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Table 2 Studies of TRIPS flexibilities

From: What is the impact of intellectual property rules on access to medicines? A systematic review

Theme

Author(s), date and reference number

Study Type/Methodology

Key relevant findings

Compulsory licencing

Thailand

 

Mohara et al. 2012 [40]

Retrospective study to assess the impact on drug expenditure resulting from the introduction of the Government Use Licence policy in Thailand.

The use of generic drugs under the policy could save the government budget approximately $US370 million over 5 years. The compulsory licence for Efavirenz resulted in the biggest cost savings- $US116.45–118.84 million.

 

Yamabhai et al. 2011 [41]

Prospective modelling (some data is actual impact- most is prospective) to measure the health and health-related economic impacts of seven government use compulsory licenses issued between 2006 and 2008.

The granting of the government use licenses resulted in an additional 84,158 patients estimated to have received access to the seven drugs over 5 years. Health gains from the use of the seven drugs compared to their best alternative accounted for 12,493 Quality-Adjusted Life Years (QALYs) gained, which translates into quantifiable incremental benefits to society of $US 132.4 million. The government use license on efavirenz was found to have the greatest benefit.

 

Yamabhai and Tantivess 2009 [42]

Prospective study aims to assess impact of the government use licenses for seven drugs issued over the period 2006-2008 in Thailand. The assessment of the public health impact of the government use licenses is intended to determine or estimate the actual and expected increase in number of patients with access to the relevant drugs, and the public health benefits derived from such increased access, in terms of gains in patients’ health utility, measured in Quality-Adjusted Life Years (QALYs) gained or Disability-Adjusted Life Years (DALYs) averted. It also estimates economic impact.

The study estimated the increase in the number of patients with access to Efavirenz and Lopinavir/ritonavir over the five-year period to be 17,959 and 3421, respectively. The estimated increase in patients using clopidogrel was estimated to be 40,947. For the anti-cancer drugs, the estimates are as follows: 8916 patients for letrozole; 10,813 for docetaxel, 1846 for imatinib; and 256 for erlotinib. The results, in terms of QALYs gained (in order of drugs with the greatest health gains) were: 1. letrozole: a gain of 3656 QALYs; 2. EFV: 2694 QALYs gained; 3. clopidogrel: 2457 QALYs gained; 4. imatinib: a total of 2435 QALYs gained (1384 QALYs for Chronic Myeloid Leukemia (CML) patients; 1051 QALYs for Gastrointestinal Stromal Tumor (GIST) patients); and 5. docetaxel: 1251 QALYs gained. The use of the generic versions of the six original drugs by way of government use licenses would result in a reduction in national health expenditure, with estimated cost savings of approximately US$ 357.8 million for the 5-year timeframe. The impact was assessed in terms of the incremental benefits to health, which was estimated to be approximately $US 132.4 million for the 5-year study timeframe.

 

Brazil

 

Scopel and Chaves 2016 [43]

Retrospective study to analyse the history of the price of lopinavir/ritonavir (LPV/r) in Brazil and in the international market including initiatives to challenge patent barriers between 2001 and 2012.

Between 2001 and 2003, there were efforts to use compulsory licensing as a threat. From 2005 to 2007, initiatives by different stakeholders were identified: declaration of public interest, pre-grant opposition and civil action. From 2006 to 2008, compulsory licensing initiatives in other countries resulted in a price reduction in Brazil. Between 2009 and 2012, there was a 30% reduction in the Brazilian purchasing price but can’t quantify price reduction to specific IP measures.

 

Ramani and Urias 2018 [44]

Retrospective review to determine the possible inter-temporal impacts of catch-up in industrial capability on access to life saving drugs and vice versa in Brazil and what insights can be gained from the interrelationships between price negotiations of essential patented drugs, access to these and industry catch-up.

Industrial capability can provide bargaining strength in price negotiations and have a positive inter-temporal impact on both future industry catch-up and future access to essential medicines. Both the threat of and the grant of CLs result in price reductions.

 

Other countries

 

Ortiz-Prado et al. 2019- Ecuador [45]

Retrospective study to identify and evaluate the possible effects of requesting compulsory licenses (denied, issued and withdrawn) on prices’ variability over the years after requesting them.

Ecuadorian experience shows that the use of Compulsory Licenses as a strategy for improving access to medicines requires more than political will. Offering better access to medicines requires adequate planning, intersectoral articulation, prioritization of goals, clear procedures and protocols and increased accountability. In the future, Ecuador should foster these capacities before initiating new CLs.

 

Chatterjee et al. 2015- India [46]

Prospective study to assess the consumer welfare implications of changes in government policies related to patent protection and compulsory licensing in the Indian market for oral anti-diabetic medicines.

Under Scenario 4 (CL of all DPP-4 inhibitors), consumer welfare increases by around INR 47 million (USD 1 million). Scenario 5 – CL of sitagliptin and non-entry of other DPP-4 inhibitors – a negative response to CL by patent holders (deciding not to launch their products in India) can lead to a substantial loss in consumer welfare (consumer welfare falls by INR 141.5 million (USD 3 million) per year. Scenario 6 – CL of sitagliptin and vildagliptin, non-entry of saxagliptin – similar picture (consumer surplus falls by INR 8.3 million (USD 0.17 million) per year. Overall: Differential pricing and voluntary licensing improve consumer welfare. Issuance of CL also increases consumer surplus, but if it discourages firms from launching patented products and if local firms are unable to have their version of the patented drugs approved by the govt, there may be a decrease in consumer welfare. (Note: there is no direct evidence that CL drives off innovators from launching drugs in India – the paper simply simulates the effects on consumer welfare if this happens)

 

Global

 

t’Hoen et al. 2018 [47]

A literature review to document the use of TRIPS flexibilities to access lower-priced generic medicines between 2001 and 2016.

