Sunday Times - Sunday, 30 November 2003

The provision of antiretroviral drugs at affordable prices has been a complex and contentious issue, writes Nicholas Neveling

Multinational pharmaceutical companies and manufacturers of generics have had to join forces to fight the HIV/Aids pandemic.

Part of the challenge of providing antiretrovirals at affordable prices has centred on the protection of intellectual property.

Multinational companies invest vast sums researching new medicines. From a batch of 10,000 molecules only one will make it to market, and getting that one molecule onto pharmacy shelves can cost up to 800-million in research and development, according to Jonathan Louw, managing director of Adcock Ingram Pharmaceuticals.

Multinationals then have 20 years of patent protection during which to recoup the costs of research. This period is often in effect reduced to as little as 10 years as the drug is tested to ensure it is safe for use.

Producers of generic drugs are able to step in after the 20-year exclusion period lapses.

They copy the molecules in the drug and sell that at vastly lower prices than the original patented medicine.

When it comes to HIV/Aids, however, the need for drugs is too pressing to allow for the 20-year patent period before cheaper generics are made available.

While producers of generics are in a position to reproduce Aids drugs cheaply, this would leave multinationals without the usual protection period and thus unable to earn sufficient profits to adequately fund further research.

In South Africa, manufacturers of generics and multinational companies have negotiated working solutions that protect intellectual property but enable antiretrovirals to be made available at affordable costs.

"Because Aids treatment is in the national interest and a public issue, we have to get into the market to deal with the social need," says Mike Norris, CEO of the Adcock Ingram Group.

To meet this need, the company has established a joint-venture company, Thembalami Pharmaceuticals, with Ranbaxy, an India-based manufacturer of generic drugs.

"The joint venture has the most comprehensive range of generic Aids drugs and the greatest number of generic equivalents currently in the Medicines Control Council registration process, with six registrations already approved," says Norris.

"We have approached multinationals for licences to produce antiretrovirals. We can work together."

Louw says: "As a wholly owned South African company, we aim to help South Africa by producing and delivering drugs at low prices that enable the masses to access them."

Another South African company, Aspen Pharmacare, has adopted a similar approach.

"For a couple of years we have been negotiating with multinationals to put voluntary licenc es in place so that we can get these drugs into the marketplace legally," says Linda Philip, Aspen Pharmacare's chief operating officer.

The agreements reached have typically involved strategies like the payment of small royalties for the use of multinationals' intellectual property, or the limiting of a license for a medicine to a particular region.

As South Africa constitutes only 0.4% of the global market, multinationals have been able to enter into such agreements knowing they will recoup their costs elsewhere, particularly in the more affluent developed markets.

Val Beaumont, executive director of Innovative Medicines South Africa, an industry body representing multinationals Pfizer, Lilly, Aventis, Roche, Novartis and MSD, says that while sharing intellectual property rights has been a "bit of a knock", multinationals recognise the importance of working with generic companies on antiretrovirals.

"Where there is a national emergency, as in the case of HIV/Aids, governments can step in and force the undermining of patent protection through the issuing of licenc es to manufacture patented medicines," says Beaumont.

"But first prize has always been to find partners and co-operate by going into voluntary licence agreements. With HIV/Aids we have really come to the party. We are quite comfortable with generics and realise that there is a place for them in the market."

Louw says co-operation between the multinationals and local generic manufacturers has not only benefited patients by bringing down the costs of HIV/Aids drugs, but also enabled makers of generics to develop antiretroviral medicines that are easier to administer, making it easier for patients to adhere to their drug regimens.

"We have come up with various combinations of innovative stuff where you can get all three combinations [of antiretroviral drugs] in one tablet. Instead of a handful of tablets, you can take one and this ensures that compliance is improved drastically," Louw says.

Beaumont emphasises, however, the importance of protecting intellectual property on other medicines where the need is not as desperate as in the case of HIV/Aids.

"Generics are old medicines using old technology, which is why they can be provided cheaply. It is important that money is freed up for research into new medicines," she says.

"Going forward, generics have an important role to play, but it is equally important that innovative medicines are offered.

"We have taken a balanced view on the Aids issue, but to keep new medicines being made available, intellectual property has to be respected. The dynamics around intellectual property have to be watched."

Norris agrees with this assessment and says it is vital that intellectual property rights are protected and that multinationals and generic players co-operate in this regard.

"We feed off multinationals because we eventually produce generics which come off patents, so the two have got to survive together," Norris says.

"In turn, a multinational with a good research and development pipeline might welcome something coming off patent because the generic lowers the cost in that therapeutic segment and there is more money in the sector to spend on research and development and the launching of new products."

The importance of protecting intellectual property rights extends beyond simply bringing new products into the South African market, says Louw.

"We don't want to see the multinationals go," he says. "We don't want to see South Africa, at the end of the day, as just a net importer of generics where there is no investment in the healthcare industry.

"Pharmaceutical companies provide jobs in all business disciplines as well as for doctors and pharmacists. We want to see the clinical trials happening; we want to produce the best-educated doctors in the country.

"We want to maintain the standards of medicine and see that the patient out there has a wide variety of drugs, so that a niche condition will still be treated.

"If multinationals pack up and go then people with unusual conditions won't have access to treatment and we won't have products registered with the Medicines Control Council because they are too expensive."

Louw points out, however, that to have a sustainable healthcare system and ensure that medicines are affordable, the "range and capability" have to be there to "drive down costs" through mechanisms such as generic medicines.

"We have wonderful local players, and we need to ensure that they continue to thrive and grow through the preservation of the intellectual property rights that we have in this country and the good manufacturing facilities we have here," he says.

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