How bringing cheap generic Indian drugs to cancer patients has lead to one man’s arrest

Source: Global Times

7th January 2015

Charges levied by a Chinese court against a leukemia patient from Jiangsu, who bought cheap, lifesaving medicine from India for his fellow patients, show a legal dilemma facing Chinese patients who require expensive drugs to survive and highlights problems in China’s healthcare system.

Much like the true story behind the Oscar-winning movie The Dallas Buyers’ Club, Lu Yong, a 46-year-old businessman and a chronic myelocytic leukemia patient, was charged last July with credit card fraud and the sale of counterfeit drugs and will stand trial in Yuanjiang, Hunan Province. However, for the over 1,000 fellow leukemia patients who gained access to cheap, lifesaving drugs with his help, he is nothing less than a saint who granted them a second chance at life.

Lu’s life was turned upside down in 2002 when he was diagnosed with chronic myelocytic leukemia and given only a few years to live. In 2004, Lu was almost bankrupt after two years of taking Glivec, a leukemia drug produced by Swiss pharmaceutical giant Novartis that costs 23,500 yuan ($3,783) each month. The drug, which is known to be able to prolong the life of leukemia patients, is not covered by China’s national health insurance.

Driven by his will to survive, Lu hunted for alternative treatments and discovered Veenat, a drug produced by India’s Natco Pharma which claimed to have the same active ingredient and effects as Glivec, through an online medical forum. The price for the generic medication was 4,000 yuan per month at first, and dropped to 200 yuan per month over the following years.

After testing the drug on himself, Lu shared his discovery on online instant messaging groups. Between 2006 and 2013, Lu helped hundreds of fellow chronic myelocytic leukemia patients, unable to afford Glivec, to learn about and buy generic drugs from India, sending payments through a credit card he acquired online.

Veenat and other generic versions of Glivec, while approved for use on leukemia patients in India, are illegal in China because they are not officially approved. Nor could they be approved at the time because Novartis’ Glivec was patented in China (the patent expired in 2013). According to the country’s drug administration laws, such drugs are regarded as counterfeit.

“I’m a patient myself and I didn’t profit through reselling these drugs. I’m merely providing help to people who need the drug to survive,” Lu told the Global Times. Lu admits, though, that the Indian company has provided him with free medication since 2011, to compensate him for his help with maintaining the company’s bank account in China.

Since Lu was charged, over 300 leukemia patients and their relatives have signed a petition asking for Lu to be acquitted. “Is the purpose of law to serve the people and protect people’s right to survival? We ask relevant legal departments not to punish our self-rescuing activities, and exempt Lu Yong from criminal punishment,” the petition reads.

“I wouldn’t have lived until today if it hadn’t been for Lu Yong,” Zhang Aiqin, a patient from Wuxi, Jiangsu Province, who was diagnosed with leukemia in 2000, told the Global Times. Zhang’s daughter signed the petition, hoping that Lu’s name may be cleared.

“Since I can’t afford Glivec, I had to resort to traditional Chinese medicine before Lu introduced me to the Indian generic in 2006. I’m old and had no idea how to get access to the drug, so Lu helped me with it. I’m really grateful,” the 66-year-old said.

Not a unique case

This is the first case in China where a patient has been charged with selling counterfeit drugs. But this is not the only incident in which someone has smuggled cheap drugs from India for sale in China. In September 2013, a couple in Shenzhen that sold cheap Indian versions of Glivec and other expensive cancer drugs via the online marketplace taobao.com were found guilty of selling counterfeit drugs.

India is known as the “pharmacy of the developing world,” largely because the Indian government believes that the price of lifesaving drugs should not be set by the market. The country has granted compulsory licenses for Glivec and other expensive cancer drugs so that Indian manufacturers can produce these drugs without fear of being prosecuted under patent law.

According to the World Health Organization, compulsory licensing is when a government allows someone to reproduce a patented product or process without the consent of the patent owner.

While the Indian government has been lauded by NGOs and patients worldwide for providing access to cheap drugs, it is also widely criticized for killing incentives for innovation and disrespecting intellectual property norms, especially by global pharmaceutical giants.

China enacted its own compulsory licensing policy in 2012, but no drug has been granted a compulsory license in the country so far. “China’s compulsory licensing is only justified during the outbreak of epidemics like SARS and Ebola or when public safety is seriously threatened. Since there isn’t a detailed set of criteria for compulsory licensing, the policy is limited in its use in China,” Eric Chong, the deputy secretary general of the Chinese Hospital Association, told the Global Times.

However, even if India’s cheap drugs are not taken into account, the price for imported drugs in China is still exorbitant when compared to the rest of he global market, due to China’s notoriously high import taxes, registration fees and hospitals who profit from drug sales. The price of Glivec in China, for example, is 1.5 times higher than that in the US, Chong said.

