Pharmacies

Safeguarding IP rights is key to defeating COVID-19

COVID-19 has exposed our unpreparedness for a crisis of global scope. As much as globalisation is partly to blame for the virus’ speedy expansion, it is also thanks to the interconnectedness of our world that we have been able to preserve international trade – despite a bundle of constraints and cries for protectionism – during these tough times. In particular, that has to do with exports of essential medical devices such as masks, ventilators, personal protective equipment. The shortages experienced by many countries have triggered an intergovernmental discussion on the scope of compulsory licencing and IP protection covered by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

As a global consumer advocacy group, we at the Consumer Choice Center are hereby sharing our perspective on the matter in the hope to contribute to this timely debate. 

The TRIPS agreement is an integral part of the World Trade Organisation’s intellectual property legal base. Among other things, the agreement whose primary aim is to safeguard intellectual property rights, also includes provisions on compulsory licencing, or use of subject matter of a patent without the authorisation of the right holder (Article 31). Essentially, this means that “in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use,” a Member government may allow someone else to produce a patented product or process without the consent of the patent owner. 

Whereas, under normal circumstances, the person or company applying for a licence must have first attempted, unsuccessfully, to obtain a voluntary licence from the right holder on reasonable commercial terms (Article 31b). However, there is no need to try for a voluntary licence first under TRIPS flexibilities.

TRIPS flexibilities, therefore, allow countries to override global IP rules to mitigate the damage caused by an emergency and have been mainly applied where pharmaceuticals have been concerned. 

In July, South Africa issued a communication titled “Beyond Access to Medicines and Medical Technologies Towards a More Holistic Approach to TRIPS Flexibilities.”  It was pointed out that the COVID-19 response required looking beyond patents towards a more “integrated approach to TRIPS flexibilities that include other various types of intellectual property (IP) rights including copyrights, industrial designs and trade secrets” (IP/C/W/666). As such, the recommendations submitted by South Africa are cross-field as they also touch upon the production and distribution of essential medical devices such as masks, ventilators, personal protective equipment.

Though proposed out of the noble motives, South African communication is ignorant of the need to protect IP rights instead of eroding them. Opponents of intellectual property rights often make the mistake of taking innovation for granted thereby turning a blind eye to the driving force of every kind of entrepreneurship: economic incentives. Patents and various other forms of intellectual property are not biased towards the inventor. On the contrary, they ensure that companies can continue to innovate and deliver on their products to consumers. 

The short-term result of eroding intellectual property rights would be increased access to innovations, but in the long-term, there would be no innovation. With the second wave of coronavirus on the way putting brakes on the economic recovery, it is not something we can afford.

In fact, we need to stay as firm as ever in our defence of intellectual property rights if we want to defeat coronavirus and many more diseases. Patients who may one day be diagnosed with incurable diseases such as Alzheimer’s, Cystic Fibrosis, Diabetes, or HIV/AIDS should benefit from the chance that a cure will become available, and protecting IP is the only way to give them that chance. If we act boldly now and weaken intellectual property rights even further – and expand the scope of TRIPS flexibilities – we will cause the damage that will be hardly reversible, and the post-pandemic world will have to foot the bill.

As the former Czech Prime Minister, Jan Fischer pointed out, “Patents and other intellectual property protections enshrine the incentives that compel drug companies to take such extraordinary risks. By temporarily barring copycat products, the rules give innovators an opportunity to try and recoup their huge development costs. A substantial portion of the revenues achieved from the sale of those innovative drugs are dedicated to fund new projects, and enable the pursuit of path-breaking R&D in the first place.”

If we want more prosperity for all, we need to protect intellectual property rights. TRIPS flexibilities, and the call to extend their scope beyond patens, in particular, are an attempt to erode IP, and should be seen for what they really are: a threat to our economic recovery from COVID-19 and future innovation.

By Maria Chaplia, European Affairs Associate at the Consumer Choice Center

Apakah Perlindungan Hak Kekayaan Intelektual di Bidang Medis Menguntungkan Konsumen?

