Thailand threatens big pharma companies

Feb 19 2007

Thailand's minister for health has reportedly threatened to override international patents on even more drugs if the big pharmaceutical manufacturers do not significantly cut their prices.

The minister, Dr. Mongkol na Songkhla, says price talks with major drug firms had become "easier" since Bangkok issued compulsory licences allowing generic drug production on two HIV/AIDS drugs and a medicine for heart disease.

Poor African countries are able to buy generic versions of patented drugs to cope with their HIV/AIDS epidemics, but Thailand is the first middle-income country to use world trade rules to break the patent on a medicine to treat a non-infectious disease and to threaten compulsory licences for an array of other drugs.

This is the first time a developing nation has used world trade rules under which a government is allowed to make or buy copycat versions of medicines needed for a public health crisis.

Mongkol says if drug prices are reduced to their satisfaction there will be no need to issue further compulsory licences.

Drug giant Merck has missed the boat though despite cutting the price of its HIV/AIDS drug Efavirenz in November by almost 50%, as Thailand has already received 16,000 bottles of a generic version of Efavirenz from Indian drug maker Ranbaxy Laboratories, which is part of a contract for 66,000 bottles.

Although Thailand's actions are completely legal under world trade rules, and the licences allow Thailand's government to make or buy copycat versions of medicines needed for public health measures, the move has shocked drug makers.

A lobby group for the industry representing 38 foreign drug makers in Thailand has said the action is completely unprecedented and it believes another 11 drugs would soon be targeted.

Mongkol too has suggested other "essential medicines" to fight cancer, heart disease and other leading causes of death in Thailand were being examined.

As Mongkol says the majority of the population in Thailand cannot afford patented drugs, and the licences issued so far are expected to save the government up to $24 million a year.

Mongkol, a senior Health Ministry bureaucrat who was appointed following the military coup last September, says 49 million people with limited resources have to be provided with health services and reaching the neglected poor is their main concern.

Mongkol is himself a doctor who has worked in remote areas of Thailand and does appear to know what he is talking about.

He has said the coup presented an opportunity to act after a year of failed price negotiations.

Regardless of strong criticism abroad, in Thailand Mongkol's policies are very popular.

Dr. Mongkol has rejected industry arguments that high prices are necessary because drug companies need to invest heavily in research and develop new medicines and has denied that Thailand's demand for lower prices will undermine future research; he says companies could compensate by cutting inflated marketing costs.

Thailand is now the forerunner in the global debate over how to widen access to life-saving drugs, while preserving incentives for innovation in pharmaceuticals.