ESSENTIALS OF GLOBAL HEALTH
Pharmaceutical Companies
and Global Health
Weng-Foung Huang, Ph.D.
Professor,
Institute of Health and Welfare Policy
National Yang-Ming University
2012/05/18
Unless noted, the course materials are licensed under Creative Commons
Attribution-NonCommercial-ShareAlike 3.0 Taiwan (CC BY-NC-SA 3.0)
2012/05/18
YMU/HWF
1
Professional Background
Weng-Foung Huang, Ph.D.
 BS in Pharmacy, National Taiwan University (1972); MS in
Pharmacy Administration (1975) and Ph.D. in Social and
Administrative Pharmacy, University of Minnesota , USA
(1979)
 Public service career (1980~1994) - Senior official in DOH:
(Senior Specialist, Deputy Director General, and Director
General of Pharmaceutical Affairs Bureau, Director General
of National Laboratories of Foods and Drugs)
 Architect of Taiwan’s drug regulatory reforms (including
GMP and clinical trial regulations); Key contributor to
Taiwan’s NHI pharmaceutical reimbursement system
2012/05/18
YMU/HWF
2
Professional Background
Weng-Foung Huang, Ph.D.
 Academic career (1994 ~ present): Associate Professor,
Director, Professor ; Institute of Health and Welfare Policy,
National Yang-Ming University
 President, Pharmaceutical Society of Taiwan (1995~1997,
2007~2011.1) ；Advisor to Taiwan’s DOH(1999～2000,
2005~2007)；Chairman of OTC Committee, DOH (1999～
2007) ；Chairman of Pharmacy Service Quality Committee,
DOH (2004～2007)
 Fields of Specialization: Health Policy Evaluation,
Pharmaceutical Pricing and Reimbursement in Health
Insurance, Health Technology Assessment (HTA) ,
Development Strategies in Health Care Industry
2012/05/18
YMU/HWF
3
Background




Significance of Pharmaceuticals in
Healthcare
Role of Pharmaceutical Industry in
International Health
Vaccines and International Health
Dilemma of Essential Drugs and Choices of
Treatment
2012/05/18
YMU/HWF
4
Significance of
Pharmaceuticals in Healthcare
• Pharmaceuticals constitute an essential element
of healthcare and disease treatment
• Pharmaceutical industry is a profit-driven
industry but pharmaceuticals are also regarded
as social goods
• Intensive R&D and intellectual right protection
are core elements in pharmaceuticals
innovation and pharmaceutical industry
2012/05/18
YMU/HWF
5
Significance of
Pharmaceuticals in Healthcare
• In a national health insurance/service (premium
based NHI or tax based NHS), government
reimbursement influences the operation of
healthcare market.
• When a national health insurance/insurance is not
available, the cost of drugs has been a sensitive
issue everywhere.
• Policy decisions in achieving the balance between
industrial goals and social goals are complicate,
and sometimes very political.
2012/05/18
YMU/HWF
6
International Covenant on
Economic, Social and Cultural Rights
“The right of everyone to the enjoyment of
the highest attainable standard of physical
and mental health”
(Article 12.1)
2012/05/18
YMU/HWF
7
Right to Health
the right to health means: availability,
acceptability, accessibility and quality
available in sufficient quantities.
acceptable, both in terms of their usability and
their appropriateness, given cultural and other
factors.
effective and of good quality.
the lowest possible cost to facilitate access.
2012/05/18
YMU/HWF
8
BBC
2012/05/18
YMU/HWF
9
12 Largest Pharmaceutical Companies
by revenue as of July 2009 in the Fortune Global 500
2012/05/18
YMU/HWF
10
Top 10 Global Generic Companies, 2008
(Representing 47% of Global Market Share)
Company
Country
Teva
Israel
110.8
17.8%
Sandoz
Switzerland
75.6
5.4%
Mylan
U.S.A.
51.4
92.7%
Watson
U.S.A
25.3
1.6%
Ratiopharm
Germany
24.4
5%
Stada
Germany
24.2
4.8%
Hospira
U.S.A.
