Pharma industry: How to deal with WTO TRIPS ?

While the Doha Declaration of WTO/ TRIPS for the LDCs' patient waiver is due to expire on December 31, 2015, a confirmation request for its extension at least up to 2021 has not yet been accepted. As such, the greatest challenge to be faced by the Bangladesh pharmaceutical industry is the end of the patent-free regime in 2016 as per WTO/TRIPS agreement adopted. The least developed countries (LDCs) have been enjoying the exemption from complying with it since then. But now under this TRIPS agreement, the WTO member-states have to legislate and enforce the minimum standards for the protection of intellectual property such as copyrights, patents, designs and trademarks. Otherwise, local pharmaceutical manufacturers will have to cease  production, distribution and sales of medicines that should come under this intellectual property rights agreement for protection as elsewhere in the world.
But the WTO could not specify as yet the number of products to be under patent protection rights that may be 25 per cent of the total branded generics. This will create a radical change in the industry scenario as several major changes are to be expected. First, price control will be lifted. Producers have to pay for patented products as well as license fees and stipulated agreement clauses for export of patented products may create problems, as Bangladesh cannot export patented products without paying / patent owner's approval which will be more costly.
In addition, foreign firms will get free access to local market, and multinational companies (MNCs) can produce several products in Bangladesh that are not allowed now. At the same time, the impact may not be as devastating as it seems. Because, about 75 per cent of the drugs in the WHO list are not subject to patent protections. And many of the products in Bangladesh are generics, thus not subject to WTO patent protection jurisdiction. However, costs of licensing fees, impeded access to export markets, withdrawal of local protection, and potential rise in import costs are issues that need to be considered. So for the forward-thinking local drug manufacturers will have to adapt their product portfolio as necessary or suffer a steep drop in their sales.
However, the global 'patent cliff' may mitigate this a little if we could develop reverse engineering mechanism like India/China along with the recognised bio-equivalent test laboratories in Bangladesh to comply with the original products.
As implementation of the much-dreaded TRIPS has been haunting the global pharmaceuticals for years, 20 drugs, including Pfizer's cholesterol-lowering atorvastatin lipitor, Bristol-Myers Sanofi's blockbuster blood thinner plavix, Eli Lilly's atypical antipsychotic zyprexa and Takeda's diabetes medication actos will become generic drugs in the years ahead. It's critical that all traditional pharma companies go through a conscious process to evaluate generics as part of their brand strategy.
Between 2011 and 2016, the world's best-selling drugs, with about $255 billion in global annual sales, are set to go off patent, as recent data from London-based research firm EvaluatePharma has revealed.
Once the blockbusters lose their patent protection lower-price generics are expected to decimate as much as 90 per cent of the sales of innovator companies.
So after the implementation of WTO/TRIPS, can LDCs like Bangladeshi consumers and companies providing healthcare will gain from the substantial slashes in costs as we are 97 per cent dependent on import-based  API from India/China? Leading pharma companies have to look at new ways and strategies to fill the gap instead of relying on traditional patent blockbuster models. All industry players will have to embrace the generic market model as an increasingly important part of the overall pharmaceutical lifecycle in compliance with the economy/per capita income of Bangladesh in comparison to the developed countries of the world.
Among all the 50 LDCs, Bangladesh is the only country that has quality pharmaceutical manufacturing base with marketing capability overseas. Moreover, the country has also the potential to export its medicines and pharmaceutical items to at least 87 market destinations across the world. There is a need to form a platform among 50 LDCs within the Asia Pacific and Africa Pharmaceutical Union (AAPU) to minimise the existing registration requirement for companies and products within themselves so that pharmaceutical products, which are registered by the Directorate General of Drug Administration (DGDA) of the Bangladesh government may be registered in the LDCs in a fast-track way. If required, the issues relating to free sales certificates/certificate of pharmaceutical products, a valid good manufacturing practice (GMP) certificate and product approved annexure can easily be dealt with the counties applied for.
"This will not only save time and money but also enable the medium-ranking companies to get the access to the international marketing domain and the current export sales turnover of pharmaceuticals will grow by many folds within the shortest possible tenure", said this writer in seminars of EPB/MOFA/DCCI and also published in different national dailies.
The gap in the provision of medical services in Bangladesh provides a strong business opportunity for private healthcare providers to make a foray into the market and establish a first mover advantage. This is further affirmed by the persistent challenges facing the Bangladesh government in remedying the system's shortcomings including a lack of medical infrastructure, illegal clinics and budgetary constraints.
According to Export Promotion Bureau (EPB) data, the sector made $41.17 million shipments, registering a 2.8 per cent decline compared to that of FY'14 mark which was $42.4 million in the first seven months (July-January). The current financial year's (FY'15) target has been set at $73.02 million.
Among the 258 licensed pharmaceuticals, 30 top ones enjoy almost 80 per cent of the pharmaceutical business and top 50 companies share almost 98 per cent of over US$ 2.17 billion pharma market of Bangladesh. It's also appreciable that meeting the 97 per cent of local market demand , Bangladesh is exporting medicines to 87 countries including the US and a few European countries and it has already received global recognition. A number of companies are also in the process of obtaining recognised certifications. Bangladesh is also exporting medicines to the mildly-regulated countries like the Philippines, Vietnam, Singapore, Sri Lanka and LDCs of Asia-Pacific region and Africa.
Besides export opportunity, this also provides huge potential for Bangladesh for contract manufacturing and compulsory licensing. Since the country is a market of cheap labour, MNCs /Asia Pacific pharma marketing agents are interested in joint venture/ contract manufacturing under strategic business alliance with the top edge pharma manufacturing and marketing companies of Bangladesh.
Ministries and Bangladesh missions abroad should form a joint mission to address the extension of WTO/TRIPS by 2016. Unless Bangladesh crosses the barrier from status of LDC to mid-level developing country, the government should give top priority to start its own API industry at Gazaria Munshiganj and bioequivalence test laboratory for a cross-examination of a generic drug with the original one before the implementation of WTO/TRIPS.
The writer is a former CEO of a pharmaceutical company.
wahidur707@gmail.com