Protecting Intellectual Property versus Making Essential Medicines Affordable: A Case of Weighing Long-Term versus Short-Term Interests?

The global economic crisis has undoubtedly deprived many of jobs because investors no longer see it as profitable to continue their business endeavours, at least, while the global economy has not yet recovered. It makes sense to avoid being on the losing end. Profitability is indeed an effective incentive to investment in innovation including those beneficial to health. How would pharmaceutical companies be encouraged to invest billions in drug research and development if their inventions are not ensured protection from illicit copying? Surely, anyone who invests resources to develop a pharmaceutical product has the right to prevent others from simply copying and selling the invention. The inventor needs to sufficiently recoup his or her investments by having fair monopoly of the sale of the product he or she has developed. It serves society’s long-term interests if pharmaceutical companies have the incentive to pursue profitable innovations that are at the same time beneficial to health. If beneficial drugs are not developed, many will suffer unnecessarily from illnesses that could be cured by medicines that innovators could invent (given effective incentives). But this long-term interest could also pose enormous costs to society, especially the poor. Commercially developed drugs are usually very expensive due to the huge investments made in producing them, especially research and development as well as profit margins. But such high costs make the product inaccessible to the needy poor. It seems that the challenge is to balance the interests of investors versus the interests of the needy in society. But the interests of investors (insofar as this is instrumental to their ability to support inventions beneficial to society) also serve the interests of society, perhaps, in the long term.

The case of the global patent battle over the blockbuster cholesterol-lowering drug Atorvastatin illustrates the above dilemma. Pfizer, which originally developed the drug as Lipitor, has sued Asian pharmaceutical companies (including five companies in South Korea, Ranbaxy of India, and Unilab of the Philippines) for patent infringement. The World Health Organization has reported in 2010 that cardiovascular diseases (CVDs) are the number one cause of death globally and that “over 80% of CVD deaths take place in low- and middle-income countries”.¹ The United Nations responded to this problem with a resolution on prevention and control of non-communicable diseases (NCDs) including making treatment available and accessible, especially to the poor.²

Unilab of the Philippines claims that the original patents of Atorvastatin (US Patent 4,681,893 granted on 21 July 1987 and RP Patent Nos. 24661 and 26330) have already expired beyond the 20 years allowed by recognised patent practices and laws. Moreover, Unilab claims that the more recent RP Patent No. 29149 Pfizer acquired “is nothing but an isomer of the Atorvastatin compound already disclosed in US patent No. 893 and RP Patents 24661 and 26330” ³ and is thus not valid under the Intellectual Property (IP) Code, as amended by the Cheaper Medicines Act of 2008 (Republic Act 9502).⁴ A petition for cancellation of the Pfizer patent in the Philippines has been filed with the Intellectual Property Office on 9 July 2009 by Unilab. Unilab also produced its own generic version of the drug as Avamax and released it to the Philippine market in October 2009. Pfizer originally sold Lipitor at Php 63.75, 78.25, and 101 per 10, 20 and 40 mg tablets, respectively. It then reduced its pricing to Php 34.45, 39.13 and 50.50, respectively. In contrast, Unilab is selling its generic version Avamax 30% cheaper for Php 25, 30 and 35, respectively (see Table 1 for price comparison).

Critics of Pfizer in the Philippines argued that since the company could cut the retail price of Lipitor into half, it could still earn some profit at a lower price range. Critics ask, why then should Pfizer set an exorbitant price tag on an essential drug in a low-income country? Pfizer argued that their patent on Lipitor is still in force until 2012 and sought the help of the...