Joint CSO Letter to World Bank on Discrimination in Uganda's Health Sector

Dr. Jim Yong Kim
President
The World Bank
1818 H St. NW
Washington DC 20433

Dear Dr. Kim:

We write to follow up on our letters of April 1 and May 6, 2014, regarding concerns about discrimination in Uganda’s health sector and the World Bank’s delay of its US$90 million loan.

We, once again, welcome your commitment to ensure that there is no discrimination in World Bank financed projects in Uganda and public recognition that discrimination is not only wrong, but undermines economic growth.

Six months after your decision to delay the health sector loan, we remain concerned that there are still not sufficient safeguards in place to prevent discrimination in health service provision for lesbian, gay, bisexual, transgender, and intersex (LGBTI) patients, or for women, among other groups in Uganda. In this letter, we share recommendations for the World Bank’s next steps in Uganda and request a meeting with your office as you chart a strategic way forward to ensure that World Bank funding does not entrench discrimination via its loans and other financial instruments. On August 26 during a meeting with the Robert F. Kennedy Center for Justice and Human Rights and Sexual Minorities Uganda (SMUG), Uganda’s former minister of health and new prime minister, Dr. Ruhakana Rugunda, made comments that reinforce this concern: he agreed that there is discrimination in the health sector, and that the government is not equipped to monitor the health sector for discrimination or to respond to discrimination when it occurs.

The Anti-Homosexuality Act
As you know, on August 1 Uganda’s Constitutional Court ruled that the Anti-Homosexuality Act was void due to a lack of quorum in parliament during the vote. While we welcome this important ruling, it did not address the substantive rights at jeopardy in the law.

Moreover the Ugandan government has unambiguously indicated that it remains committed to the discriminatory approach and practices that were reflected in the law. For example, the attorney general immediately filed an appeal to the Supreme Court; and while President Museveni has asked for the appeal to be put on hold temporarily, it is only so a ruling party parliamentary committee can determine if and how the law should be returned to parliament anew. Also, since the ruling, several government officials, including President Museveni, have spoken out in favor of the criminalization of the “promotion of homosexuality” which jeopardizes public health work.

The situation in Uganda remains volatile, especially as campaigning for the 2016 elections gets underway. There is a very real possibility all or significant portions of the discriminatory Anti-Homosexuality Act could be passed in parliament again in the next 12 to 18 months. Effectively, the Ugandan government’s pursuit of discriminatory policies against LGBTI people, including in the healthcare sector, is unchanged by the Constitutional Court ruling.

In what appears to be an effort to encourage donors, including the World Bank, to maintain funding to Uganda’s healthcare sector despite the discriminatory environment, the Ministry of Health produced a ministerial directive this year establishing guidelines for health workers who treat LGBTI people. While a written commitment to non-discrimination in the healthcare sector should not be dismissed, this directive is very problematic. It describes the provision of health services to LGBTI people as an “ethical dilemma” for healthcare workers – rather than a professional obligation or equal access to health care as a fundamental human right. The directive creates a de-facto “separate but unequal” system for LGBTI people seeking healthcare. It also remains wholly unenforceable in law. It provides no substantive protection to LGBTI people, or to healthcare workers providing services to LGBTI people, nor does it require any substantive action by the government in terms of upholding non-discrimination in the health sector. It should not be seen as meaningful action on the part of the government to address the World Bank’s publicly stated concerns which led to the loan’s delay.

The HIV Prevention and Control Act
Just as worrying, on July 31, President Museveni signed into law the HIV Prevention and Control Act, which not only criminalizes transmission and attempted transmission of HIV but allows for mandatory testing of pregnant women, their partners, and victims of sexual violence; allows certain people including health workers to reveal the HIV status of their patients without their patients’ consent; and enables courts to order the release of individuals’ HIV status without their consent.

Women tested against their will, or whose HIV status may be revealed against their will, may be exposed to potential physical violence from partners who fear or blame them for infection. Not only are the law’s provisions contrary to well-established international best practices of confidentiality, consent and counseling – a bedrock in the fight against HIV – but the well-documented impact of such punitive measures is to drive people away from services and fuel fear and further discrimination.

Given Uganda’s ongoing discriminatory environment in the allocation of health services, we believe it remains very important for the World Bank to ensure strong safeguards are in place before the delayed loan is released. Such action could significantly contribute to mitigating against existing discrimination experienced by LGBTI patients, women, and other marginalized and excluded populations who are at disproportionately high risk of negative health outcomes and poverty.

We recommend that the World Bank:

1. Publicly share the outcome of the World Bank’s independent assessment of the impact of Uganda’s Anti-Homosexuality Act on the proposed $90 million loan.

2. Only fund the health sector through the proposed $90 million loan if it includes

(a) Components funding:

  • Routine pre-service and in-service training of the Ugandan health workforce in non-discrimination in service delivery, building on existing training efforts led by civil society;
  • Robust monitoring, and supervision measures to enforce expectations regarding non-discrimination, beyond current supervisory structures. This would include, in addition to other mechanisms, independent third party monitoring to identify instances of discrimination;
  • Activities to promote all patients’ rights to non-discrimination, confidentiality, privacy, and consent to or to refuse treatment, and to be informed about risk of medical procedures during health service delivery – for example through public messages, health promotion activities, signs in clinics and public places, and other strategic communications efforts (in English and local languages); and
  • Measures to determine consumer satisfaction with health service quality.

(b) Loan covenants:

  • Prohibiting all forms of discrimination, including on the grounds of gender, sexual orientation, and gender identity, and all other grounds articulated under international law;
  • Requiring the government to respect patient confidentiality, privacy, and informed consent to all treatment, which requires being fully informed of the risks involved with medical procedures and medication;
  • Requiring that there not be any interference with any civil society or other third party monitoring of health institutions;

3. Through the Global Partnership for Social Accountability and other World Bank civil society funding mechanisms, provide financial support for patient advocates and legal counsel for individuals who face discrimination, breach of confidentiality, or other abuses in health settings;

4. Review Uganda’s new HIV law, in close collaboration with Ugandan civil society and independent experts, and describe mitigating measures the World Bank will take to ensure Uganda’s health systems is strengthened and HIV objectives are achieved given the discriminatory environment, and publish both the review and mitigating measures;

5. Publicly and privately at all levels urge the government to repeal all discriminatory laws and end discriminatory practices, emphasizing the importance of non-discrimination for health and development and emphasize that the government’s lack of progress in this area will increasingly call into question aspects of the government’s relationship with the World Bank.

