April 2014 – PEAH – Policies for Equitable Access to Health

Nature, Nurture and DNA Sequences

This article is one entry into the cottage industry of patent law analysis that is generated by the Court’s unanimous decision in Association for American Pathologists v. Myriad Genetics. The author analyzes the decision and puts it in context, both present and the near future. Although some find the decision devastating for the pharmaceutical and biotechnological industries, the ruling is not as fatal as some claim and sets the right course for the future of synthetic genetics

Nature, Nurture, and DNA Sequences

by Shubha Ghosh*

Vilas Research Fellow & Professor of Law and Elvehjem-Bascom Pofessor of Law

University of Wisconsin Law School

On June 13, 2013, the United States Supreme Court addressed the question of the patentability of DNA sequences. The Court’s answer seems straightforward. Isolating a naturally occurring DNA sequence does not give rise to patentability while creating a synthetic DNA sequence might be patentable. While this response seems clear cut on the surface, the answer raised even more questions. This article is one entry into the cottage industry of patent law analysis that is generated by the Court’s unanimous decision in Association for American Pathologists v. Myriad Genetics. Here, I analyze the decision and put it in context, both present and the near future. Although some find the decision devastating for the pharmaceutical and biotechnological industries, the ruling is not as fatal as some claim and sets the right course for the future of synthetic genetics.

Myriad Woes

In 1997 and 1998, Myriad Genetics was granted three patents related to identifying genetic sequences associated with susceptibility to breast and ovarian cancer. These patents covered the isolated gene sequence as well as complementary DNA sequences (cDNA), both useful for identifying the presence of the various strains of the cancer gene in patients and diagnosing the susceptibility to breast and ovarian cancers. Myriad marketed a diagnostic test for detecting the presence of the gene sequences. The company also sued private and university hospitals and health care providers for patent infringement.

Myriad’s practices became the subject of media scrutiny. Medical practitioners, patient rights advocates, and health care access proponents raised critical issues of high medical costs and patient’s right to know in questioning Myriad’s business and litigation strategies. In 2009, the American Civil Liberties Union (ACLU) filed a suit against Myriad, challenging its patents on First Amendment and other grounds. However, the ACLU’s legal standing to challenge the patents was questioned since the ACLU would never practice the patents at issue and therefore could not be sued for patent infringement. The Association for American Pathologists became the substituted plaintiff and the suit moved forward.

Spring 2010 marked the district court’s decision in the Myriad litigation and a turning point for biotechnology patenting. Judge Sweet of the Southern District of New York ruled that all of Myriad’s patents on DNA sequences were not patentable. The ruling rested on established, if somewhat vague, precedent that natural phenomena are not patentable. Judge Sweet reasoned that all DNA sequences whether isolated or synthetic were products of nature, indistinguishable from naturally occurring DNA sequences. Therefore, Myriad’s patents should never have been granted.

Needless to say, the responses from patent practitioners, industry players and academics were fervent. Even those who may have skepticism about biotechnology patenting were floored by the breadth of Judge Sweet’s decision. Those in the industry were for the most part stunned as the foundation for biotechnology developments were swept out from under the many companies that relied on patenting for funding and development.

Judge Sweet may have tapped into anti-patent sentiment. In June, 2010, the Supreme Court published its long awaited decision in Bilski v. Kappos, dealing with business method patents. While there was unanimity as to holding invalid the particular business method at issue (a method for hedging risk in commodities markets), four of the justices would have gone further and ruled that all business methods unpatentable. In 2012, the Supreme Court reviewed a patent on a medical diagnostic procedure to treat Crohn’s Disease held by the company Prometheus, who was alleging patent infringement by the Mayo Clinic. The Court ruled that the patent was invalid because it entailed using a correlation that would be an unpatentable law of nature. Judge Sweet’s 2010 ruling foreshadowed these developments. Upon appeal to the Federal Circuit, which hears appeals of patent cases, Judge Sweet’s decision was upheld although on slightly different reasoning in 2011. Upon further appeal by Myriad to the Supreme Court, the case was sent back to the Federal Circuit in 2012 for reconsideration in light of the Court’s ruling in Mayo v. Prometheus.

