Thread: Activists call for Abbott boycott for withdrawing drugs

In the drug wars, Abbott blinks

By Thomas Fuller, New York Times
Thailand's aggressive stance could be paving the way for other developing countries to force pharmaceutical giants in Europe and the United States to lower drug prices.
When Thailand announced this year that it was breaking patents on drugs to treat HIV and heart disease, Western pharmaceutical companies reacted with fury. Abbott Laboratories, the maker of the HIV drug Kaletra, took the radical step of withdrawing all of its new products from Thailand, depriving Thais of access to new drugs for rheumatoid arthritis, kidney disease, heart disease and high blood pressure.

"Thailand has chosen to break patents on numerous medicines, ignoring the patent system," said Jennifer Smoter, a spokeswoman for Abbott, which is based near Chicago.

"As such, we've elected not to introduce new medicines there," she said.

But two months after the uproar began, there are signs that Thailand has the upper hand.

Its aggressive stance could be paving the way for other developing countries to force pharmaceutical giants in Europe and the United States to lower drug prices.

Abbott announced on Tuesday that it would cut the price of Kaletra in low- and medium-income countries, including Thailand, to US$1,000 (32,496 baht) a patient a year. That is less costly than any generic on the market and 55% less than the current price, the company said.

The Swiss drug company Novartis offered an effective 75% price reduction this week in its leukaemia medicine Gleevec, after Thai officials said they were considering a compulsory licence on the drug - a move that would have allowed the government to produce it in its own factories and distribute it on a non-profit basis.

Merck, the American drug maker, has also offered to cut the price of its HIV drug Efavirenz after the Thai government announced last November that it would break the patent for that drug. To bring drug companies to the negotiating table, Thai officials used as a bargaining chip a World Trade Organisation rule introduced in the 1990s.

The rule gives countries the right to break a patent and either produce the drug themselves or import generics from other countries.

Many countries, including Brazil, Indonesia, Malaysia, Mozambique and Zambia have broken or have threatened to break patents on drugs for HIV and other infectious diseases.

Thailand, however, is aiming at a broader category of drugs, including cardiac drugs like Plavix, one of the best-selling drugs in the world.

Plavix is a blood-thinning drug that helps prevent heart attacks and strokes, developed by Sanofi-Aventis of France and marketed by Bristol-Myers Squibb of the United States.

The pharmaceutical industry says that the WTO rule was intended to be used in the event of national emergencies like Aids or other fast-spreading infectious diseases.

The rule is vaguely worded, but a 2001 declaration by WTO members also gives countries the "freedom to determine the grounds upon which such licences are granted".

Drug companies say they fear that Thailand's confrontational strategy may spread.

"We don't want Thailand to be used as a springboard for other countries to do the same," said Teera Chakajnarodom, president of the Pharmaceutical Research and Manufacturers Association, an industry group in Bangkok.

In the United States, the industry has complained to the federal government that such price-cutting efforts abroad meant that American consumers were unfairly carrying the burden of financing research for the rest of the world.

Drug companies were stunned by Thailand's quick application of compulsory licences and worried about the threat of more, said Paul Cawthorne, the head of Doctors Without Borders, the medical charity, in Thailand.

But use of the WTO rule may be nothing more than leverage for some old-fashioned haggling.

Thai officials say that they have not started drug production, and analysts said that might not even be the intent.

"People told us, 'It's useless to negotiate with them unless you start to announce that you want to go for compulsory licensing. Then they start to talk to you'," said Suwit Wibulpolprasert, a senior adviser on disease control at the Ministry of Public Health.

Thai officials have received support and plaudits from many global health organisations, including Doctors Without Borders, the Clinton Foundation and UNAids, the UN agency charged with helping tackle the disease.

People from these organisations say Thailand is taking advantage of an under-used provision in international law that could help save lives.

Support and sympathy for Thailand also rose after Abbott announced its partial boycott in March.

Doctors Without Borders called the decision to withhold new drugs "appalling".

Some of Abbott's investors also protested the move.

Christian Brothers Investment Services and members of the Interfaith Centre on Corporate Responsibility, who together own $35 million (1,134 million baht) in Abbott shares, said they were concerned that the company's actions might damage its reputation.

Abbott's move to reduce prices affects its Kaletra capsules, an older form of the drug that requires refrigeration, but not its more recent tablets, which are better suited for Thailand's hot climate.

Thai officials said Wednesday that the government had not yet decided if the price reduction would forestall compulsory licensing.

The government estimated that breaking the patent on Kaletra would save 8,000 lives by making it possible to distribute the drug through the country's public healthcare system to people who cannot afford it.