April 22, 2010

By Authorizing Generic Competition, Ecuador Cuts Cost of Key HIV/AIDS Drug

Ecuador to Expand Access to Medicines 

WASHINGTON, D.C. - By opening the door to competition from generic drugmakers, Ecuador is making a critical HIV/AIDS drug much more affordable for Ecuador’s public treatment programs - a move that other countries should follow, Public Citizen said.

Ecuador’s patent office issued a “compulsory license” for lopinavir/ritonavir, an important HIV/AIDS medicine. The license authorizes generic competition with the patented drug. While the patented version, sold under the trade name Kaletra, costs Ecuador’s public sector roughly $1,000 per person per year, Ecuador will soon be able to access generics at half that.  

“Ecuador is setting an example for countries that seek to expand access to lifesaving medicines, but struggle to pay for ever-more expensive drugs,” said Peter Maybarduk, director of Public Citizen’s new Access to Medicines Program. “Competition has consistently proven the most effective way to lower the prices of medicines. Countries should count compulsory licensing among their essential public health policy tools.”

Compulsory licenses authorize the use of patented technology under enumerated conditions. They do not eliminate or override patents, and the patent holder - in this case, Illinois-based Abbott - will receive royalties.

Many countries have used compulsory licenses to promote public interest objectives and to remedy anti-competitive practices in a variety of sectors. In recent years, a number of countries have issued compulsory licenses to improve access to medicines, including Thailand, Brazil, Malaysia, Eritrea, Mozambique and Indonesia, among others.

The United States is perhaps the world’s most frequent user of compulsory licensing, including the government use of defense technologies, and judicially issued licenses to remedy anti-competitive practices in information technology and biotechnology, among other instances.
 
Ecuador’s compulsory license immediately reduced the cost of a major public HIV drug purchase last week by 27 percent. Prices are expected to drop much further soon, as Ecuador licenses more competitors to enter the market. Ecuador laid the groundwork for the license last fall, when President Rafael Correa declared access to priority medicines to be a matter of public interest.

Over the past 10 years, generic competition has produced a revolution in HIV/AIDS treatment, reducing prices for first-line antiretroviral medications from about $10,000 per year to about $100 per year and enabling more than 4 million people worldwide to access treatment. But high prices continue to limit access to the patented second-line medicines that many people living with HIV need, including lopinavir/ritonavir. 

A UNAIDS 2008 country report estimated that 42 percent of Ecuadoreans needing antiretroviral therapy received it. Ecuador’s national HIV/AIDS treatment program will expand public access to treatment this year, aided by savings from the compulsory license.

Compulsory licensing is an integral component of international intellectual property rules. The right of countries to issue compulsory licenses is enshrined in the World Trade Organization’s TRIPS Agreement of 1995 and a unanimous Doha Declaration of 2001 on intellectual property and public health. The WTO’s Doha Declaration also states, “the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.”

To view Ecuador's compulsory license (official Spanish), go to https://www.citizen.org/sites/default/files/access_attachment_3.pdf.

For an unofficial English translation, go to https://www.citizen.org/sites/default/files/ecuadorcompulsorylicensetranslationunofficial.pdf.

For other documents, go to https://www.citizen.org/our-work/health-and-safety/articles/access-medicine-article, https://www.citizen.org/sites/default/files/decreto_correa_118_26-10-09_1.pdf and
https://www.citizen.org/sites/default/files/instructivo_1.pdf

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Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.