A patent war in Thailand

A nurse with an HIV-infected boy at the special ward of a government-run nursery in Bangkok. Thailand has over one million HIV-infected people. - SAKCHAI LALIT/AP

An ongoing legal battle in Thailand over a patented drug for HIV/AIDS points to the overriding profiteering motives of drug multinationals.

AT the opening, in September in Bangkok, of the 59th Annual Session of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP), whose theme was "Integrating economic and social concerns, especially HIV/AIDS, to meet the needs of the region", Festus G. Mogae, the President of the Republic of Botswana, made in his keynote address the following remark: "In Botswana's case, we continue to receive extensive support from both the U.S. government and private corporations such as Bristol-Myers Squibb and the Bill and Melinda Gates Foundation and the Merck Foundation."

That he chose to say this in Bangkok, knowing full well that in Thailand there is an ongoing legal battle with the drug multinational Bristol-Myers Squibb (BMS) since 2001 over the BMS-patented anti-retroviral (ARV) drug didanosine (DDI), defied explanation. It would have been particularly galling to Thai non-governmental organisations (NGOs) working for the cause of people living with HIV/AIDS (PLWHA). The case against BMS had been moved by two PLWHA support groups and AIDS Access Foundation, an NGO. In October 2002, the Thai Central Intellectual Property and International Trade Court (CIPITC) ruled against BMS, resulting in the revocation of invalid claims with regard to drug dosages made by BMS in its patent application against which a Thai patent had been granted in 1998. It was also a landmark judgment in that this was the first case to take cognisance of the Doha Declaration of November 2001 and the overriding social welfare caveats of Trade-Related Intellectual Property Rights (TRIPS) in arriving at the ruling.

The case, however, is far from settled. The company and, interestingly, the Thai Department of Intellectual Property (DIP) have appealed against the verdict in December 2002. In response, the public-owned Thai company, Government Pharmaceutical Organisation (GPO), sought permission from the court to allow it to produce the drug and avoid liability while the appeal is pending. On the other hand, the DIP and BMS both requested deferral of enforcement of the ruling so they can resume producing tablets at any dosage. As of date, however, GPO has been unable to begin production of the drug in the dosage outside the range declared valid by the court. More significantly, a second case has been filed for the revocation of the BMS patent for DDI in its entirety, not just the invalid claims that had provided for an all-sweeping coverage of drug doses and exclusive marketing right in Thailand. A decision on this case is awaited.

The Doha Declaration on TRIPS Agreement and Public Health is a statement of commitment by World Trade Organisation (WTO) members to use the flexibility provisions of TRIPS fully so that that "WTO members' right to protect public health and, in particular, to promote access to medicines for all" is upheld. Recognising the importance of public health over private intellectual property, the Declaration clarifies the rights of WTO members in using TRIPS safeguards such as `compulsory licensing' and `parallel imports'. In a public health crisis a country can invoke TRIPS safeguards to override the relevant patent to make the needed medical products available.

Thailand has over one million HIV-infected people. One of the main reasons for the DDI controversy has been the high price in Thailand of the drug DDI, marketed under the brand name Videx by BMS. Since the price put it beyond the reach of Thai HIV/AIDS patients, only 5 per cent of them had access to the combination use of the two drugs Zidovudine (AZT) and DDI, according to the Thai Communicable Disease Control Department.

Efforts by the Thai government in 1999-2000 to produce the drug under the compulsory licensing provision of TRIPS, as demanded by Thai NGOs and PLWHAs, failed as the United States government brought intense pressure and made a threat of Special 301 sanctions on Thai exports through its trade arm, the U.S. Trade Representative (USTR), in clear violation of its obligations under the WTO.

In fact, GPO's attempt at procuring raw materials in December 1999 for DDI from a Japanese company (which is also the main supplier to BMS) also failed because of pressure from BMS. Therefore GPO had to turn to Canadian suppliers who charged twice the price. The BMS case in Thailand is a classic example of the overriding profiteering motives of drug multinationals over access to essential medicines for public health, how companies use patents with minor modifications to establish monopolies and extend the period of patent protection, the bullying trade tactics of the U.S. government and its attempts to preserve the monopoly of its transnational drug companies.

DDI was first developed by the U.S. government's National Institutes of Health (NIH) in 1989, which it licensed to BMS for marketing in eight developed countries. The drug in its original form required to be taken along with an antacid buffer because acidity in the stomach was found to reduce the effectiveness of DDI. In a couple of years, BMS developed a formulation that combined both the ingredients in a single tablet. In 1991 BMS filed its first patent application in the U.S. for its new formulation. The U.S. Patent Office rejected its application on the grounds of obviousness. BMS filed another application in 1997 claiming that it had optimised the amount of antacid in the drug which was not obvious. Eventually BMS obtained a U.S. patent, limiting it to specific proportions of the ingredients.

