By Ellen Shaffer, Joseph Brenner, and Shayna Lewis
Why are some lower-price generics available in the US before they can be sold in Guatemala? Our recent article in Health Affairs analyzes how years of pressure by the pharmaceutical industry and the US government resulted in intellectual property rules in the Central America Free Trade Agreement (CAFTA-DR) that place desperately needed medicines out of the hands of Guatemalans in violation of the country’s internationally recognized and constitutionally protected right to health.
CAFTA covers the United States and six other countries: the Dominican Republic, Costa Rica, El Salvador, Nicaragua, Honduras, and Guatemala. In 2005, the United States Trade Representative predicted that “[CAFTA] will not affect Guatemala’s ability to take measures necessary to protect public health. . . . Stronger patent and data protection increases the willingness of companies to release innovative drugs in free trade partners’ markets, potentially increasing, rather than decreasing, the availability of medicines.” However, the Center for Policy Analysis on Trade and Health (CPATH) found that CAFTA in fact increases health risks for patients who need these drugs by increasing the prices of medicines, and CAFTA stifles innovation by undermining Guatemala’s domestic generic drug industry.
CAFTA rules protect the products and processes of brand-name pharmaceutical companies (their intellectual property, or IP) from competition by generic companies — competition that can lower drug prices. These price protections are stronger than existing US law and the World Trade Organization’s (WTO) multilateral Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The World Health Organization (WHO) and others have expressed concerns that the consequences of these “TRIPS-Plus” rules are particularly serious in lower-income countries, where price is an important factor in access to medicines.
CAFTA also undermines existing mandates to protect public health. According to the WHO, every country has signed on to at least one treaty that recognizes health as a human right. Guatemala has signed a number of international conventions advancing public health and explicitly recognizes that health is a human right in its own constitution. However, CAFTA essentially requires Guatemala to continually violate this right, by making it harder for residents to access medications.
For example, Article 10 of the American Convention on Human Rights in the Area of Economic, Social and Cultural Rights (commonly known as the “Protocol of San Salvador”), which Guatemala ratified in 2000, defines the right to health as “the enjoyment of the highest level of physical, mental and social well-being.” This right includes both access to primary health care and the “prevention and treatment of endemic, occupational and other diseases.” Yet, as discussed below, CAFTA makes this nearly impossible. It offers patent protections to pharmaceutical companies, which keep drug prices high, excluding invaluable medicines from the very residents who need them the most.
Our recent study measured the effects of two rules: data protection and patents. (There were insufficient data to evaluate the third rule, known as linkage.) Data protection (also referred to as data exclusivity) is a TRIPS-Plus rule that inserts an administrative barrier to the marketing of generic drugs even when there is no patent in place. Brand name drugs must be proven to be safe and effective through clinical studies involving human subjects. Requiring generic companies to repeat these trials would be expensive and unethical. In order to bring their drugs to market, generic drug companies must demonstrate only that their drugs are bioequivalent to brand name drugs — that is, the generic drug and the brand name drug both work the same way in the body. Generic drug companies establish safety and efficacy by referring to the results of the clinical trial data already completed by their brand-name equivalents.
But generic companies are prohibited from using or referring to the originator’s clinical trial data for drugs during the period of time that they are data protected. Under CAFTA and related domestic law, Guatemala authorizes brand-name drugs to be data protected for either 5 or 15 years (the term of data protection depends on whether the drug was listed during the years when the law offered a 15 year term, or in later years when the law offered 5 years). Originator corporations can select which medicines they submit to the Guatemalan drug regulatory agency to be listed as data protected. This is a simpler process for drug companies than getting a patent, and it offers the same monopoly marketing rights, though for a shorter period of time. The result is that generic equivalents of data-protected drugs are effectively barred from entering the market in Guatemala for years.
CPATH found that CAFTA IP protections have caused some generics that were already on the market to be withdrawn. In other cases, new generics were denied the right to register for entry to the market. Data exclusivity protections affect drugs used to treat the most common health conditions causing death in Guatemala, including hypertension (Ventavis), cancer (Fludara, Aloxi, Emend, Erbitux), pneumonia (Invanz), diabetes (Lantus), and cardiac disease and stroke (Crestor), as well as contraceptives (Yasmin) and antiretroviral medications to treat HIV/AIDS.
One example of the problems that such IP protections cause is seen in the case of insulin. In 2007, insulin made by Sanofi Aventis (US; brand named Lantus) cost $50.31 per 100 mL, while a therapeutically equivalent generic insulin made by Drogueria Pisa de Guatemala cost $5.95 per 100 mL. Yet, as Lantus is protected by data exclusivity until 2016, Guatemalans will pay 846% more for insulin than they would pay for its locally manufactured equivalent.
A number of the protected drugs will become open for generic competition in the United States, where they were first launched, before generic versions will be legally available in Guatemala. For example, clopidogrel bisulfate (Plavix), used to treat myocardial infarction, both is patented and has fifteen-year data exclusivity in Guatemala. Four drug companies that formerly sold registered generic versions of clopidogrel bisulfate in Guatemala have had that registration revoked. The result is reduced competition.
Because CAFTA has shifted power to the drug industry, the cost of managing HIV/AIDS has also gone up, and local health care facilities are unable to provide adequate treatment. According to the Guatemalan advocacy group Mujeres Positiva, in 2009 the Guatemalan government discontinued purchasing several antiretrovirals from donor organizations like the Pan American Health Organization and the Clinton Fund. Instead, the government shifted purchases to the brand-name companies, increasing the cost of a year’s supply of Abacavir from $350,000 to $5.5 million and of Kaletra from $1 million to $5.4 million. As a result, clinics are reducing the supply of drugs provided at each visit, are requiring multiple visits that are impossible for many, and are discontinuing the lab tests necessary to calibrate doses.
In 2007, the US Congress removed a similar data-exclusivity provision from the pending Peru Trade Promotion Agreement, recognizing the life-threatening consequences such provisions have on lower-income countries. As we debate health care reform in the United States, it is important to recognize the impact that trade policy has on health worldwide. CPATH urges the Obama Administration to work with Central American governments to suspend these provisions and to promote policies that further public health, advancing human rights worldwide. The President and his Trade Representative should take their lead from the World Health Organization (WHO), which has proposed a comprehensive framework for trade that balances the need for pharmaceutical innovation with the needs of developing countries to access affordable medicines.
For more information:
WTO: Intellectual Property (TRIPS) – gateway