Penulis Haikal Kurniawan – Usia harapan hidup dunia kian naik dari tahun ke tahun. Pada tahun 2020, diprediksi ada lebih banyak penduduk dunia yang berusia di atas 64 tahun daripada anak-anak di bawah usia 5 tahun (Roeder, 2019). Hal ini tentu merupakan suatu capaian yang mengagumkan, dan sangat perlu untuk diapresiasi.

Salah satu hal yang memainkan peran besar atas hal tersebut adalah inovasi dan perkembangan sains dan teknologi di bidang medis. Berbagai kemajuan di bidang tersebut telah membantu umat manusia untuk memiliki usia jauh lebih panjang daripada leluhur mereka yang hidup di masa lalu.

Konsumen tentu merupakan pihak yang paling diuntungkan dari perkembangan tersebut. Melalui berbagai inovasi, konsumen diberikan berbagai macam pilihan untuk memilih obat-obatan medis yang lebih beragam dan ampuh untuk mengatasi berbagai penyakit.

Lantas, apakah perlindungan Hak Kekayaan Intelektual memiliki kaitan erat perkembangan sains dan teknologi tersebut?

*****

Hak Kekayaan Intelektual, atau HAKI, merupakan salah satu hak yang diakui secara global oleh dunia internasional. Deklarasi Universal Hak Asasi Manusia (DUHAM), Pasal 27 UDHR, menyatakan dengan eksplisit bahwa “Setiap manusia memiliki hak untuk mendapatkan perlindungan, baik secara moral, maupun kepentingan material, yang dihasilkan dari hasil karya saintifik, literatur, maupun seni yang dibuatnya.”

Perlindungan HAKI merupakan salah satu instrumen yang dibuat untuk melindungi para inovator dan seniman atas hasil jerih payah mereka. Tanpa adanya perlindungan terhadap HAKI, tentu mustahil para inovator dan seniman yang sudah bekerja keras membuat karya tertentu untuk menikmati hasil kreatifitas yang mereka buat. Orang-orang lain, yang tidak melakukan apa-apa, akan dengan mudah mengkopi dan membajak hasil karya tersebut untuk keuntungan mereka sendiri.

Hal yang sama juga berlaku untuk inovasi di bidang teknologi kedokteran, pangan, dan kesehatan. Satu hal yang memiliki peran sangat besar untuk mendorong perkembangan tersebut adalah para investor yang menginvestasikan dana mereka untuk riset dan penelitian.

Jumlah dana yang diinvestasikan tersebut tidaklah kecil. Profesor dari Fakultas Kesehatan Universitas Tufts, Joseph Dimasi, dalam jurnalnya yang berjudul “Innovation in the pharmaceutical industry: New estimates of R&D costs” memberi estimasi, agar sebuah obat bisa dipakai oleh pasien dari nol, dibutuhkan waktu riset selama 12,5 tahun dan dana sebesar 2,8 milyar Dollar Amerika, atau lebih dari 35 triliun rupiah (DiMasi, 2016).

Dana tersebut tentu bukan jumlah yang sedikit. Tanpa adanya perlindungan terhadap HAKI, tentu insentif para investor untuk menginvestasikan uang yang mereka miliki menjadi berkurang, dan bahkan hilang. Hal tersebut tentu akan sangat merugikan banyak pihak, terutama konsumen yang membutuhkan obat-obatan medis terbaru, karena riset dan penelitian menjadi terhambat.

Akan tetapi, bukankah HAKI di bidang medis akan mendorong perilaku rakus yang dilakukan oleh berbagai perusahaan farmasi demi keuntungan sebesar-besarnya?

Memang, kerakusan perusahaan farmasi demi meraih keuntungan sebesar-besarnya merupakan karikatur yang kerap digambarkan oleh para aktivis dan para politisi yang memiliki haluan kiri.