18
5.6%
Actavis
Iceland
18
0.6%
Ranbaxy
India
17.2
6.5%
Dr. Reddy‘s
India
13.7
9.5%
2012/05/18
Revenue
(US$100M)
Sources: Scrip、IT IS/DCB
YMU/HWF
Growth Rate
11
2005我國藥品市場銷售額前20大藥廠
排行
廠商
排行
廠商
1
Pfizer
11
Eli Lilly and CO
2
Sanofi-Aventis
12
中國化學
3
GlaxoSmithkine
13
Bristol-Myers Squibb
4
Novartis Group
14
Johnson & Johnson
5
Merck & Co
15
Abbott Laboratories
6
Roche Group
16
生達
7
AstraZeneca
17
信東
8
Bayer
18
Takeda Pharmaceutical
9
永信
19
東洋
10
Wyeth
20
百靈佳殷格翰
source：吳孟欣 2006<<台灣製藥業優勢發展策略之探討
－以五大本土藥廠為例>>逢甲大學經營管理碩士在職專班
碩士論文。王啟秀等，台灣發展製藥產業競爭分析。
2012/05/18
YMU/HWF
12
Market Values of Big Pharmaceutical Companies
and GDP of Selected Countries
2012/05/18
YMU/HWF
13
2012/05/18
Public Citizen’s Congress Watch
YMU/HWF
14
2012/05/18
Public Citizen’s Congress Watch
YMU/HWF
15
Pharmaceutical Market Structure in Taiwan
Unit: NT$1M
Year
2003
2004
2005
2006
2007
Local companies
24,866
26,923
27,855
27,009
25,561
MNC/Imported
69,680
76,229
76,469
81,028
84,141
Total
94,546
103,152
104,324
108,037
109,702
Market share of
local companies
26.3%
26.1%
26.7%
25.0%
23.3%
2007 Market Structure
Unit:NT$1M
 Hospital segment the
major market (78%)，
Drugstores the next
(14%), the rest are
clinics (8%)
 Foreign companies: local
Foreign
companies by values 7:3。
Local
 Foreign companies: local
companies by quantity 3:7
100%
3021
80%
60%
70843
10249
40%
5916
20%
14716
0%
Hospitals
4957
Clinics
YMU/HWF
Source：2008 Biomedical industry Almanac
2012/05/18
16
2. Affordable Price
2012/05/18
YMU/HWF
4. Reliable Health
and Supply System
3. Sustainable Financing
Access
1. Rational Selection
Four Elements
in Access to Essential Medicines
17
Four Elements
in Access to Essential Medicines
1. Rational Selection
3. Sustainable
Financing
Access
2. Affordable Price
2012/05/18
YMU/HWF
4. Reliable Health
and Supply
System
18
WHO: Progress of WHO
Member in Developing
National Drug Policies and in
Revising Essential Drugs Lists
Geneva: World Health
Organization, 1998.
WHO
2012/05/18
YMU/HWF
19
Structure of Pharmaceutical Industry
• Multinational Companies (MNCs): Aggressive
professional marketing, huge and continuous
investment in R&D, Highly profitable industry,
Political-economic complex in capital market,
Production facilities and network, Intellectual
Property Right Protection under WTO framework。
• Containment of MNCs’ influence in developing
countries: Import control, essential drug list,
incentives for local production and export, national
pharmaceutical companies
2012/05/18
YMU/HWF
20
Issues Related to Pharmaceutical Industry
 Over-use and misuse
 Illegal or hazardous distribution: Illicit trade of heroin, cocaine,
amphetamine；dumping of counterfeit drugs, diversion of
philanthropic drugs。
 Role of government (public sector and private sector in
production and distribution): manufacture of narcotic drugs,
national pharmaceutical companies, protection of domestic
manufacturers, restricting operation of foreign investment
companies
 Drug pricing (including international price transfer)
 Equity, availability and accessibility
 R&D and profitability
 Harmonization of regulatory requirements and market
approvals
 TRIPS/WTO。
2012/05/18
YMU/HWF
21
Oxfam International & Health Action International
2012/05/18
YMU/HWF
22
Oxfam’s Criticism on EU IP Measures
1. Introducing TRIPS‐plus rules (IP rules that exceed obligations
under WTO rules) through agreements, especially free trade
agreements (FTAs) with developing countries.