We firmly believe that the World Bank’s decision regarding the $90 million loan will have a profound impact on the credibility of the World Bank in Uganda and beyond.  Countries seeking to benefit from World Bank funding should clearly understand that the delay of the loan was not a superficial decision, but rather a serious statement about the deleterious economic impact of discrimination and a precedent-setting decision to stand up for human rights. But that is not possible if the delay is concluded without any substantive progress by government regarding nondiscrimination in the health sector.

We would appreciate the opportunity to discuss the way forward in Uganda with you given the critical World Bank engagement there and the impact of the situation in Uganda on other countries who may benefit from World Bank financial instruments in the future.

Thank you for your consideration of these important issues. We look forward to meeting with you or your staff to take this conversation forward.

Sincerely,

Aaron Dorfman, Vice President for National Programs, American Jewish World Service (AJWS)
Kevin Robert Frost, Chief Executive Officer, AmFAR
Chad Dobson, Executive Director, Bank Information Center (BIC)
Moses Mulumba, Executive Director, Center for Health, Human Rights and Development (CEHURD)
Jeff Ogwaro, Coordinator, Civil Society Coalition on Human Rights and Constitutional Law (CSCHRCL)
Mark Bromley, Council Chair, The Council for Global Equality
Asia Russell, Director of International Policy, Health GAP
David Stacy,Director for Government Affairs, Human Rights Campaign
Jessica Evans, Senior Advocate/Researcher for International Financial Institutions, Human Rights Watch
Brant Luswata, Resource Center Manager, Icebreakers Uganda  
Wade McMullen, Staff Attorney,Robert F. Kennedy Center for Justice and Human Rights
Frank Mugisha, Executive Director, Sexual Minorities Uganda (SMUG)
Moses Kimbugwe, Programs Director, Spectrum Uganda
Najib Kabuye, Director, Uganda Harmonized Rights Alliance
Kikonyogo Kivumbi, Executive Director, Uganda Health and Science Press Association (UHSPA)
Beyonce Karungi, Director, TransEquality Uganda

Cc:
World Bank Board of Executive Directors
Hon. Ruhakana Rugunda, Prime Minister, Uganda
Mr. Makhtar Diop, Vice President for Africa, World Bank
Mr. Tim Evans, Health Sector Director, World Bank
Mr. Olusoji O. Adeyi, Sector Manager, Health, Nutrition and Population, Africa, World Bank
Mr. Philippe Dongier, Country Director, Uganda, World Bank
Mr. Moustapha Ndaiye, Country Manager, Uganda, World Bank
Mr. Peter Okwero, Health Specialist, World Bank, Uganda
Mr. Mark Dybul, Executive Director, The Global Fund to Fight AIDS, Tuberculosis and Malaria
Dr. Deborah Birx, U.S. Global AIDS Coordinator 

 


World Bank: Safeguards Essential for Uganda Loan, Urgent Need to End Discrimination in Health Care

For Immediate Release 


World Bank: Safeguards Essential for Uganda Loan

 

Urgent Need to End Discrimination in Health Care

(Kampala, September 24, 2014) – The World Bank should not proceed with a US$90 million loan for strengthening the health care sector in Uganda without enforceable steps to end discrimination in care for marginalized groups, 16 Ugandan and international organizations said today in a letter to World Bank President Jim Kim. Health care for women and lesbian, gay, bisexual, transgender, and intersex (LGBTI) people should be included in non-discrimination measures, the groups said.

In February 2014, shortly after President Yoweri Museveni signed the Anti-Homosexuality Act, Kim announced the delay of the Uganda loan out of concern that it would support discrimination in Uganda’s health sector. He said that discrimination is bad for economies. In August, Uganda’s Constitutional Court nullified the law on procedural grounds. But the government immediately filed an appeal to the Supreme Court and convened a committee to consider whether the law should be returned to parliament for reconsideration.

“Even with Uganda’s Anti-Homosexuality Act no longer enforceable, discrimination is alive and well in health services for many groups including LGBTI people,” said Moses Kimbugwe, program director at Spectrum Uganda, a Ugandan human rights organization. “It is vitally important for the World Bank to work with the government of Uganda to get serious about fighting discrimination – starting with clear conditions attached to this $90 million health loan.”

Beyond increasing prison sentences for same-sex conduct – already criminal under Uganda’s colonial-era, anti-sodomy provisions – the new law endangered public health work by criminalizing “promotion of homosexuality.” For example, police raided a well-respected health clinic and medical research facility in April, accusing the clinic of conducting “unethical research” and “recruiting homosexuals.” The law lacked any definition of what behavior or speech might constitute “promotion.”

The World Bank’s $90 million loan would assist Uganda’s health ministry with a funding shortfall for the renovation of certain health care facilities.

The Ugandan government has not provided any enforceable assurances that it will work to prevent discrimination in health services or even monitor discrimination by health care workers, the groups said. The Health Ministry issued a non-legally-binding directive to health workers, which defines the care of LGBTI people as an “ethical dilemma” for healthcare workers – rather than a professional obligation and a fundamental human right. It does not require health workers to provide medical care and treatment without bias. Nor does it properly guarantee confidentiality to patients who are at risk of prosecution if, for example, a health worker reports them to police for same-sex conduct, which remains a criminal offense in Uganda.

In July Museveni signed the HIV Prevention and Control Act, which could further fuel fear and discrimination. The law criminalizes intentional HIV transmission, attempted transmission, and behavior that might result in transmission by those who know their HIV status. The law also allows for mandatory HIV testing for all pregnant women. It allows medical providers to disclose a patient’s HIV status to others, contrary to international best practices and violating fundamental human rights.

