legal battles by pharmaceutical monopolies

7/18/2019 Legal battles by pharmaceutical monopolies

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Legal battles by

pharmaceutical monopolies

A group of pharmaceutical companies has engaged in a legal war

against the government to continue its dominance of Peru`s multi-

million dollar biopharmaceuticals market, which includes latest

generation medications for the treatment of chronic diseases such as

cancer. n recent years, members of the !ational Association of

Pharmaceutical Laboratories "ALA#A$PE%, including $oche, P&'er,

Abbott, (ristol, Lilly and )erck among others, have sued the )inistry

of *ealth and blocked the entry of similar drugs on the basis that theyare unsafe. *owever, +oPblico has learned that the publication of a

new regulation in coming days will reverse this situation and lead to

lower prices for eisting drugs.

(y #abiola /orres L0pe'

oo-publico.com

Angelica, aged 43, is from Piura. Her life changed dramatically after visiting

the Institute of Neoplastic Diseases Lima IN!N" in #$%%. &he mother of t'o

young children, she 'as earning the minimum 'age as a graphic designer andhad no health insurance. (he left the clinic in tears shortly after reading the

results of her medical e)amination* +reast cancer 'hich had already spread to

dierent parts of her +ody. &he diagnosis 'as depressing, until months later

she heard of a latest generation drug* the so-called +iopharmaceuticals,

created to treat chronic diseases from the cells of living organisms,

manufactured since the end of the t'entieth century thans to advances in

genetics and molecular +iology. A single dose can cost up to P!N /,$$$ 0(D

#,$$$" on the domestic maret.

&his product 'as her last hope.

1I didn2t 'ant to die and +ecause of my children I did everything I could to

ght1, the 'oman tells 5oP6+lico +y telephone, her voice +reaing as she

recalls the economic and emotional sacrice she has e)perienced 'ith her

family over the last four years. Angelica, 'ho agreed to tell her story on the

condition that her identity 'as protected, is a victim of one of the most

common cancers in Peru and is also part of the #$7 of the population 'ithout

health insurance. In the midst of this terri+le situation, she faced another harsh



reality* the eective +iopharmaceutical that 'as her treatment hope for

surviving the illness 'as too e)pensive.

Angelica 'ould have to save her income over the ne)t 8$ years to pay for the

complete Herceptin therapy that she 'as prescri+ed. &his drug is one of the

most e)clusive and sought after oncological +iopharmaceuticals and is the

9agship medication of the ('iss multinational company :oche. ;ith no other

alternative to ght her disease, she made the hardest decision of her life* she

mortgaged her home to o+tain a loan and undergo the treatment of 8#

Herceptin ampoules in a private clinic. And that 'as ho' she paid P!N

3/8,$$$ for the +iopharmaceutical. Her treatment ended, +ut she is still paying

the +an and perhaps 'ill +e doing so until the last day of her life.

;hat is the history of these drugs in Peru, and of the multinational la+oratories

that produce them, and 'hy are they so e)pensive<

LA(+$A/+$E1 A!2 (+P*A$)A3E4/3AL1

5oP6+lico has esta+lished that a group of more than %$ +iopharmaceutical

companies has entered our country since #$$$, after +eing progressively

imported +y capital su+sidiaries of the %$ largest pharmaceutical companies in

the 'orld* :oche, A++ott, =ristol->yers (?ui++, Lilly, >erc, @la)o(mithline,

PBer, (ano, Cohnson Cohnson and @enByme. &hese are grouped together

under the Peru National Association of Pharmaceutical La+oratories

ALAEA:P!". &he medications, after +eing authoriBed +y the >inistry of Health

>IN(A" and receiving ta) e)emptions from the >inistry of !conomy and

Einance in #$$%, hit the domestic maret, +ut 'ith higher prices than those

seen in neigh+ouring (outh American countries.

&he +iopharmaceutical drugs that arrived in Lima 'ere already the +est sellers

in the 'orld* the oncologicals >a+thera, Herceptin and Avastin +y :oche of

('itBerland, 'hich dominates the innovative anti-cancer product segment, and

the arthritis medications Humira and !n+rel, manufactured +y A++ot and PfBier

respectively. All these e)clusive and restricted-use products, 'hich are not sold

in pharmacies in any part of the country, +egan to +e purchased +y !ssalud-

'hich oFcially services %$ million mem+ers and shoulders the highest +urden

of e)penditure on degenerative diseases treatment in the country, 'hich

correspond to the insurances of the Armed Eorces, the Police and private

clinics.

Eifteen years after the entry of the +iopharmaceuticals, these %$ companies

dominate the local maret and have +een accused of monopolistic practices in

a +usiness that +rings them annual earnings of up to P!N #$$ million for pu+lic

sector purchases alone, according to analysis +y 5oP6+lico. &he la+oratories

have defended this position of dominance since #$$G, 'hen they led the rst

la'suits against the state and a group of Peruvian pharmaceutical companies



'ith a single aim* +locing importation of so-called +iosimilar medicines,

products similar to those of the +iopharmaceutical companies, +ut

manufactured +y companies located in India, (outh orea and =raBil. &he

argument 'as that these products are detrimental to the health of the

population +ecause the countries 'here they are manufactured do not have

internationally adopted health standards.

