Skyhigh drug prices made Romania mull unusual path

The story, confirmed by POLITICO, highlights the difficulty countries have in affording life-saving treatments that increasingly come with eye-popping price tags.
Under pressure to reimburse the drugs that could cure the 600,000 people estimated to be infected with the disease in Romania, the government considered compulsory licensing, a legal form of patent infringement to cut prices, according to several people involved in the discussions.
“We were embracing the idea,” former Romanian health minister Nicolae Bănicioiu told POLITICO.
But then politics intervened.
Social-Democrat Victor Ponta’s government fell in early November following protests against corruption triggered by a Bucharest club fire that left 64 dead. Bănicioiu was out as health minister and the compulsory licensing plan was put on ice.
Romania would have been the first EU country to use the strategy to bypass drugmaker patents for hepatitis C drugs.
Greece is also contemplating the patent-workaround strategy for the life-saving drugs, Ioannis Baskozos, secretary general on public health in the country’s health ministry said at a recent Brussels conference.
Portugal has used it as a bargaining chip in negotiations with drugmakers last year.
Compulsory licensing is enshrined in most countries’ laws, but it’s been rarely used, said Tahir Amin, co-founder and director of intellectual property at the U.S.-based NGO Initiative for Medicines, Access and Knowledge. “It’s a political issue, like anything related to patents,” he said.
Now, a high-level United Nations panel is studying the very issue: how intellectual property rights and trade rules impact the affordability of medicines, medical devices and diagnostics around the world, with a report expected in June.

Poster child

The Romanian case involves Sovaldi, a widely-hailed treatment that effectively cures hepatitis C. But the breakthrough is also infamous for the price tag: U.S.-based Gilead lists it in Europe for around €50,000 for a 12-week treatment, although countries get discounts, often undisclosed, in closed-door negotiations.
Many believe it is this price tag that revved up the current debate over drug pricing.
For Romania, which spends some €1.7 billion a year on health care, about 4 percent of its gross domestic product, the cost of Sovaldi is prohibitive. Drugmakers and some experts argue that it would save money over the long term by curing the disease.
Romania has the highest number of hepatitis C patients in the EU, possibly due to tainted blood transmissions 30 to 40 years ago, according to a 2015 report commissioned by the European Liver Patients Association. Many patients believe they got it from poor hygiene in dentist offices, said Marinela Debu, president of the Romanian liver patients’ association.

The potential way out

Early last year, Romanian authorities were under pressure to provide the drug. Vasile Ciurchea, head of the country’s national health fund, promised negotiations with drugmakers would start as soon as possible.
In spring 2015, Andrew Goldman, working for the access-to-drugs campaigner Jamie Love’s NGO Knowledge Ecology International (KEI), met with Bănicioiu and the Romanian National Medicines Agency boss Marius Savu. On the agenda: A way to get cheaper hepatitis C drugs, using a strategy pursued in the 1990s by South Africa for HIV drugs. Love made a name for himself advocating for this strategy.
In October, his group was part of a coalition asking the U.K. health secretary to overthrow patents protecting Roche’s expensive Kadcyla breast cancer drug, arguing for the manufacture or import of biosimilar versions of it to reduce the costs.
In Romania, Bănicioiu wanted to get the state-owned generics manufacturer Antibiotice Iași to produce the treatment locally.
“The process they were proposing was a long-term process, where one had to see what the possibilities were and make sure things were in agreement with European legislation,” said Bănicioiu.
But just before the government’s resignation, Romania announced it had cut a deal with AbbVie to introduce two similar drugs to Sovaldi for patients with the most severe form of the disease and for some with a lesser form, but who couldn’t tolerate the conventional treatment.
The price is confidential, as in many other countries. Former head of the Romanian medicines agency Savu said it was cheaper than the conventional treatment with interferon and ribavirin. That would put the prices for the drugs, Exviera and Viekirax, somewhere between €11,000 and €13,000 for a complete treatment per patient, Romanian media outlet Hotnews.ro wrote.
The agreement struck with AbbVie is based on how well patients fare, so the company would have to repay the cost of the treatment if the patient is not cured after 12 weeks, Savu said.
But even if the price is lower than the conventional treatment, which has serious side effects, only the most advanced hepatitis C patients can get the AbbVie drugs. At the end of last year, some 750 people had received approval to start treatment.
The deal with AbbVie did not mean however that the compulsory licensing plan was abandoned, according to Bănicioiu.
“The two processes were parallel, [s0] you didn’t have to keep patients waiting,” he said. The thinking was that the compulsory licensing process would take two years, as it involved going to court and talking to the originator companies “to ensure one does not lose billions of euros in court cases,” Bănicioiu said.

Legal questions

KEI reached out to Gilead and Brystol-Myers Squibb asking them to license their hepatitis C drugs in Romania before the negotiations with AbbVie concluded. Both companies responded that they would rather seek access to the market by directly engaging with the Romanian government.
The government resignation and Savu being transferred to a new position from the helm of the National Medicines Agency just before the government fell left things up in the air.
“The compulsory licensing [process] was not finalized; it is a very sensitive problem at EU level to decide to infringe on a patent,” Savu said. “When you sign an intellectual property treaty, you have to have a very solid argument to violate it, because the entire innovation is based on this.”
But KEI’s Goldman argues there are a lot of misconceptions surrounding compulsory licensing, that they have tried to fight against. “It can be used in any way that the national law allows,” based on the Agreement on Trade-Related Aspects of Intellectual Property Rights. “In practice, many people in power are concerned about the blowback from the industry. There has to be a political will to do that,” he said.
Even though the Romanians shied away from compulsory licensing, worried about the reaction from the EU, a Commission official said that the issue was in the hands of national governments. “We don’t have much competence to act on this in the EU,” said Alfonso Calles Sanchez, policy officer in the Directorate General for Internal Market’s unit dealing with intellectual property.
Some lawyers in Brussels are skeptical about the potential for success of the Romanian endeavour.
The original drugmakers are willing to sell in Romania and there is competition on the market between them, so it would be hard for the government to find a clear legal basis for compulsory licensing, said Thomas Graf, partner at Cleary Gottlieb. “And the idea of producing the drugs in Romania could also raise suspicions of protectionism,” he said.
James Killick, partner at White & Case, agreed. “There would be no legal basis or justification for it. You’re doing it just for savings.”
In the second half of 2016 negotiations will start for a new agreement on a hepatitis C drug that will be extended to those with less severe form of the disease,  said Ciurchea, head of the Romanian health fund. “There are several competitors … We hope to obtain a much better price.”
Some patients cannot wait anymore.
“There are desperate people who go and get generics. It’s not normal that desperate people have to go to India and Egypt when they as citizens of an EU country do not have access to medicines,” said Debu, from the liver patients’ group. “In Romania our people are dying while having the treatment at their doorstep.”