secondview

Pfizer threatens another philippine generic company with litigation to stop legal competition

2006-12-19T12:08:00.000-05:00

Pfizer is striking the Philippines generic industry again.

Orient Euro Pharma (OEP) Philippines, a subsidiary of OEP Taiwan recently launched a generic version of olmesartan medoxomil a product for the treatment of hypertension developed by Sankyo but marketed by Pfizer in the Philippines.

There is currently no patent for Olmesartan Medoxomil in the Philippines (Sankyo does have a patent application pending that OEP argues does not cover Olmesartan Medoxomil, but Olmesartan Medoxomil in combination with Hydrochlorothiazide).

However, this has not stopped Pfizer from threatening OEP and the manufacturer of the product (Hizon Laboratories, Inc.) with legal actions to prevent commercialization of the generic products that have considerably lowered the prices of Olmesartan Medoxomil in the Philippines.

Pfizer prices (under brandname Olmetec):
10mg strength PHP 38.94 per tablet
20mg strength PHP 47.20 per tablet
40mg strength PHP 70.72 per tablet

OEP Prices (under brandname Olmezar):
20mg strength PHP 18.53 per tablet
40mg strength PHP 24.75 per tablet
Note: 1 USD = 49.5 PHP, all prices are ex-retail prices inclusive of 12% VAT.

Pfizer seems to be claiming that:
1. They have 5 years of data exclusivity since Olmetec was launched in the Philippines (January 2005) under article 39.3 of the TRIPS Agreement and the Intellectual Property Code of the Philippines (Republic Act No. 8293).
2. OEP relied on Pfizer’s undisclosed test data to register its generic version.

OEP filed for a DECLARATORY RELIEF on November 2006 with the Philippine courts and the following are their main arguments, along with my analysis:

a) Article 39.3 of the TRIPS Agreement is not a self-executing provision upon which Pfizer could sue OEP and Hizon.

The correct answer to this question is that it depends. Although Intellectual Property regimes are nation based, international agreements, like the TRIPS Agreement, can have direct effects on nations that have signed them. TRIPS direct applicability depends on the method that the Philippines chose to implement its international obligations and also on the rank given to them.

It depends on which legal tradition Philippine’s constitutional law and judicial practice follows: monist or dualist. In brief, for countries following a monist tradition, international law and national law are part of a single legal order; international treaties automatically become integral part of the national law and are self-executing. Monism requires national courts to give effect to international law, notwithstanding inconsistent domestic law, even constitutional law of a constitutional character. Dualists, however, contend that international law and domestic law are distinct and that the status of international law in the domestic system is determined by domestic law.

Although there seems to be some controversy, according to Filipino lawyers that I have consulted, the Philippines is a dualist country were international treaties do NOT automatically become integral part of the national law. The legislative and judicial practice is that an enabling law has to be enacted after the Philippines ratify a treaty, because in general treaty provisions are not self-executing.

Therefore, OEP claim is correct. Article 39.3 of the TRIPS Agreement only mandates a minimal standard of protection (that does not include data exclusivity as I will explain) and there exists a need for a national legislative enactment on Article 39.3 to give it effect in the Philippines.

b) When implementing its obligations under Article 39.3 of the TRIPS Agreements, the Philippines do not have to grant “data/marketing exclusivity” over pharmaceutical test data.

This is correct. Article 39.3 only requires WTO Members States to protect from unfair commercial use and sometimes disclosure the pharmaceutical undisclosed test data that originated from new chemical entities, which required considerable effort to generate, and which is required to be submitted to national regulatory authorities to obtain marketing approval.

When implementing its TRIPS obligations WTO’s members have broad discretion and as Article 1.1 of the TRIPS Agreement provides “members shall not be obliged to, implement in their law more extensive protection than is required by this Agreement… Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.“

On 8 September 2006 (Annex “I” here and here), Pfizer’s counsel, Siguion Reyna Montecillo and Ongsiako, wrote TO OEP’s counsel answering a previous communication (Annex “H” here and here). It stated as follows: “…Your interpretation of TRIPS 39.3 – that it does not relate to data or market exclusivity – is a version promoted by interested sectors of the pharmaceutical industry seeking to influence contemporary interpretations of the provision, to their benefit. The literature on the matter does not bear out this interpretation, however. State parties respecting the TRIPS 39.3 protections recognize that a period of data protection is needed, providing innovator companies with incentive to make the necessary investment in pharmaceutical test and trial data… “

Pfizer is wrong here. Article 39.3 of the TRIPS Agreement does not mandate a data or market exclusivity regime. In fact, only a few countries, the U.S. and the E.U. where brand-name/ originators pharmaceutical companies have an important presence, have traditionally implement its Article 39.3 obligations granting a period of exclusivity to the originator of test data.