2. Exerting bilateral pressure upon developing countries to
prevent the use of TRIPS public health safeguards to reduce
medicine prices.
3. Leading on a new global framework to enforce IP rules, within
which elements of European legislation are resulting in the
seizure of generic medicines in transit, intended for developing
countries.
2012/05/18
YMU/HWF
23
Oxfam’s Recommendations
1. The European Commission and EU Member States should honor
commitments under the MDGs, the Doha Declaration on TRIPS and Public
Health, and relevant World Health Assembly (WHA) resolutions on
innovation and access to medicines, including full implementation of the
WHO ‘Global Strategy and Plan of Action’.
2. The EU should ensure its trade policy is in line with its development
objectives, including specifically enhancing access to health care and
access to medicines. This includes ensuring that trade rules, whether
multi‐lateral, regional, or bilateral, exclude essential public services such as
education, health, and water and sanitation from liberalization
commitments.19 EU Member States must act to hold the EC accountable
when the EC fails to uphold these principles.
2012/05/18
YMU/HWF
24
With respect to IP
3. With respect to IP:
• The EU and Member States should not misuse FTAs to introduce
TRIPS‐plus
IP rules in developing countries to extend monopoly protection and
introduce new enforcement measures, which limit access to medicines.
• The European Commission should stop exerting pressure on governments
that attempt to introduce safeguards and flexibilities to protect and promote
public health.
• The European Commission should amend its counterfeiting regulation to
ensure it does not have a detrimental impact on developing countries, by
excluding border measures for violations of pharmaceutical patents,
especially for medicines in transit.
2012/05/18
YMU/HWF
25
With respect to IP
• The EU should ensure that the Anti‐Counterfeiting Trade
Agreement (ACTA) does not set a new global standard for
intellectual property rules (IPR) that impedes access to
medicines in developing countries. Therefore, the EU should
ensure that patents are excluded from any agreed framework.
• The European Commission and Member States should identify
and support other measures to improve access to generic
medicines in developing countries, including the UNITAID
patent pool for HIV and AIDS medicines.
2012/05/18
YMU/HWF
26
With respect to IP
• European donors, including the Commission, should scale up
financial contributions to R&D to address diseases that
disproportionately affect people living in developing countries,
especially through alternative funding mechanisms that
promote therapeutic innovation.
• • The EU should also support Product Development
Partnerships (PDPs) that are designed to deliver affordable and
effective new products, and it should continue building R&D
capacity in developing countries.
2012/05/18
YMU/HWF
27
With Respect to R&D
4. With Respect to R&D
• The EU should support the implementation of the World
Health Organization’s Global Strategy and Plan of Action
(GSPA) on Public Health, Innovation and Intellectual
Property, and support the Expert Working Group in its efforts
to explore new models of innovation that increase both
innovation and access.
• The European Commission should take appropriate measures
to ensure that specific initiatives such as the Innovative
Medicines Initiative (IMI) meet real health needs, and that
both the IMI and the EUs regulation on children’s medicines
can also be to the benefit of developing countries.
2012/05/18
YMU/HWF
28
Oxfam International & Health Action International
2012/05/18
YMU/HWF
29
Indicative annual per person triple therapy drugs prices
- selected developing countries (US $)
$10,000
$8,000
UN Drug Access Initiative
$6,000
$4,000
Domestic production
$2,000
Accelerated access initiative
February-March 2001 offers
$0
1996
2012/05/18
1997
1998
YMU/HWF
1999
2000
2001
2002
30
TRIPS and Pharmaceuticals
 The rules
 To Create a harmonized global system under
which inventors are granted exclusive marketing
rights for a minimum of 20 years for ‘new and
inventive’ products.
 Enforcement of a country’s compliance with
TRIPS is ensured through the WTO dispute
procedure, which places the burden of proof on
the defendant.
2012/05/18
YMU/HWF
31
TRIPS and Pharmaceuticals
 Countries failing to meet their obligations can be
subjected to trade sanctions.
 Fully integrates sectors such as biotechnology and
pharmaceuticals into the global regime.
 Prior to TRIPS, approximately 50 developing
countries and several developed countries either
excluded medicines from being patented, or provided
patents only for production processes rather than
products.