Initially, the ALAEA:P! corporations directed their re against the Peruvian

importers of +iosimilars, +y maing reports of unfair competition to the

Institute for the Defense of ompetition and Protection of Intellectual Property

Indecopi", to prevent those la+oratories promoting products compara+le to

their o'n. It 'as then the turn of the Directorate @eneral of >edical (upplies

and Drugs Digemid", an organ of >IN(A that monitors the country2s

pharmaceutical industry, 'hich received various 5udicial re?uests for it to re5ect

the registration of the +iosimilars that 'ere to +e imported to compete 'ith

+iopharmaceuticals.

/*E P*A$)A3E4/3AL1 vs /*E 1/A/E

&he ey moment of the legal +attle occurred less than a year ago, 'hen the

t'enty-one ALAEA:P! la+oratories denounced Digemid. &hey then led an

in5unction 'ith the 5udiciary to prohi+it entry into the Peruvian maret of all

products that 'ere declared similar to any of their +iopharmaceutical lines,

+ased on the argument that the importers had failed to prove the therapeutic

eFcacy of the drug on the health of people, and that >IN(A did not have

sanitation standards +y 'hich the medications could +e evaluated.

In its defense +efore the court, Digemid said +iosimilars admitted into Peru tothat point 'ere not dangerous. Despite this, the state lost the +attle against

ALAEA:P!. n % >ay #$%4, Cudge >al+ina (aldaJa of the (eventh

onstitutional ourt of Lima accepted the pharmaceutical guild2s re?uest and

the ne)t day Digemid 'as una+le to respond to more than %$$ applications for

+iosimilar medicines that needed health registration +efore +eing imported into

Peru. =y the time this happened, the legal 'ar initiated +y the %$ la+oratories

to maintain its maret dominance had taen place across several fronts.

5oP6+lico in?uired into complaints presented +y the ALAEA:P! partners to

Indecopi and Lima2s constitutional courts and uncovered the follo'ing cases.

In #$$G, :oche sued the Peruvian company Earmindustria through IND!PI forunfair competition for having registered and imported the drug :editu),

produced +y the Indian la+oratory Dr. :eddyKs, to compete 'ith its

+iopharmaceutical >a+thera. &his drug is used against non-Hodgin

lymphoma cancer, 'hich aects the lymph. &he ('iss pharmaceutical giant,

'hich achieves annual sales of 0(D %,3$$ million of >a+thera according to

gures from the international consultancy I>( Health, accused Earmindustria of



promoting a product as similar to its o'n 'ithout having proven this to +e the

case. It has also prevented !ssalud and other medical insurers from ac?uiring

the drug.

In #$%3, Cohnson Cohnson of Peru, a su+sidiary of the 0(-o'ned company of

the same name, led an in5unction against Digemid and la+oratory limed to

suspend the veterinary product :emsima, a competitor to its anti-arthritis

product :emicade, 'hich +rings in revenues of 0(D /$ million per year

'orld'ide. &he action led in the Eifth onstitutional ourt of Lima 'as

dismissed, +ut this did not discourage the remainder of the multinationals from

follo'ing its controversial steps.

Also in #$%4, the 0( corporation PBer presented t'o in5unctions +efore the

Eirst onstitutional ourt of Lima against Digemid and the Peruvian

pharmaceutical companies Peru La+ and Mpharma. &he la'suit sought that the

>IN(A oFce refrain from granting health registration for the anti-arthritis drug

Alte+rel, promoted +y these t'o companies as similar to the +iopharmaceutical!m+rel, 'hich generates revenues of 0(D ,G8 million annually for PBer

around the 'orld, according to I>( Health.

)!1A $E54LA/+!

&hese la'suits have occurred not only in Peru, +ut also in (pain and in other

countries in Latin America. &he group of %$ la+oratories has +rought a scientic

argument to the courts to maintain its dominant position in the

+iopharmaceuticals maret and to delay the entry of its competitors into a

+usiness that +rings in huge prots. &he highest incomes for these companies

arise in sales of anti-cancer medicines, a disease 'hich rans as the second

leading cause of death in our country, 'ith 48,$$$ ne' cases diagnosed each

year, according to the IN!N. >any patients do not have the resources to cover

therapies 'ith latest generation +iopharmaceuticals and only receive palliative

medicine.

5oP6+lico has learned that this comple) situation 'ill end in the coming 'ees

'hen >IN(A pu+lishes regulations that are e)pected to esta+lish specic

health standards and to open doors for +iosimilars or replicas of the originals

'hose entry and registration in Peru have +een +loced +y the+iopharmaceutical since the 5udiciary ruled in favour of ALAEA:P! almost a

year ago. Ho'ever, the Director of the association, Augusto :ey vie's this 'ith

concern. In an intervie' 'ith this 5ournal, he said ALAEA:P! opposes Digemid2s

draft regulation, +elieving it to contain transitional measures that are

concessional for importers of +iosimilars. &hese, he says, allo' them a period

of four years to +ring in medications 'ithout strict ?uality controls.