Women tested against their will or whose HIV status may be revealed against their will may be exposed to potential physical violence from partners who fear or blame them for infection. The well-documented impact of such punitive measures is to drive people away from services.

In the loan, the groups said, the World Bank should require the government to prohibit discrimination in healthcare delivery, including on the grounds of gender, sexual orientation, and gender identity and all other grounds articulated under international law. It should require the government to respect patient confidentiality, privacy, and informed consent to all treatment, including fully informing patients of the risks involved with medical procedures and medication. The government should also guarantee that it will not interfere with any independent group or other third-party monitoring of health institutions.

The World Bank should fund activities to promote all patients’ rights, including funding patient advocates and legal counsel for people who face discrimination, breach of confidentiality, or other abuses in health settings and training for Ugandan health workers to respect these rights. It should also fund robust supervision and monitoring, including by independent organizations, to identify instances of discrimination.

The World Bank should review the new HIV law, in close collaboration with Ugandan groups and independent experts, and publicly outline measures it will take to ensure that Uganda’s health system is strengthened and HIV objectives are achieved, given the discriminatory environment. The bank should publicly and privately at all levels urge the government to repeal all discriminatory laws and end discriminatory practices, emphasizing the importance of non-discrimination for health and development and emphasize that the government’s lack of progress in this area will increasingly call into question aspects of the government’s relationship with the World Bank.

“This loan to the health sector should signal an end to ‘business as usual’ between the World Bank and Uganda,” said Asia Russell, director of international policy at Health GAP, an international health advocacy organization. “Discrimination in health services violates human rights and puts already vulnerable people at greater risk. The World Bank has a duty to ensure the Ugandan government invests in mitigating the effects of discrimination in the health services.”

For more Human Rights Watch reporting on Uganda, please:
http://www.hrw.org/africa/uganda

For more information contact:

In Kampala, for Sexual Minorities Uganda, Frank Mugisha (English): +256-772-616-062
In Kampala, for Spectrum Uganda, Moses Kimbugwe (English): +256-782-854-391; or spectrum.uganda@gmail.com    
In Kampala, for Uganda Health and Sciences Press Association, Kikonyogo Kivumbi (English): +256-752-628-406; or kikonyogo.k@gmail.com
In Kampala, for Health GAP, Asia Russell (English): +256-776-574-729; asia@healthgap.org. Follow on Twitter @asia_ilse
In Washington, DC, for Human Rights Watch, Maria Burnett (English): +1-917-379-1696 (mobile); or burnetm@hrw.org. Follow on Twitter @MariaHRWAfrica
In Washington, DC, for Human Rights Watch, Jessica Evans (English): +1-917-930-7763 (mobile); or evansj@hrw.org. Follow on Twitter @evans_jessica

 


Gilead’s Proposed Hepatitis C Medicines License – How Badly Will it Miss the Target?

Gilead’s Hepatitis C Medicines License – Troubling Territorial Exclusions,

Illusory Exceptions, and Tiered Pricing Policy Fracture Global Access

Professor Brook K. Baker, Northeastern U. School of Law, Senior Policy Analyst Health GAP

September 17, 2014

Introduction to basic licensing terms

Gilead has just announced and released the text of its license on two direct-acting oral antivirals (DAAs) used to treat hepatitis C virus (HCV) infections, sofosbuvir (Sovaldi®) and ledipasvir. The License allows seven Indian generic companies – Cadila Healthcare Ltd., Cipla Ltd., Hetero Labs Ltd., Mylan Laboratories Ltd., Ranbaxy Laboratories Ltd., Sequent Scientific Ltd. and Strides Arcolab Ltd. – to manufacture, distribute and sell the individual products and a combination pill of the two products in a subset of 91 low- and middle-income countries (see list attached).

The basic terms and conditions of the license are relatively straightforward.  The active pharmaceutical ingredients (APIs) must be manufactured and sourced from licensed API suppliers in India (¶ 2.1(a), ¶ 3).  The license will allow co-formulation of sofosbuvir and ledipasvir with other companies’ HCV medicines (¶ 2.3(c)),[1] and in the future Gilead’s pan-genotypic pipeline DAAs, including GS 5816, will be added to the license (¶ 2.5).  Generic licensees will pay a 7% net royalty on the licensed products regardless of patent status in the country of use, based, at this time, on challenged patent applications in India (¶ 4.1).[2] Licensees are required to report improvements (¶ 5.3) and grant a royalty free license on all product improvement back to Gilead (¶ 2.2).  Gilead is offering a one-time technology transfer (¶ 5.5)[3] and non-proprietary data and regulatory waivers with respect to the registration process (¶ 6.3).  Gilead will supervise quality standards (¶ 6.2) and insist on registration before generic sales are consummated (¶ 6.3).  It also will require stringent anti-diversion (¶ 6.1(a), ¶ 7.2) and product differentiation measures (¶ 5.4(a)) that allow it to unilaterally terminate a license if it believes that material quantities of a licensee’s generic are being diverted to non-licensed territories (¶ 10.3(b)).  Generic licensees may not terminate the license with respect to any covered product until five years have passed (¶ 10.4).[4]

 

The licensed territory covers approximately 100 million people but it leaves 49 million people in middle-income countries without generic access

 

Gilead estimates that the licensed territory covers over 100 million people, approximately 54% of people living with HCV in the world – meaning that 46% of people infected are left outside the licensed territory.  Gilead is non-defensive about its exclusion of upper-income country markets (15% of the global market with approximately 27.75 million infected) including North America, Western Europe, and Japan where it expects multi-billion dollar annual sales and profits based on a per patient treatment cost for sofosbuvir alone as high as $84,000 for a 12-week course of treatment.  (The combo product will reportedly be sold at more than $95,000 per patient in the US when approved.[5]

 

Although the License grants 100% coverage for low-income countries, it excludes 51 middle-income countries, including 13 lower-middle income countries and 38 upper-middle income countries (see list attached).  The excluded number of people living with HCV in middle-income countries is over 49 million based on 2010 global epidemiological estimates.  This represents approximately 43% of the middle-income country total.  The country with the largest excluded population is China with nearly 30 million people infected.  Brazil (2,609,607), the Philippine (1,932,854), Ukraine (1864,840), Turkey (1,549,108), Thailand (1,499,058) Mexico (1,106,450), and Romania (1,003,680) are other middle-income countries with over one million excluded.  As discussed further below, the territorial limitation will be quite problematic for people infected in excluded middle-income countries, especially given the license’s definitions of patent rights protected and the narrow and perhaps illusory window for bypassing the License’s prohibition of extra-territorial sales.

