Context: Patents on medicines block generic competitors from entering the market, and allow patent holders to charge high prices as long as they maintain a sales monopoly. High prices can limit people and governments’ ability to afford the medicines they need.
Companies often try to engage in patent “evergreening”—this means that after applying for an initial patent on a new compound used to produce a drug, they also apply in subsequent years for additional patents that cover drug combinations or small changes to a medicine. Secondary patents can block generic competition for years or decades after the initial 20-year patent expires.
Many countries do not consider secondary patents on medicines to be innovative enough to deserve a patent. In South Africa, however, evergreening is common because patent applications are not examined to ensure they meet national criteria—multiple patents are granted on the same drug over time, allowing Big Pharma to maintain sales monopolies, and keep medicine costs artificially high.
The following case study provides a prime example of how patent evergreening, and other shortcomings of the current patent laws prevent more affordable generic medicines from coming onto the market in South Africa, and what the government can do to “Fix the Patent Laws” in order to protect public health over company profits.
Oral Contraceptives case study: drospirenone (DSP)/ethinyl estradiol (EE)
Originator Manufacturer: Bayer AG (markets as Yasmin® and Yaz®)
v South Africa: Pharma Dynamics (markets as Ruby®–litigation brought by Bayer over patent has blocked active marketing)
v Globally: Teva, Actavis, Sandoz, Lupin, Barr
Recommended Dosage (all products): One pill taken every day, no more than 24 hours apart.
Yasmin and Ruby are oral contraceptives for use by women to prevent pregnancy.
Yaz is an oral contraceptive for use by women to prevent pregnancy. Yaz is also registered as a treatment for premenstrual dysphoric disorder (PMDD) and for moderate acne in women who are using the pill for birth control.
Is there any difference between Yasmin, Yaz, and Ruby?
Yasmin and Yaz are both manufactured by the pharmaceutical company, Bayer. They contain the same active ingredients, which are used to prevent pregnancy. Yaz features a lower dose of synthetic estrogen, and is a modified version of Yasmin, that was released at a later date—not a new drug.
Ruby is manufactured by Pharma Dynamics. Ruby is a generic version of Yasmin, meaning it is identical to Yasmin both chemically (in terms of the amount of the active pharmaceutical ingredients), and in terms of clinical efficacy and benefit. Like most generic products, it is cheaper than the originator product.
The below chart further explains some of the specific differences in the three products.
How big is the market for these drugs, and ho;w much to women pay?
Yaz and Yasmin are the first and second top selling contraceptive drugs by revenue in South Africa, respectively. Approximately 141,000 women used Yaz or Yasmin products in South Africa in 2013. All sales of Yaz and Yasmin are through the private sector—either through independent purchase by individuals, or through medical savings accounts. Yaz/Yasmin is also Bayer’s fourth bestselling drug globally, with over €853 million (R12.1 billion) in annual sales. Emerging markets, including South Africa, comprise 37.5% to Bayer’s total annual sales of these products.
Pharma Dynamics is not allowed to market Ruby in South Africa—this is related to patents, and discussed more below. When Pharma Dynamics registered a generic version of Yasmin in South Africa in 2011—marketed as Ruby—it was to be available through the private sector at a price of R80.93 per pack, a 30% cost reduction from Yasmin (see table below for prices).
If everyone on Yasmin had made the switch to Ruby, South African women would have saved over R11 million per year in total. The availability of a cheaper product might also have resulted in more South African women deciding they could afford DSP + EE as a potential birth control option.
South African sales of contraceptives containing DSP+EE
|Manufacturer||Brand Name||Units Sold in SA (Oct 2012-Sept. 2013)^||Annual revenue in ZAR (Oct. 2012-Sept. 2013)^||Price per pack of pills in private sector*|
|Bayer||Yaz||793 559||89 404 172||R139.80|
|Bayer||Yasmin||903 531||84 196 100||R115.62|
^Source is IMS data
*Source is Medicines Price Registry as of July 14, 2014
Why can’t the cheaper product be made available in South Africa?
A court case over patent infringement is blocking Pharma Dynamics’ launch of Ruby on the market. Bayer’s primary patent on the compounds that make up Yasmin and Yaz expired in South Africa in 2011. Anticipating this patent’s expiration, generic company Pharma Dynamics registered a generic version of DSP+EE. However, Bayer has secondary patents on Yasmin which only expire in 2024. When Pharma Dynamics launched its product, Bayer obtained a court order against Pharma Dynamics regarding a secondary patent, forcing the generic off the market in South Africa.
Pharma Dynamics was found to be infringing upon Bayer’s 2004 secondary patent, but the generic company subsequently filed a counterclaim in 2013, requesting that the Bayer patent be revoked. Because patent applications are not examined prior to being granted, Pharma Dynamics questioned whether the patent was actually valid when compared to the national patentability criteria. If the patent was not valid in the first place, then Pharma Dynamics’ could not be infringing upon it. This counterclaim was dismissed, but Pharma Dynamics appealed. On August 28th, 2014, this appeal will be heard in a Bloemfontein court, with a final judgment expected at the end of 2014.