This back and forth of a case is not atypical in controversial areas of law. In 2012, the Federal Circuit once again upheld the unpatentability of the DNA sequences identified by Myriad. In its second review of the Myriad patents, the judges agreed that cDNA, or synthetic DNA sequences, would be patent eligible since they were not natural phenomena. What was key to this ruling was the finding that research scientists at Myriad had to engage in inventive activity in constructing the synthetic DNA sequence. Two of the three Federal Circuit judges ruling on the case also found that there was inventive activity in isolating the DNA sequence from its naturally occurring state. One of the three, however, reasoned there was no difference between the isolated DNA sequence and the naturally occurring sequence. Therefore, one dissenting judge concluded that isolated DNA sequences were not patentable. The Supreme Court decided to review this opinion and issued its own, final opinion in June, 2013.

Myriad Unanswered Questions

Two words describe the 2013 Supreme Court opinion: anticlimactic and frustrating. The anticlimax was in the Court’s conclusion that isolated DNA was not patentable while synthetic DNA could be. This conclusion followed as a matter of course from the Court’s precedent. What is frustrating is the reasoning supporting this conclusion.

In 1948, the Supreme Court ruled in a case called Funk Brother v. Kalo Inoculant Co. that a patent covering a combination of bacteria that facilitated nitrogen fixation in plants was a product of nature and therefore unpatentable. The purported inventor in that case had simply combined naturally occurring substances and had not invented anything. This ruling was important in the Court’s 1980 decision, Diamond v. Chakrabrty, in which the Court addressed the question of whether a genetically modified bacterium was an unpatentable product of nature or a patentable invention. The Court held that the inventor had modified the organism to create a new life form that did not exist in nature. Therefore, the new organism could be patented. The Diamond decision is famous for the oft repeated line that “anything under the Sun made by man” is potentially patentable.

The Myriad decision is a logical extension of these precedents. The Court had to determine whether the DNA sequences at issue were natural phenomena or man-made. Its conclusion was that isolated DNA is a natural phenomenon and synthetic DNA is man-made. What is puzzling is how the nine justices came to this conclusion. The Court seems to rely on expert scientific testimony that was part of the record. The opinion is steeped in a summary of the underlying science. Interestingly, Justice Scalia refused to sign onto the scientific exegesis although he agreed with the result. What lesson then for future cases about DNA sequences, whether human, animal, or plant?

Two possibilities emerge from the opinion. One is a comparison between the claimed DNA sequence and its natural counterpart. If they are identical, then the claimed sequence is a natural phenomenon and unpatentable. The Court seemingly engages in this mind numbingly complex comparison. This approach is similar to how court’s attempt to determine whether one software program has been copied from another in a copyright infringement case. As with copyright, the Court seems to be using a substantial similarity approach to comparing DNA sequences with their naturally occurring counterpart. Although there is a language in the opinion implying that such comparison is the appropriate methodology, this approach leaves open the question of how much similarity is enough.

The second possible approach to determining when a DNA sequence is patentable is to focus on the method for uncovering the sequence. The Court emphasizes that isolating DNA sequences snipping the relevant sequence from its natural state, like extracting a mineral from the earth. Constructive synthetic DNA involves scientific activity. With respect to the isolated DNA, the Court rejects the approach of the Federal Circuit that a researcher has to determine where to snip the natural sequence in order to derive the isolated one. That decision was enough to make the isolated sequence man-made for the Federal Circuit. But the Supreme Court does not view that decision as inventive enough. Extraction is not invention while synthesizing is. That distinction seems to be the clearest answer the Supreme Court provides for distinguishing naturally occurring sequences from man-made ones.

In short, the Supreme Court applied a predictable and recognized rule in reaching its decision in the Myriad case. But it is far from clear how this rule is to be applied in practice. On the day the Supreme Court opinion was announced, within hours, the United States Patent and Trademark Office (USPTO) issued a short memorandum to patent examiners summarizing the decision. The memo tracks the Supreme Court’s reasoning by stating that patents would not be issued for merely isolating DNA sequences but patents were available for synthetic sequences. The Office promises to issue further guidelines in the future.