Namun, kenyataannya tidaklah demikian. Perusahaan farmasi asal Britania Raya GlaxoSmithKline (GSK) misalnya, memberlakukan kebijakan pemotongan harga obat yang mereka jual di negara-negara berkembang sebesar 25% dari dengan harga di negara-negara maju. Selain itu, perusahaan farmasi asal Swiss, Novartis, sejak tahun 2011, telah mendistribusikan lebih dari 850 juta obat anti malaria ke lebih dari 60 negara dengan jumlah penderita malaria tertinggi, tanpa mengambil profit sama sekali (Medicine for Malaria Venture, 2019).

Lantas, bila demikian, bagaimana kita dapat mengatasi biaya obat-obatan medis yang tinggi?

Cara untuk mengatasi hal tersebut bukanlah dengan menghapus HAKI, karena hal tersebut akan menghilangkan insentif yang sangat dibutuhkan untuk mendorong kemajuan di bidang medis. Solusi yang paling efisien untuk menurunkan harga obat-obatan agar terjangkau adalah menghapuskan berbagai kebijakan pemerintah yang mendorong kenaikan harga tersebut, diantaranya adalah tarif impor dan izin birokrasi yang rumit.

Tarif impor untuk produk obat-obatan medis tentu akan mendorong kenaikan harga barang tersebut di pasar, dimana yang paling dirugikan adalah masyarakat kelas menengah ke bawah. Nepal misalnya, memberlakukan kebijakan tarif impor untuk produk medis sebesar 14,7%. Tarif impor untuk obat-obatan medis di Indonesia sendiri adalah 4,3% (IDN Times, 2019).

Izin yang rumit dan berbelit juga merupakan hal yang tentu sangat menghambat perkembangan dan membuat biaya obat menjadi meningkat. Berdasarkan laporan Tempo misalnya, Menteri Kesehatan, Terawan Agus Purwanto, menyatakan bahwa izin peredaran obat baru di Indonesia bisa memakan waktu hingga berbulan-bulan, ia berjanji akan mengatasi persoalan tersebut (Tempo, 2020).

HAKI di bidang medis merupakan hal yang patut untuk dijaga demi mendorong perkembangan sains dan teknologi di bidang medis, yang tentunya akan membawa manfaat besar bagi umat manusia. Pemerintah dalam hal ini seharusnya menjadi pihak yang menjaga hak tersebut, bukan menjadi aktor yang mempersulit inovasi melalui berbagai regulasi ketat yang nantinya akan merugikan masyarakat.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Interview with Fred Roeder, an overview of the European medication Market

European elections 2019: science at the polls

In the context of the European elections, European Scientist is bringing you an overview of experts from different countries on various topics around science and science policy in Europe, in order to provide a panorama and analysis, which will be useful for the next commission.

The Europeans Scientist: What does the European medication Market looks like at the moment? How about the regulation?

After the United States, Europe is the most important and innovative region for pharmaceutical breakthroughs. Five out of ten of the world’s largest pharmaceutical companies are based in Europe (though only two of them in the EU after Brexit). The regulation and access to medicines in Europe is partially regulated by the EU and partially by Member States. To understand this better it’s important to distinct between mere market authorization, which allows a drug manufacturer to sell its product in a country and pricing and reimbursement decisions which determine the price of the drug and whether the public health insurance covers it.

Market access decisions are either made by the EU or at least regulated uniformly. While the European Medicines Agency (EMA) is currently busy with moving from London to Amsterdam, it has also a central role in the medicines approval system within the EU, Iceland, Liechtenstein, and Norway. If a pharmaceutical company seeks marketing authorization for an innovative drug in even just one EU Member State it has (in most cases) to apply centrally at the EMA for a marketing authorization. Generics and other medicines can be approved by national medicines agencies through either a decentralized method or by mutual recognition of existing marketing approvals in other Member States.