It is not only academics, civil society and generics companies that defend this interpretation of the TRIPS Agreement. TRIPS negotiating history also does.

And the WHO’s Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) 2006 Report is also clear:
“Article 39.3, unlike the case of patents, does not require the provision of specific forms of rights. But it does oblige Members to protect undisclosed test or other data against unfair commercial use. It does not create property rights, nor a right to prevent others from relying on the data for the marketing approval of the same product by a third party, or from using the data except where unfair (dishonest) commercial practices are involved.
Thus, the TRIPS agreement does not refer to any period of data protection, nor does it refer to data exclusivity. In some countries, however, such as the United States, a sui generis regime was adopted prior to the TRIPS agreement under which, for a period of five years from marketing approval, no other company may seek regulatory approval of an equivalent product based on that data without the approval of the originator company...... If the patent period has expired, or there is no patent on the product, this sui generis data exclusivity may act independently of patent status to delay the entry of any generic companies wishing to enter the market. This is because the regulators cannot use the data in the period of protection to approve a product, even if the product is demonstrated to be bio-equivalent, where required. The only alternative for a generic company would be to repeat clinical trials, which would be costly and wasteful, and would raise ethical issues since it would involve replicating tests in humans to demonstrate what is already known to be effective. These sui generis regimes, which provide for data exclusivity need to be clearly differentiated from the TRIPS agreement's requirement for data protection.”

To learn more about pharmaceutical data exclusivity visit CPTech website on the topic.

c) OEP also claims that at present, Article 39.3 of the TRIPS Agreement does not have a mirror or counterpart provision under any Philippine law or statute.

As explained, the Philippines has to implement the TRIPS Agreement with national regulations to give it effect. My understanding is that the Philippine has implemented its article 39.3 TRIPS obligations with a test data protection regime that does not provide any marketing or data exclusivity, but that provides protection to marketing approval data against unfair commercial use under certain conditions.

As the Government of the Philippines reported during 2005 WTO Trade Policy Review, the implementation has been done mainly though the Food, Drug and Cosmetic Act (Republic Act No. 3720) and general business confidentiality regulations.

As one Philippino lawyer reported to me, Test Data Protection is enforced in the Philippines through BFAD issuances requiring strict confidentiality of drug applications to prevent unauthorized disclosure and unfair commercial use.

The relevant laws and regulations are:
“a) Republic Act No. 3720: Prohibits the using by any person to his own advantage, or revealing, other than to the Secretary or officers and employees of the Department or to the courts when relevant in any judicial proceeding under the Act, any information concerning any method or process which as a trade secret is entitled to protection.
b) BFAD Order No. 27-A s. 2001 (Confidentiality of Documents): This directs BFAD employees to observe strictly the confidentiality of documents submitted for evaluation and/or registration.
c) Revised Penal Code: which penalizes the revelation of secrets by a public officer known to him by reason of his official capacity as well as revelation of industrial secret by private person.
d) Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees): This prohibits the disclosure and/or misuse of confidential information to further their private interest or to the prejudice of the public interest.
Republic Act No. 8293 (Intellectual Property Code of the Philippines) includes "protection of undisclosed information" as one of the intellectual property rights”.
(Source: 2005 WTO Trade Policy Review, WT/TPR/M/149/Add.1)

d) Finally, OEP claims that in obtaining registration for the product they did not have access to any undisclosed test data submitted and they only used information publicly available as well as test data that they generated themselves.

For instance, OEP argues that the website of the Center for Drug Evaluation Research and the U.S. Food and Drug Administration contains a wealth of information on olmesartan medoxomil, and that a comprehensive paper entitled “Olmesartan Medoxomil, a Novel Potent Angiotensin II blocker” is downloadable from the internet.

In conclusion, there is no regime of test data/marketing exclusivity in the Philippines. The obligation of Article 39.3 of the TRIPS agreement was implemented into the Philippines with a pure test data protection regime that is in compliance with the TRIPS Agreement. Therefore Pfizer claims that they have 5 years of data exclusivity since Olmetec was launched in the Philippines is a misinterpretation of the current legal regime as mandated by the TRIPS Agreement and implemented in the Philippines and in most of the countries of the world.

In 2001 the Philippines government (with other developing countries) was already publically interpreting their legal regime as not providing data exclusivity.