Myriad Speculation

One can hope that the USPTO provides some clarification on how to proceed. Needless to say there are some in the field who view the Myriad decision as devastating to biotechnology. Some of this speculation is overwrought. Since the Supreme Court concluded that patents on synthetic DNA, the future is not as gloomy as some foresee. While it is true that merely identifying naturally DNA sequences cannot be the basis for a patent, researchers and inventors will have to put more effort in creating synthetic forms and in developing inventions that tap the DNA sequences that have been mined. Arguably, such efforts can only enrich the industry and make the field more competitive and innovative. More devastating would have been the Myriad decision issued twenty-five years ago when identification of genomes, human, animal, and plant, was in its infancy. At that earlier limitations on patenting as we see in Myriad may have altered the field. But since the future is in synthetic DNA and in applications of isolated sequences, two areas of invention left untouched by the opinion, the Supreme Court may have just shut the barn door when the naturally occurring horse has been let loose. Instead of bemoaning lost patents, attention should turn towards the future. In that way, the Myriad decision may actually be ushering in the next stage of the genomic revolution.

References

Judicial Opinions

[1] Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013).

[2] Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 653 F.3d 1329 (Fed. Cir. 2011).

[3] Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 702 F.Supp.2d 181 (S.D.N.Y. 2010).

[4] Bilski v. Kappos, 130 S.Ct. 3218 (2010).

[5] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012).

[6] Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948).

[7] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

Websites

[101] USPTO Memorandum on the Supreme Court’s decision in Myriad, http://www.patentlyo.com/files/myriad_20130613.pdf

—————————————————————————-

*Professor Shubha Ghosh brings a national and international reputation and over sixteen years of academic experience to University of Wisconsin, where he is Vilas Research Fellow & Professor of Law and Elvehjem-Bascom Pofessor of Law. He has authored numerous scholarly articles and book chapters as well as several books in the fields of intellectual property, competition law and policy, international law, and legal theory. His scholarship is among the most cited of the law school faculty. He is a member of the American Law Institute (ALI), American Antitrust Institute (AAI), American Intellectual Property Law Association (AIPLA), International Association for Advancement in Teaching and Research in Intellectual Property (ATRIP), past chair and co-founder of the AALS Section on Law & South Asian Studies, and member of the Executive Committee of the AALS Section on Internet and Computer Law. https://law.wisc.edu/profiles/ghosh7@wisc.edu

News Link n. 92

The news links are part of the research project GESPAM (Geopolitica, Salute Pubblica e Accesso alle Medicine/Geopolitics, Public Health and Access to Medicines), which aims to focus on the best options for the use of trade and government rules related to public health by resource-limited countries

News Link 92

The Global Malaria Epidemic

Almost a third of malaria drugs failed quality tests

On the front line against drug-resistant malaria

Development Effectiveness Review 2013: ZAMBIA

The World Health Organization and multi-stakeholder governance. To be or not to be?

Improving access to immunisation: how the GAVI Alliance can make a difference

EU Commission: PUBLIC CONSULTATION ON THE PRELIMINARY OPINION ON DEFINITION PRIMARY CARE WITH EMPHASIS ON FINANCING SYSTEMS AND REFERRAL SYSTEMS

EU undermines its own development policies

The Strange and Curious Grip of Country Income Status on Otherwise Smart and Decent People

US, Japan Agree To âInject New Momentumâ Into TPP Talks

UN Climate Change Report Assesses Options For Technology And IP Policy

EU climate chief urges China to show commitment

One Year On At The Medicines Patent Pool: Interview With Greg Perry

Heat-stable vaccines urgently needed to reach the one in five children missed by immunisation worldwide

South Sudan children in the firing line

Pfizer, Novartis and 3 others put an extra $1M each into Q1 lobbying

Connected Health Opportunities For Medicaidâs Most Vulnerable Patients

Access To Clean Water One Bag At A Time

Fortified food – persuading the private sector to do good

Strong new agricultural investment rules needed to protect small-holder farmers

Food Security is About More than Land Grabs

The missing key to eradicating poverty

Why global health should embrace the global precariat

From health systems to systems for health

Il dilemma dei donatori, dalla caritÃ alla giustizia sociale

Regional Integration, Patent Pools and Access to Medicines

This paper discusses how patent pools and regional integration can be deployed as mechanisms for assuaging the African access to medicines imbroglio

