1. THE NEW
WAR ON
PHARMACEUT
ICAL DRUGS
DUYGU CAN

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:
http://www.phrma.org/access/international#sthash.MJB50uuG.d
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.