Profits of gloom - Abbott's Greed

Profits of gloom

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Profits of gloom

SIMON MONTLAKE South China Post Saturday, May 19, 2007

Somying uncaps the plastic bottle and shakes three orange pills into her hand. The branded lozenges are among the daily regimen of drugs that the 33-year-old takes to suppress the symptoms of HIV/Aids, a condition she has lived with for more than a decade. She is one of about half a million Thais infected with the virus.

A widow and mother of two children, Ms Somying lives in a two-room shack by a canal on the eastern fringe of the capital Bangkok. Her husband, from whom she contracted the disease, died seven years ago, leaving her to raise a son and daughter. Her son, 13, is HIV positive, and also takes anti-retroviral drugs to keep his condition in check. Her daughter, 11, isn't infected.

Last year, Ms Somying - a pseudonym - fell sick, so her doctor switched her to a new regimen. In March, she began taking the branded orange pill, Kaletra, as part of her daily intake. Every 12 hours, she swallows three of the pills, which she keeps in an icebox in her house, wrapped in a plastic bag and bundled with her other prescription medicines, as well as bottles of fizzy orange and cola for her children.

Since switching to the new drug, Ms Somying has gained weight, although at first she complained of nausea and sore limbs. Now, she has come to depend on the bottle of orange pills, which she receives for free every month under Thailand's national health care scheme. Her son has also switched to the drug, which he takes in smaller doses.

"I've got no choice. I must take Kaletra," she said, resting on a straw mat outside her small house. "Life is valuable, and we must keep living it."

The orange pill is at the centre of a global row over the rights of national governments to suspend patents in order to source essential medicines at cheaper prices. The dispute has thrust Thailand's health care system into the global spotlight and sparked a war of words between Thai Aids activists and US lobbyists for the pharmaceutical industry.

Last month, the administration of US President George W. Bush took Thailand to task for its failure to protect US intellectual property, including registered drug patents, placing it on a priority watch list for piracy and counterfeiting. Although the move doesn't automatically trigger any trade sanctions, US diplomats say it underlines their widespread concerns that the military-appointed Thai government is resorting to nationalist policies for short-term gain. In recent months, foreign investors have grumbled about revisions to laws on foreign shareholdings in Thai companies and the bungled adoption of short-term capital controls.

Produced by Abbott Laboratories, a Chicago-based drugmaker, Kaletra is a second-line HIV/Aids drug used to treat those like Ms Somying who become resistant to older anti-retroviral formulas. Thai health officials estimate about 10,000 HIV-positive patients fall into that category, and the number is forecast to rise dramatically in the next few years as more Thais build up drug resistance. But at an advertised cost of US$2,200 per patient per year, Kaletra is more expensive than first-line anti-retroviral drugs, which are available as generic cocktails. About 90,000 Thais are on anti-retroviral drug regimens.

Faced with a funding crunch, Thailand announced in January that it would issue a compulsory licence to source generic copies of Kaletra.

It was the third such licence issued since November under Thailand's patent law and the provisions of the World Trade Organisation for public health exemptions to patent protection. The other drugs are Efavirenz, an Aids drug produced by Merck of the US, and Plavix, a cardiovascular drug from France's Sanofi-Aventis.

The response from the pharmaceutical industry was outrage, as companies criticised what they saw as a unilateral and provocative act by the Thai government. Attention also focused on Thailand's willingness to list a blockbuster heart drug and its hints that drugs used to treat other conditions such as diabetes and cancer could follow, if the government deemed it necessary to keep down its drugs bill.

The alarm among pharmaceutical executives was heightened earlier this month when Brazil announced it would also override Merck's patent on Efavirenz. Observers say the snowball effect of Thailand's step, which has the backing of Margaret Chan Fung Fu-chun, director-general of the World Health Organisation, is unpredictable and may impact on drug companies trying to expand sales in middle-income countries.

"Already we have another country issuing a compulsory licence. Is this going to proliferate? And if it does, what does that do to companies that produce innovative drugs?" said Ashley Wills, a former US ambassador and trade representative for South Asia. Western drugmakers have tried to regain the upper hand by offering more discounts on medicines for the developing world, while insisting that compulsory licensing isn't the best way forward.

In February, Merck announced a 15 per cent price cut on Efavirenz to poor countries battling HIV/Aids epidemics, including Thailand, and trumpeted its generosity in cutting the price for the second time in less than a year. The drug is used to treat Aids patients suffering secondary infections or pregnant women, and is prescribed as an alternative to older first-line anti-retroviral drugs.

Douglas Cheung, managing director of Merck's Thailand subsidiary, said the company recognised Thailand's legal right to override patents, but was concerned that it would dampen spending on discovering new drugs.

"Compulsory licences reduce the incentives that intellectual property provides to invest in the research and development needed to generate innovative medicines and vaccines," he said.

That argument gets short shrift from advocates for greater access to medicines in the developing world, who say pharmaceutical companies earn huge profits and can afford to cut costs further for poor countries. They argue that the threat of compulsory licences is a vital tool that governments need to wield against predatory pricing by drugmakers.

"They're the most profitable industry in the world. What more do they want?" asked Paul Cawthorne, a campaigner for Medecins Sans Frontieres.

Former US president Bill Clinton struck a similar note last week when his foundation announced that it had negotiated steep discounts on bulk purchases of Aids drugs for the developing world.

Standing next to Thai Health Minister Mongkol Na Songkhla, Mr Clinton said he strongly supported the stance of Thailand and Brazil in issuing licences after "futile negotiations" with patent holders. "No company will live or die because of high price premiums for Aids drugs in middle-income countries, but patients may," Mr Clinton said.

Although Merck has taken a conciliatory path, Abbott, the manufacturer of Kaletra, has tried to play hardball against Thailand. In a move that upset some of its own shareholders, Abbott said it would not sell seven of its latest drugs in Thailand, including a new, heat-resistant form of Kaletra. Thai Aids activists said it was unprecedented for a company to withhold essential medicines, and launched a consumer boycott against Abbott products sold in Thailand.

Last month, Abbott backtracked and announced a cut in the annual cost of Kaletra to US$1,000 for several countries, including Thailand. Thai officials say this is still too expensive, particularly for the older version that needs to be refrigerated.

Vichai Chokevivat, a senior adviser to the Health Ministry and chairman of its compulsory licensing committee, said a decision would be made by August on whether to buy generic copies from Indian manufacturers or order more from Abbott.

Abbott is still holding back six other drugs that it withdrew in February, including new medicines to treat arthritis and kidney failure.

Despite the chilly relations, Dr Vichai insisted that the door was still open for further discussions with the company. "We still believe that we have a common goal with pharmaceutical companies. This is to give patients a chance to get access to drugs," he said.

As the row with Abbott rumbles on, Ms Somying's ice bill continues to mount. Every day, she buys three blocks of ice to keep her orange pills cool, as she doesn't have a fridge. This adds 360 baht (HK$85) to her monthly outgoings, on an income of 2,300 baht from a Buddhist charity and making paper garlands for temples. The new, heat-resistant Kaletra, which has been available since 2005 in the US, doesn't require refrigeration, making it easier for poor patients in countries such as Thailand to stick to their regimen.

When Ms Somying makes her monthly trip to hospital, a three-hour journey by bus, she carries an icebox so she doesn't miss her morning dose of Kaletra. "It would be more convenient to have the new formula, but we don't have a choice."