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LINES OF THOUGHT ACROSS SOUTHEAST ASIA

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Essential Drugs

The price is not right

The massive Trans-Pacific Partnership deal could cause drug prices to soar in Vietnam, devastating people with life-threatening illnesses

Daniel Besant
January 20, 2014
The price is not right
Round the table: chief negotiators of the Trans-Pacific Partnership from the US, Barbara Weisel (right), and from Vietnam, Khanh Tran Quoc, attend a joint press conference in Singapore. Photo: AFP

Press releases and media statements have been far from abundant during talks over the Trans-Pacific Partnership (TPP). This month, another round of secret negotiations will be held over the gargantuan trade deal that has the potential to impact more than 800 million people in Asia and the Pacific region. Along with the US, Chile, New Zealand, Canada, Peru, Australia, Mexico and Japan, four Asean nations – Malaysia, Brunei, Singapore and Vietnam – are negotiating hard to be part of the club.

The US had hoped that negotiations would be wrapped up last month, but sticking points have been found in the areas of state-owned companies, agricultural tariffs and intellectual property rights. The last of these sticking points is a major concern for Vietnam. Those suffering from illnesses such as HIV and Aids, cancer, and hepatitis B and C may experience a dramatic increase in the prices of the generic medicines they rely on, putting them out of reach for the majority who will not be able to afford them.

“Intellectual property rules have not yet played a major role in driving up the prices of medicines in Vietnam, yet the US’s proposal would seriously constrain Vietnam’s ability to manage medicine prices in the future, and would increase the burden on the government and households to pay for medicines,” said Andy Baker, country director of Oxfam Vietnam.

Although the state pays for some treatment costs, most people in Vietnam have to stump up for the medicines they need. “Medicines are the single largest expense for patients, accounting for 58% of all out-of-pocket costs for healthcare. Thus, high medicine prices have serious direct impacts upon patients, many of whom have to go without or find themselves and their families forced to make impossible sacrifices to pay for treatment,” Baker added.

The provisions the US are pushing for are wide-ranging and currently offer no exemptions for medicines that are crucial in the fight against endemic diseases. “The terms in the intellectual property chapter apply to all diseases and all drugs, so all drugs will have longer, stronger and broader intellectual property protections,” said Judit Rius Sanjuan, US manager of Médecins Sans Frontières’ Access Campaign.

“For a certain class of drugs known as biologics [drugs created by biological processes, rather than chemically synthesised], the US is pushing an unprecedented 12 years of data exclusivity. This means that regulatory authorities would have to wait 12 years… to approve affordable generic versions of biologic drugs.”

With an estimated 280,000 HIV-positive people – a number that may be an underestimate as testing rates are low – and up to 20% of the population suffering from hepatitis B and 4% with hepatitis C, not to mention cancer, a disease that is in the top five health problems in the country, the people of Vietnam have a huge amount riding on TPP provisions.

At present, costs for first-line anti-retroviral medicines are low (thanks to US assistance), standing at about $350 per patient per year. However, 2.7% of Vietnamese citizens rely on the second- and third-line medicines required as the disease progresses, many of which are under patent.

“Costs for second-line HIV and Aids medicines are much higher, so when more people require them, it creates economic stress on the national Aids treatment program,” said Baker. “The cost of HIV and Aids medicines in Vietnam that are under patent are anywhere from five to ten times more expensive than first-line medicines. As the disease progresses and patients have to switch to second-line medicines, there are concerns that the high costs will make it difficult to pay for new treatments.”

Hepatitis B medicines cost about $450 a year per person, and treatment for carcinoma – a common side effect – costs about $1,880. With hepatitis B, the optimal 48-day full course of treatment can soak up 400 days’ salary for an average government worker. This means drugs to treat two common diseases are effectively out of reach for most.

Do or die: Patients reliant on exisiting and future patent medicines will have to pay high prices under proposed TPP legislation
Do or die: Patients reliant on existing and future patent medicines will have to pay high prices under proposed TPP legislation. Photo: AFP

Although the percentage of the population with hepatitis C may seem low, the risk of infection rates increasing is high. “Injecting drug use is a major social issue in Vietnam and is fuelling the HIV and hepatitis C epidemic,” said Brigitte Tenni, senior technical advisor on HIV at Australia’s Nossal Institute for Global Health. Furthermore, while hepatitis C is treatable and there are a number of new drugs that are more effective, need to be taken for a shorter time and have fewer side effects, they may be unaffordable. “Because they are patented they will be exceedingly expensive – up to $80,000 for a course of treatment,” said Tenni.

For those with cancer, an already grim situation may become far worse. In 2005 the UN estimated 8.2% of deaths in Vietnam were due to cancer, with 1.5 million new cases per year. Cancer drugs can only be afforded by the wealthiest, which is reflected in the fact that medicines for cancer only account for 3% of the pharmaceutical market, according to Oxfam. Under proposed TPP legislation, existing and future cancer drugs would be even more expensive.