Now, the Philippine’s courts should protect the Philippine’s governments efforts to provide access to more affordable medicines and to support a national industry of generic manufacturers and should issue a clear judgment establishing that:
- When implementing its obligations under Article 39.3 of the TRIPS Agreements, the Philippines law does not have to grant “data/marketing exclusivity” over pharmaceutical test data and its implementation is with a pure test data protection regime.
- If, as OEP claims, in obtaining registration for their products they only used information publicly available as well as test data that they generated themselves, OEP did not violate any of Pfizer’s trade secrets.

A policy proposal for Test Data

2006-12-18T15:05:00.000-05:00

New CPTech Policy Paper

Judit Rius Sanjuan, James Love, Robert Weissman: "Protection of Pharmaceutical Test Data: A Policy Proposal" (november, 2006). Available here.

If you want more information on pharmaceutical test data, visit our website or contact us.

Stanford University Response

2006-11-09T15:02:00.000-05:00

Robert L. Joss, Dean of the Stanford Graduate School of Business, answered the Open Letter to Stanford University requesting a public inquiry regarding Dr. McKinnell (ex-Pfizer CEO) fitness to serve the Stanford University Graduate School of Business Advisory Council.

Find a copy of his letter here

And today, I responded to Mr. Robert Joss with the letter below:

TO: Robert L. Joss
CC:
John L. Hennessy
Members of the Stanford Board of Trustees
Henry A. McKinnell

Dear Dean Joss:

I would like to thank you for your letter of September 22 answering the Open Letter to Stanford University of May 18, 2006 signed by Stanford alumni, professors, staff and students, requesting a public inquiry to consider the appropriateness of the continued service of Dr. Henry A. McKinnell on the Stanford University Graduate School of Business Advisory Council.

I understand that the Stanford Graduate School of Business invites alumni/ alumnae with important responsibilities to serve on the advisory council on a purely voluntary basis and, as we acknowledged in our Open Letter, Dr. McKinnell, as chairman of the board and chief executive officer of Pfizer Inc., seemed appropriate for such a position.

However, the honor to serve Stanford University should only be conferred on those who evidence responsibility and ethical conduct in their professional lives. Dr. McKinnell’s improper use of a legal process and his decision to personally sue government officials to discourage legitimate actions of a developing country makes him inappropriate for such a service and contradicts the school’s mission to “create ideas that deepen and enhance our understanding of management and to develop innovative, principled, and insightful leaders who change the world”.

Stanford University and you, as the Dean of the Stanford Graduate School of Business, should reasonably take an interest in the corporate social responsibility and ethical fitness of the members of its governing and advisory bodies. A code of ethics could be an appropriate start.

I would like to thank you for taking a personal interest in this case and asking Dr. McKinnell, Pfizer’s ex-CEO, about Pfizer’s lawsuit in the Philippines.

Dr. McKinnell has provided an incomplete and misleading explanation of Pfizer's legal actions in the Philippines. Dr. McKinnell writes “…PITC threatened to import generic copies of Norvasc before the patent expires next year….” This does not fully describe either the nature of the dispute, nor Pfizer's response.

Pfizer’s continuing litigation in the Philippines is not about generics. The Philippines Government only sought to import samples of the drug in order to secure registration, so it could be imported for sale once the patent expired, giving the citizens of the Philippines access to more affordable drugs. This practice, referred to as "early working" of the patent, is widely permitted in developed countries, including the United States, Canada, Australia, and most members of the European Union. Indeed, before the lawsuit, early working was permitted in the Philippines under common law, the approach used by the United States before the US law was changed to provide for a statutory exception to patent rights for this purpose (the "Bolar" amendment). Further, early working of the patent for purposes of drug registration was held to be legal under WTO rules in a 2000 case involving Canada, and is endorsed by the World Health Organization as an important measure to protect consumer interests.

Pfizer's response was not only to sue the Philippines to block this common and widely endorsed practice, but to sue two government officials in the Philippines in their personal capacity -- a tactic that is widely seen as intimidation, not only in the Philippines, but across the region. Indeed, as our previous letter indicated, this was the primary complaint against Mr. McKinnell. Mr. McKinnell is fully aware of this, but chose not to respond substantively to this point.

Thank you again for taking the time to answer our Open Letter. I remain at your disposal if you require more information. I share your wish that any interested members of the Stanford community should be familiar with the views of all parties here and I therefore encourage you to broadly share this response.