The same secondary patent being upheld in South Africa has been revoked by courts in both Europe and the USA, where generic versions of DSP+EE have already available for several years. These rulings found the patent invalid due to its obvious nature—the change made by Bayer to DSP+EE did not vary from previous industry know-how. This means that while generics are available in the markets where most of the initial investment in drug research and development was made (namely, the U.S. and Europe), countries like South Africa continue to pay high prices while Bayer pursues patent litigation.
There are effective birth control pills that are much cheaper in South Africa than any of these products—so why is this case over patents important?
This court case is not only about birth control pills—it is about people in South Africa being able to access the lifesaving medicines they need, or having affordable options of medicines that they choose to take. If a legal battle over patents on birth control pills can prevent availability of lower-cost generic products, there is nothing to prevent the same scenario from happening with lifesaving medications for cancer, drug-resistant tuberculosis, hepatitis, or any number of medicines. South Africa knows this all too well, from the many years and legal battles that were required to stop Big Pharma from enforcing patents on affordable antiretroviral medicines. Many thousands of people living with HIV/AIDS could not access treatment due to the high cost. These battles can continue to be fought drug-by-drug, disease-by-disease, but changes to the system for granting patents could prevent some of these battles from having to be fought in the first place.
How could the patent laws change to promote generic competition?
The Department of Trade and Industry (DTI) is in the process of finalising a National Intellectual Property Policy, which will lay the foundation for changes to South Africa’s patent laws. The DTI released a draft policy for public comment in September of 2013. This outlined a number of important reforms that would be important for improving access to more affordable medicines. All of these reforms have been implemented in other developing and industrialised countries, and all of them are legal under international trade agreements. These reforms include:
- Strengthening the national patentability criteria to limit evergreening.
- Establishing a patent examination system, to enforce national patentability criteria and reduce patent evergreening.
- Allowing for patent opposition before and after a patent is granted, by a broad range of third parties. This allows third parties to provide evidence to the Patents Office to show that an application does not meet patentability criteria, or that granting a patent would have a detrimental impact on public health.
I’ve heard of this Pharmagate scandal—why is Big Pharma so opposed to patent law reform?
In January 2014, a scandal broke in the South African media, and was subsequently dubbed “Pharmagate”. Twenty-five multinational pharmaceutical companies—including Bayer—had developed a covert strategy to finance South African front organisations, and have these organisations publicly oppose intellectual property reform that would protect people’s right to health in South Africa.
Companies like Bayer are opposed to making it harder to get patents, because it hurts their profits. If countries have high standards for earning patents, it means companies would have to invest in developing new and innovative medicines, rather than just tweak old drugs. Big Pharma doesn’t want reform, because they care more about profits than people’s lives. The CEO of Bayer, Marijn Dekkers, has even made public statements to this effect when discussing a cancer medicine: “We did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product.”
What can I do to change things?
Your government and multinational companies should know that you are tired of paying too much for patented medicines in South Africa. The Pharmagate scandal shouldn’t be tolerated, and the Department of Trade and Industry needs to finalise a National Intellectual Property Policy that promotes the right to health, so that the patent laws can start to change!
If you want access to cheaper generic birth control, tell @Bayer to back off in South Africa, and stop enforcing their patent on Yasmin!
Tweet @the_dti @HealthZA and at your Parliamentary representative and demand they @FixPatentLaw
For more information on how to “Fix the Patent Laws” in South Africa: Please visit: www.fixthepatentlaws.org
Follow us on Twitter: @FixPatentLaw
This brief was compiled by Doctors Without Borders (MSF) South Africa
Yasmin® [package insert]. Bayer HealthCare Pharmaceuticals Inc., Whippany, NJ; April 2012. http://labeling.bayerhealthcare.com/html/products/pi/fhc/Yasmin_PI.pdf?WT.mc_id=www.berlex.com. Accessed July 23, 2014.
 Yasmin® [package insert]. Bayer HealthCare Pharmaceuticals Inc., Whippany, NJ; April 2012. http://labeling.bayerhealthcare.com/html/products/pi/fhc/YAZ_PI.pdf?WT.mc_id=www.berlex.com. Accessed July 21, 2014.
Bayer AG. (2014). Annual Report 2013, pg. 158. Retrieved from http://www.annualreport2013.bayer.com/en/bayer-annual-report-augmented-version-2013.pdfx
Bayer AG. (2014). Annual Report 2013, pg. 168. Retrieved from http://www.annualreport2013.bayer.com/en/bayer-annual-report-augmented-version-2013.pdfx
World Intellectual Property Review. Yasmin case sends good signal to patentees. January 08 2012. Retrieved from http://www.worldipreview.com/article/yasmin-case-sends-good-signal-to-patentees
Bloomberg. Bayer Patent on Yaz Birth Control Pill Ruled Invalid. April 16 2013. Retrieved from http://www.bloomberg.com/news/2013-04-16/bayer-patent-on-yaz-birth-control-pill-ruled-invalid.html