Thailand Probes Compulsory License Clopidogrel Purchasing Woes

Thailand’s Government Pharmaceutical Organization has faced heat from the health ministry over its attempts to buy blood thinner clopidogrel under a compulsory license issued for Sanofi’s Plavix in 2007. The issue is at the heart of the country’s attempts to provide universal health care without costs spiraling out of control.

BANGKOK – Thailand's Ministry of Public Health has launched a probe into the country's recent difficulties purchasing Sanofi’s anti-platelet drug Plavix (clopidogrel), one of the drugs for which the country has issued a compulsory license.

The ministry said in a statement, issued Nov. 28, it had requested the Government Pharmaceutical Organization (GPO) and the National Health Security Office (NHSO), a body tasked with developing Thailand's universal health care coverage, to set up a fact-finding committee, “asking an outside party to be on the committee as well in order to have a clear examination,” it said. It added there will be a final report on the findings but did not provide further details.

Thailand has struggled to contain costs and increase fees to pay for universal health care in a tiered system that gives better benefits to civil servants and subsidizes a number of drugs that are manufactured either by the GPO or local firms under compulsory license. Indian firm Emcure Pharmaceuticals Ltd. was awarded the CL to manufacture clopidogrel, although industry reports said quality and other issues have delayed delivery (Also see "Critics Of Thailand’s Universal Healthcare Revamp Say $1 Is Too Much To Pay" - Scrip, 16 Feb, 2012.).

The GPO is Thailand's state-owned pharmaceutical manufacturer tasked with drug procurement as well as producing low-cost drugs to reduce national health expenditures. Thailand's national health system earlier this year faced a shortage of clopidogrel due to difficulties purchasing the drug.

NHSO Deputy Secretary General Prateep Dhanakijcharoen was quoted by local media in October as saying that more than 18 million tablets of clopidogrel placed on order with Emcure were halted from being distributed in Thailand during the summer due to quality concerns.

The issue has stirred controversy in Thailand over the efficiency of the government's drug procurement procedures and the efficient use of scarce public resources for health expenditures. It also sheds light on Thailand's use of compulsory licenses that serve to lower the costs of drugs it deems essential (Also see "Thailand’s Ministers Of Health, Commerce And Foreign Affairs Conclude Compulsory Licensing Legal" - Scrip, 20 Feb, 2008.).

History of CLs

Compulsory licenses do not necessarily mean that the country produces the drugs itself, but it allows Thailand to order clopidogrel at a fraction of the price from generics producers.

Thailand has also issued compulsory licenses for two HIV drugs – Merck & Co. Inc.’s Stocrin (efavirenz) and Abbott Laboratories Inc.’s Kaletra (lopinavir/ritonavir) (Also see "Sanofi Asks Thailand To Review Compulsory Licensing Policy" - Scrip, 1 Sep, 2008.).

Thailand issued a compulsory license on Sanofi's Plavix in 2007. Negotiations with Sanofi broke down over price, and Thailand reduced the price of the drug from roughly $4 per pill to 50 cents, including taxes and royalties, by importing the generic from two Indian companies rather than Sanofi.

Thailand also issued compulsory licenses in 2008 for three cancer drugs – Sanofi’s Taxotere (docetaxel), Novartis AG's Femara (letrozole) and Roche/OSI Pharmaceuticals LLC's Tarceva (erlotinib) (Also see "Thai Officials Say Compulsory Licenses Will Not Deter Biotech Business – BIO 2008 Exclusive" - Scrip, 24 Jun, 2008.).

“Despite assurances that Thailand would be judicious in its use of compulsory licenses and consult with affected parties as required by the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Thailand’s Ministry of Public Health re-issued in 2011 their compulsory licenses on Stocrin and Kaletra, without prior consultation with the affected companies,” notes the most recent PhRMA 301 submission to the U.S. Trade Representative. “The Government of Thailand seems to be using the threat of new compulsory licenses to pressure further price negotiations.”

Drug Shortages

With drug shortages looming, the government placed an order of three million tablets of clopidogrel with another unnamed manufacturer at a much higher price, prompting critics to accuse the government of wasting funds. The shipment from India was then cleared in October. A spokesperson for the GPO declined to comment on the matter.

Emin Turan, managing director at Sanofi Pasteur, and also head of the manufacturer's operations in Thailand, in an interview with PharmAsia News earlier this week, also declined to comment when asked whether the government had been in talks with Sanofi to make up for the looming shortfall.

Sanofi sells a second brand in Indonesia for clopidogrel, a strategy highlighted by IMS in a February 2012 report as an example of a company’s proactive approach to addressing loss of patent exclusivity in a key emerging market.

Second-brand strategies are gaining traction for multinational companies in emerging markets. These brands are launched at a lower price point in an effort to capture volume and potentially ward off compulsory licenses. Importantly, a second brand allows the company to maintain global pricing on the innovator product, although the strategy requires a delicate balance to ensure maximum uptake of the second brand without cannibalizing sales of the higher-priced innovative brand.

Roche has implemented a second-brand strategy in Egypt to increase volume for its hepatitis therapy Pegasys (peginterferon alph-2a) by launching a second brand called Pegferon and pricing it much lower (Also see "Dynamic Markets Need Dynamic Pricing: Roche Explores Differential Pricing Strategies In Emerging Markets" - Scrip, 16 Feb, 2012.).

Roche has also employed a second-brand strategy in India with Emcure for Herceptin and MabThera (Also see "A Change Of Plans: Roche Teams Up With Emcure For Low-Cost Herceptin, Mabthera In India" - Scrip, 15 Feb, 2012.).

The Thai government is under increasing pressure to control health care spending. The country is running three separate health schemes, one for private-sector employees, one for civil servants, pensioners and their dependents. A universal coverage scheme covers the majority of the population that is not eligible for the first two schemes (Also see "Thailand Furthers Cost-Cutting Measures, Putting Additional Pressure On MNCs" - Scrip, 6 Mar, 2012.).

The expansion of universal coverage has put pressure on the sector. In a statement, Minister of Public Health Pradit Sintavanarong said the ministry is requesting GPO to conduct a product quality survey on both its own products and those purchased.

“If drug purchasing is efficient, [this] can save money and the money can be put back into hospital development for public services for the purpose of expanding public services,” the statement said.

The GPO ranked 8th on the Thai domestic drug market last year when measured by sales volume, according to its latest annual report; it is the largest local manufacturer.

In addition, Thailand’s interest in joining a growing number of nations negotiating the Trans-Pacific Partnership agreement drew a swift rebuke from more than a dozen civil society groups that said the trade pact’s intellectual property provisions would conflict with programs aimed at ensuring access to affordable medicines (Also see "Thai Medical Aid Groups Oppose Entry Into TPP Trade Pact Talks" - Scrip, 28 Nov, 2012.).

[Editor’s note: This story was contributed by PharmAsia News , which provides daily coverage of the Asia biopharmaceutical industry and regulatory policies. To learn more, sign up for a free trial – no credit card needed.]