NOVEMBER 5 — The Trans-Pacific Partnership Agreement (TPP) is a plurilateral trade agreement involving 12 countries including Malaysia and led by the United States. It contains 30 chapters, but only 4-5 of these pertain to traditional trade matters. The chapter that is of the most concern to the Malaysian AIDS Council is the intellectual property chapter. With the release of the finalised text today by the New Zealand Ministry of Foreign Affairs and Trade, we as an organisation are horrified to note the confirmation of our very worst fears — that these provisions will put generic medicines out of the hands of patients all over Malaysia and decimate the public health budget.
Access to Medicines in Malaysia
Malaysia relies heavily on generic medicines with data showing that pharmacists recommend generic substitution for 85 per cent of all brand name requests of medicines in Malaysia1. In a regional study involving 10,000 cancer patients, approximately 45 per cent of Malaysian cancer patients suffer from ‘financial catastrophe’ where medical costs exceed 30 per cent of household income 12 months after diagnosis2. In regard to HIV treatment, Malaysia currently pays up to 8 times more for the HIV drug lopinavir-ritonavir when compared to countries in the same income bracket. (Figure 1)
More recently a new drug (Sofosbuvir) that can cure Hepatitis C is being priced at an unaffordable RM357,000 (US$84,000) for 12 weeks’ treatment3. The generic versions of these HIV and HCV drugs can be obtained at a fraction of these costs. For instance, generic versions of Sofosbuvir can be provided at RM750.06-1579.07 (US$171-360) for 12 weeks treatment4. Examples of price differences between innovator and generic drugs used in palliative care settings in Malaysia are contained in Figure 2. Given that the median monthly household income in Malaysia is RM4585.005, it is important that access to generics are protected.
With the implementation of the TPP, generic versions of these life-saving medications will not be available for additional (more than 20 years if patents for new indications are applied) years following registration. These means the government of Malaysia and Malaysians will have to pay the full price of branded medications at very, very high prices.
Recently, the Minister of International Trade and Industry Dato’ Sri Mustapa Mohamed argued that the data exclusivity or patent provisions in the TPP ‘will not have an influence on the price of drugs’6. This statement is simplistic. What provisions in the TPP would do is extend patents and have data exclusivity periods that would delay the entry of generics, meaning that Malaysians would have to pay innovator prices for longer. Innovator prices, as evidenced by the above table, are higher than generic prices.
It should also be noted that post-adoption of similar TRIPS-plus provisions in the Jordan-US free trade agreement, the delay of generic medicines cost Jordan an extra USD$18 million (RM78.95 million) per year7. Malaysia has been lucky to have a Ministry of Health that fully comprehends the cost impact of higher medicine prices for longer. In October 2015, the Deputy Minister of Health stated: “The Health Ministry has announced that we do not agree with the extension of the duration of (the patent) of medicines as it will burden the people.”8 It is clear that based on the release of these finalised texts that the concerns of the Ministry of Health have been deemed insignificant.
Data exclusivity for biologics
The finalised text of the TPP9, released today on 5 November 2015, has similar IP provisions to leaked texts previously commented on by Bantah TPPA. In addition to patent extensions, the text contains a controversial provision in the Intellectual Property chapter, requiring 5 or 8 years of data exclusivity for biologic medicines.
Many cancer medications are biologic, including the breast cancer drug Herceptin which costs RM8,000 (US$2,600) per cycle with 17 cycles of treatment needed, costing a total of RM136,000 (US$44,000) for the entire treatment.
The finalised text states:
Article 18.52: Biologics
1. With regard to protecting new biologics, a Party shall either:
(a) with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic, provide effective market protection through the implementation of Article 18.50.1 (Protection of Undisclosed Test or Other Data) and Article 18.50.3, mutatis mutandis for a period of at least 8 years from the date of first marketing approval of that product in that Party; or alternatively
(b) with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic, provide effective market protection:
(i) through the implementation of Article 18.50.1 (Protection of Undisclosed Test or Other Data) and Article 18.50.3, mutatis mutandis, for a period of at least five years from the date of first marketing approval of that product in that Party,
(ii) through other measures; and
(iii) recognising that market circumstances also contribute to effective market protection to deliver a comparable outcome in the market.
The Malaysian law does NOT have data exclusivity for biologics and Malaysian law will have to be amended to incorporate this. What does this mean for the average cancer patient in Malaysia?
