Malaysia Can Teach Trump How to Lower Drug Prices

by Fifa Rahman and Fran Quigley

In his 2018 State of the Union address US President Donald Trump issued yet another vow to address his country’s crisis in prescription drug pricing, where fast-climbing costs are causing one in four Americans to struggle to pay for their prescribed medicines. “One of my greatest priorities is to reduce the price of prescription drugs,” said Trump. “That is why I have directed my administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”

But previous Trump promises have proved to be empty. Some very limited drug pricing reforms proposed in Trump’s 2018 budget have been overshadowed by his failure to deliver meaningful changes. Worse, his administration’s health policy leadership has been captured by the pharmaceutical industry, as evidenced most recently by the appointment of former Eli Lilly executive Alex Azar to lead the Department of Health and Human Services. The pharma fox is now guarding a henhouse filled with Americans who can’t afford their medicines.

It doesn’t have to be this way. Trump’s promises can be more than bluster, and the South East Asian country of Malaysia has proved it.

Malaysia faces a frightening crisis in the spread of hepatitis C, with an estimated 500,000 people—2.5% of the population—infected with the chronic liver disease. It is not alone in this struggle. World Health Organization statistics reveal 71 million people globally live with hepatitis C, of whom nearly 400,000 die each year. There are an estimated 5.2 million Americans living with the disease.

The good news is that direct acting antivirals (DAA) are remarkably effective at treating hepatitis C, with cure rates approaching 100%. The bad news is that the corporation Gilead Sciences holds monopoly patents on key DAAs, especially sofosbuvir, despite not having discovered the drug. Gilead has exploited its position to charge as much as $95,000 per patient for treatment. The manufacturing cost is estimated to be less than US$200. US government health programs have spent billions on sofosbuvir, yet its high cost blocks most US patients with hepatitis C from accessing it.

The government of Malaysia has refused to accept this deadly status quo. Spurred by civil society, including the Malaysian AIDS Council in which co-author Rahman served as Manager of HCV Access and Affordability, and an ongoing feasibility trial of generic sofosbuvir/ravidasvir among Malaysian patients, the ministry of health has partnered with the non-profit Drugs for Neglected Disease Initiative and Egyptian drug manufacturer Pharco Pharmaceuticals. Together, they are developing the generic version of sofosbuvir/ravidasvir, aiming for a treatment price of just US $300 per patient.

Malaysia has every legal right to do so. Under its own national law and the terms of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), Malaysia can sidestep the Gilead patent. As previously outlined in the Health and Human Rights Journal, the TRIPS Agreement protects the rights of nations to issue “compulsory licenses” for generic drug manufacturing, especially when the patent-protected corporate price makes the medicine unavailable to many. Recognizing this, the United States has considered compulsory licenses for medicines in the past, notably during the anthrax scare of 2001 and more recently for hepatitis C treatment at the request of the health secretary of Louisiana.

Worried by Malaysia’s steps toward a compulsory license, Gilead announced last August that it would include the country in its voluntary license program. That program allows company-approved generic drug manufacturers to sell versions of sofosbuvir. But that voluntary license price, while lower than the patented price, was still expected to be prohibitive. So the government of Malaysia proceeded with its plans to allow broader generic manufacture, irrespective of Gilead’s approval.

This is not the first time that Malaysia has prioritized its people’s health over the profits of pharmaceutical companies. In 2003, the country issued compulsory licenses for antiretrovirals to treat HIV—the disease had previously been widely considered a death sentence in Malaysia because of the prohibitive cost of treatment. Bolstered by the licensing decision, Malaysia created a national program of free first-—line HIV treatment, and 90% of those on the program have achieved viral suppression.

There is every reason to believe that Malaysia’s current compulsory license decision will have a similar impact. That means that Trump, the United States, and every other nation can and should follow its lead. Not only does the TRIPS Agreement protect their rights to do so, but national laws usually do as well. In the United States, for example, both Bayh-Dole Act “march-in” rights and the even broader eminent-domain-esque power granted by 28 US Code 1498, allow the administration to follow the same path on sofosbuvir and other life saving medicines.

In fact, the US Government has a long history of bypassing patents when it considers doing so to be in the national interest. The bottom line is that patents are inherently fragile government-created and government-granted legal constructs. And they are relatively recent legal constructs at that, especially for medicines. The state giveth so-called intellectual property, and the state can certainly taketh away. As recently as 2016, the US Government has explicitly acknowledged the legal right to override medicine patents for health reasons.

As DNDi executive director Dr. Bernard Pécoul says about the Malaysian action on sofosbuvir, “The decision is a strong signal to other countries where high treatment prices act as a barrier to implementing a public health approach for hepatitis C.” It is a signal that Donald Trump, and the rest of the world’s leaders, would be wise to follow.

Fifa Rahman is a Postgraduate Researcher in Intellectual Property Law, International Trade, and Access to Medicines, University of Leeds. Quigley directs the Health and Human Rights Clinic at Indiana University McKinney School of Law and People of Faith for Access to Medicines.

Fran Quigley is a clinical professor and director of the Health and Human Rights Clinic at Indiana University McKinney School of Law and is coordinator of People of Faith for Access to Medicines.