or Remdesivir, the estimated manufacturing cost is $ 0.93 or about Rs 19.85 per vial at purchasing power parity (PPP). The difference between the lowest market price in India and the estimated cost of production is around Rs 880!
For Favipiravir, the estimated cost in the US is $ 1.45 per day, or about Rs.31 at PPP. With, BALflu approved by the Drug Controller General of India (DCGI) for emergency use for COVID-19 at Rs 85 per tablet (400 mg), the average price for a day is Rs 185 (or 8, $ 7 in PPP).[PPP conversion factor (=21.35 for 2020) is used – the rate at which currency of one country would be converted into that of another country to buy the same amount of goods and services, taking into account tariffs, labour and transaction costs, etc. Exchange rate conversion does not account for differences in prices between countries]
The cost estimates for some drugs by Hill et al. (2020), and a comparison with market prices then in effect shows a huge difference between the cost of manufacturing a drug and the market prices charged. The total estimated cost includes the cost of pharmaceutical ingredients, packaging and other items, and also assumes a 10% profit margin for drug manufacturers.
Pharmaceutical giant Gilead, however, disagreed with the study’s results, saying the true cost of manufacturing Remdesivir is not accurately reflected.
Medicines and vaccines approved for the treatment of COVID-19 were not available or, when available, were overpriced. Reason – Patents! Patents give the manufacturer exclusive rights to the invention and allow him to charge arbitrarily high prices. With monopoly rights to the production of these drugs and vaccines, supply has also remained limited. And, yes, even in a time of a pandemic that has claimed more than 3.7 million lives.
THE VARIABILITY OF PRICES – MAKING IT OUT OF REACH
At the height of the pandemic due to limited supply, Remdesivir was available at exorbitant prices; for example, in Delhi the price was between Rs 45,000 and Rs 70,000 per vial on the black market.
Gilead, the original company, had priced Remdesivir at $ 390 per vial (around Rs 8,326 at PPP) for government agencies in developed countries, noting that “under normal circumstances we would price a drug according to the value it provides ”, which was apparently much higher because it reduced about four days of hospitalization for patients.
In May 2021, Gilead signed non-exclusive licensing agreements with nine generic drug manufacturers based in Egypt, India and Pakistan to expand Remdesivir’s offering. Different companies in India had different retail prices ranging from Rs 2,800 (Cadila Healthcare) to Rs 5,400 (Hetero Labs). It was only after an intervention by the National Pharmaceutical Pricing Authority (NPPA) in April 2021 that the prices were reduced and ranged from Rs 900 to Rs 3,490 per vial.
Likewise, another crucial drug, Tocilizumab, manufactured by Roche, is offered at an exorbitant price at around Rs 50,000 per vial and treatment requires one to three vials per person. During the recent acute crisis in India, the supply was insufficient and the drug even reached a price of Rs 1 lakh on the black market. Roche did not disclose the cost of manufacturing the drug.
Although some of these drugs are now not recommended for the treatment of COVID-19, the profit-making nature of the pharmaceutical industry is exposed, Big Pharma has taken the same approach for vaccines and has fought for upholding patents and others. protectionist measures such as trade secrets leading to vaccine shortages and vaccine apartheid.
THE FIGHT FOR ACCESSIBILITY AND AFFORDABILITY – PROPOSED TRIP WAIVER AND MANDATORY LICENSES
The WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS), signed in 1994, set minimum standards for the protection of intellectual property rights (IPRs). An IPR system has functioned to protect the monopoly power of the big pharmaceutical companies that hold the production and marketing rights. The result is that drugs and vaccines are sold at exorbitant prices, beyond the reach of most of the population, especially in poor and middle-income countries.
To mitigate the negative impact of patents, such as high prices, monopoly power of pharmaceutical companies, unequal access to drugs and medical products, TRIPS flexibilities were negotiated as part of the Doha Declaration on TRIPS and Public Health in 2001. The protection of IPRs under TRIPS has helped Big Pharma in maintaining monopoly profits, which is evident during the current health and economic crisis caused by the COVID-19 pandemic. Even in a crisis of such magnitude, there have been cases everywhere where pharmaceutical companies have dictated their profit conditions.