It means that a period of exclusivity can be imposed on their already expensive medication, keeping the cheaper generic versions out of their hands for an additional 5-8 years. The Malaysian AIDS Council is especially concerned in regard to the treatment for liver cancer and leukemia which disproportionately affects key affected populations under our purview.
While many argue that data exclusivity for biologics and patent extensions are necessary to promote innovation, data indicates that pharmaceutical companies are no longer innovating, and are instead using strong intellectual property provisions to profit from ‘merely minor variations’10 to existing drugs. Cynthia Ho, Professor of Intellectual Property Law at Loyola described in her 2015 article this ‘innovation crisis’11 affecting pharmaceutical companies. In a September 2015 op-ed12, Rahman and Quigley discuss the example of India which has a flexible IP system that has come under attack for being too weak – but at the same time is rapidly innovating. Medécins Sans Frontières’ Chase Perfect elaborates: ‘India’s current intellectual property model is under attack not because it has failed, but because it has succeeded.’13 India’s system enables access to generic medications, while ensuring that real innovation14 occurs, not merely minor variations of old drugs.
Hence the argument of innovation fails. The release of the TPP text today confirms that Malaysian patients will wait longer to access more affordable generic drugs.
1 Chong CP, Hassali MA, Bahari MB and Shafie AA. Generic medicine substitution practices among community pharmacists: a nationwide study from Malaysia.Journal of Public Health 2011; 19(1): 81-90.
2 The George Institute for Global Health, ASEAN Costs In Oncology “Cancer and its economic impact on households in the ASEAN countries” (ACTION) study. http://www.georgeinstitute.org/projects/asean-costs-in-oncology-cancer-and-its-economic-impact-onhouseholds-in-the-asean-countries Accessed 5 November 2015
3 Timothy Achariam, Hepatitis C cure too expensive in Malaysia (20 October 2015) The Sun Daily http://www.thesundaily.my/news/1586956 Accessed 5 November 2015
4 van de Ven et al. Minimum Target Prices for Production of Direct-Acting Antivirals and Associated Diagnostics to Combat Hepatitis C Virus (2014)Hepatology. The study assumes large scale programmes can be established.
5 Department of Statistics, Malaysia. Household Income and Basic Amenities Survey 2014
6 Joseph Sipalan, ‘TPP won’t alter Malaysia’s policy on drug patents, minister says’ (7 October 2015) http://www.themalaymailonline.com/malaysia/article/tppa-wont-alter-malaysias-policy-on-drug-patents-minister-says#sthash.TRahaVSs.dpuf Accessed 5 November 2015
7 Abbott, Ryan B. et al. ‘The price of medicines in Jordan: the cost of trade-based intellectual property.’ (2012) 9(2) Journal of Generic Medicines 75-85
8 Deputy Health Minister Dato’ Sri Hilmi Yahaya, quoted in TPPA: Extended expiry date of patent for meds rejected (12 October 2015) Free Malaysia Todayhttp://www.freemalaysiatoday.com/category/nation/2015/10/12/tppa-extended-expiry-date-of-patent-for-meds-rejected/ Accessed 5 November 2015
9 New Zealand Ministry of Foreign Affairs & Trade, Text of the Trans-Pacific Partnership http://www.mfat.govt.nz/Treaties-andInternational-Law/01-Treaties-for-which-NZ-is-Depositary/0-Trans-Pacific-Partnership-Text.php Accessed 5 November 2015
10 European Commission Director-General’s for Competition, Pharmaceutical Sector Inquiry: Final Report 33, 351-65 (2009)
11 Cynthia Ho, ‘Sovereignty under Seige: Corporate Challenges to IP Decisions’(2015) 30(1) Berkeley Technology Law Journal
12 Fifa Rahman and Fran Quigley, The illusion of a ‘golden balance’: Access to medicines and the TPP. 29 September 2015) Malay Mail Onlinehttp://www.themalaymailonline.com/what-you-think/article/the-illusion-of-a-golden-balance-access-to-medicines-and-the-tpp-fifa-rahma#sthash.YckPjo2Z.dpufAccessed 5 November 2015
13 Chase Perfect, India needs to resist pressure from big drug firms and their backers to change patent laws (19 July 2015) Scroll.in
14 Dirk Matten, India’s generics drug ruling will help, not hinder, innovation (2 April 2013) http://www.theglobeandmail.com/globe-debate/indias-generics-drug-ruling-will-help-not-hinder-innovation/article10662256/ Accessed 13 August 2015