A ‘shocking’ disregard for generics

By Mara Kardas-Nelson

This article was originally published in the Mail&Guardian on 15 March 2013. The original is available at http://mg.co.za/article/2013-03-15-a-shocking-disregard-for-generics

Many drugs cost far more in South Africa than in countries with strict patent-vetting processes.

Two thousand four hundred and forty-two. That’s the number of medicine patents South Africa granted in 2008.

In Brazil, only 273 patents were given between 2003 and 2008.

South Africa grants patents without substantially reviewing applications first and routinely gives patents for new versions of old medicine, thus in effect extending patent life beyond the normal 20-year period. Brazil, in contrast, examines each application before a patent is granted.

The result, say some health activists and academics, is high medicine prices, because excessive patenting prohibits cheaper generic medicines from coming on to the market.

The Treatment Action Campaign (TAC) and Médecins sans Frontières (MSF), which have launched a “Fix the Patent Laws” campaign, say there are several instances in which patents block generic entry of key medicine – antiretrovirals, tuberculosis (TB) medicines, antibiotics and cancer treatments among them.

“I am shocked by how much South Africans pay for many drugs, for example, the TB drug Linezolid,” says Leena Menghaney, a lawyer who works with MSF’s Access Campaign. “In India, generic Linezolid is available for less than R10 a tablet. In South Africa, Pfizer has a patent on Linezolid and to get it for patients in need MSF pays R660 per tablet.”

Linezolid isn’t the only example: the anti-cancer drug Gleevec, patented by the drug company Novartis, is available at R876 a tablet in South Africa’s private sector. Generics are available in India at R86 a pop. A donation programme for public sector patients has been set up by Novartis, but it is unclear how many patients currently benefit.

Because South Africa allows for multiple patents to be given on a single medicine, Gleevec is set to be patent-protected until 2022, much longer than in other countries.

New intellectual property policy
But South Africa has the opportunity to make amendments that could reduce the cost of medicine through a new intellectual property policy that is being spearheaded by the department of trade and industry. The policy aims to review all aspects of intellectual property patents, copy­right and trademarks.

The policy will affect all aspects of the economy, not just pharmaceuticals. Once reviewed, the department will propose amendments to a gamut of legislation in an attempt to update, streamline and harmonise the country’s myriad laws relating to intellectual property.

Although the policy has been in the works for years, it still sits behind the trade department’s closed doors, but is expected to emerge by April to be scrutinised by the Cabinet, before the matter is opened for public comment.

The department hosted an Africa Intellectual Property Forum in Midrand last month. Many issues were on the agenda, but health reigned supreme.

Participants agreed that healthcare is a human right and that South Africa’s healthcare costs are too high, but there was little consensus on whether intellectual property is to blame, or how laws should be tailored to balance, in the words of Minister of Trade and Industry Rob Davies, “the rights of innovators and the rights of humanity”.

The battle for more affordable medicines is likely to play out both in public and behind closed doors in the weeks before the policy is finally released, throughout the public comment period, and as attempts are made to turn suggested amendments into reality.

Examination system
A key question is whether South Africa should thoroughly examine patents during the approval process.

MSF and the TAC say that an examination system, rather than the current depository system, in which patents are granted without review, is essential to making sure that patents are only granted to applications that are truly worthy and to prevent “evergreening”, or multiple patents, on a single product.

In a presentation to the forum, Menghaney outlined the Indian patent approval system, offering examples in which the use of a thorough examination system prevented unnecessary patents from being granted. This opened the door for more affordable generic products to enter the market.

The system is also profitable: India’s patent office generates R230-million a year in revenue, but annual expenditure is only R35-million. Menghaney noted that other developing countries, including Brazil, China and Thailand, all use examination rather than depository systems.

But Danie Dohman of Adams & Adams, South Africa’s leading intellectual property law firm, argued that instituting an examination system will be too costly and one-rous, adding red tape that could dissuade foreign companies from investing here.

He is not alone: in an article published in the doctors’ newspaper Medical Chronicle last year, Val Beaumont of Innovative Medicines of South Africa said that instituting an examination system could increase the time needed for patent review by 18 months to three years, dissuading innovators from bringing their medicines to the South African market.

Patent application review could take years
According to the Companies and Intellectual Properties Commission, it takes between six months and a year for a patent application to be reviewed here, although non-government sources say the wait can sometimes be years.

Beaumont said that instituting an examination system would require a significant increase in human resources. MSF and the TAC propose that, if cost and human resources are issues, an examination system could first be instituted for pharmaceutical patents and later for all patent applications. Dohman said that this is not allowed under international law, an assertion other intellectual property lawyers deny.

A 2011 study conducted by the University of Pretoria estimated that if South Africa was to examine patents, 80% of those applied for would not be granted.

An as-yet-unpublished paper by professors at Columbia and Yale universities and a researcher at the Medicines Patent Pool showed that patent applications that had been rejected in the United States and European Union – known for their strong intellectual property protection – had been granted in South Africa.

Most patents are going to foreign companies: of the 2442 figure for 2008, only 1% of patents went to South African companies. A study by the department of trade and industry  in 2011 showed that 70% of royalties paid to patent holders were given to foreign companies.

Whatever approach is taken, harmonising the many different types of laws overseen by different departments and affecting different constituents is likely to be the trade department’s biggest challenge.

The department and its policy will have to balance seemingly competing challenges, some that require the strenghtening of intellectual property  protection and others that require the scaling down of such protection.

Musicians and artists, for example, claim they need more protection, and media articles about foreign firms attempting to patent and sell traditional South Africa products – rooibos and hoodia being the most prominent examples – have prompted the drafting of an Intellectual Property Amendment Bill, which is meant to protect indigenous knowledge.

The trade department hopes for the Bill to be finalised this year.

However, so that more generic medicine can be put on the market, intellectual property protection would need to be lessened in some cases. “We are consulting with all stakeholders so that the policy incorporates different views,” said the trade and industry’s deputy director general Zodwa Ntuli.

“We are working with all the government departments that work with intellectual property, such as the departments of arts and culture, communications, and science and technology. We need to look at what kind of system we want for South Africa.”

This story was produced with the support of the Open Society Foundation


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