For Vietnam, and other poor countries that may lose out under the TPP, Baker advises standing their ground. “[Those countries] should call the bluff of US negotiators and refuse to accept the US’s negotiating tactics,” he said. “Those tactics consist of proposing provisions that enhance monopoly power of the pharmaceutical industry and waiting until the last possible moment in negotiations, when everything else is agreed, at which time the US will insist that negotiating partners must accept the US position on intellectual property protections or risk sinking the entire agreement.”

“Vietnam can simply say no to US pressure,” Baker added. “It will surely be in good company with other negotiating partners.”

The provisions the US are pushing for are wide ranging and currently offer no exemptions for medicines that are crucial in the fight against endemic diseases. “The terms in the intellectual property chapter provisions apply to all diseases and all drugs, so all drugs will have longer, stronger and broader intellectual property protections,” said Judit Rius Sanjuan, US manager of Médecins Sans Frontières’ Access Campaign. “For a certain class of drugs known as biologics [drugs created by biological processes, rather than chemically synthesised], the US is pushing an unprecedented 12 years of data exclusivity. This means that regulatory authorities would have to wait 12 years… to approve affordable generic versions of biologic drugs.”

With an estimated 280,000 HIV positive people – a number that may be an underestimate as testing rates are low – and up to 20% of the population suffering from Hepatitis B and 4% with Hepatitis C – not to mention cancer, a disease that is in the top five health problems in the country – the people of Vietnam have a huge amount riding on TPP provisions.

At present, costs for first-line anti-retroviral medicines are low (thanks to US assistance), standing at about $350 per patient per year. However, 2.7% of Vietnamese citizens rely on the second- and third-line medicines required as the disease progresses, many of which are under patent.

“Costs for second-line HIV and Aids medicines are much higher, so when more people require them, it creates economic stress on the national Aids treatment program,” said Baker. “The cost of HIV and Aids medicines in Vietnam that are under patent are anywhere from five to ten times more expensive than first-line medicines. As the disease progresses and patients have to switch to second-line medicines, there are concerns that the high costs will make it difficult to pay for new treatments.”

Hepatitis B medicines cost about $450 a year per person, and treatment for carcinoma – a common side effect – costs about $1,880. With Hepatitis B, the optimal full course (48 days) of treatment can soak up 400 days of salary for an average government worker. This means drugs to treat two common diseases are effectively out of reach for most.

Although the percentage of the population with Hepatitis C may seem low, the risk of infection rates increasing is high. “Injecting drug use is a major social issue in Vietnam and is fuelling the HIV and Hepatitis C epidemic,” said Brigitte Tenni, senior technical advisor on HIV at Australia’s Nossal Institute for Global Health. Furthermore, while Hepatitis C is treatable and there are a number of new drugs that are more effective, need to be taken for a shorter time and have fewer side effects, they may be unaffordable. “Because they are patented they will be exceedingly expensive – up to $80,000 for a course of treatment,” said Tenni.

For those with cancer, an already grim situation may become far worse. In 2005 the UN estimated 8.2% of deaths in Vietnam were due to cancer, with 1.5 million new cases per year. Cancer drugs can only be afforded by the wealthiest, which is reflected in the fact that medicines for cancer only account for 3% of the pharmaceutical market, according to Oxfam. Under proposed TPP legislation, existing and future cancer drugs would be even more expensive.

For Vietnam, and other poor countries that may lose out under the TPP, Baker advises standing their ground. “[Those countries] should call the bluff of US negotiators and refuse to accept the US’s negotiating tactics,” he said. “Those tactics consist of proposing provisions that enhance monopoly power of the pharmaceutical industry and waiting until the last possible moment in negotiations, when everything else is agreed, at which time the US will insist that negotiating partners must accept the US position on intellectual property protections or risk sinking the entire agreement.”

“Vietnam can simply say no to US pressure,” Baker added. “It will surely be in good company with other negotiating partners.”

Pacific pains: Other potential TPP headaches

Added to issues stemming from intellectual property legislation within the TPP, there are two other areas of concern for Vietnam. The first of these is Investor-State Dispute Settlements (ISDS), a common provision in international trade treaties that allows foreign investors to sue the government of the country in which they have invested if that country breaches the trade treaty. Philip Morris is currently suing Australia over its introduction of plain packaging of tobacco using an ISDS in a Hong Kong investment treaty.

Others are worried over tax duties. Up to 11,000 duties may be reduced to zero if Vietnam gains membership. Businesses in the food and garment industries are particularly concerned that opening up the market to foreign importers will be lethal to local firms. Strict rules on product tracing will be especially difficult for the meat trade. “TPP has strict requirements on product tracing… Many local firms will ‘die’ as they fail to meet these regulations,” a representative of Cau Tre, a major manufacturer of processed food, said in an article in Tuoi Tre News in November.



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