Sincerely,

Judit Rius Sanjuan
Staff Attorney
Consumer Project on Technology
1621 Connecticut Ave, NW, Suite 500
Washington, DC 20009 USA

A good idea: amending Philippines’s Patent Law

2006-09-22T14:51:00.000-04:00

Not all are bad news in the Philippines fight for affordable medicines. There is currently an excellent initiative to amend the Philippine Patent Law and incorporate public health flexibilities to promote greater competitiveness in the Philippine pharmaceutical industry and made medicines more affordable and accessible.

At CPTech we are following with great interest the work of the Philippine’s Senate Committees on Trade & Commerce and Health & Demography, chaired by Senator Roxas and Senator Cayetano, respectively.

On June 7, these two senators filed Committee Report No. 79 containing Senate Bill no. 2263, substituting Senate Bill no. 2139 and which would amend the Intellectual Property Code of the Philippines. On August, 16 2006, Senator Mar Roxas presented a sponsorship Speech.

The proposed bill has a title that is worthy to read: “An act to make the laws on patents, tradenames and trademarks more responsive to the health care needs of the Filipino people by clarifying non-patentable inventions, allowing the importation and early development of patented medicines, and modifying government use provisions for drugs or medicines, to lower prices and increase access to and supply of quality drugs or medicines, amending for this purpose certain provisions of Republic Act no. 8293 otherwise known as the Intellectual Property Code of the Philippines".

Some of the most important public health flexibilities included in the proposed legislation are:

a) Following on the example of the Indian Patent Act, exclude from patentability new indications/uses of existing substances that have already been patented.

b) Express recognition of the early working of a patent (Bolar Amendment in the U.S.)

c) Adopting the doctrine of international exhaustion of intellectual property rights that will allow for the parallel importation of patented medicines from third countries. And in order to make the process more easily operationalize, the proposal includes an exception to the application of trademarks and tradename restrictions when applied to parallel imports.

d) Amends the conditions for the use of a patented invention by the Government (or third person authorized by the Government) without agreement of the patent owner, to make the process simple and fast.

But not everybody is happy with this new turn of the Philippines, as Inside US Trade reported last 4/8/2006, the Pharmaceutical Research and Manufacturers of America (PhRMA) opposes proposed Filipino patent law amendments and in that sense is pressuring Adrian Cristobal, Director General of the Intellectual Property Office of the Philippines.

A bad idea: settlement proposal for the Pfizer-Philippines Litigation

2006-09-22T12:08:00.000-04:00

There are changes in the Pfizer litigation I reported some months ago. The Philippine court dealing with the case released a settlement order (available here and here). At CPtech we have studied the settlement proposal and I would like to share with you our analysis.

The paragraph 2 of the order, aims to introduce linkage of patent and health registration in the Philippines, although a 2005 Department of Health Administrative Order, clearly stated the Government of the Philippines intentions not to accept linkage.

What is linkage? Patent-Registration Linkage is the practice of linking drug marketing approval to the patent status of the originator’s product and not allowing the grant of marketing approval to any third party prior to the expiration of the patent term unless by consent of the patent owner. This practice requires that "second applicants" for marketing approval (usually generics) demonstrate that the pharmaceutical product for which they are applying is not protected by a valid patent. Under this kind of regulation, national regulatory authorities have the obligation to prevent the registration and marketing of a generic pharmaceutical when a patent covers the product.

The use of linkage is subject to several critiques, the most important is that linkage creates many problems if the national patent office grants low quality patents. If linkage is introduced in the Philippines through this settlement, Pfizer is the clear winner in this litigation and will force the Philippine health administration to act as a patent police.

How is Spain implementing the EU InfoSoc Copyright Directive?

2006-05-15T17:04:00.000-04:00

Spain is one of the last European countries to implement the controversial European Directive 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society (as well as France and Finland) and has by far failed to meet the December 2002 transposition deadline.

The current text of the bill has been passed by the lower chamber (Congress), and is now pending the approval of the Senate; it will then go back to Congress for final approval (expected sometime this year).

Raquel Xalabarder, a well-known Spanish copyright professor and lawyer, has sent us an excellent summary of the current proposed copyright law. Professor Xalabarder’s summary is very useful, not only because of its completeness, but also because it provides the political context of the proposed law.

Based on her research and according to my own reading of the proposed text, the evaluation of the Spanish implementation is heartbreaking: it is a “minimal” and "bad" implementation of the EU Directive.

Consumer groups and the technology industry have expressed their discontent with the current proposed text. Even the SGAE (the Spanish collecting society for music authors and publishers) has unexpectedly attacked the current proposal.

Among the more controversial issues is the express recognition of a private copy levy for digital copies (with a campaign against it) and the narrow language in the implementation of the exceptions and limitations.

