Big Pharma believes that a global generics franchise might give it a softer landing off the patent cliff, but governments that sponsor and regulate the industry are still acting a bit slow on the uptake. The reason? Anti-IP activists are again poisoning the well on global access to medicines, engaging the bigger emerging market governments and the Geneva-based multilateral institutions in a debate that seeks to polarize the commercial world. The two factions are an innovator camp based in the US and Europe, dependent on high prices and patents; and generic producers from developing countries, with lower prices that offer—at least on the surface—more patient access to the needy part of the world.
Big Pharma’s commercial diversification model now seems to want a little bit of both. But public policy always lags behind business realities, and the old innovator vs. generics contest is now playing out in a volatile new venue—the World Health Organization (WHO)—and influencing its approach to control of counterfeit medicines.
Simply put, key countries in WHO want to leverage the organization’s prestige to sever any connection between use of generics and the rising global trade in bogus drugs. Brazil, India, and Turkey, among others, have a strong industrial policy bias in favor of off-patent generic medicines, and are wary of suggestions that such medicines might be “sub-standard” in terms of safety and quality, when compared to patented innovations.
Their claims were bolstered by recent action of the European Union to sequester shipments of Indian drugs it believed infringed on a patent held by a Dutch company. It was asserted that since the patent holder could not guarantee the quality of goods manufactured outside of its control, the shipped medicines from India were—in essence—unsafe. Brazil has now filed a complaint against the EU at the World Trade Organization (WTO). The case is certain to highlight the commercial implications of being tagged as an unreliable supplier of a product deemed essential to public health.
A decision sponsored by Brazil and endorsed last week by the World Health Assembly (WHA) proposes to investigate ousting the innovative industry from future engagement in the WHO’s counterfeit work on grounds of “conflict of interest.” At present, the pharma industry trade association, IFPMA, is a full member of the WHO International Medical Products Anti-Counterfeiting Task Force (IMPACT), which coordinates activities in this area. Eliminating IMPACT is the goal, in favor of a new group that would leave decision-making on counterfeit trade solely in the hands of member governments. This effectively cedes control to Brazil and its emerging market allies whose interests lie in protecting a sector (generics) it considers strategic. A decision on IMPACT is due by the next meeting of the WHO Executive Board in January.
If Big Pharma is interested in maintaining a level playing field on generics produced in emerging markets, and in international trade in general, then reversing this value shift at the WHO ought to be a priority. It is doubly important as these countries begin to develop approaches to the authorization of biosimilars based on local regulatory standards that might charitably be called “opportunistic.” It won’t help the cause of transparent and non-discriminatory regulation if the innovative industry is shut out in defining the global threat from fake drugs.