May 032009

Part 1 Part 2 Part 3 | Part 4 | Part 5


We had SARS with wings and now to flying pigs

Reading between the lines

On the first of May Haaretz published an article titled Israel,  Arab states meet to combat swine flu in region where it covers the current saga to great length through the lens of local issues and government actions. At the very end of this article I found the most interesting thing in the whole article.

The main reason I was not surprised by the heavy hand and extreme ‘police state’ like measures the Israeli government choose to instigate, is that if you followed international law and the rapid changes to it since 911 you would not be surprised at all. As what is happening now in Israel is following those laws crossing all the T’s and dotting all the I’s.

I will start this story from where the article mentioned above has ended. It reads:

“Israeli team heads to India to examine swine flu drugs A Health Ministry delegation will head to India on Sunday to examine the quality of generic alternatives to Tamiflu, an antiviral drug being stockpiled around the world to treat swine flu. If the conditions are suitable, Israel could end up spending tens of millions of shekels on the generics – at 50 percent to 75 percent less than the cost of Tamiflu. But though the ministry is considering making a deal with Indian drug makers, it cannot legally go through with the deal at the moment. An Israeli court has issued an injunction preventing such purchases in response to a 2008 suit brought by the maker of Tamiflu, Switzerland’s Roche, which wants to stop tender proceedings for generic alternatives. Roche said yesterday that decision makers should look at Tamiflu’s quality and availability rather than its price.”

The underlined above is my emphasis and what I consider to be the most interesting part of this article.

If Roche got the Israeli court injunction in 2008. when did they start proceedings? Is Israel the only country subjected to such legal action? Did Roche knew in advance this outbreak was coming? Otherwise why would they pre-empt with such an injunction well a head of a rising need? If such injunction was put on the Israeli government by an Israeli court, which is an interesting conundrum in itself, why does the Israeli government sending teams to India to explore generics, if such action was rendered unlawful by the courts? All very interesting questions…

If you wana know what’s up – Follow the money

I can just imagine that any kind of looming pandemic, is the wet dream of every financially ambitions pharmaceutical organisation and I am sorry to say – I don’t know any that are not profit motivated…

I can also imagine that the new WHO international laws relating to pandemics put in place since 2005, were heavily lobbied for and influenced by, those who stand to benefit the most as a direct result.

The patent on Tamiflu the antiviral drug which was found to be effective against bird flu, and surprise surprise is also effective against ‘pig-bird-human flu’ viruses, is owned by a US biotech firm – ‘Gilead Sciences Inc.’ The Swiss pharmaceutical company ‘Roche Holding AG’ only owns the monopoly over production and marketing of the Tamiflu drug.

These exclusive rights of Roche and Gilead were increasingly challenged as early as 2005. Governments all over the world were confronted with Roche lack of capacity to produce the necessary quantities of Tamiflu. With growing fears of a global bird flu pandemic, countries worldwide were obliged under the new (then) international WHO laws to stockpile the drug, while Roche was unable to fulfil their orders.

So here we have not only a wet dream, but one where the heroine in the dream is leaping off the dream interface right into the lap of the dreamer, only to be grabbed by other copycats before Roche and Gilead had a chance to have their way with her…

It is not hard to imagine then, why both Roche and Gilead would want to ensure they could maximise the profit potential in any way possible before the patent runs out, including legal means.

The legal framework

However despite all this legal to and fro, what we have here – is a government which boldly goes against it’s own court ruling. That may not surprise any Israeli I am sure, being well desensitised to systemic corruption by now… But rest assured in this case your Government has it’s own pre-emptive plan, which it is about to execute well within their legal right.

To understand all this legal eagle manoeuvres, we need to look at ‘Compulsory Licensing’ under patent law – the mechanism which allows the overriding of existing patent rights on a medicine.

In 2003, the ‘World Trade Organisation’ (WTO) agreed to open up a loophole in the TRIPs Agreement by giving some countries compulsory licensing rights for patented medicines in order to protect the public health within their territory (read the decision here).

All WTO member countries can be eligible to import patented medications under this agreement. 23 developed countries announced voluntarily that they will not use this system to import. Other countries announced that they will only use the system in emergencies or extremely urgent situations. One of these countries is Israel, but of course. Those countries may apply for a compulsory license on a patented drug that will help them face a disease threatening the public health of its population.