 

The License should also be understood and evaluated in light of Gilead’s planned tiered-pricing policies whereby it will attempt to maintain its monopoly control over this 50-million person market. As a patent holder – or even as a patent applicant, Gilead can exclude competitors and charge profit-maximizing prices on its life-saving HCV medicines. Its current plan seems to be to offer an access price of $900 for 12 weeks of treatment or $1800 for 24 weeks of treatment in its 60-country low-income country category, which includes India and Brazil[6] – a price that generic entrants will have to compete against – with significantly higher prices in lower-middle income countries and even higher prices in upper-middle income markets.  In discussion with advocates, Gilead has said that it would set prices in the newly added lower-middle income and upper-middle income tiers according to predetermined bands and that it would negotiate country-by-country; those price bands have not been publicly disclosed.  Gilead averred that it would lower prices in the future if governments commit to expansive treatment programs and if they adopted liberal treatment guidelines.  In sum, Gilead still sits in the driver’s seat and has enormous power to decide who does and doesn’t get its most favorable price.  In all instances, Gilead’s tiered prices in lower- and upper-middle income countries will be hundreds or even thousands of dollars more expensive per treatment than with generics.

 

Gilead’s definition of product patents and its insistence on preventing extra-territorial sales if there is “any reasonable possibility of obtaining a product patent within a reasonable period of time” means that it will be very difficult – nearly impossible – for licensees to supply from India or elsewhere to excluded countries.

 

Pursuant to Paragraph 10(C), Gilead has created a narrow, essentially illusory window for allowing licenses to sell outside the licensed territory. 

(i) For clarity, and notwithstanding anything to the contrary in this Agreement, with respect to a particular Product, and on a Product-by-Product and country-by-country basis, if there is no Product Patent owned or controlled by Gilead (or its Affiliates) in India and a particular country outside of the Territory, and if there is no reasonable possibility of obtaining such a Product Patent within a reasonable period of time (for example, through pending patent applications, the filing of patent applications, or by legal action (including appeals)) in India and such country outside of the Territory, it shall not be deemed to be a breach of this Agreement for Licensee to supply such Product in such country and Licensee shall not be obligated to pay Gilead any royalty therefor; provided that Licensee obtained applicable regulatory approval in such country (emphasis added).

(ii) Similarly, on an API-by-API and Product-by-Product basis, it shall not be deemed to be a breach of the Agreement for Licensee: (x) to manufacture API in any country where there is no Product Patent owned or controlled by Gilead (or its Affiliates) covering such API in such country, and there is no reasonable possibility of obtaining such a Product Patent within a reasonable period of time (for example, through pending patent applications, the filing of patent applications, or by legal action (including appeals) in such country; (y) to sell such API referred to in clause (x) of this Section 10.3(c)(ii) in any country where there is no Product Patent owned or controlled by Gilead (or its Affiliates) covering such API in such country, and there is no reasonable possibility of obtaining such a Product Patent within a reasonable period of time (for example, through pending patent applications, the filing of patent applications, or by legal action (including appeals) in such country; or (z) to manufacture and/or sell Product incorporating such API referred to in clause (x) of this Section 10.3(c)(ii) in in any country where there is no Product Patent owned or controlled by Gilead (or its Affiliates) covering such Product (or the API contained therein) in such country, and there is no reasonable possibility of obtaining such a Product Patent within a reasonable period of time (for example, through pending patent applications, the filing of patent applications, or by legal action (including appeals) in such country.

 

Gilead holds a lot of cards with its definition of "reasonable possibility of obtaining a product patent."  This at the very least covers patents already filed but not granted (¶ 4.1(h)); patents in the pipeline, e.g., Patent Cooperation Treaty applications, of there are several listed in the License’s appendix; patents where new divisional or selection or amended applications patents are possible;[7] and patents that can still be filed within the Paris Treaty one-year grace period window.[8]  With this definition, Gilead is clearly taking advantages of loopholes in the patent system that give pending patent applications almost as much deterrent value as a granted patent.  Plus, analysts know that companies, including Gilead, are willing to game the patent system with recursive patent applications, divisional/selection patents, patent amendments, etc. and with endless appeals if their patent is not granted.  Using the Novartis’ Glivec case as an example, it took over seven years to achieve the level of finality that would satisfy the Gilead license provision (patent denied January 2006, Supreme Court judgment April 2013).

 

With the existing language concerning the “reasonable possibility of a patent being granted”, supply outside the territory can occur easily only if the generic licensee manufactures “outside the license” in a country other than India and no patent is pending or reasonably expected in that country.  In addition, the country to which the generic product is to be exported and used must also be without any pending or reasonably anticipated product patent.  In the more common case, however, there will be a patent pending in India or any other country of production, i.e., China, and a product patent pending or reasonably expected in the country of importation and use.  In these circumstances, the generic licensee will have to twiddle its fingers for years waiting for Gilead’s evergreening strategies to play their way out (or it will have to seek compulsory licenses as discussed further below.)  These licensees do not really have the option of testing the waters – “infringing” then defending – because to do so does not expose them simply to infringement claims but will immediately subject them to license termination.

 

Although it is true that some unlicensed generic companies could decide to take the risk and manufacture in a patent-free India – assuming all Indian oppositions are successful and that appeals are denied – or in a country other than India where no patent was pending in order to supply to an excluded territory, this seems unlikely.  Supplying such countries would create liability risks where national legislation allows retroactive damages for infringements occurring during patent pendency.   For this reason, patent pendency is enough to deter most generics unless the patent is fatally flawed on its face.  Another practical problem that generic companies might face in supplying extra-territorial markets is that it might not be easy to discover Gilead’s patent and pending patent landscape in excluded countries, especially since Gilead persists in refusing to disclose such information.

