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How changing drug patent rules will affect developing nations

Only by importing and manufacturing generic drugs can developing nations afford to meet their people’s health care needs. Mohamed Abd El Ghany/Reuters

After years of legal battles, a global agreement has been reached for developing countries to buy – and for drug manufacturers to produce or import – generic medicines without breaching patent rules. The Conversation Africa’s Health and Medicine Editor Candice Bailey asked Natalie Schellack to explain what this means for the developing world.

Are drugs about to become cheaper for poor people in developing countries? Why?

Through the World Trade Organisation an agreement was reached in November 2015 for the world’s poorest countries to buy –- and for drug manufacturers to produce or import –- generic medicines without breaching patent rules until January 1 2033. The decision was taken by the organisation’s Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Put simply, the need of a nation trumped the right to derive protected benefit from a patent. This initiative will help developing countries come up with better policies. It will provide legal certainty, which should lead to better access and more affordable drug prices.

The agreement is good news for all countries in the Southern African Development Community as members of the World Trade Organisation (with the exception of the Seychelles). They’ll be able to incorporate the TRIPS agreement into their national laws. The community’s protocol on Trade confirms this position.

South Africa, as a signatory to the TRIPS agreement, is allowed to pass intellectual property legislation, inclusive of patent laws, so that intellectual property rights do not become barriers to legitimate trade while ensuring the technology is transferred and disseminated in line with social and economic welfare.

If South Africa actively participates in this opportunity for more generic trade, medicines should be more affordable.

South Africa has been fighting for access to generic drugs for some time. In the late 1990s around 40 big pharmaceutical companies such as GlaxoSmithKline and Boehringer Ingelheim filed a lawsuit to the Pretoria High Court against the South African government due to the importation of generic anti-retroviral medicine to treat the HIV/AIDS pandemic.

Millions of people were suffering from HIV/AIDS and could not afford the original brand-name medicines. The South African state was trying to find a way to guarantee their health. After three years the court overruled the patent law in this case and recognised the right to health as a basic human right of South African patients.

How do patents affect prices?

A patent in this context is when a pharmaceutical company develops a new drug for a disease. The company sells it under a “brand name”. The patent protects the pharmaceutical company’s right to manufacture and market the drug to profit from it. This helps recover the costs that have gone into developing the drug.

In most cases the drug patent is awarded for around 20 years. Once the patent has expired other companies can “copy” and manufacture the drug.

Generic drugs have to be near-identical “copies” of the branded drug. For example, they must be identical– or “bioequivalent”–to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. In South Africa this is regulated by the Medicine Control Council of South Africa.

For a developing country like South Africa, the most effective and sustainable way to bring down the price of a drug is by driving competition between different generic manufacturers. This can’t be done if a medicine is still under patent and the patent owner is not willing to allow competition. Preventing competition can drive up the price to an artificially high level.

Developing countries can’t afford this. Life-saving treatments for diseases such as HIV/AIDS, tuberculosis and malaria are needed. The price of medicine for people with these diseases is a matter of life or death.

What changes and challenges has South Africa made to patent laws and how could they affect people?

South Africa’s draft Intellectual Property Protection Policy of 2013 is designed to reform the country’s patent law and to address various shortcomings that hamper access to medicine. The draft policy provides public health safeguards and promotes cooperation between ministries. And more recently, South Africa’s cabinet approved a new Intellectual Property framework.

The three-year delay in finalising the policy first set out in 2013 has affected the health of certain patients adversely. Two examples stand out. Patients with multidrug-resistant tuberculosis (MDR-TB) struggle to pay for one of the medications they need called linezolid. The hepatitis B medication, entecavir, is another example. It remains inaccessible to most people because it’s so expensive – while generic products are available outside South Africa at prices that are around 84% lower.

Once the policy becomes law, South Africa could be a role model for the rest of the world in prioritising people’s health over profit.

What more needs to be done?

The process of finalising the Intellectual Property Protection Policy needs to be treated with urgency. The Department of Trade and Industry and all ministries involved must continue to prioritise turning it into law.

This will mean more affordable medicines can become available.

But there are other steps that can be taken too.

The most effective and sustainable way to bring down the price of a drug is through competition between manufacturers.

Investment is also needed. This can be promoted by having large pharmaceutical companies invest directly in South Africa to boost local production of medicines. And the approval process for new medicines should be streamlined by the Medicine Control Council.

Another market in South Africa that should get more attention is clinical trial research. This would not only allow research into conditions inherent to South Africa, it would also be an investment in local specialists.

The distribution of medicines throughout South Africa by the National Department of Health should be streamlined to avoid medicines being unavailable. One solution could be to transfer logistical and distribution costs of medicines to the suppliers to avoid delays, additional transport costs and stock-outs.

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