cost wide distribution that comes with it, accompanied by a fee paid to the patent-holder. In fact, compulsory licensing was the process that led to lifesaving treatment for HIV being made available across the globe. But the unrelenting pressure put on the “pharmacy of the developing world” likely serves as a cautionary tale for governments that are considering a decision to prioritize public health over corporate interests.