Patents must serve the public interest

Linezolid, made by the pharmaceutical company Pfizer, is one of the only drugs with some proven efficacy in treating drug resistant TB. It is currently sold in South Africa at an unaffordable R676 per pill in the private sector. The state pays R288 per pill. It must be taken daily for up to two years.

Médecins Sans Frontières (MSF) would like to treat 300 drug resistant TB patients in Khayelitsha with linezolid, but can only afford to buy the drug for little more than 20 patients. Right now, MSF doctors are in the horrible position of having to decide who gets the drug and who does not.

Linezolid is not particularly expensive to make. A generic version is available in India for a mere R25 per pill. Had South Africa been able to import the Indian generic, MSF would likely be able to treat all 300 patients in Khayelitsha who need the drug.

However, mostly because of South Africa’s outdated patent laws, MSF cannot legally import the Indian generic, nor does it seem there is any workable way in which to force Pfizer to lower their price. The only option open to MSF so far has been to ask Pfizer – a request to which Pfizer has so far been indifferent.

On 4 September, the Department of Trade and Industry (DTI) released South Africa’s much-anticipated Draft National Policy on Intellectual Property (IP) for public comment. This policy could in time provide us with the legal tools to deal more effectively with issues like the lack of access to linezolid.

The policy is not just about TB though, it will also impact the ability of medical schemes to pay for their members’ cancer or heart disease medicines. The intricacies of patent law quickly become highly contested. Given the consequences this policy could have on healthcare in South Africa and the affordability of National Health Insurance, it is essential that this is not just a debate between industry lawyers, but between people from all sectors of the health system and broader society.

The policy will lead to the first substantial intellectual property law reforms in decades. It provides an opportunity to recalibrate the existing framework to better serve the public interest. Section 27 of the Constitution places an obligation on the state to take reasonable legislative measures to ensure the progressive realisation of the right to access healthcare, and to consider the impact policy will have on people’s daily lives. This process cannot be allowed to be hijacked by narrow economic interests.

The draft policy explicitly acknowledges that access to healthcare must be considered when developing patent law. The drafters understand that access to generic medicines, like the Indian generic of linezolid, is in the public interest. This is a major step in the right direction – for which the DTI must be commended.

Rebalancing the patent system is nothing new, and South Africa is by no means the first country to take such steps. Under international law (the WTO’s TRIPs Agreement) all countries are able to protect the right to health. There are a host of safeguards deliberately built into the system that aim to balance the rights of patients with the private interests of patent-holders.

Other developing countries - such as India, Brazil, Argentina and Thailand - have led the way in proactively incorporating these WTO-sanctioned safeguards into their national laws to protect public health.

It is not only patients who benefit. These legal safeguards also promote local generic manufacturing. That is in part why India is in a position to supply roughly 80% of the medicines used in Africa. The industry versus patients frame in which the patent debate is frequently presented is misleading. Since the majority of the South African pharmaceutical industry makes generic medicines; both industry and patients stand to gain from legislation that enables quicker access to cheaper generic medicines.

It is in the interests of large multinational companies to secure as many patents as possible. The Treatment Action Campaign, in line with the Draft National Policy on Intellectual Property (IP), argues that patents should only be granted for medicines that are truly new and innovative, for example a brand new cancer cure.

As in other developing countries, South Africa should stop granting patent monopolies for every reformulation or new use of an existing medicine. This process, called ‘ever-greening’, is a tactic used by the pharmaceutical industry to continually extend their patent protection by making minor changes to existing drugs.

On top of high prices, it actually reduces the incentive to develop truly new medicines by offering hard-to-resist income streams for less risky, but also less innovative, investment in ‘ever-greening’.

Apart from setting the bar for patenting a medicine higher, the new policy seeks to make it easier to override patents (through compulsory licensing) where the public interest demands it.

Of course some will argue that if legal mechanisms can override a patent, it will undermine the incentive for companies to invest in researching new medicines.

Had pharmaceutical companies spent say 50% of sales on researching the kind of medicines the world needs, then this argument may have been compelling. In reality, major multinationals spent on average less than 8% of sales on research and development in 2010 – and much of that was on making reformulations or on churning out yet more variations on existing hypertension or cholesterol drugs. If patents are to serve the public interest, we must make it less enticing for companies to waste billions on developing me-too drugs, marketing them, and litigating and lobbying to maintain the regulatory status quo.

The recent Novartis case in India is telling. According to Knowledge Ecology International (KEI), Novartis invested between US $38m and $96m developing their cancer drug Gleevec but a much greater investment was in fact made with US public research funds. Gleevec is a new formulation of an existing cancer medicine and the patent was therefore rejected in India. Novartis unsuccessfully fought this battle all the way up to the Indian Supreme Court demanding that they deserved a patent to recover their R&D costs – this while making US$4.6billion from Gleevec in 2012 alone, recovering their entire investment every 13 days.

While there are cancer patients who can’t afford the drug, such profiteering can not possibly be in the public interest.

Furthermore, commonly made threats that more progressive patent regimes will lead to disinvestment are merely a cover for the underlying greed to maximise profits. Despite India’s progressive patent laws according to The Economic Times, India realised US$1 billion of foreign direct investment from April to June 2013.

In contrast, South Africa’s experience has been largely opposite. Since adopting US style patent laws in the late 1990s, some 37 pharmaceutical plants owned by foreign multinationals have shut down, choosing to move operations to regions with cheaper labour and production costs.

At the time of the landmark Gleevec decision, Novartis still had 146 patents in India. So even in the most progressive legal framework the vast majority of patents are upheld.

Whatever the victim rhetoric from big pharma, the truth is that the United States, Europe, and the pharmaceutical companies that they represent won the war over patents when the TRIPs Agreement was signed, locking all WTO members into granting 20 years of patent protection.

What India, Brazil (with its current reform bill) and others have achieved is to bring some nuance and sensitivity to the blunt and indiscriminate instrument that the rich world wants intellectual property to be. Our Constitution demands we follow their example.

Marcus Low is the editor of the Treatment Action Campaign’s magazine, Equal Treatment. You can follow him on Twitter @marcuslowx.