The Indonesian government has taken the unprecedented step of overriding the patents on seven HIV and hepatitis treatments, citing urgent need to improve patient access.
IHS Global Insight perspective
The Indonesian government on 3 September issued a "government use" order that overrides the patents on seven hepatitis B and HIV treatments.
The drugs are generally beyond the reach of patients in Indonesia, and are expected to be authorised to firms to produce generic versions in the future.
Challenges to patents in Asia-Pacific represent a flourishing trend, and one that Big Pharma may have to get used to, with governments increasingly willing to put the needs of patients ahead of the interests of patent holders.
The Indonesian government has issued a decree that overrides the patents on seven hepatitis and HIV drugs and opens the way for cheap generic versions, in what is being described as an unprecedented step. President Susilo Bambang Yudhoyono's decree was issued on 3 September, but has gone unnoticed until being publicised this week by United States-based rights group Public Citizen.
The new protocol renews a previous compulsory licence issued against Merck & Co (US)'s HIV anti-retroviral (ARV) Sustiva (efavirenz) in 2007, and adds six more drugs to the list. Pre-existing 2007 compulsory licences remain against Boehringer Ingelheim (Germany)'s ARV Viramune (nevirapine) and Shire Pharmaceutical (United Kingdom)'s hepatitis B treatment lamivudine. These drugs can be licensed by the Ministry of Health to pharmaceutical companies to exploit patents on behalf of the government, effective until the end of term of each patent, with a 0.5% royalty paid to the patent holder, as summarised below.
For a link to the presidential decree, in Indonesian, see here. For Public Citizen's press release, see here.
Indonesia's Compulsory Licences, 3 September 2012
Merck & Co.
7 August 2013
14 May 2018
Bristol-Myers Squibb (US)
6 August 2018
Combination lopinavir, ritonavir (Kaletra)
Abbot Laboratories (US)
23 August 2018
Gilead Sciences (US)
23 July 2018
Combination of tenofovir and emtricitabine (Truvada)
Gilead Sciences (US)
3 November 2024
Source: Public Citizen
Outlook and implications
The Indonesian government's decision is described by Public Citizen as precedent setting, and "the broadest single use of pharmaceutical patent licensing power by a country since the World Trade Organization 1995 Agreement on Trade-Related Aspects of Intellectual Property [TRIPS]". It should be noted that the Indonesian government has as yet not authorised any companies to produce generic versions of the drugs involved.
The move follows recent patent controversies in India, which issued its first compulsory licence against Bayer (Germany)'s kidney cancer drug Nexavar (sorafenib) seven months ago, and where compulsory licences and generous interpretations by local courts in patent infringement cases have caused consternation for foreign firms operating there (see Germany - India: 13 March 2012: First Drug Compulsory Licensing Granted in India, Big Pharma React with Fury). The trend within Asia appears to be tilting in favour of compulsory licences as a way of promoting patient access, with China recently altering its patent laws to allow the issuing of compulsory licences, while patient groups in Malaysia are also pushing for a compulsory licence against Abbot's ARV Kaletra.
Although pharma firms may be concerned, and have argued in India that companies will sell their generic versions worldwide, patient rights groups and governments argue that such steps are in line with the WTO's TRIPS agreement, which provides member countries the right to challenge patents in order to promote access to vital medicines. In Indonesia, Kaletra (also marketed as Alluvia) costs USD83.80 per month under public health schemes, equating to USD1,000 a year, relative to an average per capita income in the country of USD2,900. The Indonesian government specifically cites the need to make such drugs available, with only 23,000 of the 70,000 patients in need of ARV treatment currently receiving it. The firms targeted in Indonesia have so far remained silent.
- United States - India: 5 October 2012: Big Pharma's India woes continue as Pfizer sees Sutent's patent revoked
- China: 12 June 2012: Change to China's IP Law Facilitates Issuing of Compulsory Licences
- United States - Thailand: 14 March 2007: Abbott Strangles New Drug Supply to Thailand in Protest over Compulsory Licensing