Of special concern is the language implementing the Technological Protection Measures (TPMs). The proposed text establishes a two-step system to address possible conflicts between TPMs and exceptions & limitations (e.g. the private copy exception):

a) First, it relies on the voluntary measures adopted by the copyright-holders;
b) In the absence of these measures, the beneficiaries of the exceptions can sue the copyright-holders to ensure the full enjoyment of their exceptions/limitations.

The system is up-side-down and completely forsakes the effectiveness of limitations and exceptions in the digital world by putting the burden of the limitation and exceptions enforcement on the “potential users of works” and not on the “right holders”.

My reading of art. 6(4) of the Directive is that it creates the two-step regime that Spain is implementing but it allows for flexibility when designing the system (".... in absence of voluntary measures taken by right-holders....Member States shall take appropriate measures..."). A suggestion: Spain should create a cheap & easy arbitration system as an alternative to the current "go to court and defense your-self" proposal.

Hopefully the Senate will react to the current proposal and amend it by taking in to consideration consumers and public interest's concerns. We will keep you posted.

Pfizer's Response

2006-05-10T11:49:00.000-04:00

Today I received a fax from Pfizer's Legal Division (NY Headquarters) answering my April 3 letter to Hank McKinnell (Pfizer CEO) on the Philippines litigation.

The fax does not comment on Pfizer suing government officials in their personal capacity; however it confirms that they are suing to prevent BFAD (the Filipino FDA) from accepting and evaluating drug applications during the pendency of patents, so that they can enter the market as soon as the patents expire. The early working of a patent (so called bolar exception), something that is completely legal in the United States, the European Union and several other countries.

Pfizer is trying to impose a higher level of patent protection on the Philippines than exists in much higher income countries, and it is pricing the drug higher than 90 percent of the Philippine population can afford. Pfizer’s real purpose is to delay the legitimate efforts of a developing country government to provide access to cheaper drugs to its citizens.

Both the early working of patents and the parallel import of cheaper drugs by developing countries, have been recommended by the World Health Organization in its recent report by the Commission on Intellectual Property, Innovation and Public Health (CIPIH) (I copied some excerpts below).

The Pfizer fax literality says: "the purpose of the proceedings is to ensure that there will be no importation of an unauthorized copy of Norvasc into the Philippines for the duration of its patent term."

As we all already know, the patent expires in June 2007 and the Philippine government owned trading company (PITC) has repeatedly said it will not sell the cheaper Indian version of the Pfizer drug to the public until the Pfizer patent expires.

Even Pfizer acknowledges this in their complaint. See Annex K, where the Department of Justice itself stated that PITC would respect the "subsisting patent rights" of Pfizer. Despite this assurance, Pfizer sued.

The Pfizer fax

The scanned copy of the fax is available here. I copied the text below:

Marguerite Sells
General Counsel, Pfizer Global Pharmaceuticals Japan, Asia, Africa/Middle East, Latin America

May 9, 2006
Judit Rius Sanjuan, Esq.
Consumer Project on Technology
1621 Connecticut Avenue, N.W.
Suite 500
Washington, D.C. 20009

Dear Ms. Sanjuan:

Re: Pfizer v. Philippines International Trading Corporation

We have received your April 3, 2006 letter sent to Dr. Hank McKinnell relating to the Norvasc lawsuit in the Philippines.

The patent on Norvasc, one of the world's leading medicines for combating high blood pressure, remains in force in the Philippines, until June, 2007. The patent on Norvasc was granted by the Philippine Government.

Despite the patent on Norvasc, the Philippine Government Authority, the Bureau of Food & Drugs (BFAD) issued regulatory documents to the Philippines International Trading Corporation (PITC), authorizing the immediate importation of an unauthorized copy of Norvasc.

PITC are relying on these documents to authorize importation and have refused to give an undertaking that they will not import generic copies of Norvasc into the Philippines, before the patent expires next year.

There have been a number of attempts to remedy the situation with the Philippine Government and with the PITC, but in the absence of legal assurance that our patent would not be violated, Pfizer filed legal proceedings in the Philippines on March 1, 2006. The legal proceedings are in accordance with the provisions of the Philippine intellectual Property Code.

The purpose of the proceedings is to ensure that there will be no importation of an unauthorized copy of Norvasc into the Philippines for the duration of its patent term.

Pfizer believes in the importance of encouraging innovation by protecting the rights of those who discover and develop life-saving medicines. Pfizer also believes in the obligation of Government to respect the intellectual property rights they have granted.