 

Gilead’s compulsory licensing exception allowing extra-territorial sales might also prove difficult to use in practice

 

Paragraph 10(d) of Gilead’s license allows generic licensees to become compulsory licensees to manufacture and sell if there is:  (1) a compulsory license issued in the country of import, (required only if there are any relevant product patents or patent applications) and/or (2) an export license in India (only required if any relevant product patents or patent applications are pending).  

(d) For further clarity, and notwithstanding anything to the contrary in this Agreement, it shall not be deemed to be a breach of the Agreement for Licensee to supply an API or Product outside the Territory into a country where: 

(i) the government of such country has issued a Compulsory License relating to such API or Product allowing for the importation of such API or Product into such country, provided that Licensee's supply of Product or API into such country is solely within the scope and geographic range of such Compulsory License and only for the duration that such Compulsory License is in effect; and/or (ii) the Government of India has issued a Compulsory License allowing for the export of an API or Product from India and into such country, provided that: (Y)(1) there are no Product Patents owned or controlled by Gilead (or its Affiliates) issued in such country or (2) a Compulsory License has also been issued by the relevant authorities of such country; and (Z) Licensee's supply of Product or API into such country is solely within the scope and geographic range of the Compulsory License issued by the Government of India, and only for the duration that such Compulsory License is in effect.

In the normal case, in order to supply an excluded territory, the generic licensee would have to be granted a compulsory license in the country of production (India) or in the country of importation or both – in essence wherever a patent or pending patent exists. 

 

A special problem could arise if there is uncertainty whether it is permissible to grant a compulsory license on a pending patent as opposed to a granted patent.  If such an interpretation occurred, this could mean that generics might have to wait until a patent is granted before prosecuting a compulsory license application.  Fortunately, the superior interpretation of compulsory licensing rules should allow involuntary use on all active and pending patents covering the licensed medicine.  It would defeat the purpose of compulsory licensing and government use rules if pending patent applications bound the state and competitors more tightly than granted patents with respect to involuntary use.

 

Nonetheless, an additional problem with respect to compulsory licensing is that it might require detailed knowledge of patent filings and status of patent applications in excluded countries – a task that would be much easier if Gilead were to disclose its global patent landscape on sofosbuvir and ledipasvir, which it currently refuses to do.  This problem could presumably be overcome by the compulsory license application seeking coverage of all pending and granted patents covering the medicines in question.

 

Gilead’s intentions for excluded countries – is tiered pricing and intra-country sector segmentation and price differentiation good enough?

 

The essence of Gilead’s current license is to grant early access in 91 select countries in exchange for receipt of royalty payments collected even where patents have not been filed or granted, mainly on the basis of pending and challenged patent applications in India.  In addition, Gilead has announced tiered pricing plans whereby the company offers lower prices in different income countries for its branded HCV medicines, and differential pricing between the public/voluntary sector and the private sector even in those countries.  Using common drug company metrics, Gilead plans to offer different price bands for the public sector and select NGOs in low-income, lower-middle-income countries and upper-middle-income countries.  With the exception of low-income countries where Gilead is on record saying that it will have a uniform access price of $900 for a 12-week course of treatment with sofosbuvir, it appears unlikely that the public/NGO sector tiered pricing will be uniform within each tier; instead, Gilead plans to negotiate country-by-county, particularly in the upper-middle-income country tier.  Early conservative estimates show that Gilead’s tiered pricing strategy could increase the price of production of curing hepatitis C by a conservative estimate of $60 billion.[9]

 

Gilead had previously announced imminent deals with Egypt and India that promise a probable price of $900 for a standard 12-week course of treatment with sofosbuvir. However, this price is reportedly only applicable for the public sector and non-governmental organizations engaged in demonstration projects.  Meanwhile, Gilead has indicated that it will charge substantially higher prices in the private sector.  As a consequence, since only a handful of middle-income countries are able to introduce comprehensive public sector treatment programs, especially in the absence of donor funding, most patients will have to access sofosbuvir out-of-pocket and solely through the private sector at much higher prices.  The total price paid for treatment would even be higher because sofosbuvir must be combined with other medicines to achieve maximum effect.

 

By means of its tiered pricing, sector-segmentation strategy, Gilead is trying to maximize its profits in middle-income countries excluded from the license by fully controlling sales to both public, NGO, and private sectors.  In this way, Gilead aims to fragment the generic and brand-name tiered-pricing markets, leaving its generic licensees unable to achieve maximum economies of scale by excluding them from some of their most lucrative potential markets.   Meanwhile, Gilead will make significant profits on large-volume sales in excluded territories given the huge differential between the projected cost of producing a 12 week supply of sofosbuvir (estimated at $100, range $68-136[10]) and projected prices for public/NGO sector sales and even higher price for private sector sales.  Spread over millions of LMIC sales per year, Gilead’s LMIC profits will eventually add nicely to the excess profits it already reaps in rich country markets where it earned $5.8 billion in the first six months based on its upper-income country price in the US and Western Europe of $600 to $1000 a pill. 

 

For excluded middle-income that don’t like living under Gilead’s tiered-pricing, sector-segmentation tyranny, the license effectively limits their policy options. Perhaps the most anti-competitive aspect of Gilead’s plan is that it will lock leading generic producers into licenses that will make it very difficult for there to be generic producers for Gilead’s DAAs in the excluded middle-income countries.  None of the licenses will be willing to risk license termination to test the edges of Gilead’s “no reasonable possibility of a product patent” and “all necessary compulsory licenses” requirements.  Even if a qualified generic that is not a licensee decided to test Gilead’s patents or to seek compulsory licenses, it would face a relatively small and fractured market and one where robust competition is far less likely

 

How significantly will Gilead’s license lower prices – not quickly and not as much as it could

 

Gilead’s license will probably lead to phased availability of generic equivalents and of country use over a protracted period of time.  At the very least, many months will be required to develop the product for commercial production, to prosecute product registration, and to establish distribution schemes.  In the meantime, Gilead is not offering radical price discounts other than in low-income markets.