The decision on how much a pharmaceutical company, a wholesaler, and pharmacies can actually charge for drugs is made on either member state level or even on lower regional levels. Traditionally wealthier countries pay higher prices for drugs and cover more innovative medicine than less wealthy member states. There has been recently a push by Italy and also the World Health Organization to bring price controls on to a supranational level. Several EU countries already collaborate in the hope to have a higher bargaining power against pharmaceutical companies in the price negotiations.

ES: Is there a model to follow? Do you recommend more regulation and harmonisation or do you think that each state should keep its difference?

Different numbers show that innovative pharmaceutical companies make over 50% of their global profits in the United States. This has historically allowed Europe to have lower drug prices than the US. The current aggressive moves to bring drug prices even further down in several EU countries might severely harm the future pipeline for innovation in Europe. As a patient I am of course interested in cost control but I am even more interested in new drugs that are able to cure diseases we currently can’t treat. Many politicians run a populist train of cutting profits for pharmaceutical companies. This sounds first sexy but might jeopardize future scientific breakthroughs.

ES: What are your recommendations for the next Commission?

During the stalled TTIP talks there were good idea about more regulatory harmonization between the US FDA and Europe’s EMA. It would be good if the next Commission picks up these conversations and pushes for mutually recognizing market approvals of FDA and EMA. This would put both regulators under competitive pressure: Drug companies would seek approval first at the regulator that promises a better market approval process. Patients in this jurisdiction would benefit from life-saving innovative drugs being earlier available. Another important area were we still need improvements is to allow more patients to have access to potentially life-saving drugs that have not been approved by regulators yet. This is called compassionate use – One of these programs got recently approved in the United States and is called Right to Try. A terminally ill patient should have the right to try experimental (and potential unsafe) medicine if there’s a chance that this drug would save his or her life.  At the same time the Commission should refrain from pushing for unified drug prices in the EU.

Right now less affluent Member States benefit from high drug prices in the ‘North’. If there’s regulatory push to bring drug prices down to the smallest common denominator we risk that some innovative medicines companies just pull out of Europe entirely or massively delay the launch of their drugs in Europe.

Fred Roeder is a Health Economist and Managing Director of the Consumer Choice Center

Read more here

Liberals want to build their campaign around pharmacare, but ignore where drugs would end up

Fred Roeder is a health economist and the managing director of the Consumer Choice Center. David Clement is the North American-affairs manager for the Consumer Choice Center.

Internal documents from within the Liberal Party recently showed that Ontario Liberal MPs want 2019’s election campaign to be built on a national pharmacare plan.

Specifically, the proposed plan would seek to centralize and consolidate the 46 drug-procurement programs that exist in Canada. The goal would be to give Canada as a whole more bargaining power in the drug-procurement process, which would potentially lower the prices Canadians pay for their medicine. Although pharmacare could lower drug prices in the short run, it could also run the risk of exacerbating Canada’s existing drug shortage, and significantly limit patient access in the long run.

If a national pharmacare plan were to work, as advertised, it would help Canadian patients by lowering the price they pay for medicine. Unfortunately, the Liberals are largely ignoring the issue of where much of these low-priced drugs would end up, which is the United States. It is one thing to lower drug prices for Canadians, but that benefit isn’t realized if Canadian patients never actually have access to those cheaper drugs.

Pharmacare would be an attempt to further control the price of drugs. The problem is that Canada already has price-control mechanisms for prescription drugs at the federal and provincial level. Those price controls lead to much lower drug prices compared with the prices paid south of the border. That said, because Canadian drugs are cheaper than in the United States, several U.S. states have begun looking at importing pharmaceutical products from Canada in an attempt to undercut U.S. prices. For example, the Republican Governor of Florida has recently pushed for federal approval for drug importation from Canada, and U.S. President Donald Trump has already signalled his support of this measure.