Regional Integration, Patent Pools and Access to Medicines

by Olasupo Owoeye*

Doctoral Researcher, Faculty of Law, University of Tasmania

Introduction

The connection between intellectual property protection and access to medicines remains a highly topical issue. Scarcity of medicines continues to be an issue of significant global concern. As noted in the World Health Statistics 2013:

Even the cost of the lowest-priced generics can put common treatments beyond the reach of low-income households in developing countries. The greatest price is paid by patients suffering chronic diseases. Even though effective treatments exist for the majority of conditions contributing to the global burden of chronic disease, universal access remains out of reach.

The pharmaceutical patents debate has attracted an inundating degree of commentaries and various recommendations have been made on how to maximise the use of the available flexibilities in international intellectual property law to make medicines available at affordable prices to people in developing countries. This paper discusses how patent pools and regional integration can be deployed as mechanisms for assuaging the African access to medicines imbroglio.

The TRIPS Agreement and the Pharmaceutical Patents Debate

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) is the major international agreement on intellectual property protection with significant implications for access to medicines due to its unprecedented harmonisation of the standards for the protection of intellectual property rights in the 159 member countries of the World Trade Organization (WTO). A major flexibility available to developing countries that are seeking access to affordable patented medicines is the option of granting a compulsory or non-voluntary licence for the production of generic versions of patented drugs. Fulfilling the requirements for the use of compulsory licences can however be daunting especially where the country in need is without pharmaceutical manufacturing capacity and generic versions are not available from other sources. A country in such a situation will then have to import under the WTO decision on the Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health or the Protocol Amending the TRIPS Agreement.

It would appear that developing countries with little or no manufacturing capacity may not be in a position to make maximum use of compulsory licences under the TRIPS Agreement especially where they have to import such drugs under the Doha paragraph-6 system. This is particularly so in Africa where many countries are still in the United Nation’s list of least developed countries. One must however hasten to add that the access to medicines problem in Africa is not all about patents or intellectual property protection. The administrative, economic and political environments in which the health sector operates in Africa are also a significant part of the problem.

Regional Integration and Patent Pools

Given the acute shortage of essential medicines in the continent, it is important for African nations to consider the development of a strong pharmaceutical manufacturing capacity as a top priority. Nonetheless, to address immediate and pressing public health needs, steps should be taken to achieve short-term public health goals in relation to access to affordable medicines in the continent. The procurement of essential medicines in Africa is an issue that deserves some substantial attention. In this respect, the patent pool option can be very helpful. A patent pool can be defined as an arrangement whereby two or more patent owners agree to aggregate or pool their patents and license them to one another or to independent third parties upon the payment of a given fee. The patent pool option has already been recommended as a mechanism countries seeking access to affordable medicines might want to explore. Patent pools can serve a useful purpose in facilitating the use of voluntary licensing at cheaper rates. For Africa, the various existing regional economic communities can obtain voluntary licences from patent pools to meet their public health needs. There currently exist the following 8 regional economic communities in Africa:

the Community of Sahel-Saharan States (CEN-SAD);
the Common Market for Eastern and Southern Africa (COMESA);
the East African Community (EAC);
the Economic Community of Central African States (ECCAS);
the Economic Community Of West African States (ECOWAS);
the Intergovernmental Authority on Development (IGAD) in Eastern Africa;
the Southern African Development Community (SADC); and
the Union du Maghreb Arabe (UMA)

These communities can obtain licences from patent pools to supply drugs to member countries within each community at affordable rate. It has already been suggested in another article that the amalgamation of the existing regional economic communities in Africa into a single community can go a long way in facilitating the use of compulsory licences and the development of a strong pharmaceutical manufacturing capacity in the continent. Such an economic alliance can also go a long way in giving African nations leverage in negotiating the terms of voluntary licences, especially from patent pools, whilst facilitating the bulk procurement of essential medicines for the continent.

