Just weeks after Johnson & Johnson, among other pharmaceutical giants, was exposed for charging South Africa 15% more than what it charged the European Union for Covid vaccines, the group has come under fire for the exorbitant costs – for South Africa – of its TB drug, notes MedicalBrief.
The Competition Commission is to investigate Johnson & Johnson (J&J) for the exorbitant price it has been charging SA for the TB drug bedaquiline, as well as for extending the tablets’ 20-year patent until 2027 to block cheaper generics from entering the country.
The probe was made public last Thursday by the national Department of Health and the Health Justice Initiative (HJI) at a media briefing of Doctors Without Borders.
Professor Norbert Ndjeka, director of drug-resistant TB at the department, told News24 he understood the commission would compare the price SA paid for the drug with what other countries were charged.
Commission’s media spokesperson Siyabulela Makunga has confirmed to Bhekisisa that the probe is under way, writes Mia Malan.
South Africa has one of the highest TB disease rates in the world, and, despite it being curable, TB is the country’s top killer.
Bedaquiline is used to treat multidrug-resistant (MDR) TB, and given mostly in combination with other medicines.
It has to be taken for six months and is considered a game changer because it has replaced treatment – up to two years of long, painful injections with serious side effects such as hearing loss – with lower cure and higher death rates.
The department started using bedaquiline in the public health sector in 2018.
The latest announcement comes hard on the heels of HJI’s exposure recently of J&J’s “take it or leave it” bullying tactics in its secret Covid vaccine contract with the government. The agreement revealed that J&J charged South Africa 15% per dose more than what it charged the European Union for the shots, and 25% more than the estimated not-for-profit price.
How does SA pay for bedaquiline?
From 1 October, South Africa will pay more than double the price for bedaquiline than with many other countries pay for the drug.
Currently, the health department buys a six-month course per patient for R5 400. But from 1 October, when a new contract with J&J starts, South Africa will pay R5 500 for a course, while countries which procure bedaquiline through the Stop TB partnership’s Global Drug Facility will be able to buy it for R2 446.
The Global Drug Facility uses pooled procurement to negotiate payments, making it possible to bargain for lower prices for TB medicines because the drugs can be ordered in large amounts.
But countries like South Africa, which have open tender systems, can’t legally buy medicine through such systems, which is why the health department buys bedaquiline directly from J&J (Janssen).
South Africa’s October agreement with J&J has a clause which allows for prices to be renegotiated, but that has not yet happened.
“We are enraged to witness that J&J prioritises profit over the needs of the most vulnerable populations in a country with a high burden of drug-resistant TB,” said Candice Sehoma, MSF’s access campaign advocacy officer.
“We urge J&J to offer the same price – of R 2 446 for the medication – to South Africa as it has offered to countries that are part of the Global Drug Facility deal.”
Why does J&J still have a patent in SA?
The patent for bedaquiline compounds in South Africa expired in July, but was then extended to 2027 through a practice activists refer to as evergreening, whereby pharmaceutical manufacturers make small, trivial changes to medicines, or their use, to keep their monopoly in the market.
Extended patents are called secondary patents and original patents primary patents.
Evergreening, which South Africa’s patent laws allow because secondary patent applications are often not scrutinised sufficiently, makes it possible for drugmakers to keep patents far beyond the standard 20 years and so prevent competitors who make the same products, cheaper, from entering the market.
“The Competition Commission believes J&J could be in contravention of Section 8 of the Competition Act, which deals with excessive pricing and exclusionary conduct, which, in this case, refers to the practice of evergreening (because it results in excluding others from the market),” said HJI’s head, Fatima Hassan.
“Evergreening and exploitative pricing are both anti-competitive,” she said. “We believe this is unprecedented. We do not know of other investigations by the Competition Commission into a pharmaceutical company for evergreening.”
What SA can learn from India
Some countries, like India, have found ways to prevent the granting of unjustified secondary patents by doing strict reviews of patent applications, which examine the novelty and inventiveness of a medicine for which a pharmaceutical company would like to extend the patent.
Using this system, India’s patent office denied J&J’s application for a secondary patent for bedaquiline in March. Had the patent been granted, J&J would have enjoyed a monopoly for four more years and it would’ve been illegal to sell cheaper generic versions of the drugs.
Because of this ruling, India can now make and sell generic bedaquiline (after the branded product’s patent expired in July), but the country is not allowed to export these products to countries such as South Africa, where secondary patents for bedaquiline have been granted.
The Global Drug Facility agreement makes it possible for some countries, where J&J holds secondary patents for bedaquiline, to buy a specific generic product via the facility, but because South Africa isn’t part of that agreement, the country is unable to do so.
South Africa’s patent office falls under the jurisdiction of the Department of Trade, Industry & Competition and its conduct has been contentious. For the past decade, health activists have been advocating for the legislation to be changed so that evergreening is controlled.
Russell Rensburg, the director of the Rural Health Advocacy Project at Wits University, said: “Something for our legislators to consider is why we haven’t fixed our (patent) laws, to ensure we don’t expose ourselves to these kinds of exploitative practices. Fixing the patent laws is essential to addressing health inequity.”
On 22 September, world leaders will gather at the UN General Assembly in New York for a high-level discussion on the progress and stumbling blocks in the fight against TB – including practices such as evergreening.
J&J responded as follows to Bhekisisa’s request for comment: “Johnson & Johnson is a longstanding and committed partner in South Africa’s fight against multidrug-resistant tuberculosis. Today, all patients in South Africa who require bedaquiline… have access to it, thanks to our collaboration with the government and other partners, which has contributed to a steady decline in TB incidence.
“We will continue to work collaboratively with our partners to ensure we can achieve our shared goal of ending TB.”
See more from MedicalBrief archives:
SA’s patent system denies vital drug access
J&J patent deal allows for cheaper generic TB drugs, but SA may lose out
TB drug costs to drop after J&J loses patent extension bid
MSF: Vital paediatric TB medicines need to be available as generics