Overall, 176 instances of the possible use of TRIPS flexibilities by 89 countries were identified: 100 (56.8%) involved compulsory licences or public non-commercial use licences and 40 (22.7%) involved the least-developed countries pharmaceutical transition measure. The remainder were: 1 case of parallel importation; 3 research exceptions; and 32 non-patent-related measures. Of the 176 instances, 152 (86.4%) were implemented. They covered products for treating 14 different diseases. However, 137 (77.8%) concerned medicines for HIV AIDS related diseases.

 

Cherian 2016 [48]

Literature review to evaluate outcomes and policy approaches used by different countries for compulsory licenses under TRIPS Article 31, and identify shortfalls and best practices. Determined how Compulsory Licensing has used to enable generic entry and availability in some focus countries, and how use of the flexibility can set a precedent by informing the international regime on patents and the innovation framework.

Following the Doha ministerial declaration on public health in 2001, there has been more frequent use of compulsory licenses to procure HIV medications, and increasingly, non-essential medicines such as oncologic agents, anti-inflammatory agents, and prophylactic drugs for heart disease. Approaches taken by countries include an official Government-use policy to compulsory license drugs, use of CLs as a threat, an emergency use for pandemic preparedness, and anti-competitive tool to promote parallel trade. Each case has unique motivators and reveals context specific outcomes. Countries have successfully used CLs to increase access, provide costs savings and negotiate price reductions. After issuing a compulsory licence, a 73% price saving from purchasing generic Oseltamivir was seen in Taiwan and a 97% cost saving was seen in India from being able to purchase generic Sorafenib.

 

Son and Lee 2017 [49]

A literature review to examine patterns and trends in attempts to issue compulsory licenses for pharmaceuticals, and to assess the related implications for access to medicines.

There have been 108 attempts to issue compulsory licensing for 40 pharmaceuticals in 27 countries since 1995. Most of the attempts were in Asian, Latin American, and African countries and mainly for HIV/ AIDS medicines. When the claimer was the government, the likelihood of approval and positive outcomes increased. Even the request for a compulsory licencing led to a price discount in 25% of cases.

 

Beall and Kuhn 2012 [50]

Literature review to systematically analyse CL activity since the Doha declaration.

Twenty-four verified CLs were issued in 17 nations between 2001 and 2010. CL activity has diminished markedly since 2006. While upper middle income countries have high CL activity and strong incentives to use CLs compared to other countries, there is considerable countervailing pressures against CL use even in UMICs. The vast majority of CL episodes ended in some kind of price reduction via either CL, voluntary licence or discount.

 

Beall and Attaran 2017 [51]

Retrospective study to determine whether developing countries, that have granted patent protection on essential ARVs, are procuring generic equivalents of those same medicines. Determine which legal flexibilities have been most relevant for facilitating access to medicines.

Voluntary licensing agreements between originator and generic companies resulted in more generic procurement than the other flexibilities (least developed country waiver, non-assert declarations and compulsory licences). Least developed country waivers also played an important role.

Parallel importation

Multiple country EU

 

Kanavos and Costa-Font 2005 [52]

Retrospective study to analyse the impact of parallel importation on stakeholders; the extent of competition in markets subject to PI, explain the overall determinants of PI and impact on prices, and determinants of price competition in PI importing countries.

There is an increase over time in parallel import market share in destination countries, but little price difference compared to domestic products. Key determinants of parallel trade penetration are price difference between destination and export country and pharmaceutical market size in importing country. Also important are the number of physicians/ 100 pop, and generic penetration. Parallel trade does not lead to lower prices in destination countries; most gains accrue to distribution chain, including pharmacies, some modest gains (< 2%) go to pharma funders (governments/insurers).

 

Kyle et al. 2008 [53]

Retrospective study to examine the effect of parallel trade on patterns of price dispersion for prescription drugs in the European Union.

The distribution of prices among EU countries did not show a dramatic change concurrent with the adoption (especially after 1995) of parallel trade. About half of the price differentials in prescription drugs exceeded 50% in all EU and non-EU countries in each time period. Although price differentials decreased after 1995 for most countries, they decreased less in the EU than elsewhere.

 

Single country EU

 

Duso et al. 2014- Germany [54]

Prospective economic modelling study to assess the welfare impact of parallel imports for all 700 anti-diabetic drugs sold in Germany between 2004 and 2010.

Parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total) which is relatively small compared to the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by 37% per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.

 

Mendez 2016- Denmark [55]

Economic modelling simulation of the effects of banning parallel imports. Aims to identify and understand the effects of parallel imports on consumers’ consumption choices, government expenditures for pharmaceuticals, and producers’ strategies

Data are for the statin market in Denmark. Banning parallel imports leads to (i) an increase in variable profits for original producers and a decrease for generic firms, (ii) an increase in governmental health care expenditures, and (iii) a decrease in consumers’ welfare.

 

Granlund and Koksal-Ayhan 2014- Sweden [56]

Retrospective econometric study to determine the effect of competition from parallel imports on prices of locally sourced on-patent drugs and to determine whether the 2002 Swedish mandatory substitution reform increased this competition.

On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.