The United Nations’ supported Medicines Patent Pool (MPP) is a good example of a patent pool that holds great prospects for Africa and the continent can benefit immensely from the licensing schemes administered by the MPP. The Medicines Patent Pool signed its first licence agreement with a pharmaceutical patent holder, Gilead Sciences, in July 2011. The licence covers active pharmaceutical ingredients (APIs) and product licences for Gilead Sciences antiviral agents including; tenofovir (TDF), emtricitabine (FTC), cobicistat (COBI), elvitegravir (EVG) and the Quad [a combination of TDF, FTC, COBI, and EVG]. Not less than six sub-licences have already been granted pursuant to the agreement. In August 2013, another agreement was signed with F. Hoffmann-La Roche for the sale of Valganciclovir, an antidote for HIV related cytomegalovirus infections, at considerably discounted rates in poor countries and the licensing of the right to manufacture generic versions of the drug. In December 2013, the MPP signed an agreement with a pharmaceutical company, Bristol-Myers Squibb to increase access to a major HIV drug, atazanavir, in up to 110 developing countries through a technology transfer package that will facilitate the production of the drug. More recently on 1 April 2014, the MPP and ViiV Healthcare signed two licensing agreements to improve access to dolutegravir (DTG), a new antiretroviral for both adult and paediatric care.

Conclusion

Although the MPP only covers patented anti-retroviral drugs, the licensing schemes available in the MPP can be highly beneficial to Africa and a collaborative use of the scheme by the existing African economic communities is highly recommended. Whilst patent pools may not necessarily enhance the use of compulsory licences, they can substantially reduce the costs of voluntary licensing thereby reducing the need for compulsory licences and the financial burden involved can be considerably reduced if African regional economic communities could jointly apply for licences on behalf of their member countries. Patent pools initiatives can also be developed to cover other tropical diseases affecting people in Africa. Thus, although the development of a long term local pharmaceutical manufacturing plan in Africa is a desideratum, African countries can still address immediate and pressing public health needs by having a collaborative framework for making maximum use of the current initiatives for facilitating access to medicines in developing countries.

—————————————————————————–

*Dr. Olasupo Owoeye (olasupo.owoeye@utas.edu.au) is currently completing his doctoral research in international intellectual property law at the Faculty of Law, University of Tasmania, Australia. He is admitted as a barrister and solicitor in Nigeria, New Zealand and Australia

What is behind the sudden Global Marketplace call for Universal Health Care: Co-opting in the making

After setting up the public health infrastructure to fail, the World Bank and their allies are proposing a new solution: to create a publicly funded insurance package using the now expanded network of private providers, who will participate in the program, as long as they are guaranteed payment. While reinforcing the notion that healthcare is a commodity and not a basic human right, this approach has several problems and side effects: fragmentation of care, higher cost, precedence of procedures over preventive medicine and further dismantling of the public healthcare system. At the same time, insurance packages divert attention and funds from a more comprehensive approach directed at modifying the root causes of disease, through socioeconomic interventions aimed at increasing equity

What is Behind the Sudden Global Marketplace Call for Universal Health Care: Co-opting in the Making

by David Chiriboga*, MD, MPH

Former President of the Health Council for the Union of South American Nations (UNASUR) and former Minister of Health of Ecuador

Universal health care (UHC), meaning equal access to healthcare services for all, has been a longstanding demand from progressive movements around the world, for whom health is considered a basic human right and not a commodity to be privatized for economic gain. The neoliberal policies of “fiscal responsibility” promoted by the World Bank focus on decreasing public spending on social programs, with public healthcare services among the main targets. This has caused massive privatization of healthcare services worldwide and severely limited access for the poor. Why is there an apparent change of heart of the World Bank and the global corporate interests? Why do these organizations now seem to be rallying in support for UHC?