Beyond buying Indian generic drugs, some have taken more drastic measures to provide cheap drugs to cancer patients. In 2009, Ding Jiayi, faculty member at a university in Hangzhou and owner of a medical doctorate, was charged with the operation of an illegal business after he manufactured and sold cancer drugs with the same ingredients as brand-name drugs Eloti, Emati and Sorenic, at less than a 10th of their Chinese market price. The market price of all the drugs he produced was estimated to be 27 million yuan and the case was the biggest counterfeit drug crime in the history of the People’s Republic.

Gao Zhenhua, Ding’s lawyer, argued that Ding manufactured the drugs out of a sense of his duty as a medical expert, since he knew that most cancer patients were unable to afford expensive drugs which were not covered by medical insurance. In the court of final appeal, Ding was sentenced to six years in jail, reduced from the 10-year-long sentence he was given in his first trial, and 4 million yuan fine.

Healthcare coverage debate

Lu, now calm about the charges levied against him, does not expect that he will be acquitted. “I only hope that the court will do justice, and that the national healthcare system will cover Glivec as a result of my case,” he told the Global Times.

While patients, their relatives and doctors have been calling for the inclusion of Glivec in national public health insurance, experts say it is not easy.

Due to the relatively small number of patients who suffer from myelocytic leukemia and its high cost, Glivec is one of those drugs that is often ignored by the national healthcare system. “From a health economics point of view, our healthcare resources are limited and the consensus has been that more money should be spent on more common and curable diseases, so as to maximize the effect of health insurance and reach optimal healthcare resource allocation,” Chong told the Global Times.

Apart from the government issuing drug price control policies, more needs to be done. “The government should set up an effective mechanism when it comes to negotiating drug prices with global pharmaceutical giants,” Ma Jin, Dean of Shanghai Jiao Tong University’s School of Public Health, told the Global Times. John Cai, director at the Center for Healthcare Management and Policy at the China Europe International Business School, said that pharmaceutical companies could set up charitable foundations to help those in need of expensive medication.

Several provinces, including Guangdong, Fujian, Shandong and Jiangsu have started to include Glivec in their public healthcare coverage. In Jiangsu Province, for example, the government, the pharmaceutical companies and the patient share the costs of a number of expensive drugs that have been proven to be effective in treating some critical illnesses. After being included in the provincial healthcare provision, patients pay for less than 30 percent of the overall cost of the drug. Novartis has also launched discount programs, allowing eligible patients in areas where certain drugs are not covered by public healthcare to buy three months’ worth of medicine and then get nine months’ for free.

Unfriendly domestic market

The patent for Novartis’ Glivec expired in China in April 2013, and China’s pharmaceutical companies launched their own generic versions of Glivec two months later. A generic version produced by Chia Tai Tianqing Pharmaceutical Group in Jiangsu costs 4,200 yuan a month and another version, made by Jiangsu Hansoh Pharmaceutical, costs 3,800 yuan a month. However, the Indian generics are still highly sought-after as they cost just 5 percent of these Chinese alternatives and have earned the trust of thousands of chronic myelocytic leukemia patients in China due to their stable and effective performance over the years.

“The competition in India’s generic drug market and the country’s overall expertise in the field have brought down the price of its drugs,” said Wang Wei (not his real name), who has worked in Shanghai’s pharmaceutical industry for 17 years.

“In comparison, China’s generic drug industry is lagging far behind. Many drugs have proven to have unsatisfactory clinical results due to the lack of well-executed industry standards, even though they use the same active ingredients,” he said.

“China is a giant in manufacturing active pharmaceutical ingredients, but not medicines, which are far more complicated than ingredients, which are basically just chemicals,” he said.

In the meantime, China’s generics market is known to favor local players. Last January, Ireland-based Actavis, the world’s third-largest generic drug producer, announced its decision to pull out of the Chinese market due to the “unfriendly environment.” A report issued by the prestigious McKinsey management consultancy firm in 2013 claimed that slow registration, the difficulty of winning highly competitive provincial tenders and hospital listing requirements make it difficult for foreign generic drug manufacturers to gain a foothold in the Chinese market.

Several years ago, Lu tried to help legalize Indian generic medicines in China. In 2006, along with a volunteer from the Chinese Red Cross Foundation, Lu visited India to research the manufacturers of generic versions of Glivec. An Indian company’s representative also came to China to see if it would be possible to sell the drug through legal means, but was thwarted by the slow registration process and high registration fees, Lu said.

This entry was posted in Cancer, IP Rights, Patents, Pricing. Bookmark the permalink.

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