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The new war on pharmaceutical drugs

  2. PHARMACEUTICAL INDUSTRY  Develops, produces and markets drugs  Global spending on prescription drugs: $954 billion (2011)  Global market worth: $857,800 million (2012)  Leader: U.S. & Canada w/ 41% of the shares
  3. THE BIG PHARMA Rank Company Country Total Revenues(USD billions) 1 Johnson & Johnson[2] United States 71.3[3] 2 Pfizer[4] United States 51.6 3 Roche[5] Switzerland 52.1[6] 4 GlaxoSmithKline[7] United Kingdom 45.4[8] 5 Novartis[9] Switzerland 57.9[10] 6 Sanofi[11] France 44.6[12] 7 AstraZeneca[13] UK/Sweden 25.7[14] 8 Abbott Laboratories[15] United States 21.8[16] 9 Merck & Co.[17] United States 44.0[18] 10 Bayer HealthCare[19] Germany 54.2[20] 11 Eli Lilly[21] United States 23.1[22] 12 Bristol-Myers Squibb[23] United States 16.4
  4. HIGH COST of R&D EXPENSES  12-15 years to develop a drug  $800 million in R&D expense  1/10,000 of tested drugs for patient use  3/10 of approved compounds covers initial expense  High prices
  5. LIMITED PROTECTION FOR INTELLECTUAL PROPERTY  Inadequate protection in developing countries  Example: India  1972, revision in Indian Patent act revoked all medicine patents  Foreign manufacturers abondoned India  Patented compounds reverse engineered  Generic manufacturers flourished
  6. THE CHALLENGE FROM GENERIC BRANDS  Drug patent protection time = 20 years (WTO Rules)  Effective time < 12 years (due to R&D)  When expires Generic drugs  investing ~20% of revenues into R&D  No R&D costs for generic drugs  Prices fall by 90% within 12 months  Example: Teva Pharmaceutical (Israel) makes 150 brand name compounds  Generic industry is rising rapidly (due to demand in developing countries)
  7. COUNTERFEIT DRUGS  Due to goverments’ failure to check bioequivalance of generics  Counterfeit or bioINequivalent medications: deceptively represent its origin, authenticity or effectiveness  Argentina, Brazil, China, India  Threat to human health  Costly for branded manufacturers who wants to protect their intellectual propert  Anti-counterfeit platforms  SMS messages based verification services in Ghana, Nigeria (Sproxil), etc.
  8. NEGLECTED THERAPEUTIC AREAS  More focus on profitable markets  Example: Cancer and central nervous system diseases (psychiatric)  No or little research on diseases common in poor countries  Example: Tuberculosis  Diseases in developing countries: too risky to invest  Incentive packages and public-private partnerships by governments and private initiatives  Example: Bill and Melinda Gates Foundation, billions for AIDS, tuberculosis, other infectious diseases
  9. PhRMA’s GLOBAL EFFORTS  innovation, research and development to support the discovery of new medicines for both common conditions and rare disorders  one of the largest funders of R&D  Invested $365 million in 2008 alone  $9.2 billion in direct assistance to healthcare in Africa, Asia and Latin America (over last decade)  donations of medicines, vaccines, diagnostics and equipment, as well as other material and labor.  See more at: puf
  10. CLOSER TO PUBLIC SCRUTINY  South Africa:  High prices of branded AIDS drugs  Goverment let importation of non-approved generics  Manufacturers sued S. Affrica  International backlash, negative publicity  Awareness of generic drugs  For affordable prices: Brazil and some others threatened to break patents  For good public relations: AIDS drugs offered at lower prices  88 medicines for AIDS & related conditions  U.S. And European Gov.’s provides billions
  11. TRIPS and PHARMACEUTICAL PATENTS  Govermental obligations:  Patenting: WTO members have to provide patent protection for any invention, whether a product (such as a medicine) or a process (such as a method of producing the chemical ingredients for a medicine), while allowing certain exceptions. Article 27.1. Patent protection has to last at least 20 years from the date the patent application was filed.  DOHA Decleration: to clarify the interpretation of TRIPS flexibilities especilally for the African Group.  Exporting countries’ obligations under Article 31(f) are waived — any member country can export generic pharmaceutical products made under compulsory licences to meet the needs of importing countries.  Importing countries’ obligations on remuneration to the patent holder under compulsory licensing are waived to avoid double payment. Remuneration is only required on the export side.  Exporting constraints are waived for developing and least-developed countries so that they can export within a regional trade agreement, when at least half of the members were categorized as least-developed countries at the time of the decision. That way, developing countries can make use of economies of scale.