Sincerely,

Marguerite Sells

Excerpts from the WHO CIPIH Report

(page 142)

“PARALLEL IMPORTS
....

In practice, this means a situation, for example, where a wholesaler in Country A makes available to a purchaser in Country B a product patented in both countries, at a lower price than it is available in Country B. If Country B allows parallel imports, then the purchaser could import the product at a lower price than the product is available locally. Thus, in principle, parallel imports are a means to reduce the cost of medicines where there are significant intercountry differences in prices. Whether they actually do so depends on a number of assumptions, in particular that any price reductions obtained are passed on to patients rather than absorbed in the distribution chain.

TRIPS explicitly says that nothing in the agreement “shall be used to address the issue of the exhaustion of intellectual property rights.” This means that countries can choose whether to allow or forbid parallel imports as they think best, without fear of a dispute settlement case being brought in the WTO.

As regards parallel trade between developed countries, taken as a group, and developing countries, taken as a group, there is little doubt that restrictions on parallel imports, which exist in the laws of most developed countries, are beneficial as they help to preserve price differentials through market segmentation that potentially benefit developing countries, and help maintain lower prices in those countries. The benefits and costs of parallel trade between developing countries, or parallel imports by developing countries from developed countries, require close consideration. Free trade principles would suggest that restrictions on parallel trade should be avoided wherever possible. However, some developing countries have opted to restrict parallel imports for reasons other than public health considerations. Developing countries should be free to benefit from the gains available from international trade.”

Recommendation:
“4.19 The restriction of parallel imports by developed countries is likely to be beneficial for affordability in developing countries. Developing countries should retain the possibilities to benefit from differential pricing, and the ability to seek and parallel import lower priced medicines.”

(page 147 and 148)

“FACILITATING THE ENTRY OF GENERIC COMPETITION ON PATENT EXPIRY
Facilitating the entry of generic competition after the expiry of a patent is one means of potentially bringing down the price of health-care products. Countries can employ a number of intellectual property measures or exceptions, consistent with the TRIPS agreement, to promote rapid market entry of generic products after patents on products expire. One measure of importance is a provision that exists in most countries' legislation (commonly known as the "early working" exception) which allows prospective generic producers to make use of a patented product within the patent period for the purposes of obtaining regulatory approval of their product as soon as the patent expires. The “early working” exception14 constitutes jointly, with parallel imports and compulsory licences, one of the flexibilities that the TRIPS agreement permits, with an aim to get a balance between private and public interests, as set out in articles 7 and 8 of the agreement.

This policy has been used very successfully in the United States and other jurisdictions to facilitate generic entry as soon as the patent expires. It has recently been introduced in the European Union. In the United States the generic share of the market (by volume of prescriptions) has risen from 19% to over 50% since this legislation was introduced in 1984 as part of the Hatch–Waxman Act. Evidence from the United States shows that, especially where there are several generic producers (and hence competition), this will result in very substantial price declines on patent expiry (75). But this outcome may depend on the size of the market (76). In developing countries where markets are small, this mechanism may work less effectively to reduce prices significantly and it needs, hence, to be supplemented by other measures, including those to promote generic competition and regulate prices.

In some countries, companies (both the originator and generic producers) may differentiate their off-patent original or generic products through branding and promotion to obtain higher prices. Whereas consumers may prefer a more expensive brand-name food product to an equivalent and cheaper supermarket own-label, for rational or irrational reasons, there is no reason to purchase a medicine accordingly if both the brand and generic have been properly approved by the health authority for marketing. Several developed countries have introduced policies that allow doctors to prescribe medicines by generic names, or for pharmacists to substitute approved generics for brand-name drugs prescribed by doctors. One answer to this problem is appropriate legislation in relation to prescribing, and the education of pharmacists, doctors and patients in the availability of brand-name and generic products and their pricing (77).”

Recommendations:
“4.24 Countries should provide in national legislation for measures to encourage generic entry on patent expiry, such as the "early working" exception, and more generally policies that support greater competition between generics, whether branded or not, as an effective way to enhance access by improving affordability. Restrictions should not be placed on the use of generic names.
4.25 Developing countries should adopt or effectively implement competition policies in order to prevent or remedy anti-competitive practices related to the use of medicinal patents, including the use of pro-competitive measures available under intellectual property law."

Open Letter to Stanford University

2006-04-27T11:16:00.000-04:00

While trying to contact Pfizer's Chairman and CEO (Dr. Henry McKinnell) on the Philippines litigation, we realized he is a Stanford alumnus and member of the Stanford University Graduate School of Business Advisory Council.

