Global Pharma Companies See Battle For Survival In Pakistan

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Lahore, Pakistan – Weak regulation of the local pharmaceutical industry in Pakistan, including non-enforcement of intellectual property rights and the absence of a simple and swift dispute resolution mechanism, have hit the country’s health sector badly, industry sources say.

These discrepancies have led to proliferation of poor quality drugs and unhealthy practices, which consequently have caused harm to legal businesses and people’s health, they say. In extreme scenarios, hundreds of people lost their lives over the last two years due to administration of substandard medicines.

As a case in point, there were around 150 deaths last year when heart patients in Lahore were administered a drug labelled as Isotab that contained extraordinary concentration of an anti-malarial drug. Later in the year, there were dozens of deaths of drug addicts who consumed adulterated cough syrup in large quantities.

Authorities investigating these tragic incidents have failed to clearly identify those responsible so far. But public pressure and response from all over the country and abroad have had an impact. The authorities concerned have been forced to identify loopholes and formulate mechanisms to avoid such incidents in future and at the same time guard interests of legal businesses.

One of the biggest issues with the Pakistani pharmaceutical sector is that generic drugs can be registered without bioequivalence tests and there is no limit on number of generics registered against a patented molecule, said Shehryar Ansari, co-chairman of Pharma Bureau of Pakistan. The bureau is a consortium of 24 multinational companies, such as brand-name producers Novartis, Pfizer and GlaxoSmithKline, involved in pharmaceutical business in the country.

Ansari told Intellectual Property Watch that patents do not have sufficient protection in the country, and if there is a dispute, it takes ages to get a decision from courts. “Just imagine how it feels like when you find around 0.6 million cases pending in the civil courts you approach for redressal. In case the person violating the patent gets a stay order from the court, you are doomed.”

Ansari said he is comfortable with sale of generic medicines provided it is not at the cost of MNCs’ genuine interests. An MNC makes huge investment in developing a molecule and then conducting the required clinical tests, while a generic drug is registered without delay in Pakistan. The real problem, he adds, is that the government determines the prices of both the patented and generic drugs, which are mostly kept low. He argues that patented drugs should be able to sell for higher prices.

“How can MNCs survive in the country or bring in more investment if returns are not there?” he said. “The situation becomes even worse when thousands of generics have been registered without bioequivalence tests.”

Ansari cited an example of a medicine called Thyroxine (used to treat thyroid disorder), which the manufacturer MNC had to sell in Pakistan for $0.5 per 100 tablets for a long period of time. It took the concerned authorities too long to raise the price to $1 per 100 tablets, so that the company could afford to produce them for the market. Meanwhile, people were forced to buy smuggled Thyroxine tablets for up to $ 8 to $ 10 per 100 tablets, he said.

The Pharma Bureau co-chairman said he believes the local pharmaceutical market would be around $6 billion, up from the existing $2 billion, if the prices are rationalised and revised upward.

While patent protection is still a dream in the country, there are demands from groups for data exclusivity – something next to impossible in the existing scenario. A European Union parliamentary delegation which visited Pakistan recently has called for data protection and data exclusivity for multinational pharmaceuticals and expressed its reservations over the government’s pricing policy.

Muhammad Anum Saleem, a Pakistani lawyer who specialises in World Trade Organization systems, believes the EU may link grant of Generalised System of Preferences (GSP)-plus status to Pakistan to the above-mentioned conditions. In case of data exclusivity, registering generics becomes too difficult, which is the opposite of what happens in Pakistan.

Leading pharmaceutical manufacturers and exporters reveal that bioequivalence tests are extinct in Pakistan. Only the exporters, whose buyers make them mandatory before export, get them done from some other country. There are a couple of laboratories offering bioequivalence tests in the country, but none of them is certified by the World Health Organization.

The MNCs have somehow learned to co-exist with companies endlessly registering generic drugs but are uncomfortable with the registration of biological drugs like insulin and interferon without testing them on human beings. Made from live animal and human cells and genes, the copied drugs may not be as effective original ones, they believe.