The answer to this change in heart stems from the understanding of the economic impact of “investing in health,” since the healthcare industry can be a significant component of economic growth, and when people have access to healthcare people live longer, and they produce and consume more. Global corporate interests have one goal: increased returns, and the best way to achieve this, aside from maximizing profit margins, is by increasing market share. As many other industries, including the tobacco and fast food industry, the healthcare industry, currently around a USD $7 trillion industry worldwide, with its related corporations (pharmaceutical industry, medical devices and equipment, and private insurance) are targeting previously untapped populations: the large pool of poor people in “third-world” countries, where over 3/4ths of the world’s population reside. A strategy to access that market share is to implement insurance packages, ideally publicly funded, since the poor have minimal out-of-pocket resources. These insurance packages tend to cover few specific conditions that affect certain high-risk population groups, like women of childbearing age and young children. However, many of these resource-poor countries have precarious public healthcare systems that have been severely undermined by the very same austerity policies put forward by the World Bank over two decades ago. After setting up the public health infrastructure to fail, the World Bank and their corporate and academic allies are proposing a new solution: to create a publicly funded insurance package using the now expanded network of private providers, who will participate in the program, as long as they are guaranteed payment. This will not only strengthen the private network, but will increase the market share of healthcare corporations, while reinforcing the notion that healthcare is a commodity and not a basic human right.

Although this approach may in fact save lives, albeit selectively, publicly funded insurance packages, delivered by private providers, have several problems and side effects: fragmentation of care, higher cost, precedence of procedures over preventive medicine and further dismantling of the public healthcare system. At the same time, insurance packages divert attention and funds from a more comprehensive approach directed at modifying the root causes of disease, through socioeconomic interventions aimed at increasing equity, since socioeconomic injustice is directly responsible for over one third of deaths in the world, about 20 million avoidable deaths each year, for the past 20 years. Investing on improving socioeconomic inequality could have an enormous impact on overall health and wellbeing that providing partial health insurance does not address.

Insurance packages provoke fragmentation of healthcare services and its associated health disparities under the banner of progressive (a little at a time) universalization, since they cover only specific services in restricted population subgroups. This causes huge gaps in care even within families, if a family member who is not a young woman or a child of a specific age group, the family will have to struggle to access the now dismantled public healthcare sector, or pay out-of-pocket for the private services. Similarly if the woman or child who is insured suffers an illness that is not covered, they are left to fend for themselves. Since eighty percent of the world population live on less than US $10 per day, when a serious illness strikes in this already vulnerable population, oftentimes, not even selling all their possessions and going into debt will cover the full cost.

As part of the neoliberal mandate, reimbursing private providers’ services takes priority in the government’s budget, therefore private doctors and hospitals, as well as the pharmaceutical industry, and the medical device and equipment companies, get reimbursed for their services first. In the meantime, public services continue on their downward spiral of quality due to chronic underfunding, decaying physical and technological infrastructure and brain drain. As a result, the private sector starts booming, since through the insurance packet the government picks up the tab, effectively subsidizing private practice, further distorting the notion of a rational, equitable healthcare system.

The packages cover for the most part procedures, and procedures will be done even if medically not indicated, as the mounting evidence shows, among a “cadre” of overbilling abuses, even in countries with strong regulatory agencies. An analogy could be drawn to having fire departments and firemen paid on the basis of the number of fires: it would become a system with perverse incentives. Therefore there is a need for a strong oversight, but, given that there are no appropriate governmental agencies to supervise the system, again as direct a result of the fiscal austerity policies and corruption, the usual prescription from the neoliberal cookbook will be to find a private third-party hired to do the job. Even with regulatory agencies in place there is growing evidence that in general they are seldom effective and tend to not be able to keep up with their mandate.

The end result is that by using publicly-funded health insurance packages, there is an effective co-opting of the term universal health care, shifting from a human rights’ approach, towards the private sector, for profit-healthcare becomes a product that can be bought or sold. Therefore the World Bank and associates’ new proposal is yet another attempt at privatization of healthcare services, this time using government subsidies. Since the public sector has been set up to fail and deemed âinefficientâ, the private sector appears to save the day.

