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Policy Coherence To Boost East Africa Pharmaceutical Industry


Intellectual Property Watch

02/10/2015 BY  FOR INTELLECTUAL PROPERTY WATCH

KAMPALA, UGANDA – The pharmaceutical industry in the East African Community is approaching a higher level of production quality and manufacturing practices. To benefit the industry and increase access to medicines, stakeholders are working towards a united regulatory policy framework aimed at harmonising industrial, health and regulatory policies. 

“The main objective of the industrial policy is to develop a viable local industry which is competitive, reliable, innovative, productive and responsible,” said Ermias Biadgleng, legal affairs officer, United Nations Conference on Trade and Development (UNCTAD). “While the main aim of the health policy is to promote health for all through universal health coverage in terms of prevention, treatment and rehabilitation.”

Biadleng was moderating a panel of experts attending a regional pharmaceutical workshop on policy coherence for local production of pharmaceutical products and other means to improve access to medicine and medical products in the East African Community, held in Kampala, Uganda from 21-23 September. The workshop was organised by UNCTAD, Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) and the East African Community (EAC) Secretariat.

EAC has so far adopted the Regional Pharmaceutical Manufacturing Plan of Action, 2012-2016, the Regional Intellectual Property Policy on the Utilisation of Public Health-Related WTO-TRIPS Flexibilities and the Approximation of National Intellectual Property Legislation, 2013. TRIPS is the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights, which contains flexibilities for developing countries in enforcing the agreement.

“The East African Community Regional Pharmaceutical Manufacturing Plan of Action, 2012-2016, (RPMPOA) is a regional roadmap to guide the East African Community towards evolving an efficient regional pharmaceutical manufacturing industry that can supply national, regional and international markets with safe, efficacious and quality medicines,” said Jennifer Gache, Senior Industrial Engineer, EAC Secretariat.

The RPMPOA is divided into six strategic intervention pillars, which if effectively implemented are expected to lead to a strong local pharmaceutical industry. Implementation of RPMPOA is part of the EAC Industrialization Policy and Strategy, which has prioritized the development of regional pharmaceutical industry among regional industries through collective efforts of the EAC partner states.

According to Thomas Walter, “The implementation of RPMPOA has been much more successful than anticipated. It will be revised next year for the next five years. The next action plan will have a bigger scope, focusing on those areas which have been a bit neglected in the ongoing plan.”

Walter is the senior adviser Industrialization, TRIPS and Pharmaceutical Sector Promotion, EAC-GIZ Programme on Regional Integration.

“We have not had any significant utilization of the TRIPS flexibilities neither by companies nor by governments in the EAC,” said Thomas. “The reasons are complex. One of the main reason companies are not utilizing TRIPS is because all the pharmaceutical products produced locally are generics, and production of generic medicines do not require utilization of TRIPS flexibilities. This situation may change in future as we are moving to new treatment regimes.”

Utilization of TRIPS flexibilities towards improved local production of pharmaceuticals is pillar 5 of the RPMPOA.

World Health Organisation describes a generic drug as “a pharmaceutical product, usually intended to be interchangeable with an innovator product that is manufactured without a licence from the innovator company and marketed after the expiry date of the patent or other exclusive rights.”

In a presentation from the private sector perspective titled, The State Of EAC Internal Market And ECT: Implications For Drug Policy (pdf), Pierre Claver Niyonizigiye from Siphar Pharmaceutical Manufacturers, in Burundi, revealed that according to 2014 RPMPOA estimations, the market share of locally produced pharmaceutical drugs per country is: Kenya 30% of the estimated 558 USD million market, Tanzania 31% of the estimated 350 million USD market, Uganda 5% of the 270 million USD market, Rwanda 0.00% of the 75 million USD market, and Burundi 3% of the 75 million USD market.

The region has about 65 pharmaceutical companies, with Kenya having 42 of the companies.

With the enactment of the EAC Common Markets Protocol, the pharmaceutical industry now has a regional market of over 143.5 million people. Trade between EAC partner states in pharmaceutical products in 2011 was estimated at USD 264 million. This situation presents both opportunities and challenges to the pharmaceutical sector in the region given that only 30 percent of the medicines demand is met through local production.

According to Thomas, “the main cause for this is lack of access to a competitive market. Once the manufacturers have access to a bigger market, not only the national public procurement but also the international procurement agency, the utilized capacity will shoot up.”

Article 35, of the Common Market Protocol calls on partner states not to discriminate against suppliers, products or services originating from other partner states, for purposes of achieving the benefits of free competition in the field of public procurement.

“Many of the procurement laws of the partner states have not adapted to the regulation of the common market protocol even though the heads of state have committed to this protocol,” Thomas said. “It’s up to the heads of government to enforce the required approximation of the legal framework in order to actually create this market. National procurement laws and regional common market still have elements of incoherence which need to be eliminated.”

The EAC governments are the largest clients for the region’s local pharmaceutical products. The preferred method of procurement is international competitive bidding. Other methods used are restricted procurement, direct purchase and local tenders. The source of funds for this procurement comes from revolving funds, government funding from the central government and complementary financing, and grants from Global Fund for AIDS, Tuberculosis and Malaria and development partners.

To assist the manufacturers develop their capacity, EAC governments have provided a number of policy incentives. These include: tax and customs exemption, price control, preferential procurement and import classification.

In the EAC treaty, Chapter 21, Article 118 provides for developing a common regional medicines policy, which includes establishment of quality control capacities, good procurement practices and harmonisation of drug registration procedures.

