Klang MP Charles Santiago has slammed a government-commissioned study on the Trans-Pacific Partnership Agreement (TPPA) as “shallow”.
The national interest analysis prepared by the Institute of Strategic and International Studies (Isis), Charles said, missed out on a number of key issues that could impact the prices of medicines.
The TPPA, he said, stipulates two different circumstances when the patent term for medicines can be extended but the analysis completely ignored the one stipulated under Article 18.37.2 of the agreement.
“There are avenues in the agreement itself that allow for patent extensions, which Isis is not acknowledging. Therefore you can be assured that patents will be extended.
“What is the impact of patent extension? If you extend the patents, that means the medicines involved will remain at high prices,” Charles told reporters in Petaling Jaya yesterday.
Several TPPA critics, including Charles ( photo ), have pointed out in the past that this provision would allow pharmaceutical companies to pass off minor variations of an existing medicine as a novel product, hence garnering an extension on their patents.
This phenomenon is known as 'ever-greening' . It supposedly allows the companies to hold a monopoly for longer than the original 20-year patent period, and hence keeping out competition from generic drug manufacturers and keeping prices high.
Charles said that instead of addressing this concern, the Isis report focused on a separate mechanism where patent extensions are granted if there is “unnecessary delay” in the approval process in granting patents and the approvals for drugs to be sold to the market.
The report said that such patent extensions would not be an issue in Malaysia as the Malaysian Intellectual Property Corporation (MyIPO) is taking steps to improve its processes, and the Drug Control Authority (DCA) is already efficient at processing applications.
Asked about former health director-general Dr Ismail Merican's reassurance that the DCA has provisions in place to ensure that ever-greening would be impossible under Malaysian law, Charles said that such reassurances were insufficient and there must be explanation on how this is to be done.
Whatever the case, he pointed out, a committee is to be formed under TPPA that will ensure regulatory coherence among the laws of the TPPA countries and it will review how the countries implement their TPPA obligations on intellectual property every 10 years.
When that happens, Malaysia may be told to change its laws, he said, in particular to suit the interests of the US companies.
Six-digit figure for medicines
Charles also said Isis was wrong to conclude that the granting of data exclusivity protection for biologic drugs would have a minimal impact on their prices.
He said Malaysia currently does not provide any market protection for biologic drugs, which help drive down the prices of medicines.
This would change and drive up prices once some drug manufacturers are granted data exclusivity for their products when the TPPA is implemented.
Under the TPPA, parties to the agreement are required to prove an eight-year data exclusivity period for biologic drugs, or in the alternative, a five-year protection together with other measures that would give similar protection.
This means that once a drug innovator submits test data to obtain government approval to sell a biologic drug, a competitor cannot use the same test data to apply for approval to sell a similar biologic drug, which is also known as 'biosimilars'.
Biologics are an emerging class of drugs that are grown and harvested from living organisms (particularly genetically-engineered cells), and typically comprise proteins. These may not be patentable in some cases.
They are used to treat a range of diseases, including cancer, arthritis and psoriasis, and are often contrasted against conventional 'small molecule' drugs.
Patent protections and data exclusivity protections are different types of intellectual property protection that a medicine may have, and the protection periods may overlap.
Charles also slammed the report for highlighting that biosimilars are only 15 to 30 percent cheaper than their original counterparts in the European Union (EU), calling it an "apples-to-orange" comparison.
This is in contrast to savings of 80 percent and above for conventional drugs, when compared with their generic counterparts.
EU subjects drugs to price control
Unlike Malaysia, Charles said, drug prices in the EU are subject to price controls.
In addition, he pointed out that a 30 percent price difference is huge, especially since the price for a course of biologic drugs can run into five or six-digit figures in terms of the ringgit.
Already, he said, 22 percent of Malaysians who have been diagnosed with cancer report that they are unable to pay for their mortgage or rent a year after the diagnosis, with another 22 percent of the 1,662 Malaysian patients studied discontinuing treatment altogether.
On this, Charles quoted figures from a news report last month about the findings of the Asean Costs in Oncology Study, which found that 29 percent of patients in the region died within a year of a cancer diagnosis while another 48 percent ended up spending more than 30 percent of their household income on cancer treatment.
The study covered all Asean countries, except Singapore and Brunei, and involved 9,513 newly-diagnosed cancer patients whose cases were followed up a year after their diagnoses.
Charles, who was a member of the bipartisan parliamentary caucus on the TPPA, said the agreement has failed to strike a balance and only protects the rights of patent holders.
“I think it is quite clear that this agreement promotes the interests of patent holders. It is unable to create a fair balance between legitimate business goals and social responsibility to society for affordable healthcare,” he said.
Charles conceded that the process of developing a new medicine is very
costly, and pharmaceutical companies should be allowed to recoup their
investments and turn a profit.
However, he said, pharmaceutical companies are already turning a tidy profit and are spending more of their overall revenue on sales and marketing, instead of research and development.
For example, in the case of Pfizer, which is the world's largest drug company, it spent US$6.6 billion on research and development but nearly double that sum (US$11.4 billion) on sales and marketing in 2013.
It turned a profit of US$22 billion, or a profit margin of 43 percent.
“That tells you where it is weighted. More money is being spent on promotion, rather than on developing (medicines),” Charles said, adding that the figure highlighted the conflict between profits and access to affordable healthcare.
However, he said, pharmaceutical companies are already turning a tidy profit and are spending more of their overall revenue on sales and marketing, instead of research and development.
For example, in the case of Pfizer, which is the world's largest drug company, it spent US$6.6 billion on research and development but nearly double that sum (US$11.4 billion) on sales and marketing in 2013.
It turned a profit of US$22 billion, or a profit margin of 43 percent.
“That tells you where it is weighted. More money is being spent on promotion, rather than on developing (medicines),” Charles said, adding that the figure highlighted the conflict between profits and access to affordable healthcare.
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