A drug patent standoff in Thailand

Image source: UNESCO (visit site for higher-res image)

This week, Patent Baristas have an excellent (as usual) post on Abbott Labs’ ongoing conflict with the government of Thailand. This unfortunate situation illustrates some key difficulties in getting expensive pharmaceuticals to impoverished populations. It’s tough when public health and free enterprise collide – it sometimes makes me glad that I’m just a biologist.

Over half a million Thai citizens are HIV-positive – in a country of 65 million, that’s about 1 in 100. The Thai government supplies about 80,000 AIDS patients with subsidized anti-retroviral drugs, including Abbott’s Kaletra. The problem is that the Thai government doesn’t want to pay full price for Kaletra to Abbott. So Thailand issued a compulsory license in January, allowing them to buy a generic version of Kaletra, probably to come from an Indian manufacturer.

A generic manufacturer will sell Kaletra to the Thai government more cheaply than Abbott will – partly because Abbott bears the original cost of research and development on the drug (as well as its ill-fated cousins – most drugs that undergo R&D don’t make it, and the company must recoup the costs of those failed drugs somewhere). The Thai government will save money (about $24 million a year); Abbott, on the other hand, will lose the Thai market – and because it’s difficult to prevent shipments of generic drugs from illicitly entering the global market, Abbott may lose sales of Kaletra in markets outside Thailand as well.

Was Abbott shamelessly exploiting the Thai AIDS patients for profit? Not exactly. Abbott was already giving Thailand a discount, selling a year’s worth of Kaletra to Thai patients for $2,200, most of which cost, I understand, is borne by the Thai government. The generic version will cost about half that. US patients, in contrast, get Kaletra for about $7,000 a year, and because the US respects Abbot’s patent, no generic is available here.

It smarts that an AIDS patient might have a better chance of affording retrovirals in Thailand than in the US. On the other hand, the recent Thai HIV infection rate is a national health crisis. Over the past decades, Thailand has instituted a number of efforts to slow infections down, including compulsory condom use among sex workers, advertising and education, blood testing, etc. This worked quite well for a few years, but efforts have fallen off. A Thai health minister has promised that the money saved on Kaletra would be used to fund even more AIDS prevention measures (reference). Thailand is simply trying to get the most anti-AIDS bang for its buck. And according to international law, the compulsory patent was totally legal.

Abbott, on the other hand, has a duty to its shareholders to avoid losing money. So the company decided not to bring any new drugs to Thailand at all, and rescinded seven drug applications it had already made. Health activists are crying foul, but Abbot is behaving rationally: if it’s not going to make money in a market because its patents won’t be respected, why invest there? Unfortunately, that means Thai patients will lose access to at least seven new Abbott drugs, in exchange for a better price on a drug that was already available. For the individual Thai patient, that may turn out to be a good deal, or it may not. This is really a no-win, frustrating situation.