 

Gilead is on record saying that its licensees can set prices at their own discretion.  As stated above, the cost of production for a 3-month course of sofosbuvir is relatively modest, estimated between $68-$136, and the stated royalties will be 7%.  Production costs will get to the lower end of the estimated cost range, the more efficiently and competitively active pharmaceutical ingredients (API) and final formulations are produced.  Unfortunately, the anticipated Gilead license might not result in the lowest possible prices because the size of the generic market is limited to only a portion of people living with HCV, mostly those in poorer and higher prevalence countries.  Generic manufacturers will not necessarily be producing at the most efficient economies-of-scale and there will be fewer successful generic competitors[11] because the smaller and generally poorer markets will be less attractive to generic producers.  Generic entrants might be particularly reluctant to serve all smaller volume, poorer countries because of the costs of registering their products and establishing distribution systems.

 

Moreover, regardless of the significant number of licensees, price reductions will not necessarily occur immediately and volumes might initially be small.  As discussed above, licensees have to register their medicines in licensed territories and arrange marketing and distribution systems and both of these can take a lot of time.  In addition, there are no donors at present that are helping countries or patients by subsidizing the costs of HCV treatment.  Accordingly, actual treatment access might initially be quite low, especially in licensed poorer and high prevalence countries where health sector budgets are limited.

 

Gilead’s license is a partial step forward, but ultimately it will delay universal access and the erdication of HCV

 

Perhaps the most important critique of Gilead’s license – and its related tiered-pricing, market-segmentation policy – is that they do not ensure universal, affordable access to it lifesaving drugs. Hepatitis C virus is an infectious disease just like HIV.  Globally an estimated 185 million people have been infected[12] and there are 3-4 million new infections and 350,000+ deaths annually. Unlike HIV, HCV can now be cured.  When a person is cured of Hep C, he or she is no longer infectious, meaning the more people cured with affordable treatments, the quicker the pandemic will end.

 

Countries (and donors) are more likely to invest in universal access to an HCV cure if the medicines are available at their most affordable cost.  With a low-enough price, even patients who are not actively progressing with HCV-related liver disease will be treated to eliminate the virus and the risk of onward transmission.  (This is the strategy used in rich countries to cure latent tuberculosis and is increasingly the strategy for tackling HIV and AIDS.) 

 

Unfortunately, Gilead’s License is not well designed at present to end the HCV pandemic.  The License fails to cover 43% of people living with HCV in middle-income markets. Gilead’s market fragmentation approach will lead to higher than necessary prices even in licensed territories and ultimately to less than universal access.  That means that this License misses both the target of worldwide equitable access to treatment and the ultimate goal of accelerating HCV eradication. Many additional efforts will be needed to achieve eradication, including improved diagnostics and linkages to care and improved therapies.[13] Also important will be efforts to address the needs of most affected populations, most especially people who inject drugs who require massive scale-up of harm reduction programming, removal of structural barriers to treatment, and measures that address stigma and discrimination and advance a human rights based approach.  None of these other efforts will come to fruition, however, unless Gilead and other DAA producers make their therapies universally available and affordable.

 

Gilead is by no means the only company that is failing to contribute as much as it might to HCV treatment globally.  All the other DAA innovators – Merck, Bristol-Myers Squibb, AbbVie and Johnson and Johnson are sitting on the sidelines.  People living with hepatitis C need those companies’ medicine too, especially DAAs that are pan-genotypic.  Pan-genotypic medicines will reduce the need for complex diagnostics and thereby simplify treatment.  All companies in with DAA for treating HCV should broadly license their medicines and allow them to be co-formulated into the most efficacious and most affordable treatments.   With this license, Gilead has taken two steps forward but it refuses to take the third.  That third leaves 50 million people risk in excluded territories and the failure to take the final step also weakens the license’s impact in included territories.

Included Territory

 

 

1. Afghanistan

2. Angola

3. Antigua and Barbuda

4. Bangladesh

5. Benin

6. Bhutan

7. Bolivia

8. Botswana

9. Burkina Faso

10. Burundi

11. Cambodia

12. Cameroon

13. Cape Verde

14. Central African Republic

15. Chad

16. Comoros

17. Congo, Rep

18. Congo, Dem. Rep. of the

19. Côte d'Ivoire

20. Cuba

21. Djibouti

22. Dominica

23. Egypt

24. Eritrea

25. Ethiopia

26. Equatorial Guinea

27. Fiji

28. Gabon

29. Gambia

30. Ghana

31. Guatemala

32. Guinea

33. Guinea-Bissau

34. Guyana

35. Haiti

36. Honduras

37. India

38. Indonesia

39. Kenya

40. Kiribati

41. Kyrgyzstan

42. Lao, People's Dem. Rep.

43. Lesotho

44. Liberia

45. Madagascar

46. Malawi

47. Maldives

48. Mali

49. Mauritania

50. Mauritius

51. Mongolia

52. Mozambique

53. Myanmar

54. Namibia

55. Nauru

56. Nepal

57. Nicaragua

58. Niger

59. Nigeria

60. North Korea

61. Pakistan

62. Palau

63. Papua NewGuinea

64. Rwanda

65. Samoa

66. São Tomé and Príncipe

67. Senegal

68. Seychelles

69. Sierra Leone

70. Solomon Islands

71. Somalia

72. South Africa

73. South Sudan

74. Sri Lanka

75. St. Vincent and the

Grenadines

76. Sudan

77. Surinam

78. Swaziland

79. Tajikistan

80. Tanzania, U. Rep. of

81. Timor-Leste

82. Togo

83. Tonga

84. Turkmenistan

85. Tuvalu

86. Uganda

87. Uzbekistan

88. Vanuatu

89. Vietnam

90. Zambia

91. Zimbabwe

 

 


 

Excluded Territory and HCV Infected

 

 

Lower-Middle Income (13)

# of HCV Infected 

  1. Armenia

133012

  1. El Salvador

164689

  1. Georgia

328945

  1. Kosovo

 

