June 1, 2013

Will Hepatitis C Become A New Battleground Between Pharma And Poor Nations?

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Ed Silverman 5/31/2013 @ 12:25PM

Will the new crop of hepatitis C treatments form the next battleground between the pharmaceutical industry, poor nations and patient advocates? A new report from the Global Commission on Drug Policy, which includes former Federal Reserve Chairman Paul Volcker and billionaire businessman Richard Branson, suggests compulsory licenses should be pursued when pricing talks with drugmakers fail.

“Governments should enhance their efforts to reduce the costs of new and existing hepatitis C medicines – including through negotiations with pharmaceutical companies to ensure greater treatment access for all those in need. Governments, international bodies and civil society organizations should seek to replicate the successful reduction in HIV treatment costs around the world, including the use of patent law flexibilities to make them more accessible,” the report recommends (here is the report).

The mention of ‘patent law flexibilities’ refers to a World Trade Organization pact called TRIPS, or Agreement on Trade-Related Aspects of Intellectual Property Rights, which allows countries to pursue compulsory licensing as an option to make patented medicines more affordable to their citizens. But this has been a contentious provision for the pharmaceutical industry.

Brand-name drugmakers argue that overriding patents with compulsory licenses robs them of incentives and rewards for investing in innovative research, while patient advocates say licensing is the only means to make high-priced medicines affordable. The issue has caused several high-profile disputes in recent years in such countries as Thailand, Brazil and South Africa involving various HIV and cancer treatments.

Last year, India entered the fray when a license was authorized for a Bayer cancer medicine. The drugmaker appealed, but the license was upheld two months ago. The episode has been described as a game changer, because the move is expected to encourage still other Indian generic drugmakers to seek licenses for all sorts of medicines in one of the world’s largest and fastest-growing markets, although Indian authorities have been debating the issue (read more here and here).

Hepatitis C, however, is quickly landing on radar screens in developing and poor nations. About 170 million people are infected globally, including 10 million who inject drugs, but the commission found that drug enforcement laws in many countries are forcing drug users away from public health services into riskier settings where the virus abounds. And this is increasing pressure for medicinal solutions.

But the commission report notes that “if treatment access remains low, there will be a rising number of people who use drugs who develop advanced or fatal liver disease” and the use of hepatitis C drugs “will be severely limited if they are not affordable for low and middle income countries… Reducing the costs of existing and future hepatitis treatments should be an urgent priority for all national and international authorities.”

“If the prices were to be unaffordable once more in history, it would be one more scandal around inequity of access to health care,” Michel Kazatchkine, the United Nations Secretary General’s Special Envoy on HIV/AIDS in Eastern Europe and Central Asia, said at a briefing in Geneva yesterday where the report was disclosed, according to Bloomberg News. “There’s no reason why a country like Ukraine wouldn’t go for this and declare a public emergency.”

Several drug makers are unlikely to be pleased with the report, since the hepatitis C market has grown crowded due to the burgeoning need. Gilead Sciences, for instance, recently sought regulatory approval for a drug that was part of its $11 billion for Pharmasset in 2011 (see this). Mark Schoenebaum, an analyst at ISI Group, believes Gilead may charge as much as $100,000 per patient, at least in the US, and Leerink Swann analyst Howard Liang estimates the drug could become a $9 billion seller by 2015. Others playing in this market include Merck, Johnson & Johnson and Vertex Pharmaceuticals.

Although PhRMA has derided compulsory licensing (read this), the industry trade group has not issued a response to the report.

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