RICARDO SIQUEIRAFar-Manguinhos, of the Fiocruz, is a reference point in the Brazilian pharmaceutical marketRICARDO SIQUEIRA
Brazil is ready to transfer anti-retroviral manufacturing technology to Portuguese-speaking African countries, with which it has a cooperation agreement. Negotiations are underway for a future agreement with Angola, a country with 5 million Aids virus carriers. The idea is to support the installation of a plant to produce medications under a public patent and with free distribution. “Our objective is not to create an international antiviral market, but to share knowledge with countries that have the ability to manufacture” says Eloan Pinheiro, director of the Pharmaceutical Technology Institute (Far-Manguinhos), at the Oswaldo Cruz Foundation (Fiocruz). “We will transfer our technology free of charge, sending and receiving people for training in the cooperation program”, she explains.
The cost of setting up a plant like Far-Manguinhos, for example, goes as high as US$ 50 million. For an enterprise of this sort Angola could ask for a loan from the World Bank (IBRD), says José Marcos Nogueira Viana, international advisor to the Ministry of Health, the organ to which Far-Manguinhos is linked. “Brazil has expressed its view at large forums, such as the World Aids Conference in New York and the Pan-American Health Conference, that it is willing to transfer technology for the production of medications to fight the disease, since it is unable to transfer money. Our policy is international solidarity” he adds. The purpose of the agreement with Angola, or with any other African country, is to train future partners to develop and standardize formulas for unpatented medicines. “This is not the same as copying”, emphasizes Eloan. “We are talking about product development”.
Medicine policy
Far-Manguinhos is a reference point in the Brazilian and international pharmaceuticals markets. The institute has already developed eight of the 12 anti-retrovirals produced by six official laboratories and distributed by the Ministry of Health. These medications are not protected by patents as they were registered in this country before 1997, when the Brazilian Patents Law came into effect. Eight of these antivirals have already been approved in bioequivalence tests, which assess their quality standards against branded medications. Six of them are registered as generics.
In Brazil, the development of anti-retrovirals at Far-Manguinhos and their production in six public laboratories support the Ministry of Health’s Aids medication distribution program. Nevirapin, for example, which used to cost US$ 3.04 a 200-mg tablet, had its price reduced by 58%. In the case of Didanosine (ddI), the reduction was 72%. At present, these medications already account for 41% of the R$ 575 million that the government spends on buying anti-retrovirals for free distribution. If all the medications in the anti-Aids cocktail were imported, government spending on the project would be almost twice as much. Spending on imported, patent-protected antivirals still account for 59%.
The government has tried to reach an agreement with the big pharmaceutical companies to lower prices. In September, after winning its dispute with the US government in the World Trade Organization (WTO), in which the US government questioned article 68 of the Brazilian Patents Law, on compulsory licensing in the event of abuse of economic power, and the threat to halt Nelfinavir’s patent, led to Roche, the owner of the brand, to lower its price by 40%. Nelfinavir, moreover, had already been developed by Far-Manguinhos. With the agreement, the price per tablet produced by Roche will fall from US$ 1.07 to US$ 0.64. This has been the second agreement reached with the pharmaceutical company this year.
In March, Merck Sharp e Dohme lowered the prices of Efavirenz and Indivinar, by 59% and 64.8% respectively. The results speak for themselves: the Aids mortality rate in this country has fallen by half over the last five years and the number of people being interned in hospital because of opportunistic diseases such as tuberculosis or cytomegalovirus, has been cut by 80%. “The State has to have the power to monitor prices and profits and to establish a clear policy for treating diseases that the pharmaceutical industry considers unprofitable” justifies the director of Far-Manguinhos.
The same policy applies to treating diseases associated with poverty and lack of basic sanitation, such as malaria and Chagas’ disease, which are among the various lines of research undertaken by the institute. The projects are structured according to the level of priority. Research into diseases established as neglected, for example, tuberculosis and leishmaniasis, are among these priorities, as is research into plant-based therapies and medications referred to as exceptional, such as anti-psoriatics, anti-psychotics or those against hepatitis and epilepsy. The strategy is to keep the focus of the research on what society and people most need. Eighteen plant-based products are currently being researched. Another four are being grown. Far-Manguinhos is currently carrying out chemical and pharmacological tests on five products and on the formula of two others.
The projects are conducted by 134 researchers in various branches of knowledge, six post-doctors, 26 doctors and 30 researchers with masters’ degrees. The researches are monitored by a Project Planning and Management Nucleus, which is responsible for assessing the work and which acts as a sort knowledge development council. The nucleus assesses each project’s cost/benefit ratio, cuts those with poor performance, interfaces with the market and assesses the team’s efficiency. “The private sector only trusts us when laboratory-bench-scale development is standardized. And this is done by the Management Nucleus. We carry out laboratory-scale research in the pilot plant and with products of up to 1 kilo. Through partnerships with the private sector we can jump from 1 kilo to 30 kilos”.
Optimization of spending
Partnership between the public and private sectors has been the Far-Manguinhos strategy for producing pharmaceutical products and developing pharmaceutical formulations. The institute has non-disclosure agreements for copying molecules of products costing more that US$ 100, for which there is little supply or are not served by the market. The synthesis of these products is transferred to the private sector, which takes on the responsibility for manufacturing them. Many of these products are already on the market. None of these molecules is protected by patents, which frees the country from the obligation to pay royalties and enables prices to be monitored.