  1. Micronesia

2200

  1. Moldova

99498

  1. Morocco

624,953

  1. Paraguay

76162

  1. Philippines

1932854

  1. Syria

94405

  1. Ukraine

1864840

  1. West Bank & Gaza

 

  1. Yemen, R.

412352

Upper-Middle Income (38)

 

  1. Albania

53172

  1. Algeria

70846

  1. America Samoa

 

  1. Argentina

743750

  1. Azerbaijan

314735

  1. Belarus

226600

  1. Belize

2100

  1. Bosnia Herzegovina

58605

  1. Brazil

2609670

  1. Bulgaria

139068

  1. China

29791212

  1. Columbia

425191

  1. Costa Rica

32453

  1. Dominican Republic

66713

  1. Ecuador

195605

  1. Grenada

5150

  1. Hungary

219582

  1. Iran

630450

  1. Iraq

834600

  1. Jamaica

20250

  1. Jordan

114660

  1. Kazakhstan

474592

  1. Lebanon

31850

  1. Libya

104736

  1. Macedonia

40800

  1. Malaysia

397515

  1. Marshall Islands

900

  1. Mexico

1106450

  1. Montenegro

10980

  1. Panama

22500

  1. Peru

284100

  1. Romania

1003680

  1. Serbia

156345

  1. St. Lucia

1232

  1. Thailand

1499058

  1. Tunisia

124488

  1. Turkey

1549108

  1. Venezuela

272976

51 Countries

49,369,632

 



[1] Note:  There is some inconsistency between this stated right and the description of “dose requirements” in ¶ 6.2(d) of the License, which limits product sold to single dose or combination Sof and LDV and also requiring that the product have been approved by the U.S. Food and Drug Administration or by DCGI and the appropriate medicines regulatory question in the country of sale.

[2] Regrettably, Gilead proposes to still collect royalties even if patents in India and in a covered territory are not granted (¶ 4.1(h)), though Gilead does commit to negotiating a reduced royalty.  Gilead may think it is entitled to some royalty even where there are no patents because of its technology transfer provision.

[3] The technology transfer are unbundled meaning that licensees can take all, some, or none. 

[4] In discussions about the license, Gilead said that licensees not taking the technology transfer could terminate sooner than five years, but that option is not clearly described in the license itself.

[5] Deena Beasley, Gilead to raise price for new hepatitis C drug above $84,000, Reuters (Sept. 12, 2014) http://206.132.6.101/article/2014/09/12/us-gilead-sovaldi-idUSKBN0H72KR20140912.

[6] In creating this category, which is not just GNI/capita based, Gilead apparently takes into account prevalence rates as well.  It is believed that the 60 countries originally discussed might be the “low-income” countries entitled to this lowest “discount” price.

[7] These applications can really proliferate and now appear to be a key part of companies’ evergreening strategy.  After an original patent application is opposed, the applicant stays in the driver’s seat by amending, dividing, or selecting patent claims requiring a whole new cycle of patent examinations, oppositions, and eventual appeals.

[8] See Paris Convention for the Protection of Industrial Property, Art. 4.C(1).

[9] I-Mak, Press Backgrounder for Sofosbuvir (Sept. 15, 2014), available athttp://tinyurl.com/lnuqrut.

[10] Andrew Hill et al., Minimum costs for producing Hepatitis C Direct Acting Antivirals, for use in large-scale treatment access programs in developing countries, 58:7 Clin. Infect. Dis.  928-936 (2014), available at http://cid.oxfordjournals.org/content/58/7/928.full.pdf+html.

[11] Gilead is purportedly negotiating with at least the following companies:  Hetero Drugs Ltd., Mylan Inc., Cipla, Ranbaxy, Strides Acrolab.

[12] Hanafiah K Mohd et al., Global epidemiology of hepatitis C virus infection: new estimates of age-specific antibody to HCV seroprevalence 57:4 Hepatology 1333-42 (2013).

[13] Wei, L. and Lok, ASF.  Impact of New Hepatitis C Treatments in Different Regions of the World. Gastroenterology. Published Online: March 21, 2014 DOI:http://dx.doi.org/10.1053/j.gastro.2014.03.008. Available at:http://www.gastrojournal.org/article/S0016-5085(14)00357-6/fulltext.

     Barriers That Need to Be Overcome to Achieve HCV Eradication

           Detect persons who are infected

Identification of high-risk/high-prevalence groups

Availability of sensitive, specific, and affordable tests for screening and for confirmation of infection

Screening programs that are practical and tailored to individual countries or settings

Public awareness of risk groups, sequelae, and treatment options

           Link infected persons to care

Access to care for all infected persons

Availability of trained health care providers and resources to manage infected persons

          Eradicate HCV with safe and effective drugs

Development of drugs that are potent, safe, and have pangenotype activity

Development of treatment regimens that are simple and effective against all HCV genotypes and all stages of liver disease

Availability of safe and efficacious drugs at affordable price


New voter poll shows proposed 2014/15 budget ‘out of step’ with Ugandan voters’ priorities

Supporters.png

PRESS STATEMENT For Immediate Release: September 8 2014

For more information, contact: Dorcas Amoding, AGHA Uganda, 0782585305
Asia Russell, Health GAP asia@healthgap.org, 0776574729

New voter poll shows proposed 2014/15 budget out of step with Ugandan voters priorities
Civil society demands Uganda’s FY2014/15 budget prioritize life saving health service delivery

(KAMPALA) Civil society organizations working for access to essential health services in Uganda today released new data on Ugandan voter priorities revealing that during the course of the 9th Parliament, health has surged forward as the most prominent voter priority—more important than crime, education, or unemployment. Read the report here. Moreover, the research revealed the vast majority of voters will not support an MP who does not prioritize health issues, such as correcting medicine stock outs or increasing health financing. The organizations called for MPs to take action based on these data, specifically that Parliament not approve the FY2014/15 national budget unless it includes dramatically scaled up investments in recruitment and motivation of front line professional health workers, alongside expansion in primary health care (PHC) funding for health facilities.

