Call for compulsory licensing in the UK – a new approach to Pharma IP and research?

Signal of change / Call for compulsory licensing in the UK – a new approach to Pharma IP and research?

By Joy Green / 03 Apr 2016

A coalition of doctors, patients’ groups and campaigners in the UK has made the first call for a patent on a life-saving drug to be set aside in a rich country, potentially signalling a new approach to intellectual property (IP) in the pharmaceutical industry.

It is now fifteen years since the heated global debate around the high cost of anti-retroviral drugs for HIV was resolved. A few countries such as India were permitted to make and sell cheap generic copies of the drugs for African countries that could not afford the artificially high cost of the patented versions, under a process known as compulsory licensing. At the time it was assumed that rich countries would continue to pay full price for pharmaceuticals under patent.

However a convergence of factors - such as ageing populations and the ongoing austerity agenda resulting from the 2008 financial crisis - means that some new patented drugs are becoming too expensive for healthcare systems in rich countries like the UK. Advanced cancer drugs in particular are often rationed due to the extremely high cost of the patented versions, despite the fact that the drugs themselves are cheap to make. A particularly eye-catching example of this is the drug T-DM1, marketed as Kadcyla by the pharmaceutical company Roche. T-DM1 is highly effective against stage four breast cancer, extending lives with far fewer side effects than chemotherapy. However at an initial cost of £90,000 per patient per year, Kadcyla was the most expensive breast cancer drug ever marketed, and despite recent price reductions it remains too expensive for use by the NHS.

In October 2015, a coalition of doctors, patients and campaigners made a radical proposal to the UK’s health secretary Jeremy Hunt, calling for the government to set aside the patent on Kadcyla and issue a compulsory licence so that cheap generic versions can be manufactured or imported. This is permitted under UK law as long as the company is given ‘affordable compensation’. One of the signatories, Doctor Chris Redd, said “There are 1,500 UK citizens living with breast cancer right now, who could be kept alive by this medication. The solutions are all there in the document. The only question that remains is whether our government is more interested in protecting its citizens or the shareholders of a multinational drug company.” The UK government - caught between vocal patients’ groups on one hand and lobbyists for Big Pharma on the other - is still considering the proposal.

So what?

The call for compulsory licensing in a rich country presents an unexpected challenge to current Pharma IP models. This challenge may intensify as pressures build on health systems like the NHS.

High prices for patented drugs are traditionally justified as a way for pharmaceutical companies to recoup the considerable expense of research and development (R&D). Opponents of compulsory licensing claim that long-term R&D will be affected.

However campaigners for compulsory licensing point out that much medical research is actually publically funded and carried out in academia; promising compounds are often bought cheaply by small biotech firms, who in turn are bought by Big Pharma if their research drugs look marketable. Campaigners claim that the actual cost of R&D by large pharmaceutical companies is dwarfed by the profits they make on patented drugs - and that from this perspective the aim of Big Pharma seems to be to maximise revenue rather than accessibility.

Proponents of compulsory licensing in the UK have also called on the government to invest in the research process for drugs like T-DM1 – giving it a financial stake in such drugs and ensuring the NHS has access to them at cost price. Such a move in a market as significant as the UK could shake up both research and IP in the pharmaceutical industry in the long term.

Sources

The Guardian, 26th January 2016, ‘Big Pharma’s worst nightmare

What might the implications of this be? What related signals of change have you seen?

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