Monday, February 19, 2007

Thailand Announces Production of Generic Drugs

Sources: Thais Warn of Switch to Generic Medicines, Thailand Allows Generic Production of HIV Drug, Thailand Allows Generic Production of AIDS, Heart Drugs

In late January, Thailand's health ministry announced its approval of generic versions of the anti-AIDS drug, Kaletra, and the popular heart attack drug, Plavis, much to the outrage of large pharmaceutical companies. Thailand has a successful universal HIV/AIDS treatment program, which has received much prise from health activists because of the country's dedication to providing effective treatments to its people at cheaper costs. In 2002, the goverment implemented a generic version of HIV/AIDS triple therapy which effectively decreased costs of treatment 18-fold. This treatment program has reportedly cut the number of AIDS-related deaths by 75%. Plavix is a blood-thinning drug that is used to prevent and treat heart attacks, and with global sales in 2005 reaching $5.9 billion, it is believed to be the second most widely sold medication worldwide.
The pharmaceutical companies that tout these drugs are threatening to withdraw their investments in Thailand because of the government's action. Their complaints are based on the fact that Thailand's act essentially breaks the patents these companies have on these drugs. In fact, when a Canadian company tried to do something similar by introducing a generic version of Plavix, it was ordered by a court to pull the drug from shelves because it violated these patents. Thailand's Public Health Minister Mongkol Na Songkhla justifies the government's position on international trade rules which allow governments to issue a compulsory license in the case of a national public health emergency. Such action has been taken by like Brazil and India in the case of HIV treatments.
Songkhla claims that the drugs' high price constitutes a crisis for the country's public health. Generic production of these drugs would significantly decrease prices and increase the drug's availability to the population. For instance, the generic version of Plavix is estimated to reduce the cost from about $2.06 to less than $0.18 per pill. Songkhla and the Thai government had been trying to years, unsuccessfully, to negotiate lower prices with the pharmaceutical companies, and they point to the high drug costs and their main obstacle to providing effective health care to the public.

1) Given the HIV/AIDS crisis that plagues many countries in the world, is Thailand's decision to break the patents on these drugs justified?
2) What are the possible ramifications on the drug companies if all the countries suffering from an HIV/AIDS epidemic decided to follow Thailand's lead?
3) How can governments of countries like Thailand widen the access to life-saving medicines while preserving incentives for drug companies to continue to innovate?

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