Australian Pharmaceutical Formulary 23 PDF 35: Essential Drug Information for Pharmacists and Studen

The main finding of this review is that the stronger pharmaceutical monopolies created by TRIPs-plus intellectual property rules are generally associated with increased drug prices, delayed availability and increased costs to consumers and governments. There is evidence that TRIPS flexibilities can facilitate access to medicines although their use is limited to date. There were few studies that included resource poor settings, signalling a need for greater research in such settings where the impact on access to medicines is likely to be more damaging.

australian pharmaceutical formulary 23 pdf 35

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The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is one of the core World Trade Organization (WTO) agreements and came into effect in 1995 [1]. It includes minimum legal standards of intellectual property (IP) protection including patents for pharmaceutical products. All WTO Member States must comply with TRIPS by implementing its requirements in their national IP laws. TRIPS also contains flexibilities designed to respond to concerns that patents and monopoly pricing are barriers to accessFootnote 1 to medicines [2, 3]. These flexibilities include but are not limited to compulsory licencing, Bolar provisions, limits to the scope of patentability, definitions of invention, parallel importation and the least developed country (LDC) transition period. See table below.

The LDC transition period frees LDCs from TRIPS obligations related to patents on pharmaceuticals until 2033 or until they are no longer a LDC [7]. This allows LDCs to purchase and/or produce cheaper generic medicines.

Two articles used retrospective quantitative analysis to measure the impact of data exclusivity clauses in the US-Jordan FTA on the availability of generics and the cost of medicines [28] and the additional cost to the private market due to delayed entry of generics [39]. The studies found that data exclusivity clauses delayed market entry of generics and increased costs for private consumers in Jordan [39] as well as preventing generic competition resulting in greater pharmaceutical expenditure by governments and consumers [28].

Three prospective modelling studies focused on the impact of the two-year extension of biologics data exclusivity that was originally proposed by the USA for the Canada-US-Mexico Agreement (CUSMA)Footnote 7 [24, 31, 32]. One study combined this analysis with the impact of Canada implementing patent term extensions (SPCs) as part of CETA [24]. All three studies reported that a two-year extension of biologics exclusivity in Canada would delay the market entry of generics and increase pharmaceutical costs [24, 31, 32]. The impact would be minor on products whose data exclusivity periods had expired [31].

The last article in this theme was a prospective modelling study that explored whether pharmaceutical spending increased in countries that signed FTAs with the USA between 1985 and 2016. In countries with US FTAs, it found that national drug spending had not increased as a share of overall health expenditure, the consumption of pharmaceuticals had not declined and there was no discernible shift to patent medicines from cheaper generics [36].

The five articles in this theme were all European-focused.Footnote 10 Two included a multi-country EU focus [52, 53] and the remaining three included a focus on Germany [54], Denmark [55] and Sweden [56]. Both multi-country EU studies were retrospective econometric studies that assessed whether parallel trade reduces the cost of prescription drugs [53]. Both suggested that parallel trade did not result in significant reductions in the price of medicines within EU countries [52, 53]. However the authors stressed that this did not mean that parallel trade did not have the potential to significantly impact prescription drug prices [53]. Key determinants of parallel trade included price differentials between trading countries, pharmaceutical market size in the importing country, number of physicians and generic penetration [52]. The single country econometric modelling studies aimed to calculate the welfare impact of parallel imports of anti-diabetic drugs [54]; to investigate the impact of parallel trade in markets for pharmaceuticals [55]; and to determine the effect of parallel imports on prices of local patented drugs [56]. In contrast to the multi-country EU studies, findings suggest parallel imports reduce prices for patented drugs [54, 56] but do not affect the price of generic drugs [54]. In addition, without provisions for parallel importation there would be an increase in profits for originator firms, a decrease for generic firms, an increase in governmental health care expenditure and a decrease in consumer welfare [55].

