Thai Government, Drug Companies Fail To Reach Agreement in Talks Over Compulsory Licensing; Another Round of Talks Anticipated

The Thai government and international pharmaceutical companies have failed to reach an agreement in recent talks over compulsory licenses issued by the country for certain medications, the Bangkok Post reports (Bangkok Post, 3/27). Pharmaceutical company Abbott Laboratories recently announced that it has withdrawn applications to sell seven new drugs in Thailand in response to the country's decision to issue a compulsory license for the company's antiretroviral drug Kaletra. Thai Health Minister Mongkol Na Songkhla in January signed the compulsory license, which allows Thailand to produce a lower-cost version of Kaletra, into law. World Trade Organization regulations allow governments to declare a "national emergency" and issue compulsory licenses without consulting the foreign patent owner. Thailand, which has 580,000 people living with HIV/AIDS, has won international recognition for its quick launch of a national drug program that provides treatment to more than 82,000 HIV-positive people. However, the government's commitment to providing universal access to care is facing increasingly high drug costs. The compulsory license for Kaletra could save the country as much as $24 million annually. Abbott offered to lower Kaletra's cost to $167 per patient monthly, although representatives from the health ministry said that was still too high. Abbott and the ministry agreed to meet for further negotiations. Mongkol recently said that he will expand the country's generic drug program to include more antiretroviral and cancer drugs unless pharmaceutical companies reduce their prices (Kaiser Daily HIV/AIDS Report, 3/21).

Negotiations, Comments
Thai Food and Drug Administration Secretary-General Somsak Choonharasmi, who is leading the negotiations, on Monday said the government offered to compensate the drug companies with 0.5% of the revenue generated from the generic drug sales. Pharmaceutical representatives did not accept the offer and said that they need to discuss the issue with their companies, the Post reports. Merck also offered to reduce the price of its antiretroviral Efavirenz to $23 per bottle, but the government can purchase a generic version of the drug from India-based drugmakers for about $20 per bottle, the Post reports. Abbott rejected the compulsory licensing for its antiretroviral Kaletra and the offer of compensation, saying the policy would harm its research and development of other drugs. Abbott representatives declined to say whether they would petition the Department of Intellectual Property Rights to review the policy, Somsak said. He added that the government plans to open another round of talks with the pharmaceutical companies on April 10 (Bangkok Post, 3/27). In related news, Mongkol last week said that he plans to explain the need for compulsory drug licensing to pharmaceutical companies through the governments of the countries in which they are based, Thailand's Nation reports. Mongkol said he was uneasy about Abbott withdrawing the drug applications. "I believe that regular consumers of Abbott would still prefer Abbott's drugs to the generic versions, while the compulsory license would help underprivileged people to have access to the drugs," he said. Suwit Wiboonphonprasert of the health ministry last week after a meeting with delegates from the U.S. Chamber of Commerce said that a meeting between U.S. officials and Mongkol will take place soon. "They first asked whether we have respected the intellectual property laws, but after they were informed of our need to enforce the compulsory licensing, they understood our point," Suwit said. He added, "We are ready to explain our point to both the private and government sectors in the U.S." Chamber of Commerce Senior Vice President Daniel Christman in Bangkok last week called on Thai health officials to re-establish talks with the U.S. private sector, adding that he is willing to facilitate the negotiations. He said U.S. businesses are concerned that the compulsory drug licensing would become a standard operation rather than an exception to international patent law. He added that the case had a "broad reputation effect" and that he hopes the government will come up with a quick solution (Nation, 3/21). In addition, Mongkol has said the health ministry will use the money that will be saved as a result of the compulsory licensing to fund an HIV education campaign aimed at commercial sex workers, their clients and other high-risk groups. "In addition to treatment, prevention is key to fighting HIV/AIDS," he said, adding, "We have 100% condom access, but 100% of the people do not use them" (Nation, 3/27).