The patent law
Thailand has had a patent law since 1979, however, for pharmaceuticals, this law provided for process patents only. Since 1986, the US Trade Representative (USTR) has negotiated with the Thai Government about the inclusion of pharmaceutical product patents in the law. The US pressure led, in 1992, to the amendment of the Thai patent law. The amended version included pharmaceutical product patents, increased patent protection from 15 to 20 years and provided for pipeline protection. It also established a Pharmaceutical Patent Committee, to monitor prices and supply of patented drugs. This Committee was abolished during a further revision in 1999, which also made some other modifications, such as the introduction of petty patents.
Due to the regulations for pipeline protection, in some aspects, Thailand has a “TRIPs-plus” patent law. Pipeline protection, via the safety monitoring program (SMP), grants indirect market exclusivity to pharmaceuticals which do not qualify for a patent due to lack of novelty. Designed to monitor for adverse reactions for at least 2 years, under the SMP, new drugs can be used only in hospitals, under the supervision of physicians. Based on that experience, companies have to submit a report to the Thai FDA with safety data obtained in Thailand. After release from SMP, the product can be sold outside the hospital setting and generic products can be registered (on the basis of bio-equivalence data).
Box 11 Market exclusivity in Thailand
Effective market exclusivity for drugs in Thailand will last:
• 10-15 years for patented drugs (20 years patent duration, minus 5-10 years for R&D and registration);
• 5-6 years for non-patented NCEs, under the Safety Monitoring Programme.
The current (1999) Thai patent law allows parallel import and includes a ‘bolar-type’ provision, in addition to provisions for compulsory licensing. But due to the conditions imposed by the law, it is not easy to obtain and use a compulsory license.
The law’s impact on drugs
In the period 1979 - 1992, when only process patents were granted, after 1 or 2 years, a generic version could appear. On average, about 24% of the patented drugs would have a generic on the Thai market, creating competition and thereby increasing accessibility.
Currently, it takes 5 to 15 years after the introduction of the original product for a generic version to appear (see box 11). As a result, prices of patented drugs are high; this has not only reduced access but also caused a significant increase in government expenditures for drugs. In 1997, five years after its introduction, it has been estimated that the market exclusivity of the 25 top selling products under the SMP had caused an increase in drug expenditures of about 2,000 million Baht (approximately 50 million US dollars). This figure could increase 10-fold once the full impact of the introduction of product patents would be felt (around the year 2000). Finally, the new patent legislation has affected the local industry (see paragraph 2.5.1).
Access to HIV/AIDS drugs
While limited access due to high prices is noticeable in all therapeutic classes, the situation is particularly dramatic in case of anti-retroviral drugs, a category of drugs which are important and expensive. In Thailand, more than 1 million people are HIV infected and there are more than 100,000 patients with full blown AIDS. It is estimated that less than 5% of the Thai HIV/AIDS patients can afford double antiretroviral therapy.
Access to these drugs is determined by a number of factors, including the registration status, that is, whether they are allowed on the market, and whether they are sold at an affordable price. While several antiretroviral products are registered in Thailand, only AZT and didanosine (ddI) are classified as essential drugs. Neither should be affected by product patents or SMP regulations, since they have been approved for marketing in Thailand a number of years ago (AZT in 1987; ddI in 1992), so they are not patentable (not new). Yet currently there is a problem with affordability of ddI, though not with AZT. For AZT, only a process patent was granted (since the application was filed before the 1992 law was enacted); as a result, generics are presently available at more affordable prices.
In case of ddI, the situation is different. While ddI does not have a product patent in Thailand either, its manufacturer, Bristol-Myers Squibb (BMS), has obtained a formulation patent; BMS claims that the formulation they invented significantly improves bioavailability. In fact, this claim, and therefore the validity of the patent, is questionable, since in the US, the patent application for the same formulation has twice been rejected on the basis that it was obvious to someone ‘skilled in the art’. But revocation of a patent is very difficult and time consuming, and the Thai patent is effectively being used to block generic competition; as such, it reduces access to this important product.
Under pressure from domestic patient - and activist groups to make the drug affordable, and from the US to refrain from issuing a compulsory license, the Thai Government has recently allowed ‘generic’ production of ddI-powder, which is not covered by BMS’ formulation patent. But, while being a way out in this particular case, this obviously is not a structural solution.