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Catherine Tomlinson, Heather Moyo, Zain Rizvi, Claire Waterhouse, Salomé Meyer and Marcus Low on behalf of Fix the Patent Laws and the Cancer Alliance.  Click here for the full report (PDF)

Executive Summary:  Cancer rates in South Africa are expected to rise significantly over the next two decades.[4] In sub-Saharan Africa, the number of new cancer cases is expected to increase by more than 85% from 2008 to 2030.[5] By then, for every four deaths from HIV/AIDS in the region, there will be three deaths from cancer.[6] Along with a growing cancer burden, states will be confronted with rising and unaffordable prices for cancer medicines.

For example, while the volume of oncology medicines procured in South Africa remained the same between 2015 and 2016, private medical insurers spent an increasing share of their medicine expenditure on oncology treatments – from 8.8 to 9.3%.[7] Specialty medicines, in particular, pose a significant burden. One report found that specialty medicines used in oncology had an average cost of ZAR 23,533 per item in 2016.[8] Indeed, oncology specialty medicines accounted for only 13% of specialty medicines by volume, but made up 31% of expenditure for all specialty medicines.

This study seeks to investigate how South Africa’s patent laws influence access to cancer medicines by analysing the patent status and length, affordability of, and access to 24 case study medicines. Our research demonstrates that South Africa routinely grants and upholds patents that could have been challenged and rejected if South Africa adopted strong patentability criteria, patent examination processes and opposition procedures. Overlapping secondary patents create significant legal uncertainty regarding the patent status of medicines, dis-incentivise the entry of generic or biosimilar products, and hinder the affordability and accessibility of the medicines to patients in need.

While the 24 medicines were not randomly selected, they represent a large sample that illustrates certain characteristics of the patent system in South Africa and the relationship between domestic patent laws and medicines pricing and access.

PATENT STATUS AND LENGTH

• We found a total of 92 secondary patents on the 24 cancer medicines in our study. 74 were active secondary patents and thus potentially competition-blocking in South Africa.
• Of the total 92 secondary patents granted, 39 were rejected or withdrawn in at least one other jurisdiction. Secondary patents were composed of compositions (26), Markush claims (23), methods of use (17), methods of preparation (13), polymorph/isomer/ prodrug/ester/salts (11), combinations (8), selection patents (4) and other (3). (Some were classified in multiple categories).
• An additional 17 patents on these medicines were pending or accepted in South Africa, 6 of which had been rejected or withdrawn in at least one other jurisdiction.
• Secondary patents can significantly extend the length of monopoly protection beyond the 20 years mandated by international law. For example, the primary patent on rituximab expired in 2004, but it will be protected by secondary patents until at least 2030 – or 42 years after the first patent was granted in South Africa.

AFFORDABILITY

• Of the 24 medicines, 15 are available in India for less than half of the price offered to the South African private sector. In the most extreme case, a year’s supply of lenalidomide is priced at ZAR 882,000 in South Africa and less than ZAR 32,000 in India.
• 10 medicines that are not available in the South African public sector – likely due to their cost –
  are available in India for less than half the price offered to the South African private sector.

ACCESSIBILITY

• Of the 24 case study medicines, 21 are available in the private sector in South Africa and only 7 are available in the public sector. (Some additional ones may be available in specific public sector hospitals where budgets allow.) Of the 24 medicines in our study, 10 are on the WHO’s Essential Medicines List (EML) and only 4 of the 24 are on South Africa’s Essential Drugs List (EDL).
• Our analysis suggests that the lack of public sector availability of these drugs is driven mainly by high prices which, in turn, are caused by the proliferation of poor quality patents.

In other jurisdictions, poor quality patents are commonly rejected or withdrawn during examination or via opposition procedures. In South Africa, neither mechanism exists. Instead, the only mechanism to challenge patents is through undertaking litigation after a patent has been granted. Our research, however, highlights that patent litigation in South Africa is rare and thus many weak patents remain in force.

