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Tuesday, October 7, 2003

Generic drug makers hope to profit from WTO decision

Associated Press
Itapira (Brazil), October 7

Inside a laboratory in Brazil's coffee growing region, scientists
painstakingly replicate brand name drugs and oversee mass production of
cheap copies to treat ailments ranging from Parkinson's disease to AIDS.
In three decades, Laboratorio Cristalia has grown from a tiny company making
one cloned anti-hyperactivity medication to a firm with 1,200 workers
churning out 150 drugs, illustrating the exponential growth of the generic
drug industry in countries like Brazil and India.

Now Cristalia and its competitors are trying to figure out how to profit
from the World Trade Organization's recent agreement allowing impoverished
nations to bypass big pharmaceutical companies and import copied patented
medicines to fight killer diseases. The WTO's 146 member countries reached
the agreement last month, a week before the group's talks on trade and
agricultural issues collapsed at a summit held in Cancun, Mexico.

Although there are challenges that might make the medication plan
unworkable, getting the business could be a big moneymaker for Cristalia,
founded in 1972 by Dr. Ogari de Castro Pacheco to make cheaper drugs for
patients with mental illnesses at his private clinic next to the drug lab.
Before the decision, Cristalia was free to sell its copied versions of
patented drugs in Brazil and ship them abroad after the patents expired.

But the agreement opened a huge potential new market by allowing generic
drug makers to export drugs still under patent protection to treat diseases
such as AIDS, tuberculosis and malaria when needy countries declare they
can't afford prices charged by multinational pharmaceutical corporations.
Millions of patients need the drugs, and tens if not hundreds of millions of
dollars in sales are possible. Despite doubts from the pharmaceutical
industry that the developing world's generic drug makers can handle the
demand, Pacheco said it would be easy for him to increase production.
"If they asked me for the level of consumption in Brazil for the AIDS
cocktail, I could deliver it in three to six months," said Pacheco,
Cristalia's chief executive and principal shareholder. "For what's consumed
in all of South America, I'd need a little more time."

But Pacheco and his counterparts in Brazil and India face potential
political, bureaucratic and financial obstacles that could prevent them from
selling a single dose of a lifesaving AIDS medication. Under the WTO
agreement, poor countries that want the drugs must prove they don't have
manufacturing capability, then issue a special license to a generic drug
maker.

Notification to the WTO is mandatory, and the drug maker must then obtain an
export license from its government. Each country that embarks on the effort
must review its generic importation process annually, and complaints can be
taken to the WTO's committee on intellectual property "with a view to taking
appropriate action." Experts say poor countries will have to negotiate first
with the patent holders to try to get the drug companies to slash prices,
and may end up using the threat of deals with the generic drug makers as
bargaining leverage.

© Hindustan Times Ltd. 2003.
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