The private sector and its proponents claim that individual freedoms of both providers and patients are essential. Initially individual physicians may have the power to make decisions about practice patterns as well as pricing of services and procedures. As the private health market progresses, physicians groups take over that role and subsequently, the decision-making power shifts to insurance companies and healthcare corporations. Most physicians and other healthcare providers become salaried employees and have progressively less of a say on how business is run. Providers increasingly clash with the demands of meeting their daily quota of patients, while finding that sometimes even clinical decisions on individual patients are taken remotely by administrators, who respond to institutional financial needs and not always patient needs. As for the freedom of the population to choose providers in the private sector, the freedom is related to the purchasing power of the individual and to the type of insurance. As a general rule, the wealthier the person, the better the choices, otherwise, type of insurance, co-payments and caps progressively limit choice, and in the case of severe illnesses or catastrophic events, bankruptcy ensues. Individuals with public insurance tend to have little freedom of choice.

As the public insurance package only covers certain needs that selected high-risk individuals may have, the rest of the population fall prey to the supplemental private insurance market. Before the era of medical insurance the price of private services and procedures was limited by the out-of-pocket capacity of the population, however, with insurance this market safeguard has disappeared and allowed the price of procedures and services across the board to skyrocket, since now it is not just the cost of the procedure or the service, but the added compensation for an intermediary. Supplemental insurance is yet another way in which insurance package progressive UHC works for the private sector. Ultimately, people may end up having to pay several times for their healthcare services: first, in the form of taxes to finance the public services and limited insurance packages (a progressive tax); second, as workplace health insurance (social security and private insurance, which tend to be regressive -USD $300 a month per person is not the same percentage of the salary for a factory worker than it is for a corporate CEO); a third time as private supplemental insurance, also regressive, to cover the gaps in basic public and private insurance; and, finally, a fourth time, as out-of-pocket costs, for everything that is not covered by any of the preceding programs.

Health insurance packages are a method to induce progressive dependence on insurance companies. Once they are able to introduce the basic package, the rest will follow. They create a “need” by inducing fear of having to confront the high costs of private healthcare-made higher through their participation. They also market their services to providers as physicians and hospitals welcome the security of reimbursement, even if it means splitting the earnings to a point dictated by the size of the group practice. If the government subsidizes the initial package, this is welcome news, and the private insurance market is there to feed on fear, promising progressive coverage for the right asking price. Insurance companies thrive with low risk coverage (young and healthy individuals) and tend to use unethical “cherry picking” practices to avoid insuring those at higher risk, like pre-existing conditions, complications of deliveries, neonatal care, cancer, etc., either by refusing coverage or by applying event, yearly or life ‘caps’ on reimbursement and progressively increasing the price tag. As happens with the rest of the corporate world, these companies usually have little governmental oversight and regulation, even in high-income countries.

Another issue with the insurance package UHC, delivered by private providers is the creation of double standards. As the private sector gets stronger with the cash infusion from the government, it becomes more selective and tends to favor patients who have private insurance, since public insurance packages reimburse a lesser amount. In response to the progressive discrimination of the “poor” in the healthcare setting, the government has to setup economic stimulus, in the form of grants, for non-governmental organizations (NGOs) to compete over federal funding every year to provide healthcare services to the poor. This situation occurs in the United States (US) with the Medicaid program, a public insurance program in the US, which reimburses private providers for healthcare services. Many private providers stop taking care of patients with Medicaid insurance because the reimbursement is less. Therefore the system does not provide equal access. Not only double standards in terms of access, but there are many reports of public insurance holders receiving substandard healthcare services as compared to the private insurance holders.

Cost containment is an increasing concern, however, in a government-funded progressive UHC system delivered through private providers, there is limited opportunity to use the purchasing power in price negotiations for medications, medical supplies, devices and equipment. It is definitely not the same to buy, pain medication, anti-retroviral or chemotherapeutic agents for one hospital or even a group of hospitals, than it is to buy for the entire healthcare network of a country or even a continental region. The same applies to medical supplies, devices, and equipment, from blood pressure monitors to magnetic resonance imaging scanners. Given current levels of health expenditure we cannot afford not to use the leverage of a government or a continental region to control expenditures. Along the same lines of cost containment for the long run, and under the premise of health as a basic human right from a global perspective, novel and ethical ways of thinking about the outdated international patent system are required. International laws to defend the public domain, pool patents, and facilitate the strategic development of national or regional not-for-profit production of pharmaceuticals, as well as medical devices and health technology and equipment.