In partnership with the Federal University of Rio de Janeiro (UFRJ), the institute has been carrying out research into new antivirals for three years. Sixty molecules have already been patented and they are ready for pharmacological testing. Toxicology and sub-acute pharmacological tests have already been done out and it has been proved that the molecules have the active potential for new medications. Far-Manguinhos, is now seeking partnerships with private laboratories to develop the pharmaceutical product, since it is a risky undertaking. We expect, says Eloan, to produce at least two pharmaceuticals. “We prefer to entrust the development to companies that have pharmacochemical production here in Brazil. Our partners will have the license to manufacture. But as the patent is public, the State will retain control over the market price”.
New molecules
Far-Manguinhos is also part of the worldwide network of laboratories, headed by Médecins sans Frontière, the French organization financed by the Global Alliance – formed by Bill Gates, president of Microsoft, and the Rockfeller Foundation, among others -, to conduct research into new molecules for treating leishmaniasis, malaria and Chagas’ disease or those diseases neglected by the large pharmaceutical companies. Between 1975 and 1997, of the 1,233 new drugs developed, only 1% was intended for treating these diseases, which, however, kill 13 million people a year in developing countries, according to information from Médecins sans Frontière. These molecules will be developed in partnership with the public and private sectors and States will have the right to control prices, since the purpose is to eliminate these diseases.
Pharmacochemical market
Brazil has 3.37% of the world pharmaceutical market, representing US$ 10.31 million. It is the fifth biggest in the world and the leading market in Latin America. With regard to the production of medications, in the opinion of the director of Far-Manguinhos, the Brazilian market is competitive: 89.3% of medications are produced in Brazil. But when it comes to pharmaceutical ingredients the opposite is true: 82% of pharmochemicals are imported. We have few companies with the technological ability and with the international standards required to undertake all the stages in research.
There are only six or seven companies in the country. “From this standpoint, Brazil is highly dependent” she says. Brazil, in her opinion, does not have a policy of encouraging technological development and the local production of active principles. On the contrary, what can be seen is a decrease in imports of active ingredients as a result of an increase in imports of finished pharmaceutical products, and a tendency to lower import duties on importing finished products, while active ingredients remain unchanged.
This lack of incentive helps explain the sequence of gaps found in the various stages of developing a new medication. The first occurs between the basic research and the pre-clinical trial: the results are published, but the pre-clinical trial stage does not begin. And when it does take place the validated drugs do not go forward to the clinical trial stage because of the company’s strategic choices, creating a second gap in the development of the medication. And, finally, when clinical research makes progress, the new or existing drugs do not reach the patient because of lack of commercial interest.
In the opinion of the director of Far-Manguinhos, only partnership between the public and the private sectors will be able to consolidate the policy on pharmaceutical ingredients in this country. “We have to protect local competitive industry, with tax incentive policies to strengthen domestic products. Competition brings price down.” She quotes India as an example. It is one of the world’s biggest producers of generics, and it has developed its market with a national program of tax and breaks export incentives for medications. The Indian system of developing the pharmaceutical industry was built on a succession of short-term strategies to leverage businesses, particularly in the private sector.
The government created a foundation to promote the development of medications. It restructured and modernized research and development centers; it implemented investment funds for Research and Development into new medications; it changed the Patents Law and adopted tax incentive policies benefiting imports. In the medium-term, it invested in strengthening the infrastructure for the New Molecules Discovery program and in developing human resources for research into new medications. The results are well-known: India is, at present, one of the biggest producers of generic medications in the world. Eloan believes that strengthening the pharmochemical sector in Brazil is going through a similar process.
Partnership for generics
The Indian laboratory Ranbaxy is studying a joint venture with a Brazilian laboratory to set up a plant for manufacturing generic medications in this country. The giant Teza, of Israel, has begun negotiations for the production of generics in partnership with Biosintética. “There are also understandings with Canadian companies, through the National Association of Medication Manufacturers, with the same end in view”, adds José Marcos Viana, international advisor to the Ministry of Health. The federal government’s intention is to expand local production of generics, which, at present, represent between 5% and 6% of the pharmaceutical market in Brazil”, he says.
Some multinationals pharmaceutical companies guarantee that they will soon begin producing generic versions of their out-of-patent products. But the government’s strategy is to look for partnerships with large international producers like India – the biggest private sector producer of generics in the world -, Israel or Canada. The first step was to put up a credit line from the National Economic and Social Development Bank (BNDES) available to companies interested in producing generics in this country.
The second was for the National Congress to approve, in February this year, conversion of the provisional measure altering clause 7 of article 43 of the Patents law, in order to facilitate production of generic medication in this country. The change in the legislation makes it clear that generics of a given brand can only be sold after 20 years, when the period of patent protection ends. But there is no impediment to companies undertaking research on the active ingredient before that date. “The earlier wording left it open to restrictive interpretation that would prevent not only production but also research” says Viana.
This matter was the subject of heated debate between the European Union and Canada, which allowed research, production and warehousing of generic medications before the end of patent protection. The debate was mediated by the World Trade Organization (WTO), whose decision resulted in an international agreement, enabling only research before the 20 years were up. This measure became known in the market as the Bolar Provision, referring to another dispute with the United States, before the Trips agreement, involving a company producing generics, Bolar, and a large pharmaceutical company.
“The matter went to the Supreme Court, which authorized research before the end of the patent.” tells Viana. Besides Brazil, only Israel, the United States, Hungary and Canada give this protection. The Bolar Provision was the essential reason, besides the money from the BNDES, for attracting companies like Teza and Ranbaxy to this country.
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