Thailand issues compulsory licence for patented AIDS drug
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BRIDGES Weekly Trade News Digest - Vol. 10, Number 42 13 December 2006
THAILAND ISSUES COMPULSORY LICENCE FOR PATENTED AIDS DRUG
Thailand's military-backed government on 29 November issued a compulsory licence for Merck's HIV/AIDS drug efavirenz, in an attempt to cut growing healthcare costs by encouraging the production and import of generic versions of the patented medicine.
The Thai ministry of public health authorised the Government Pharmaceutical Organisation to manufacture generic versions of the drug until 2011, and to import generics from India until domestic production comes on line. It specified that the medicines were to be used for the country's widely-praised national HIV/AIDS treatment programme. Bangkok stressed that the decision was in accordance with WTO rules on access to medicine, specifically citing the 2001 Doha Declaration on the TRIPS Agreement and Public Health, which permits compulsory licensing for "emergency cases and public uses."
While other developing countries such as Zambia and Indonesia have issued compulsory licences for HIV/AIDS drugs in the past, the Thai move is significant for its longer duration and the fact that it opens the door to competitive imports of generics from India. Both steps will mean increased downward pressure on drug prices, according to public health advocates, who praised the government's decision.
US-based global pharmaceutical giant Merck, which owns the patent on efavirenz and markets it under the name Stocrin, was less enthusiastic. The company's local subsidiary, MSD Thailand, complained in a statement that the Thai government did not approach it to discuss the compulsory licence decision prior to the announcement itself.
While Merck's Stocrin treatment currently costs 1,500 bahts or USD 41 a month in Thailand, Indian generic efavirenz would cost roughly half as much, or 800 bahts (USD 22). The compulsory licence would thus help rein in the ballooning cost of providing efavirenz to patients through the country's universal HIV/AIDS treatment scheme. According to Médecins sans Frontières, at least 12,000 HIV/AIDS patients in Thailand currently require the drug due to an intolerance to one of the components in the generic triple drug cocktail provided by the government. That number is expected to rise sharply as patients now treated with generics already off-patent will start requiring second-line medicines such as efavirenz to survive.
As per the terms of the licence, it will be limited to the provision of efavirenz to no more than 200,000 people a year, and the Government Pharmaceutical Organisation will pay Merck a royalty fee of 0.5 percent of the total sale value of the imported or locally-produced generic.
Following Bangkok's announcement, Merck said that it might seek to negotiate with the Thai government to agree on a 'voluntary licence' for the generic production of efavirenz, or offer it a lower price for drug. Médecins sans Frontières, on the other hand, urged Bangkok to go further. "Thailand is demonstrating that the lives of patients have to come before the patents of drug companies, and this policy needs to be expanded to essential drugs that are expensive and in short supply, such as the AIDS drug lopinavir/ritonavir, which currently costs over 7,000 baht a month (USD 194) and is far too expensive for Thailand,"