In July 1992, with the imminent amendment of the Thai Patent Act (TPA), which did not allow pharmaceutical product patents, BMS applied for a Thai patent for its formulation. In September 1992, the TPA was amended to allow product patents. In the patent application the drug dosage was limited to 5-100 mg of DDI per dose. The application came up for examination in 1997 when the company moved an application to remove the limitation on the dosage range which was essentially the original U.S. application which had been rejected. Strangely enough, the DIP amended the application and granted a patent in January 1998 that covered all DDI doses in the drug. In Thailand, Videx is priced between $2.56 and $4.11 a tablet - a negotiated discounted price as compared to its international price - and the average DDI dosage required is 150 mg, which means two tablets a day.

The implication of the unlimited patent was that GPO could not manufacture the drug in any dosage even though it had developed the knowhow to make the generic form of the drug. The exorbitant price of DDI provoked an NGO-led campaign in 1999 to issue compulsory licensing to GPO for the manufacture of DDI. In January 2000, the USTR warned of sanctions if compulsory licensing was issued for DDI. The threat worked and the Thai government refused to invoke the compulsory licensing provision in TPA but asked GPO to manufacture the drug in powder form, which is not covered by the patent. But the powdered form has an unpleasant taste and apparently has side effects that the tablet form does not have. Also, the tablet is easier to consume.

The suit against BMS was filed on May 9, 2001. The verdict ruled that the amendment done in the patent application was unlawful and that the scope of BMS's patent was limited to the dose range of 5-100 mg. In principle, therefore, the ruling permits GPO to manufacture generic DDI as tablets in doses outside the patent. According to GPO, even though it is ready to manufacture tablets of 125 mg, 150 mg and 200 mg dosages (at about 45 cents a tablet), it has not yet been able to do so. Interestingly enough, BMS has brought another formulation of DDI (an enteric coated capsule) into the market and the company is bound to initiate similar patent manoeuvres.

A KEY unresolved issue in the Doha Declaration was what developing countries and least developed countries (LDCs) with little or no manufacturing capabilities, such as Botswana, to exploit the compulsory licensing provision, were to do in a public health crisis. But even this unfinished aspect was resolved by the WTO decision of August 30 this year. The decision allowed countries not possessing the wherewithal to manufacture generic drugs to import the same from countries, which have the capacity.

The decision amounts to a waiver of Article 31(f) of TRIPS (until it is amended), which says that production under compulsory licensing must be predominantly for the domestic market. This effectively limited the ability of countries that cannot make drugs to import cheaper generics from countries with TRIPS-compliant domestic laws. This meant that, for instance, Botswana could not have imported generic ARVs for its HIV/AIDS patients from WTO member-countries where drugs were patented before August 30. However, it can certainly import them from India where the transition period for TRIPS is in operation until 2005 and there are no patents as yet for pharmaceutical products. Indeed, some other African nations have done this with the help of organisations such as Medicins Sans Frontieres (MSF) or `Doctors Without Borders'.

Botswana has the world's highest prevalence rate of HIV-positive people (38.8 per cent) in its 1.7-million population. Access to ARV at affordable prices would be of paramount importance to the country's infected population. One could argue that a country like Botswana could do little against the pressures of multinationals and the pharmaceutical lobby within the U.S. government and that it would have been pragmatism that dictated Mogae's decision to negotiate with the multinationals themselves. His UN-ESCAP address is perhaps a signal that he would continue to go that way in spite of the WTO decision.

Against an international price of about $10,000 for a year's dosage, the Indian ARV is priced at about $350 and the Thai product is priced even lower. According to MSF, this has already had the impact of drug multinationals, in particular BMS, bringing down their ARV prices to these levels in some African markets, including Botswana. Indeed, BMS has launched a `Four Point Programme to Fight HIV/AIDS in Africa', one of which is to supply its two patented ARVs - DDI and stavudine, sold as Zerit - at "below cost price" ($1 a day), according to the BMS web site. Botswana is one of the countries where this is being implemented. Botswana is also one of the nine African countries to benefit from BMS Foundation's $115 million five-year aid package for HIV/AIDS-related programmes.

"We see no conflict," President Mogae said when asked about Botswana's dependence on multinationals like BMS given their apparent double standards. Speaking to journalists, he said: "We cannot wait till the world is perfect. We considered our crisis situation realistically and what we needed was drugs under favourable negotiated conditions with suppliers. We negotiated only the price we could afford. That's what BMS is giving us. Merck has also donated ARV drugs free to us."

The WTO decision on importation of essential drugs under compulsory licensing from other countries is more complex than it would seem. It comes with a string of conditions that would invariably get into a complicated bureaucratic process and disputes at the WTO that any country, let alone Botswana, might find it extremely hard to fight multinationals' might. Thailand's ongoing experience with BMS would just suggest that.