And while importation from Canada to the United States could mean lower drug prices for patients in Florida, Canadian patients could suffer as a result of worsening access. U.S. Health Secretary Alex Azar has publicly stated that Canada doesn’t have the appropriate supply to meet patient demand, and that large pharmaceutical companies are unlikely to increase their supply for the Canadian market. Worsening drug shortages are the most likely outcome for Canadians if the federal government adds in more price controls while having large-scale drug exports to the United States. We know that this is the probable outcome because Canada already suffers from a lack of supply, and another measure to intervene on pricing will simply increase the incentive for American states to import from Canada.

Supply is one problem for Canadian patients, but it isn’t the only issue they face, and it isn’t the only issue that could get worse as a result of pharmacare. In addition to poor supply, Canada is significantly lagging in terms of access to potentially life-saving and innovative medicines. Countries such as Germany, Japan and the United States all introduce, and reimburse for, innovative drugs quicker than in Canada. Here, it takes more than 450 days for a new drug to be reimbursable, while that number is only 180 days in the United States. It can be expected that a pharmacare plan would make this innovation problem worse. It is unlikely that the manufacturers of these drugs will want to roll out innovative medicines in Canada, under various forms of price control, if those drugs can then be resold into other markets, undercutting prices abroad.

For cost, it is important to remember that Canadians have lower drug prices than Americans. At the same time, it is important to be aware that because of price controls, Canada is not a significant market for drug manufacturers, especially when compared with the United States, which accounts for more than 50 per cent of the industry’s global profits. If Canada goes too bullish against drug prices, while at the same time allowing American states to import prescription drugs from Canada, we might run the risk of drug companies leaving entirely, or massively delaying the introduction of new drugs in Canada.

Companies leaving the domestic market entirely might sound like a far-fetched concept, but it is something the Canadian marketplace has seen in other industries. Take Google and the recent issue of political advertising in Canada. Ottawa significantly changed its election advertising regulations, and rather than comply, Google decided that it would leave the political advertising market altogether. Thus, we have a large multinational entity cutting itself out of the political advertising market because conditions aren’t ideal, and because Canada’s market is minuscule in comparison to others.

Everyone wants more competitive and better pricing for patients. Unfortunately, the elephant in the room is where these price-controlled drugs end up, and how industry will respond. Our concern, as a consumer group, is that the pharmacare plan, without addressing export, could exacerbate the already serious issue of drug availability in Canada.

If a provider of vital pharmaceuticals were to pull out of the Canadian market as a result of price fixing and undercutting, it would be Canadian patients who pay the ultimate price. Drug access – especially to new innovative treatments – lags in Canada, and without the foresight to correct some of these blind spots, access could either get significantly worse, or be eliminated altogether under a national pharmacare plan. That scenario should concern all Canadians.

Read more here

Lower Drug Prices Without Harming Innovation

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Prescription drug situation less than ideal for consumers

Jeff Stier of the Consumer Choice Center has mixed opinions. “Senator Braun’s is an attempt to solve or address the problem of PBMs, pharmacy benefit managers who are not passing along price reductions instituted by the pharmaceuticals along to the consumers, so there is a real problem there,” Stier begins. “I as a freemarketer am never pleased […]

A Patently Reasonable Approach to Addressing Pharmaceutical Prices

We seem to be at an impasse when it comes to getting the prices of prescription drugs under control for patients while at the same time fostering innovation. This need not be the case. The left and the right have their own ideological approaches, none of which will advance given current political reality. Progress will […]

Are ‘middle men’ the culprit?

ONE NEWS NOW: “One of the real hidden costs that we’ve been seeing [in drug prices] is the role that the pharmacy benefit mangers (PBMs) play,” says Jeff Stier, senior fellow at the Consumer Choice Center. “Those are the middle men who negotiate between the drug companies – the companies that innovate, that make the drugs we […]

How Europe’s Pharmacy Lobby wants us to keep paying too much for Aspirin

VOCAL EUROPE: The European Union has been successful in opening and liberalizing many industries in the past decades. Among them telecommunication, airlines, and banking. All these liberalization efforts lead to lower prices and more choice for European consumers.

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