In this scenario, what keeps the MNCs from opting for dispute resolution mechanisms? Lawyer Mehnaz Shiraz, Advocate High Court, comes with an answer. She said they have always had an issue with patent and other IP rights control, not just in Pakistan but in most developing countries.

“Since the implementation of TRIPS, we have the Patents Ordinance, which is most relevant in protecting IPRs of pharmaceutical MNCs,” she said. “The law is there, but I think there may be problems with implementation.”

Shiraz states counterfeit drugs are also a big problem in Pakistan. There are many laws, including criminal laws, but in her opinion implementation is always weak, lengthy and expensive. “And I have noted that these pharmaceutical industries complain a lot but, barring the big companies, they do not hire competent lawyers to help them access their rights under the law,” she adds. Her advice to the complaining MNCs is, “use the law when you need it, go to the courts.”

The relevant fora are the Intellectual Property Organisation (IPO), the district courts and the High Courts and Supreme Courts (appellate), depending on the IPR violation in issue. The Federal Investigation Agency (FIA) also has teeth now and has seized counterfeit medicines and arrested people on charges of copyright and trademark violations, but the reluctance of MNCs to avail these options may be attributed to the lengthy litigations and endless waits in such cases.

Something to Celebrate?

Amid all these complaints, the government says it has something to celebrate. IPO director Hamid Javed Awan claims the government has taken drastic measures to streamline the system. These include setting up of specialised tribunals for these cases, training of judges on IP laws and steps to speed case disposals in courts.

The passage of IPO Act 2012 from the parliament is a landmark achievement, he said, adding that the absence of such a law was the main hindrance in enforcing IP laws in Pakistan.

Section 15 of the act talks about trial of offences. It states: notwithstanding anything contained in any other law for the time being in force, an accused shall be tried and prosecuted for an offence in the Tribunal and the case shall be heard from day to day and shall be disposed of within ninety days. To build the capacity of judges on IPR legislation, a two-day conference was organised for Pakistani judges in Singapore.

Hamid told Intellectual Property Watch that different state departments and law enforcement authorities will fully cooperate with IPO and ensure the violators are brought to book. He hopes violation of patents and sale of counterfeit medicines will soon become history.

 

Shahzada Irfan Ahmed may be reached at info@ip-watch.org.

Creative Commons License"Global Pharma Companies See Battle For Survival In Pakistan" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Comments

  1. Aziz ur Rehman says

    Thanks for sharing information about Pakistan and the state if pharmaceutical industry there. Pharmaceutical sector in Pakistan is quite diverse and there is a need to reflect more correctly about the policy nuances including the perspective of local manufacturers i.e. Pakistan Pharmaceutical Manufacturers Association. Patents are protected in Pakistan and several cases were filed my patent holders since 2000 where courts issued injunctions. So an IP system is functional in the country. A demand to introduce data exclusivity will have serious negative implications on local manufacturers and it is important to note that India did not agree on data exclusivity under its ongoing FTA negotiations with the European Union. Pricing issue also needs a more realistic and holistic analysis as multiple price increases was given both to MNCs and local companies during last 2-3 years.

  2. Shahzada Irfan Ahmed says

    I would thank Mr Aziz ur Rehman for giving highly valuable comments on this write-up. Here I would like to add something. He is right when he says several patent holders have won relief from courts in Pakistan. However, it is also a fact that the process at courts is so lengthy and the backlog of under-hearing cases is so huge that a large number of aggrieved companies shy away from taking the legal recourse. Fortunately for them, the government has recently introduced tribunals which will exclusively hear cases of IPR violations and decide within the stipulated time period. On prices, I would say the MNCs and local companies are demanding across the board increases which they claim they haven’t got after 2001. Yes, there have been increases in prices and companies benefiting from them say they were accommodated on hardship basis. These companies had or had threatened to suspend production of certain medicines for being financially non-viable. However, there is a strong possibility that some companies might have taken undue advantage by creating artificial shortage etc.

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