And not only that, he has been honored by the business school for his "leadership"

I am a proud Stanford alumna and I do not believe he is the kind of leader we want to honor or have serve on our Advisory Councils. For that reason, with a group of other Stanford students, alumni, staff and professors we are trying to start a public inquiry regarding his fitness to serve the Stanford University and hopefully induce a broader debate at Stanford on social corporate responsibility...

So far the following have signed:

Judit Rius, alumna, LL.M. 2006
Julia Salzman, graduate student, Department of Statistics
Holly Telerant, alumna, J.D. 2002
Regan Whitmer Johnson, student, Class of 2006
Rishi Madhok, student
Latha Palaniappan, student, School of Medicine
Charles G Bragg Jr, alumnus, B.A. 1967
Robert Casuga, staff, School of Medicine
Luciana Dias, alumna, SPILS 2005
Fred von Lohmann, alumnus, A.B.'90, J.D.'96
Lawrence Lessig, C. Wendell and Edith M. Carlsmith Professor of Law
Shahid Buttar, alumnus, J.D. 2003
Daniel Rey-Losada, alumnus, EE 2003

If you are willing to sign this letter, please send a note to judit.rius@cptech.org, by May 15, with the following information:

Name: ________________
Stanford status (student or alumni) ___________________
Contact information (for verification) ___________________

-----------the letter follows------------

May XX 2006

Open Letter to John L. Hennessy, president of Stanford University; to Robert L. Joss, Philip H. Knight Professor and Dean of the Stanford University Graduate School of Business; and to all the Members of the Stanford University Board of Trustees [1]

Dear President Hennessy, Dean Joss and Members of the Stanford Board of Trustees:

As students, alumni, professors and staff of Stanford University, we are writing to request a public inquiry to consider the appropriateness of the continued service of Dr. Henry A. McKinnell on the Stanford University Graduate School of Business Advisory Council.

As chairman of the board and chief executive officer of Pfizer Inc, Dr. McKinnell is undoubtedly among the most successful graduates of Stanford Business School. But, in that capacity, he is also responsible for improperly using a legal process to discourage appropriate government actions and an appalling bullying of government officials in the Philippines.

Pfizer has sued both the government and two top drug regulators in their personal capacity for taking very modest steps to help the poor find less expensive sources of a Pfizer medicine -- (amlodipine besylate, an important blood pressure drug, which is marketed in the U.S. under the trade name Norvasc) -- after the patent on the drug expires.

It would be one thing for Pfizer to engage in lobbying activity or even litigation seeking to clarify its rights under Philippine Law. But to sue the top drug regulators in the Philippines in their personal capacities is an extraordinary act of intimidation. The chilling effect of this litigation is evident in the Philippines, as many government officials will now hesitate to take any measures contrary to Pfizer's interests.

We believe that Pfizer’s actions, for which Dr. McKinnell is responsible for his official capacity, belie values and motives that are in stark contrast with the lofty aspirations of Stanford University and its School of Business. The mission of the Stanford Graduate School of Business Advisory Council [2] is "to provide external perspective and review as well as advocacy and support for the School's programs, strategic direction, and overall objectives". The School's mission [3] is "to create ideas that deepen and enhance the understanding of management, and with these ideas develop innovative, principled, and insightful leaders who change the world." The core values are also clear: "believing in the power of ideas and intellect; striving for excellence in all we do; acting with integrity; exhibiting compassion and respect for others; and taking ownership of one's actions".

Dr. McKinnell's actions, on behalf of his corporation, reflect poorly on Stanford and are grossly inconsistent with the school's mission. Their seeming purpose and effect is to emasculate and intimidate the poor and the powerless. Therefore, we believe that the University should undertake a public inquiry to consider whether these inconsistencies render Dr. McKinnell unfit to serve on the Stanford University Graduate School of Business Advisory Council.

Sincerely,

..................

[1] Members: http://www.stanford.edu/home/stanford/facts/board.html
[2] Advisory Council Homepage. Available at: http://www.gsb.stanford.edu/advisorycouncil/
[3] Stanford Graduate School of Business Mission. Available at: http://www.gsb.stanford.edu/about/

For more information:
http://secondview.blogspot.com/2006/03/pfizer-is-suing-philippines.html
http://www.cptech.org/ip/health/c/phil/
http://www.huffingtonpost.com/james-love/terrorism-pfizer-style_b_18290.html

Follow up: Pfizer's Philippines litigation

2006-04-20T11:31:00.000-04:00

In order to express concern on the Pfizer's lawsuit in the Philippines, I contacted Mr. McKinnell, the CEO of Pfizer, by telephone, fax and letter. Today, I still have not received any response.