Currently there is zero onus on monopoly holders to demonstrate and deliver novel innovation as a prerequisite for receipt of extended commercial monopolies. Rather, the burden to disprove the validity of weak patents falls on third parties – such as patient groups or competitors – through undertaking expensive and lengthy litigation against the monopoly holder. This bias of South Africa’s patent system towards monopoly holders is at odds with government’s Constitutional obligation to take reasonable legislative steps to protect and promote the right to health of people living in South Africa. It is also particularly troubling given the disconnect between the cost of developing drugs and subsequent profits: a recent study found that the average, riskadjusted cost to develop a cancer drug was $648 million, while the median revenue was $1658 million.[9]

In 2016 United Nations (UN) Secretary-General Ban Ki-Moon’s High-Level Panel on Access to Medicines set out recommendations to improve medicine access and promote innovation to address health needs. The HighLevel Panel called on countries to fully utilise flexibilities to protect health contained within the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[10] TRIPS, which was adopted in 1995, requires World Trade Organisation (WTO) members to provide minimum standards of intellectual property protection, including 20-year patent terms on inventions. But the agreement also preserved important safeguards, or flexibilities, that states could utilise to protect health.

To date, South Africa has not fully taken advantage of these flexibilities. To improve medicine access, address the growing cancer epidemic, and remedy the bias in favour of monopoly holders, South Africa should follow the HLP’s recommendations and fully implement TRIPS flexibilities. In the short-term, South Africa must implement existing TRIPS flexibilities to reduce the exorbitant prices of cancer medicines, and increase access to lifesaving treatment. These include granting compulsory licenses, and importing cheaper, patented products from other countries (i.e., parallel importation).

For instance, if South Africa issued compulsory licenses on cancer medicines lenalidomide and sorafenib, the prices of these medicines could be reduced by more than 90% through accessing generics at prices available on par with those available in India. At lower prices, the public sector could offer these medicines, substantially increasing access to cancer treatment.

Going forward, South Africa must urgently revise its intellectual property policy to protect and promote medicine access by:

1. Setting stringent patentability criteria to limit the granting of patents to only genuine innovations (i.e., excluding mere new formulations or new uses of existing medicines from patentability);
2. Introducing examination and opposition procedures to ensure patentability criteria is met; and
3. Developing easy-to-use, workable procedures for granting compulsory licenses.

Notably, the South African government has made commitments to adopting and implementing these reforms in the recently released 2017 Draft Intellectual Property Policy. To improve medicine access in the country, government should urgently finalise this policy and introduce bills to reform the Patents Act and other health-related intellectual property legislation. Above all, the government must implement these TRIPS flexibilities, lest they remain words on paper. Thousands of people living with cancer in South Africa cannot afford to wait any longer.

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ENDNOTES

4. World Health Organisation. World Cancer Report 2014. Available at: http://www.who.
int/cancer/publications/WRC_2014/en/

5. Morhason-Bello I et al. Challenges and opportunities in cancer control in Africa: a perspective from the African organization for Research and Training in Cancer. Lancet Oncology. 2013 Apr; 14: e142-51.

6. World Health Organisation. Global health estimates summary tables: Projection of deaths by cause, age and sex, by World Bank income group and WHO Region. Available at: http://www.who.int/healthinfo/global_burden_disease/projections/en/ (accessed 9 October 2017).

7. Mediscor 2016 Medicines Report

8. Mediscor 2016 Medicines Report

9. Prasad V & Mailankody S. 2017. Research and Development Spending to Bring a Single Cancer Drug
to Market and Revenues After Approval. JAMA Intern Med. doi:10.1001/jamainternmed.2017.3601

10. United Nations. Report of the United Nations High Level Panel on Access to Medicines: Promoting innovation and access to health technologies. United Nations, 2016: http://www.unsgaccessmeds.org/final-report/ (accessed 15 November 2016)