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Data Protection, Trans Pacific Partnership, and the US-Jordan FTA (Post 2 of 2)

September 8, 2011
This post is a continuation of a previous post: Data Protection, the Trans Pacific Partnership, and the US-Jordan FTA (Post 1 of 2).

4.  Oxfam criticizes pharmaceutical innovators for not making all of their innovative drugs available in Jordan.

Ryan responds:

a.  Innovator companies introduced few new drugs before IP reform because local companies were using their know-how and clinical data to get marketing approval and brochures describing the drug’s therapeutic function and side effects with doctors.  Thus, there was little market incentive to invest in Jordan.

b.  Post reform, from 2001-2006, 13 major American and European innovator companies launched 78 new drugs in the Jordanian market with approval from JFDA.

c.  During 2006, major innovator companies sponsored 336 Jordanian physicians to participate in international medical congresses at a cost of $1,154,932.  Another 1,464 physician participations were sponsored for company-sponsored international symposia at a cost of $1,290,000.  The companies carried out 111 local educational programs at a cost of $230,203.

d.  In sum, exclusive of promotional materials, major innovator companies invested $3,894,832 in Jordanian medical education activities in 2006 alone.

5.  Oxfam claims that the FTA has not encouraged FDI into Jordan’s local drug industry, that there was hardly any investment in Jordanian pharmaceutical manufacturing, and local generic companies complain that multinational pharmaceutical companies neither signed more licensing agreements nor transferred technology to local manufacturers (only in packaging agreements).

Ryan responds:

a.  Pharmaceutical manufacturing investment is based on the nature of the product – high-value but small and inexpensive to ship, which means that drug companies are not in general big global manufacturing investors.

b.  Jordan is a small pharmaceutical market in a region riddled with pharmaceutical import barriers, so there is little business reason to invest in manufacturing capacity in the country.

c.  Oxfam ignores how Good Manufacturing Practices stimulates partnerships in high value-added activities like R&D licensing.  Due to regulations, liabilities, brand equity, and ethics, GMP certification is a necessary condition for production partnerships.  Before reforms, only one Jordanian firm was GMP certified and by 2004 a quarter of that firm’s sales owed to licensing relationships.  Post-reform, APM, Dar Al-Dawa, and United Pharmaceutical distribute for European and American companies.  Manufacturing deals will be struck when Jordanian companies come into compliance with USFDA and EMEA GMP requirements and as confidence grows in the relationships.

d.  IP reforms in Jordan have contributed to medical tourism, i.e., people going to Jordan for health care.  Previously untracked, by 2004 medical tourism in Jordan had grown to about $650 million.  By 2005, medical tourism exceeded $1.3 billion and represents a substantial portion of the total $2 billion Jordanian tourism.  Medical tourism has become one of Jordan’s largest export sectors and contributes significantly to its balance of payments.

6.  Oxfam compares prices between Jordan and Egypt in an attempt to demonstrate that the implementation of data exclusivity in Jordan has resulted in drastic price differences between the two countries.  The study claims that companies use data exclusivity to obtain inflated prices.  Oxfam asserts that Jordan suffers from its FTA and IP reforms.

Ryan responds:

a.  The prices of drug products discussed by Oxfam predate the introduction of data exclusivity in 2002.

b.  The Jordanian Ministry of Health establishes a reimbursement price based on an international reference pricing system.  They look at a basket of prices in other countries in order to negotiate a fair-value price that it is willing to pay.  Prices are similar to drug prices in Saudi Arabia and Lebanon.  The Jordanian government does not consider Egypt an appropriate comparison country, so it is unclear why Oxfam would choose it.

c.  Oxfam fails to take into account an Egyptian currency devaluation of about 80% USD and 70% JD, which significantly influences price comparisons in the region.

d.  Oxfam’s price analysis erroneously includes products, such as simvastin and metformin, which are available as generics in Jordan.  Oxfam compares the generic price in Egypt for these products with the innovator brand price in Jordan (ignoring the generic price for these same products in Jordan).

e.  In sum, Oxfam misinforms regarding medicine prices in Jordan through inaccuracies and distortions.

Ryan concludes:

According to 2006 World Bank indicators, Jordan has a per capita income of about $2,190, rising at 5-7% per year, life expectancy has risen from 68 to 72 years, infant mortality has declined to 23 per 100 births, under-five mortality has declined to 27 per 1000 children, low birth weight babies has declined to 4%, and malnourished children have declined to 8%.  Jordan public health indicators are improving, not declining.

Thus, Oxfam misunderstands the rationale for health competitiveness and IP reforms in Jordan and misinforms regarding the impact of these reforms in Jordan. Taken together, IP reforms have had a significant positive impact on the Jordanian economy and public health situation. The reforms are establishing Jordan as a viable export center for pharmaceutical technologies and health care in the Middle East region.