The letter:

CONSUMER PROJECT ON TECHNOLOGY
1621 Connecticut Ave., NW, suite 500
Washington, DC 20009 USA
Tel.: +1.202.332.2670 Fax: +1.202.332.2673

Mr. Henry A. McKinnell
CEO, Pfizer Inc.
235 East 42nd Street
New York, NY 10017

April 3rd, 2006

Dear Mr. McKinnell:

As chairman of the board and the chief executive officer of Pfizer Inc., we are writing you to express our deep concern with the lawsuit that Pfizer has initiated in the Philippines against the government-owned pharmaceutical company (Philippine International Trading Corporation- PITC), the Philippines Food and Drug Administration (Bureau of Food and Drugs- BFAD), and two government officials, in their personal capacity (BFAD Director Leticia Barbara B. Gutierrez, and BFAD-LICD OIC Emilio L. Polig, Jr.).

Pfizer claims that the defendants have infringed on its patent for amlodipine besylate (commercialized in the U.S. under the trade name Norvasc® and in India as Amlogard®) by either importing samples of the same drug from India and submitting them to the Philippines drug regulatory authorities; or accepting the application.

Philippines government owned company (PITC) has repeatedly informed Pfizer that they do not intend to market the product until after the patent expires next year. The PITC is trying to use the broadly recognized “early working/bolar” patent liability exemption.

We have been informed that Pfizer’s intimidating tactics with the Philippines drug regulatory administration (BFAD) has already created a chilling effect. The result being that the BFAD is not even registering non-patented products if they would compete with Pfizer’s products.

This lawsuit has alerted many to the dramatic situation of amlodipine besylate’s patients in the Philippines due to Pfizer high prices. We enclose a blog entry we recently published with a more detailed analysis of the situation.

We believe Pfizer’s behavior in the Philippines is completely inappropriate, unethical and adversely affecting millions of people. At a time when the United States and the World corporations are facing important ethical challenges, we believe the unethical management of the world's largest research-based pharmaceutical company should draw your immediate attention.

We urge you to take personal responsibility in this case, stop the litigation and reduce the prices of amlodipine besylate in the Philippines.

Sincerely,

Judit Rius Sanjuan
Consumer Project on Technology

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

2006-03-31T17:43:00.000-05:00

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.

Notes from WIPO PCDA, Feb 24

2006-02-27T11:00:00.000-05:00

This were my notes from last friday, Feb 24. Judit Rius, CPTech

--------------------

The first session of the PCDA finished a few minutes ago.

The tangible results of this week of discussions are two documents:

a) A draft summary by the chair with an annex of 45 proposals, from Chile, Colombia, the African Group and the United States; and

b) A list of 66 proposals presented by the 15 countries of the Group of Friends of Development (FoD).

The chairman announced his intention to produce a unique list of proposals that will be the basis for discussions at the second PCDA, scheduled for June 26 to 30, 2006. With controversy, the delegates from the Member States decided that the proposals will be listed without indicating their source/proposer.

The proposals are organized in 6 main categories or clusters:
* Technical Assistance and Capacity Building
* Norm-Setting, Flexibilities, Public Policy and Public Domain
* Technology Transfer, Information and Communication Technology (ICT) and Access to Knowledge
* Assessments, Evaluation and Impact Studies
* Institutional Matters including Mandate and Governance
* Other issues

Overall, the PCDA has been interesting. Specially, the substantive discussions during the presentation of the Chilean proposal, and the excellent interventions of the delegates from Brazil, Argentina (on behalf of the FoD Group), Chile and Nigeria (on behalf of the African Group).

Yesterday, the interventions were especially intense between Rumania and Brazil. During the discussion of the US proposal that the WIPO Advisory Committee on Enforcement discusses and analyzes the relationship between the rates of counterfeiting and piracy of intellectual property and technology transfer, foreign direct investment and economic growth and that the WIPO Secretariat assists in the collection of data on piracy rates. Rumania defended the U.S proposal; while, Brazil and most of the developing countries were for a national solution of the counterfeiting/piracy problem and the recognition that this is not a development agenda problem but a global one.

More information on the last day of the PCDA can be found here:

Gwen Hinze (EFF) post :

http://www.eff.org/deeplinks/archives/004439.php

And Pedro Paranagua (FGV) post (in Portuguese):

http://www.direitorio.fgv.br/cts/