Friday, March 31, 2006

Pfizer is suing Philippine’s governmental officials in their personal capacity in order to stop parallel trade

Judit Rius Sanjuan
March 31 2006

Pfizer likes high prices -- even when the market is in a developing country. And Pfizer is willing to sue to get high prices.

Now, Pfizer is suing a Philippine government-owned company (PITC, Philippine International Trading Corporation), the Philippines FDA (BFAD, Bureau of Food and Drugs) and two Philippine government regulators (the BFAD director and one other staff person) in their personal capacity. For what? For importing from India samples of a drug that Pfizer sells in both the Philippines and India, and for submitting the samples to the government drug regulatory agency.

Pfizer is doing this to delay parallel trade of one of its drugs. Parallel trade is a term used to describe the practice of buying a product in a country where prices are cheaper, and importing it into a country where prices are higher. The Philippines permits parallel trade, but only after patents expire.

The drug in this case is amlodipine besylate, which is marketed by Pfizer in the United States under the trade name Norvasc. It is used to treat hypertension, angina and myocardial ischemia. The drug is sold in two dosage formats: 5 mg. and 10 mg. tablets, and typically taken once a day.

Pfizer charges different prices in the Philippines than they do in India. In the Philippines, the prices are $.87 per day for the 5 mg version, and $1.46 per day for the 10 mg dose. In India, the prices are $.12 and $.18 per day, for the same doses of the same drug made by the same company.

Pfizer holds a Philippines patent on Norvasc, which expires in June 2007.

The Philippine government owned trading company says it will not to sell the cheaper Indian version of the Pfizer product to the public until the Pfizer patent expires in June 2007. Its only goal is to begin the process of registering the imported version, so it can promptly enter the market when the Pfizer controlled patent expires.

What is at stake legally is a new twist on the issue of “early working” of a patent. In the United States, there was a 1983 dispute between Roche and Bolar Pharmaceuticals. Bolar was in possession of small quantities of a generic version of a sleeping pill marketed by Roche as Dalmane. The Bolar Company wanted to register a generic version, so it could promptly enter the market when the Roche patent expired. Roche successfully sued Bolar and its officers and importers, claiming the effort to register the generic product violated the Roche patent. This had the effect of delaying entry by generics for about 18 months. In 1984, the US Congress changed US patent law to allow for the early working of a patent when preparing a generic drug registration, effectively overturning this decision. This is known as the “Bolar” provision, or “Bolar amendment.”

Some countries have implemented similar statutory changes in their laws (early Australia, Canada, Argentina, Israel), and recently the European Union required its member states to implement similar provisions. Some countries in Europe have done this through statutory changes, while others already allow this through interpretations of other exceptions in patent laws, including domestic experimental use exceptions.

There is no express Bolar provision in the Philippines Intellectual Property Code. The exception, however, has been part of Philippine regulatory practice for several years, and it has never been challenged before.

The Pfizer pricing of Norvasc in the Philippines:

The Pfizer prices for Norvasc vary by country. As noted above, in the Philippines, the prices are from $.88 to $1.46 per day. For the vast majority of people who live in the Philippines, this is not affordable.

The World Bank reports that the Philippines has a per capita income of $1,170 per year. This is of course an average. Many earn much less. About 20 percent of the population earns less than $400 per year. A handful of Philippine residents earn more. The top 10 percent have an average per capita income of $4,247.

The Pfizer price is targeted at only the wealthiest Philippine residents -- probably no more than the top 5 percent of the population. Like many developing countries with a highly skewed and unequal income distribution, selling to the economic elite at high prices is the profit maximizing strategy for Pfizer.

The government of the Philippines is trying to protect the 95 percent of the population who cannot afford the high Pfizer price for Norvasc.

The lawsuit against the Philippine regulators is an appalling action by Pfizer. Pfizer is reportly seeking more than 1.4 millions Philippines pesos from the defendants. Pfizer is making it personal by suing the government officials in their personal capacity; therefore we are going to make it personal also. I will be writing the Pfizer CEO, Mr. Henry A. McKinnell, asking him to take personal responsibility for Pfizer’s actions, and drop the lawsuit. I’ll report his response.