:ey, 'ho re5ected that a pharmaceutical monopoly e)ists, maintained that if

the Digemid regulation is approved under these conditions, it 'ill not +e in line

'ith international re?uirements to ensure the safety and eFcacy of the

products. &he representative of the #% pharmaceutical companies comprising

ALAEA:P! stated, If pu+lished, no one 'ill +e a+le to cele+rate. ;e cannot

allo' them to enter the maret if they do not meet health standards1

1I no' they are opposed to the e)istence of a transitional period in the

registration and monitoring re?uirements for ne' la+oratories 'ishing to enter

Peru ..." &his 'ill +e a staged process. Health >inister Ani+al Oelas?ueB already

has the regulation in his hands for approval. &his regulation is an A-% priority

for the health sector. &here are asymmetries in the pharmaceutical maret 'e

have to resolve, 'ith clear and transparent rules to ensure the registration of

safe medicines and create price competition,1revealed sar Amaro, the head

of Digemid, in dialogue 'ith 5oP6+lico.

&he senior >IN(A oFcial is careful during the intervie' to not use the 'ordmonopolyQ to descri+e the position of the pharmaceutical companies in the

+iopharmaceuticals case. Ho'ever, in the pu+lic de+ate, many individuals,

from former AP:A Health >inister scar 0garte to the former Prime >inister in

the current government Cuan CimneB >ayor, as 'ell as oFcials from !ssalud

and researchers from the N@ International Health Action, have taled a+out

monopolistic practices in the +iopharmaceuticals maret. Indecopi has also

investigated the ?uestion of collusive practices in the case of some of these

la+oratories, +ut has not ned any of them for lac of evidence.

/*E (+1L)A$1 6(++)6

As the end of maret e)clusivity for these pharmaceutical companies

approaches several of their patents 'ill e)pire +et'een no' and #$%" and

the +iosimilar industry R+oom2 +egins, the 5udicial +locage currently aecting

these products in Peru could +e lifted 'ith approval of the >IN(A regulation

'hich deals 'ith the registration process and denes the re?uirements to +e

imposed on these medications as recommended +y the ;orld Health

rganiBation ;H", the 0( Eood and Drug Administration and the !uropean

>edicines Agency. ne of the main re?uirements is that the la+oratories 'hich

import these alternative products implement pharmacovigilance systems toreport to Digemid adverse reactions if any" on the health of their patients.

And since their appearance, la+oratories that produce similar drugs to those

mareted +y the multinationals have faced a tough scientic de+ate a+out the

evidence of eFcacy, safety and compara+ility of their products compared 'ith

the original +iopharmaceuticals, given that the manufacture of the latter today

there are 3 of this type in the 'orld" represents a process in 'hich millions of



dollars are invested. =ut one aspect that today is in their favor is that @erman

companies lie >erc merged 'ith Indian Dr.:eddyKs la+oratory in #$%#" have

+egun to develop their o'n catalog of +iosimilar drugs, at lo'er prices. &he

same director ALAEA:P!, Augusto :ey, conrmed that several of its partners

are in the process of going into the +usiness of copying +iopharmaceuticals.

;hat seems to +e clear is that entry into the Peruvian maret of +iosimilars

could, as has already happened in some !uropean countries 'ith strict health

monitoring, reduce +y +et'een 3$7 and /$7 the price of the originals,

according to preliminary pro5ections +y specialists of the >inistry of Health,

'ho are preparing a report. &hese calculations are supported the evidence of

'hat occurred 'ith :oche2s oncological product >a+thera, 'ith the company

o+liged to reduce its price +y half a+out P!N 8,$$$ to P!N #,8$$ per dose"

'ith the arrival of competitor :editu) in #$$G.

1A +usiness of single suppliers allo's harmful distortions in the prices of

medicines. &oday there are products 'orth +et'een P!N %,$$$ and P!N /,$$$per dose, i.e. they cost up to #$ times their actual price1, said Cavier LlamoBa,

pharmaceutical chemist of the research section of the N@ Action International

Health, 'hich produced a detailed study in #$%% on the cost of the medicines

monopoly in Peru. &hat is 'hy (eguro Integral de (alud omprehensive Health

Insurance - (I(", the state organ 'hich su+sidiBes health care for %8 million

Peruvians 'ith scant resources, has no +udget to cover e)pensive

+iopharmaceutical therapies.

Although not covered +y (I(, Angelica, the 'oman 'ho had to sell her house to

pay P!N 3/8,$$$ in order to aord her treatment for +reast cancer, continues

+attling to prolong her life, 'hile the pharmaceutical companies play their lastcards to e)tend their dominance in the e)pensive +iopharmaceuticals +usiness.

legal battles by pharmaceutical monopolies

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