Another multi country retrospective econometric study included selected OECD countries in Europe and North America. It aimed to quantify the impact of patent expiry on the daily cost of pharmaceuticals [60]. Like the EU studies, it found that average medicine prices fall upon generic entry. The last study in this theme focused on the countries of the Southern African Development Community. This retrospective statistical study analysed global ARV prices to examine the relationship between national drug policies and ARV prices [61]. The most consistent predictor of ARV drug prices was generic status. In the vast majority of cases generic ARVs were priced lower than originator drugs [61].

Articles in this theme include multi-country studies that span between nine and 76 countries. Four econometric retrospective studies examined the impact of patent policies on various aspects of drug launches [81,82,83,84]. A study of 68 countries assessed how regulatory polices affect whether new drugs are launched in a country and how quickly [82]. Similarly, three studies investigated how patent regimes affect the timing of drug launches in 76 countries [81], the speed of drug launch, price and quantity of drugs sold [84] and how the introduction of product patents affect the likelihood that pharmaceutical firms launch new and innovative medicines [83]. This study also measures how much patent owners or generic firms modify their prices to local income levels in 70 countries [83]. Findings suggest that longer patent protection facilitates market entry of new drugs in high income countries, though the evidence is mixed as to whether longer patent periods improve access to new medicines in LMICs [82]. Similarly, Watal and Dai found that pharmaceutical product patents facilitated the likelihood of drug launch, though in low-income markets this effect is limited. Innovative medicines are launched sooner than non-innovative ones and differential pricing does not appear to be adjusted to local income levels [83]. These findings were reinforced by Cockburn et al. who found that longer and more extensive patent provisions facilitate launches of new drugs; however, in contrast to the other studies the findings were equally applicable to low- and middle-income countries as high-income countries [81]. Similarly, Kyle and Qian found patents to be associated with earlier launch of new products, higher drug prices and higher sales volumes. However, they also found that the increase in price associated with patents was smaller in lower income countries and suggested that policies to countervail price increases were therefore effective [84].

Two retrospective modelling studies aimed to assess the impact of patent provisions on access to ARV medicines in low income countries [85, 86].Footnote 16 The findings suggest richer countries may pay a little more for ARVs, but a lot more if an originator brand is supplying them [86]. These findings are supported by Borrell and Watal who found that pharmaceutical product patents constrain the sale of new drugs in developing countries and that switching all ARVs to generics would increase the coverage of treatment with new drugs of people living with HIV considerably [85].

Overall, only about a third of the studies included resource poor settings, signalling a need for greater emphasis on the impact of IP laws in low and LMIC contexts where longer patent terms are likely to have more damaging impacts on access to medicines for the most vulnerable. This is particularly pertinent as some low-income countries are poised to graduate from LDC status and will no longer be exempt from granting pharmaceutical product patents.

Although more extensive IP provisions and longer monopoly periods are largely being driven by trade negotiations, most studies did not primarily examine trade agreements. Those that did, focused on US and EU trade agreements. This is not surprising given these jurisdictions are net exporters of medicines and therefore the most likely to seek TRIPS-plus IP provisions in trade agreements. The EU trade agreements studied included CETA and the EU-Andean FTA. The IP provisions in these EU trade agreements were found to have potential negative implications for access to medicines in Canada [22,23,24], Peru [37] and Columbia [38] by delaying the entry of generic competition and increasing pharmaceutical expenditure.

The US trade agreements studied spanned a broader range of countries. Some of the studies included regional trade agreements that included the USA, however their findings were confined to the impact of the IP provisions on a specific country. This included the impact on Thailand [25,26,27], Jordan [28, 39], Korea [29, 30], Canada [31, 32], Chile [34], Guatemala [33], and Vietnam [35]. All of these studies found negative implications for access to medicines in the selected country. These negative implications included increased treatment program costs and decreased treatment coverage [35], increases in drug prices [26, 27, 32, 34, 39], restricted and or delayed access to generic [26,27,28, 33, 39] and biosimilar drugs [32], lost savings [31], consumer [25, 29] and total welfare losses [29], and increased pharmaceutical expenditure [26, 28]. Additionally Son found that the Korea-US trade agreement failed to increase the availability of new medicines in Korea and did not shorten the drug availability lag for new medicines [30]. 2ff7e9595c