TRAVEL WAIVER PROPOSAL
As COVID-19 continued its grip on the world and countries faced severe shortages in medical supplies and treatment with IPRs hampering the timely delivery of affordable medical products, on October 2, 2020, India and South Africa presented a proposal to the TRIPS Council, within the framework of the World Trade Organization (WTO). The proposal required a temporary waiver of certain TRIPS obligations on copyright and related rights, industrial designs, patents and the protection of undisclosed information in relation to the prevention, containment or treatment of COVID- 19. The proposal has gradually garnered support from other countries, the latest being the United States. At present, only the European Union and the United Kingdom are opposed to it.
Compulsory licenses (CL), one of the flexibilities of the TRIPS Agreement, arise when a government allows someone else to produce a patented product or process without the consent of the patent holder. The first CL in India was granted in 2012 to NATCO for Sofraneib Tosylate produced by Bayer Corporation. NATCO had offered to sell the drug for less than $ 200 which Bayer was selling for $ 5,608, and the successful rejection of Novartis’ patent plea for the drug Glivec in 2013.
At present, there are some petitions in India and applications that have been filed for the issuance of CL on the production of certain drugs in order to increase their price and accessibility.
Medicines effective in the treatment of drug-resistant tuberculosis such as bedaquiline and delamanid are under patent (bedaquiline under Janssen Pharma and Delamanid under Otsuka Pharma), thus preventing generic suppliers from entering. In India, a six-month course of bedaquiline costs about Rs 25,000 per person, which would be tripled with an extended 18-month regimen. A six month course of Delamanid costs over Rs 90,000 per patient. Two Mumbai-based tuberculosis survivors – Meera Yadav and Brinelle D’Souza (applicant on behalf of Jan Swasthya Abhiyan, Mumbai) have filed a PIL requesting the granting of a LC / government use authorization for Bedaquiline and Delamanid under the Patent Act, 1970.
NATCO had applied for a CL for barcitinib. But the government has delayed a decision on this. Although the High Court requested a response from the government, NATCO ultimately withdrew the request and struck a deal with Eli Lilly. However, no details of the agreement are available.
DIVERGENCE IN THE POSITION OF THE INDIAN GOVERNMENT – AT THE COUNTRY AND AROUND THE WORLD
However, while on the one hand, the Indian government has opposed compulsory licensing of essential medicines in India, thus enforcing intellectual property rights (IPR), on the other, India is a co-sponsor. the proposed TRIPS waiver at the WTO. .
These two positions are opposed.
In April 2021, the bench of the Supreme Court (SC) of justices DY Chandrachud, L. Nageswara Rao and S. Ravindra Bhat took up the suo motu case on issues related to COVID-19 (In the redistribution of essential supplies and services during the pandemic). The SC asked the central government why it did not consider invoking the powers under the Patents Act 1970 (Section 92 / Section 100) for the LC / government authorized use of drugs such as Remdesivir, Tocilizumab, Favipiravar, and allow the manufacture of generic drugs. The Court noted that “this is a specific case where we should turn to compulsory licensing. This is a public health emergency ”.
The Center, however, in an affidavit replied that “… it is not in favor of the exercise of powers under the Patent Act, such as compulsory licenses… any discussion or mention of the exercise of statutory powers for essential drugs or vaccines with patent issues would have serious, serious and unintended negative consequences in the country’s efforts on the global platform… ”.
More recently, NITI Aayog stated that “compulsory licensing is not a very attractive option because it is not a ‘formula’ that matters, but active partnership, training of human resources, procurement of materials. first and highest levels of biosafety laboratories. what is required ”.
KM Gopakumar, an expert on trade and political issues and working as legal advisor for Third World Network, believes that, “This contradicts and seriously undermines India’s negotiating position in the WTO. In fact, this position gives room to the forces that oppose the waiver proposal and calls into question India’s integrity and sincerity on the issue ”.
The key is to use different mechanisms to ensure affordability and accessibility of drugs and vaccines. As Supreme Court Senior Counsel Anand Grover says, “Whether it’s essential drugs or vaccines, if we have more companies producing them, the prices will go down. We should have a minimum of five companies to ensure competition. The base needs to be broadened and should include the granting of manufacturing rights to public sector companies. Private companies will have profit as their basic objective, for example in the case of CIPLA. CIPLA was once the protagonist of low-cost manufacturing, but today it produces at prohibitive prices.
India, time and again, had challenged the hegemony of the big pharmaceutical companies and maintained its stature as the world’s pharmacy, protecting the interests of the poor and marginalized in the multilateral arena. Will he once again be able to rise to the occasion or side with big pharma?
First published by Newsclick.