2012/05/18
YMU/HWF
32
What is ‘TRIPS plus‘?
 The US government policy to push developing
countries into passing 'TRIPS plus' national
legislation.
 These are laws based on the most restrictive
interpretation of TRIPS, purged of the original
safeguards, and containing levels of IP protection that
go well beyond anything mandated by TRIPS.
 The aim of the US government is to provide the
longest possible period of effective protection for its
corporations.
2012/05/18
YMU/HWF
33
What is ‘TRIPS plus‘?
 The threat to developing countries is unilateral trade
sanctions, which can be authorised either by Section
301 of the US Trade Act, or by a WTO Dispute
Settlement panel in the event of a TRIPS violation.
 The US government also uses bilateral and regional
trade agreements to induce countries into accepting
the patent rules sought by US companies, and then
binds them into those commitments.
2012/05/18
YMU/HWF
34
How the US TRIPS strategy works
 The US strategy employs three mutually reinforcing
instruments:
 unilateral US investigation and sanction under
Section 301 of the US Trade Act
 bilateral IP treaties, and bilateral and regional trade
instruments containing IP provisions which specify in
detail what national laws should be
 TRIPS, backed by the WTO enforcement
mechanisms
2012/05/18
YMU/HWF
35
Section 301
 301 requires the USTR annually to identify countries that
deny adequate IP protection to US firms and, depending
on the perceived severity, to warn those countries to
shape up, to present them a plan for progress, or to apply
trade sanctions.
 In the case of medicines, the office of the USTR bases its
assessment and grading on information supplied by
PhRMA.
 Section 301 also allows the USTR to act against countries
opposing the IP policies of the US government in
multilateral organisations.
2012/05/18
YMU/HWF
36
* Prospective impacts of the EU–
Peru FTA, employing the same
methodology, are similar to
findings in Colombia. These
studies were commissioned during
the EU–Andean community trade
negotiations. After objections by an
alliance of Latin American and
European civil society,69 and the
countries in question, TRIPS-plus
rules have been modified to reduce
public health impacts on
negotiating partners.
Oxfam International &
Health Action International
2012/05/18
YMU/HWF
37
Oxfam International & Health Action International
2012/05/18
YMU/HWF
38
Oxfam International & Health Action International
2012/05/18
YMU/HWF
39
Issues in Pharmaceutical Innovation
Economic/industrial development
Intellectual property protection
Regulatory requirement and approval
Pricing and reimbursement in health insurance
Public assess to pharmaceutical innovation —
availability, acceptability, accessibility and
quality
2012/05/18
YMU/HWF
40
Stakeholders
•
•
•
•
•
•
•
Biotechnology sector
Generic drugs industry
Civil society groups,
A group of developing countries
Universities
Governments
Non-profit foundations and/or organizations
2012/05/18
YMU/HWF
41
DECLARATION ON THE TRIPS AGREEMENT
AND PUBLIC HEALTH (DOHA DECLARATION)
Adopted on 14 November 2001
1.
2.
3.
We recognize the gravity of the public health problems
afflicting many developing and least developed countries,
especially those resulting from HIV/AIDS, tuberculosis,
malaria and other epidemics.
We stress the need for the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS
Agreement) to be part of the wider national and international
action to address these problems.
We recognize that intellectual property protection is
important for the development of new medicines. We also
recognize the concerns about its effects on prices.
2012/05/18
YMU/HWF
42
DECLARATION ON THE TRIPS AGREEMENT
AND PUBLIC HEALTH (DOHA DECLARATION)
Adopted on 14 November 2001
 “.. the TRIPS Agreement does not and should not
prevent Members from taking measures to protect
public health. …… the Agreement can and should be
interpreted and implemented in a manner supportive
of WTO Members’ right to protect public health and,
in particular, to promote access to medicines for all.”
 “..the right of WTO Members to use, to the full, the
provisions in the TRIPS Agreement, which provide
flexibility for this purpose.”
2012/05/18
YMU/HWF
43
DECLARATION ON THE TRIPS AGREEMENT
AND PUBLIC HEALTH (DOHA DECLARATION)
Adopted on 14 November 2001
 These flexibilities include:
a) ….each provision of the TRIPS Agreement shall be
read in the light of the object and purpose of the
Agreement as expressed, in particular, in its
objectives and principles.
b) Each Member has the right to grant compulsory
licenses and the freedom to determine the grounds
upon which such licenses are granted.
