Yesterday’s letter to Jeremy Hunt, the UK’s Secretary of State for Health, from The Coalition for Affordable T-DM1, suggests compulsory licensing of Roche’s Kadcyla (trastuzumab emtasine) in order to provide affordable treatment to women suffering from breast cancer. The last time I recall compulsory licensing being suggested in a developed market was in 2001 when the US and Canada both considered ignoring Bayer’s patents on Cipro (ciprofloxacin) to meet what was thought to be a terrorist plot to disseminate Anthrax. Before that in 1998/99 South Africa was embroiled in an argument with the US and many pharmaceutical companies over whether TRIPS (Trade-related Aspects of Intellectual Property Rights) allowed compulsory licensing and/or parallel imports of antiretroviral therapy to meet the very real public health threat of AIDS. The point here is that compulsory licensing is usually a last resort.
Ignoring the legal position (I am not a lawyer) what is at the heart of each case is how a sovereign nation reconciles recognition of intellectual property with a growing and possibly unaffordable challenge to public health. So far Health Technology Assessment groups like the UK’s NICE have been the arbiters of what society can afford and denied market access to medicines that failed to meet their test of value for money. However, as the gap between the clinical needs of an ageing population and the ability to pay for innovative medicines grows ever wider so the pressure for a reconciliation of these two issues must grow.
Roche is no stranger to these challenges since it happens to be one of the innovators in cancer treatment. Furthermore, Roche will know well that pricing in one market has an impact on others through reference pricing. On a case by case basis it presumably compares the NPV of total profits made with high prices and low volumes vs lower prices and higher volumes. So far, so good. Yet, there is another factor that cannot be ignored and that is societal opinion. The legitimation of intellectual property, although now embedded in complex trade agreements, ultimately depends on the company’s license to operate. This in turn relates to the Social Contract in which a company is granted a monopoly position on innovative medicines (IP) in exchange for R&D into medicines that meet unmet clinical need. The question here is; “At what point does a medicine that meets unmet clinical need become hypothetical rather than real if its price exceeds what a sovereign nation can afford?”
In the South African situation the coalition of pharma companies backed down amidst a public relations disaster. Low priced HIV drugs were soon available thereafter. It remains to be seen how the UK Government will react to a request for compulsory licensing but in the meantime we are at least entitled to ask why we support a system of intellectual property that doesn’t always provide us with the benefits of that system. I suspect we will be asking this question more often in future, as evidenced by the letter from The Coalition for Affordable T-DM1.
The author was a Pharmaceutical Analyst at Lehman Brothers for 23 years as well as being involved with the PharmaFutures projects www.pharmafutures.org but is now writing independently. Stewart Adkins is a Director of Pharmaforensic Limited www.pharmaforensic.co.uk
Stewart Adkins was a Pharmaceutical Analyst at Lehman Brothers for 23 years and was involved with the Pharmafutures projects.