The changes to the TRIPs Agreement came about as a result of the Aids/HIV crises in developing countries to enable governments to cope with growing public health crisis by waiving the patent rights of a private company and allowing the import of cheaper generic drugs needed to counter the problem.

Due to the panic around ‘SARS with wings’(bird flu) comparisons been made between the case for anti-AIDS drugs in poor countries and the case of Bird flu medication Tamiflu, that clearly falls within the scope of this new agreement. With WHO declaring a swine flu at phase five out of a scale of six, it is reasonable for a WTO member to apply for a compulsory licensing on the patent of Tamiflu in order to cope with the potential pandemic ahead.

The Indian connection

Roche eventually licensed drug firms in the developing world to make a cheaper generic form of Tamiflu, called oseltamivir or Fluvir. India’s Hetero Drug is claiming to be the world’s largest licensed producer of the generic version of Roche’s Tamiflu, said it could produce large quantities of the drug to treat the current breakout of swine flu.

“We’ve created a capacity to produce 80 million doses a month,” said Hetero director of marketing Srinivas Reddy. He added the Hyderabad-based company was having inquiries from many nations about supplies.

Hetero is the only producer of the generic anti viral in India that is licensed by Roche. Other big Indian drug companies also make generic versions of Tamiflu to export to countries where it is not patented. Ramesh Adige, president of India’s biggest generics company Ranbaxy, said the company was ready “to meet urgent requirements of countries to tide over the crisis emerging from the outbreak of swine flu.” However Ranbaxy declined to comment on how many generic capsules it could produce. Indian drug maker Cipla, is another major generics player, claims it can supply 1.5 million doses of a Tamiflu copycat within six weeks.

The India times reported today that the Delhi Patent Office has rejected ‘Gilead Sciences’ plea to patent its Hepatitis B drug. “This is Gilead’s second drug to be rejected by the Delhi patent office in the last two months. Last month, the same patent office turned down the company’s patent application for its popular antiflu drug Tamiflu as it found merit in Cipla’s opposition that the drug lacked invention to be given a patent under Indian patent laws.”

“Gilead has reportedly said it will contest the rejection of its patent application for Tamiflu. The rejection came as a timely booster for generic drug makers ahead of the global Swine flu outbreak. Cipla and other generic companies can now legally manufacture and sell their generic drug in India and other countries where Roche does not hold patent.”

According to Gilead’s website Roche has the marketing licence for the drug in India and has earned around $33 million globally for the quarter ended March 31, 2009, from it’s royalties on Tamiflu from Roche.

Meanwhile Roche has said it has enough Tamiflu on hand to treat five million people and can ramp up production swiftly. I bet they would…If Gilead’s royalties earned over a period of last 3 month is $33 million, can you imagine what Roche is pocketing from this latest bonanza?

The Israeli connection

Another twist to the story comes from Israel home grown copycat pharmaceutical manufacturer – Teva – the world’s largest manufacturer of generics drugs. In 2008 Teva announced plans to invest over $1 billion in India to acquire Indian drug companies and set up greenfield manufacturing facilities.

The investment was planned for 2 years. with $250-$300 million for manufacturing facilities and the rest to fund acquisitions in India.

In the beginning of 2008  Teva acquired over 100 acres of land near Gwalior, Madhya Pradesh, to set up manufacturing facilities that will match the production capacity of domestic generic majors. Regent Drugs, is a 100% subsidiary of Teva in India, along with it’s Indian arm, Teva India, plus a research and development centre in New Delhi, which it started a couple of years ago. Teva is rumoured to aim at major acquisition in India, Cipla, being one target.

Final words on the hyped national emergency

So what would Israel need in order to become eligible to import generic antiviral under the ‘compulsory licensing’ agreement? Well yes, the government would need to declare a national emergency and act accordingly. Which is precisely what the Israeli government is doing.

So please don’t panic, those measures are not a response to a real crisis. Two confirmed cases is hardly a pandemic…


Swine Flu – Man made or natural evolution –  Part 1 

Is Agri-biz at the root of swine flu? – Part 2 

We had SARS with wings and now to flying pigs – Part 3

Swine Flu  – The Smoking Gun – Part 4

The “Big One” is coming – Part 5