2012/05/18
YMU/HWF
44
DECLARATION ON THE TRIPS AGREEMENT
AND PUBLIC HEALTH (DOHA DECLARATION)
Adopted on 14 November 2001
c) Each Member has the right to determine what constitutes a
national emergency or other circumstances of extreme urgency,
it being understood that public health crises, including those
relating to HIV/AIDS, tuberculosis, malaria and other
epidemics, can represent a national emergency or other
circumstances of extreme urgency.
d) The effect of the provisions in the TRIPS Agreement that are
relevant to the exhaustion of intellectual property rights is to
leave each Member free to establish its own regime for such
exhaustion without challenge, subject to the MFN and national
treatment provisions of Articles 3 and 4.
2012/05/18
YMU/HWF
45
DECLARATION ON THE TRIPS AGREEMENT
AND PUBLIC HEALTH (DOHA DECLARATION)
Adopted on 14 November 2001
 We recognize that WTO Members with insufficient or no
manufacturing capacities in the pharmaceutical sector could
face difficulties in making effective use of compulsory
licensing under the TRIPS Agreement. We instruct the Council
for TRIPS to find an expeditious solution to this problem and
to report to the General Council before the end of 2002.
 . ….the least-developed country Members will not be obliged,
with respect to pharmaceutical products, to implement or apply
Sections 5 and 7 of Part II of the TRIPS Agreement or to
enforce rights provided for under these Sections until 1
January 2016.
2012/05/18
YMU/HWF
46
Public health, Innovation and
Intellectual Property Rights
REPORT OF THE COMMISSION ON
INTELLECTUAL PROPERTY RIGHTS,
INNOVATION AND PUBLIC HEALTH
4/25/2006
WHO
2012/05/18
YMU/HWF
47
WHO
2012/05/18
YMU/HWF
48
Thank you for your attention
huang@ym.edu.tw
2012/05/18
YMU/HWF
49
COPYRIGHT DECLARATION
PAGE
9
10
WORK
LICENSE
AUTHOR/SOURCE
BBC http://www.bbc.co.uk/news/health-13751809
Wiki List of pharmaceutical companies
http://en.wikipedia.org/wiki/List_of_pharmaceutical_compani
es
Visited 2012/07/03
13
14
This work is from "Drug Industry Most Profitable Again"
Public Citizen’s Congress Watch April 11, 2001, p4
This work is used subject to the fair use doctrine of
Article 52, 65 Taiwan Copyright Act by GET.
15
This work is from "Drug Industry Most Profitable Again"
Public Citizen’s Congress Watch April 11, 2001, p5
This work is used subject to the fair use doctrine of
Article 52, 65 Taiwan Copyright Act by GET.
2012/05/18
YMU/HWF
50
COPYRIGHT DECLARATION
PAGE
WORK
LICENSE
AUTHOR/SOURCE
16
NTU Weng-Foung Huang
17
NTU Weng-Foung Huang
18
NTU Weng-Foung Huang
19
WHO
p9http://apps.who.int/medicinedocs/pdf/whozip16e/whozip16e.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
22
Oxfam International & Health Action International
http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
29
Oxfam International & Health Action International
http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
30
2012/05/18
NTU Weng-Foung Huang
YMU/HWF
51
COPYRIGHT DECLARATION
PAGE
37
WORK
LICENSE
AUTHOR/SOURCE
Oxfam International & Health Action International
http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
38
Oxfam International & Health Action International
http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
39
Oxfam International & Health Action International
http://www.oxfam.org/sites/www.oxfam.org/files/bp-trading-away-access-to-medicines.pdf
This work is used subject to the fair use doctrine of
Article 46, 50, 52, 65 Taiwan Copyright Act by GET.
48
WHO
http://www.who.int/intellectualproperty/documents/thereport/CIPIH23032006.pdf
This work is licensed by WHO
for the use of “Essentials of Global Health” ONLY. The
copyright belongs to the above mentioned creator(s)
and GET does not have the authorization right.
2012/05/18
YMU/HWF
52