Benchmarking

Regional economic communities can borrow from each other aspects of regulatory framework. The EAC is borrowing from the Ghana model, whose government has established a very supportive system to develop the local pharmaceutical industry over the last 20 years.

Kwabena Asante-Offie represented the Pharmaceutical Manufacturers Association of Ghana at the conference. “In East Africa,” he said in a panel discussion, “the industry sector is leading the development of the pharmaceutical sector. While in West Africa, it was the ministry of health that led the development of a robust pharmaceutical industry”. This is because the industry started more as a public health concern rather than an industrial development strategy.

Other Policies

Other key policy and regulatory initiatives of EAC are at the working stage. These include an EAC Anti-Counterfeit Bill (2013) which is being modelled into the Competition Act, the proposed African Community Medicines and Food Safety Commission Bill, the Medicines Registration Harmonization initiative, launched in 2012, and the procurement of essential medicines and health supplies.

South Africa’s Department of Health to clamp down on tender system


Political Analysis

October 18th, 2012

Health Minister Aaron Motsoaledi has stated that tender-based procurement for the Department of Health needs to be reduced. It is his contention that these tenders are destroying the public health care system, and proposes that the majority of work should be carried out in-house. It remains to be seen whether or not the tender process will be separated from the healthcare system, and what repercussions might follow such a decision.

South Africa spends relatively more on health care than many other countries, considerably more than the expenditure recommended by the World Health Organization, yet health services are poor, and patient care is on the decline. With the discrepancy between healthcare spending and results being so significant, it is clear that the Department of Health is not performing adequately.

Motsoaledi claims the problem can be attributed to uncontrolled commercialism; the procurement of even basic essentials is deferred to the tender process, drawing out transaction periods and inflating prices at both the private and public level; Discovery Health and various other medical aid agencies have been forced to hike premiums and reduce coverage in efforts to keep up with inflated healthcare costs in the country. According to the annual budget, the Department of Health spent R6 billion of the R121 billion on security companies, further highlighting the peculiarity of the extant procurement process and the transactions that it foresees.

Motsoaledi proposes to cut costs by implementing an employment system that calls for contracts directly between the Department of Health and prospective employees, instead of contracting jobs through tenders to private contractors. The system will include staff training, however, which will itself require contracting to external bodies; without drastic re-imagining, the healthcare system cannot operate without some form of tender procurement being issued.

By internalising skills and resources, and reducing the concentration of tenders in the procurement process, the Department of Health will reap greater returns on transactions characterised by faster turnaround and lower margins for non-value-adding services, thus increasing the yield of productivity per Rand, which will in turn lead to superior healthcare and lower rates across both the private and public markets.

(For further analysis and tailored research, please contact our analysts, analysts@politicalanalysis.co.za)

Faith reps welcome first pharma agreement with patent pool


Graph showing HIV copies and CD4 counts in a h...
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July 15, 2011

Summary & Comment: The first agreement between the Medicines Patent Pool and a pharmaceutical company – Gilead Sciences – to improve access to HIV and Hepatitis B treatment in developing countries is a commendable step towards alleviating suffering of people living with HIV and AIDs in Africa. M.Makoni

“An important first step” was announced on July 12 when Gilead Sciences became the first pharmaceutical company to sign a licensing agreement with the Medicines Patent Pool to increase access to HIV and Hepatitis B treatment in developing countries. The agreement allows for the production of four HIV medicines – tenofovir, emtricitabine, cobicistat and elvitegravir – as well as a combination of these medicines into a single pill called “Quad”. Additionally, the license allows for the development and production of other combination pills that include these medicines. Tenofovir is also used to treat Hepatitis B. “This is no doubt an important first step to making essential medicines available at a lower cost especially in countries that have had to wait years before they can afford ‘new’ medicines for HIV-related treatments”, stated Peter Prove, Executive Director of the Ecumenical Advocacy Alliance.

The Medicines Patent Pool, founded by UNITAID in 2010, aims to stimulate innovation and improve access to HIV medicines through the negotiation of voluntary licenses on medicine patents that enable robust generic competition and facilitate the development of new formulations. The Medicines Patent Pool was recently endorsed by the G8 and the UN High Level Meeting on AIDS as a promising, innovative approach to improve access to HIV medicines.

According to David Deakin of the UK faith-based organization Tearfund, “The patent pool offers a completely new paradigm to address the HIV needs of developing countries. As someone who has previously been involved in the pharmaceutical industry, the pool, although far from perfect, represents one of the biggest breakthroughs ever in beginning to develop a sustainable solution to treatment access in developing countries.” In recent months Tearfund has worked with the UK AIDS Consortium to put pressure on pharma companies to join the Medicines Patent Pool. A current initiative involves sending thousands of signatures from church members to Johnson & Johnson in the UK.

While this historic agreement between Gilead Sciences and the Medicines Patent Pool marks the first step in access to affordable medicines for people living with HIV, six other patent holders are currently in negotiations with the Medicines Patent Pool. Some concern has already been raised by Médecins Sans Frontières over the exclusion of some middle-income countries in the Gilead agreement, with the hope that future agreements are inclusive of all developing countries. “The Medicines Patent Pool will only work effectively if others follow Gilead and join the pool,” stated Deakin. “It is really important that companies such as Johnson and Johnson, Merck and Abbott now enter their own negotiations with the pool. One of the reasons given for not doing so previously was that they wanted to see the first pharma company reach a successful outcome. With Gilead this has now been achieved so there is no excuse for not entering into their own negotiations if they are serious about contributing to a sustainable solution to meet the needs of millions who need access to treatment.”

Source: AfricaFiles – Ecumenical Advocacy Alliance

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