By Thomas Fuller
When Thailand announced earlier this year that it was breaking patents on drugs to treat HIV and heart disease, Western pharmaceutical companies reacted with fury. Abbott Laboratories, the maker of the AIDS drug Kaletra, took the radical step of withdrawing all of its new products from Thailand, depriving Thais of access to new drugs for rheumatoid arthritis, kidney disease, heart disease and high blood pressure.
"Thailand has chosen to break patents on numerous medicines, ignoring the patent system," said Jennifer Smoter, a spokeswoman for Abbott, which is based near Chicago. "As such, we've elected not to introduce new medicines there."
But two months after the uproar began, there are signs that Thailand has gained the upper hand. Its aggressive stance could be paving the way for other developing countries to extract lower drug prices from pharmaceutical giants in Europe and the United States.
Abbott announced Tuesday that it would cut the price of Kaletra in low-and medium-income countries, including Thailand, to $1,000 a patient per year. That is less costly than any generic on the market and 55 percent less than the current price, the company said.
The Swiss drug company Novartis offered an effective 75 percent price reduction this week in its leukemia medicine, Glivec, after Thai officials said they were studying a compulsory license on the drug, which would have allowed the government to produce it in its own factories and distribute it on a nonprofit basis.
Merck, the U.S. drug maker, has also offered to cut the price of its HIV drug, Efavirenz, here after the Thai government announced it would break the patent for that drug last November.
Drug companies say they fear a spread of Thailand's confrontational strategy.
"We don't want Thailand to be used as a springboard for other countries to do the same," said Teera Chakajnarodom, president of the Pharmaceutical Research and Manufacturers Association, an industry group in Bangkok.
To bring drug companies to the negotiating table, Thai officials used as a bargaining chip a World Trade Organization rule introduced in the 1990s. The rule, part of the Agreement on Trade-Related Aspects of Intellectual Property Rights, or Trips, gives countries the right to break a patent and either produce the drug themselves or import generics from other countries.
Many countries, including Brazil, Indonesia, Malaysia, Mozambique and Zambia, have broken or have threatened to break patents on drugs for HIV and other infectious diseases.
What is new in Thailand's case is the broader categories of drugs that the government is aiming at.
A groundbreaking case was the compulsory license for Plavix, a blood-thinning drug developed by Sanofi-Aventis of France and marketed by the U.S. company Bristol-Myers Squibb.
Plavix is designed to help prevent heart attacks and strokes. The pharmaceutical industry says the spirit of the WTO rule is being violated: It should be used for national emergencies like AIDS or other fast-spreading infectious diseases, the industry argues.
Thai officials make no excuses.
"People told us, 'It's useless to negotiate with them unless you start to announce that you want to go for compulsory licensing," said Suwit Wibulpolprasert, a senior adviser on disease control at the Thai Ministry of Public Health. "Then they start to talk to you.' "
"We learned that lesson," Suwit added. "After we announced our intention to implement compulsory licensing they knocked at our door almost every day."
Drug companies were stunned by the quick succession of the compulsory licenses - and worried about the threat of more, said Paul Cawthorne, the head of Medecins Sans Frontieres, the medical charity, in Thailand.
But in practice, the strategy may be nothing more than using the WTO rule as leverage for some old-fashioned haggling. Analysts say the government may not even intend to produce its own drugs. Officials note that they have not started production.
"Our door is never closed," said Health Minister Mongkol na Songkhla, who is heading to the United States later this month to explain the government's drug policies. "We are willing to discuss. We are willing negotiate."
The WTO rules are vaguely worded: Governments can act in cases of national emergencies. But a declaration in 2001 by WTO members also gives countries the "freedom to determine the grounds upon which such licenses are granted."
In forging their more aggressive approach toward drug companies, Thai health officials had plenty of room to maneuver in the tumultuous political atmosphere that has reigned in Thailand since the military coup that ousted a civilian government in September.
The current, military-appointed government has shown little reluctance to take bold and controversial measures, such as capital controls and crackdowns on foreign ownership of companies.
After breaking the patents, Thai officials received support and plaudits from many global health organizations, including Medecins Sans Frontieres, the Clinton Foundation and Unaids, the UN agency charged with helping tackle the disease. People from these organizations say Thailand is taking advantage of an underused provision in international law that could help save lives.
Support and sympathy for Thailand among health advocates also rose after Abbott announced its partial boycott in March. Medecins Sans Frontieres called the decision to withhold new drugs "appalling."
Some of Abbott's investors also protested the move. Christian Brothers Investment Services and members of the Interfaith Center on Corporate Responsibility, who together own $35 million in Abbott shares, said they were concerned that the company's actions might damage its reputation.
"To our knowledge, no pharmaceutical company has before withdrawn AIDS drugs in response to a pricing or licensing dispute," the groups said in a statement. "By keeping life-saving medicines like Kaletra off the shelves in Thailand, Abbott Labs is threatening the health of Thais who need access to these drugs for survival."
Abbott has reduced the price of its Kaletra capsules, an older form of the drug that requires refrigeration, but not its more recent tablets, which are better suited for Thailand's hot climate. Thai officials said Wednesday it would be days before the government decided whether Abbott's price reduction would forestall compulsory licensing.
By breaking the patent on Kaletra, the Thai government estimates it would save 8,000 lives, by making possible distribution to people who cannot afford it through the country's public health care system.
The Pharmaceutical Research and Manufacturers Association of America argues that U.S. consumers are unfairly carrying the burden of financing research for the rest of the world.
"Americans are effectively subsidizing other countries' health systems through higher prices, while having fewer medicines from which to choose," the group said in its complaint to the U.S. government.
Suwit, the Health Ministry official, advises drug companies to learn from what he describes as a Chinese proverb: "Less profit means more profit."
"If you sell at a lower profit per piece," he said, "people will consume more."
Blog master said... If Thailand win , Its the first success of his job or this government junta, the Health care 's minister who came from the past , he is the old doctor who had retire for many years ago. In first month of his work , he ordered to abolish the 30 bath health care program of Thaksin 's regime and changed to be total free , he claimed that its the populist policy , so dangerous for something else , he had to destroy it by that changed and renamed it , perhaps Thais may be forget Thaksin and his policies in near future.
For his role about the brangle with the drug company , I don't know about side effect from this case if he (Not Thais) overcome. He worked like a crazy assured.
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