For as long as pharma and biotech companies have contemplated doing business in BRIC, there have been questions about intellectual property (IP) risk.
In the years following the Doha Declaration in 2001, these concerns focused on HIV medicines. Brazil, for example, used the threat of compulsory licensing to obtain discounts for various HIV drugs, before actually issuing a compulsory licence in 2007 for Stocrin. IP risk has since switched to innovative oncology products.
India has been by far the most active country in targeting IP protection to increase access to innovative oncology products. The recent upholding of the Indian patent office’s rejection of Novartis’ Glivec patent application is the latest in a series of actions including the compulsory licence of Nexavar and initiation of the compulsory licence process for Herceptin, Sprycel and Ixempra, revocation of a patent for Pfizer’s Sutent and a legal ruling allowing a generic version of Tarceva.
China and Brazil have issued compulsory licences in the past for infectious diseases. So far neither has issued compulsory licences or denied patents to medicines for non-communicable diseases. Importantly both have stronger pricing and patient access systems than India and, until now, have used these systems to drive discounts.
However, China also passed the “Measures for the Compulsory Licensing of Patent Implementation” law in May 2012. This law, which enables compulsory licensing in China and also allows compulsory licensed drugs made in China to be exported, provides China with another tool to obtain access to innovative medicines at lower prices.
There are two ways of interpreting recent trends in compulsory licensing and IP loss.
On the one hand, as the instances of compulsory licensing and other forms of IP loss are still relatively rare, they do not pose a serious threat to the biopharma industry. This interpretation would support the traditional response of the industry, primarily legal action and lobbying US and EU governments for stronger protection globally.
The alternative – and our view – is that these decisions are harbingers of a more fundamental shift for the industry.
Given this more fundamental shift, biopharma’s response to major IP losses has so far been a missed opportunity. To ensure protection of its IP, the industry will need to move towards new models of engaging and collaborating with governments and other local stakeholders to deliver commercially sustainable access to innovative treatments in areas of high unmet need. In this model, the industry will have to do its bit to increase access, while emphasising that governments and third party civil society organisations also have an important part to play, especially in terms of increased financing for innovative medicines. It is critical to get this right to ensure that patients today get access to current treatments while maintaining the incentive for future innovation.
This article is based on the May 2013 IMSCG White Paper Securing IP and Access to Medicine: Is Oncology the Next HIV (pdf).
This article was originally published in the PME supplement Pharma and BRIC