 “A nation of sick Ugandans cannot benefit from economic development,” said Dennis Odwe, Executive Director of AHGA Uganda (the Action Group for Health, Human Rights and HIV/AIDS). These data show clearly: MPs cannot ignore the health priorities of their voters. Without expanded funding for these priorities, pregnant women will continue to suffer preventable deaths and complications, people with HIV will wait in line for life saving treatment, and Ugandans will continue to suffer without access to essential health services. For too long, health workers have toiled without adequate remuneration, leading to demotivation, attrition, and lack of accountability for poor quality service delivery.”

Coalition members also demanded an increase for PHC funding—the resources health facilities use to pay for electricity, clean water, fuel, and other priorities. “The Current PHC non-wage recurrent funding levels are only 41bn instead of the required 82bn,” said Samuel Senfuka of White Ribbon Alliance for Safe Motherhood Uganda. “Government is failing to deliver on its commitment to ensure access to emergency obstetric care in all Health Center IVs, and women are dying as a result. Our health facilities cannot respond to the leading causes of preventable maternal death—post partum hemorrhage, sepsis, obstructed labor, unsafe abortion and eclampsia—unless they are equipped to provide essential health services. Government must match their promises with the funding levels needed to save the lives of pregnant women, newborns and children.” 

The Budget Speech indicated that “government will enhance health workers’ remuneration and improve their skills through capacity building” and that “health facility infrastructure at both local government and referral levels, will also be expanded, in addition to the construction of additional staff houses in lower level health facilities to minimize absenteeism.” However, according to civil society, it is unclear what portion of the UShs 450 billion announced for enhancement of civil servants’ salaries will be invested in health workers. UShs 215 billion is already ring fenced for a raise in teachers’ pay; civil society is calling for the balance of UShs 235 billion to be invested in production, recruitment and retention of front line health workers, particularly priority cadres such as midwives working at Local Government health facilities.

Civil society called for government to expand funding for HIV treatment as well, consistent with prior years’ increases. “This year’s budget proposes a flat line in funding for lifesaving anti retroviral treatment,” said Margaret Happy of the International Community of Women Living with HIV Eastern Africa (ICW EA). “Yet more people are waiting in line for treatment because Uganda has changed the clinical eligibility criteria so that more people with HIV can benefit from the clinical and prevention benefits of treatment. We call on government to increase investments in HIV treatment by 50%. Civil society is recommending:

(i)             Dramatically enhancement PHC by 41.2bn in the priority areas of administration of health facilities to cater for immunization, supervision, coordination, hygiene inspection, and health education.

(ii)            Prioritized enhancement of wages for midwives and other critical cadres of the health workforce is estimated to cost UShs 13.3 bn

(iii)           Completing the recruitment exercise of 3,371 health workers a will cost UShs 28.3 bn in annual salary and allowances.

(iv)          Increasing investment in HIV and TB treatment by 50% to UShs 150 billion.

 


Constitutional Court Strikes Down Uganda’s Anti Homosexuality Act

Press Statement 

For Immediate Release: August 1 2014

 

Constitutional Court Strikes Down Uganda’s Anti Homosexuality Act:

A Victory for the Human Rights of All Ugandans

(Kampala, Uganda) Health GAP reacted to today’s ruling in Uganda’s Constitutional Court striking down the Anti Homosexuality Act: “Today lesbian, gay bisexual and transgender Ugandans along with all human rights defenders in Uganda have scored a decisive victory against the politics of scapegoating and the politics of hate,” said Asia Russell, Director of International Policy at Health GAP. “Parliament is not above the law and the Constitution guarantees fundamental rights for all Ugandans—no matter their sexual orientation or gender identity.”  

Parliament passed the bill on December 20, 2013 and President Museveni signed the bill into law on February 24, 2014, despite earlier public pledges that he would not assent to the bill. It is widely believed that he reversed his position in an effort to strengthen his chances in 2016 for reelection as President. 

The law, which is now nullified, increased the punishment for same sex acts between consenting adults to life in prison and criminalised ‘promotion’ of homosexuality and ‘aiding and abetting’ of homosexuality with 7 years’ imprisonment and hefty fines. These crimes were defined so broadly as to criminalize provision of essential health and social services, such as HIV prevention and treatment. Uganda’s Penal Code Act already includes colonial-era provisions criminalizing “carnal knowledge against the order of nature.” Today’s ruling does not affect that pre-existing law.  

Today’s ruling was also hailed as a crucial development for increased access to life saving health services: Uganda is one of the only countries in East Africa reporting recent increases in HIV incidence. Criminalised populations including gay men, sex workers, transgender women and drug users are at higher risk of HIV infection and disease progression as well as violence and abuse. For example, gay men in Kampala have an estimated HIV prevalence of 13%, more than three times the prevalence of other men. 

Today’s ruling comes as a result of a case filed March 10, 2014 in Uganda’s Constitutional Court by ten petitioners, including Ugandan politicians, human rights activists, and legal experts. The petition argued that the law violates Ugandans’ constitutionally guaranteed human rights, including freedom from discrimination and freedom of expression. (The petition is available at ugandans4rights.org.)

“This decision is a bright spot in a dark record on human rights,” continued Russell. “It is the bravery and courage of gay and trans Ugandan activists that we have to thank for this decision. But we cannot rest—we must continue work to realize health and human rights for all, in Uganda and in other countries around the world that criminalize the sexual behaviour of consenting adults.”

According to activists, the signing of the law is part of a pattern of troubling actions indicating a deteriorating environment for human rights in Uganda, including the recent passage by Parliament of the HIV Prevention and Management Bill, which would criminalize people living with HIV. 

“Today in Uganda we are still far from that reality—for example the HIV Prevention and and Management Bill, which would criminalise people living with HIV and undermine the national AIDS response, is awaiting signature by President Museveni. He should reject this flawed Bill without delay and recommend Parliament eliminate its provisions on HIV criminalization, mandatory HIV testing and mandatory HIV reporting.” 

Contact for more information: Asia Russell, Health GAP +256 776 574 729 (Uganda mobile) or +1 267 475 2645 asia@healthgap.org


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