Pfizer granted Prevnar patent from India; drugmaker draws quick fire for pricing, access.

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The News:

India has granted Pfizer Inc. (NYC) a patent for its powerful pneumonia vaccine Prevenar 13, in a blow to some health groups that said this would put the treatment out of reach of thousands in poorer nations, according to Reuters.

The decision by India’s patent office bars other companies from making cheaper copies of the vaccine and allows Pfizer to exclusively sell it in India until 2026.

It’s a big victory for the US drugmaker in a market that has the world’s largest number of pneumonia cases, a lung disease that kills nearly a million children a year globally.

The decision also has international implications, as several poorer nations rely on India’s robust drugs industry to supply cheaper copies of medicines and vaccines.

It also comes at a time of ongoing US pressure on India to tighten its patent laws. The US expressed concerns about India’s intellectual property laws in a report in June, and listed it among countries whose IP laws unfairly favor local companies.

Pfizer’s vaccine protects children and adults from 13 types of pneumococcal bacteria, and a full vaccination course costs about $170 on India’s private market. India started giving out the vaccine for free under its national immunization program earlier this year, but the rollout like that of most vaccines in the program, is in phases, so only about 2.1 million of the 25 million eligible people in the country will get it this year.

The patent means Indian companies won’t be able to make the vaccine for domestic use, or exports.

“Manufacturers will have to find new routes to develop a non-infringing (pneumonia) vaccine, which may delay the availability of competing products in the pipeline from Indian producers,” the medical charity Médecins Sans Frontières (Geneva) said in a statement.

MSF, also known as Doctors Without Borders, filed an objection to Pfizer’s patent request last year on the grounds that a patent would deprive many developing nations of cheaper copies. At least one Indian company, Panacea Biotec Ltd., is developing a cheaper form of the vaccine, and had also filed an opposition to Pfizer’s patent request last year.

A source familiar with the matter said Panacea is considering filing a post-grant opposition, says Reuters. Separately, MSF said it was reviewing its legal options in the matter.

Pfizer’s patent on the same vaccine was revoked by the European Patent Office last year, and is being challenged in South Korea and the US, MSF said.

Steve’s Take:

There are some important facts left out of some of the news accounts of Pfizer’s award of the Indian patent for Prevnar.

MSF didn’t pull any punches in its outright slam of Pfizer’s corporate soul:

“It’s unfair and unacceptable that almost a million children die each year from pneumonia, even though a life-saving vaccine is available. Children everywhere have a right to be protected from pneumonia, but many governments can’t afford the prices set by Pfizer,” said Dr. Prince Mathew, Asia regional coordinator for MSF, adding: “We urgently need additional manufacturers to rapidly introduce competition with the aim of lowering vaccine prices.”

According to Leena Menghaney, South Asia head for MSF’s Access Campaign, “the method Pfizer is trying to patent is too obvious to deserve a patent under Indian law, and is just a way to guarantee an extended market monopoly for the corporation for many years to come.”

In 2016, MSF challenged Pfizer’s unmerited patent claims in India, after the same patent was revoked by the European Patent Office (EPO), according to The Pharma Letter. The patent is also being legally challenged in South Korea and before the US Patent Trademark Appeal Board.

“The Indian Patent Office’s decision also has broader implications, as it indicates a weakening of India’s strict patentability standards, which results in granting monopolies for minor and trivial improvements of existing medical products, as allowed in some other countries. Such ever-greening practices will hamper India’s role as ‘pharmacy of the developing world,’ supplying governments and procurers like MSF with affordable medicines and vaccines,” the organization claims.

To its credit, Pfizer has expanded its humanitarian assistance program for the drug and also works with the Global Alliance for Vaccines and Immunization (GAVI) to expand access.

Last year, for example, Pfizer said it would lower the price of Prevnar in emergency humanitarian settings to the lowest prevailing global price–now currently $3.05 per dose. In its assistance program, Pfizer has made Prevnar available in a four-dose vial.

“In its multi-dose vial presentation, this vaccine has been included in the expansion of India’s public immunization program in select states under the GAVI funded platform,” Pfizer said in a statement. “Pfizer remains committed towards further enhancing access of this vaccine in India, both in the market as well as through partnership with the Government to expand introduction in the public program.”

MSF has an ongoing campaign to push both Pfizer and GlaxoSmithKline PLC (London) to lower the cost of their pneumonia vaccines to below $5 per child for three doses.

“In our work, we see many children with life-threatening respiratory infections; many deaths could be prevented if more kids were vaccinated with PCV,” said Anas Shorman, a pediatrician working for MSF in Jordan. “More than 50 countries have spoken out against high vaccine prices, and children in countries like Indonesia, Jordan, and Tunisia simply can’t wait any longer to get access to the lifesaving pneumonia vaccine.”

Bottom Line:

Pfizer has made Prevnar 13 available at discounted prices under the Global Alliance for Vaccines and Immunization (GAVI)–an international public-private partnership to improve access to vaccines in the world’s poorest countries. More than 50 countries are eligible to procure the vaccine through GAVI, according to the organization’s website.

Following criticism over the high price of Prevenar 13, Pfizer reduced the vaccine price to non-governmental organizations last November, seeking to protect vulnerable people from illness in humanitarian crises.

There is one overarching theme that gets lost in this contentious debate surrounding the pricing of medicines throughout the world.

Fact No. 1: Pfizer is a for-profit, publicly held corporation, with some 5.97 billion shares outstanding as of Aug. 24, 2017. It has a duty to operate its pharma business such that it enhances shareholder value.

Translation: Pfizer’s first goal is to turn a profit. If it does, it may possibly pay shareholders a dividend and the value of its shares may appreciate. What this amounts to is the success of Pfizer’s board and management in discharging the company’s primary corporate objective, viz., enhance shareholder value.

Fact No. 2: Pfizer’s primary purpose is not that of the Bill and Melinda Gates Foundation, which has acquired and distributed millions of doses of life-saving medicine to impoverished people, mostly in the under-developed world. The Gates Foundation is exempt from US Federal income tax under Section 501 (c)(3) of the Internal Revenue Code and classified a “private charitable foundation.” Contributions to the Foundation are tax-deductible. Upwards of 88% of its expenses are in the form of charitable disbursements and just 0.2% is compensation to officers.

The Gates Foundation has no shareholders.

Steve's Take: @Pfizer is a good corporate citizen, but first responsibility is to shareholders Click To Tweet

Although I believe Pfizer has demonstrated its sensitivity and, dare I say it, the commitment to be a moral, corporate citizen of the world with its pricing policies, it is not a tax-exempt, charitable organization like the Gates Foundation, and isn’t required by IRC Section 501 (c)(3) to make any charitable disbursements. But a case can be made that it in fact does so by discounting its medicines in certain situations. Still, it isn’t required by law to do so.

Yes, Médecins Sans Frontières and other nonprofit groups should be vigilant in calling on companies like Pfizer for a demonstration of humaneness. My personal view is that the “Pfizers” of the world make plenty of mistakes and are caught breaking the law from time to time. But they also cannot be faulted for operating for the primary purpose of enhancing their shareholders’ interests.

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