Thai Move to Trim Drug Costs Highlights Growing Patent Rift

A decision by Thailand's new, military-installed government to increase access to certain drugs by suspending patent protections highlights an increasing tension over intellectual-property rights versus public-health interests.

The decision was criticized by the pharmaceutical industry, which said Bangkok is considering allowing copycat versions of more drugs in the near future. The government's move was notable partly because it included a heart medicine, expanding the realm of drugs over which such conflicts have typically occurred.

Thailand's Ministry of Health confirmed yesterday that the government had approved the sale and production of cheap, generic versions of Plavix, the blood-thinning drug originally developed by Sanofi-Aventis SA, of Paris, and co-marketed in several countries with Bristol-Myers Squibb Co., of New York, and the HIV treatment Kaletra, made by Abbott Laboratories, of Abbott Park, Ill.

World Trade Organization rules allow a government to unilaterally declare an emergency and make or sell patented drugs without the permission of the drug companies.

"We do not view [the move] as legal or in the best interests of patients," said Melissa Brotz, a spokeswoman for Abbott.

The decision "is a matter of serious concern for Bristol-Myers Squibb and the research-based pharmaceutical industry," said Laura Hortas, a spokeswoman for Bristol-Myers Squibb, adding that only Sanofi-Aventis markets Plavix in Thailand. Sanofi-Aventis wasn't available to comment.

Teera Chakajnarodom, president of the Pharmaceutical Research and Manufacturers Association, an industry group in Bangkok that represents the large international drug companies, including these three, said he has heard there are more products for which the government may allow copycat versions. While he declined to be more specific, he said that there are cardiovascular and cancer drugs under consideration, as well as others, made by Swiss and British drug firms.

"After the company does 10 years of research, and then suddenly the Thai government would like to impose the compulsory license, taking away their property, their assets – this is not a good practice," Dr. Teera said. "They claim that the drug is far too expensive for the Thai public to have access. But they never approached the companies before. Everything is negotiable."

In fact, a government's ability to suspend a company's drug patent can prove a powerful bargaining chip in reducing prices. In July 2005, Brazil reached an agreement with Abbott that lowered the price of Kaletra while preserving the company's patent on the drug.

Indian generics makers, which for years have benefited from that country's lax patent laws, stand to benefit from the Thai decision. Bangkok is considering making its purchases from Hetero Drugs Ltd. and Cipla Ltd., both of India, according to Thawat Suntrajarn, director general of the Ministry of Health's department of disease control.

The ministry said the move was necessary to ensure that sick people had access to affordable drugs. "They are waiting for these drugs. But the Thai government does not have enough money to purchase these drugs at the existing price," Dr. Thawat said. Thailand's government has already suspended a foreign company's drug patent, announcing late last year that it would allow domestic production and imports of Merck & Co.'s AIDS drug Efavirenz.

Dr. Thawat said the government's move will cut the price of the HIV drug Kaletra in half, reducing the monthly cost per patient to about 3,000 Thai baht ($89.55) or less. At current prices, the government can afford to provide medicine to only one-fifth of the 500,000 people living with the HIV virus in Thailand, Public Health Minister Mongkol Na Songkhla told the Associated Press, adding that the ministry was willing to talk to the companies about importing their drugs at cheaper prices.

Kannikar Kijtiwatchakul, a campaigner in Thailand for Doctors Without Borders, told the AP the government's move was "a brave decision, despite both anticipated pressure from industry and possible threats to withdraw investments. The authorities have engaged in dialogue with companies before, but the discounts have been marginal."