The end result of using this progressive UHC based on insurance packages and delivered through private providers is a highly complex, extremely expensive, procedure-based, publicly-subsidized private healthcare system, with a plethora of primary and supplemental private insurance companies, healthcare corporations, managed care organizations, private and public control agencies; with a struggling, disjointed yet massive administrative maze, in a frantic quest for quality assurance and cost containment. In the US, the richest country on the planet, and probably the most important exponent of healthcare as a commodity, the end product is not a system but an intricate patchwork scheme, with a price tag of around USD $3 trillion, or 18% of its GDP in healthcare.

That is with about 47 million non-elderly adults (15% of the population) devoid of any form of health insurance, either public or private. After the enactment of President’s Obama Affordable Care Act, which makes it compulsory to purchase health insurance or face tax penalties – a regressive measure, the number of uninsured dropped to 40 million. These uninsured people in the US are not poor enough to qualify for public insurance but neither have enough income to afford private insurance. In 2013, according to the US Institute of Medicine, in spite of this massive expenditure people in the US have shorter lives and poorer health than people in other high-income nations, making it not only an inefficient but also an economically unsustainable model.

On the other hand, in Europe, where there has been a longer tradition of health as a human right and of comprehensive UHC systems, with a mixture of public and private providers, there is a real danger of insurance companies gaining market share and causing and deepening fissures in the public system by selling supplemental health insurance, to either “jump the queue“ or other forms of preferential treatment, preying on the limitations of public systems. As long as health is treated as a commodity, there will be double standards based on oneâs ability to pay. Unlike most merchandise which we choose to purchase or not, all of us will need to use the healthcare system at some point, and when we do it needs to be accessible to all, effective and compassionate.

There is much to learn from successes and failures of universal healthcare systems across the globe. Those that succeed honor the right to health and recognize that economic injustice accounts for a significant proportion of morbidity and mortality, and by investing in the social determinants of health: sanitation, housing, education, job security, access to quality food, alternative urban planning, pollution control, among others, countries can improve health and overall wellbeing to a much greater extent than through healthcare services in and of themselves.

There are enormous challenges ahead for a mature, ethical world, which acts on universal societal principles, abiding by all basic human rights, so that we can provide the best possible level of physical, psychological and social wellbeing for all, while preserving our world for generations to come. To negate the catastrophic effect on our planet of having unregulated sustained economic growth and GDP as the sole goals is tantamount to insanity. We need an urgent change of course. We need to reclaim our say in the political realm and not let self-serving, economic, corporate and partisan interests dictate our fate and that of our planet. We will be responsible either way.

Citizens of countries with universal health care have a historical duty to defend true UHC from private co-opting, as an expression of their right to health, by participating in the search for creative solutions to the limitations of the current system, and by not giving in to the private market equivocation, a responsibility shared by governments of those countries, and international democratic organizations like the World Health Organization. Publicly funded insurance packages are NOT equal to universal health care and rather pursue the consolidation of the private healthcare sector and the health-associated corporations. So yes, we need universal health care (meaning for all people), through appropriate funding mechanisms, like fair regressive taxation, and developing a sensible, straightforward, ordered healthcare system based on the ethics of equity. A system that promotes, facilitates and rewards excellence in service; that is centered in health promotion and disease prevention, and which includes the active participation of the population in its design and implementation. Health is a basic human right, not an article of trade.

——————————————————————————-

*Dr. Chiriboga obtained his doctorate degree in medicine at Escuela de Medicina de la Universidad Central del Ecuador, and his postgraduate training in Preventive Medicine and in Public Health at the University of Massachusetts Medical School and School of Public Health. He held academic appointments at the University of Massachusetts Medical School. He designed and implemented a comprehensive healthcare system for the indigenous people in central Ecuador 1988-2001. He served as Minister of Health in Ecuador (2010-11) where he undertook a major re-structure of the healthcare system of the country. He also served as President of the Health Council for the Union of South American Nations (UNASUR) 2010, bringing key draft resolutions regarding generic medicines and research and development of medicines for neglected diseases approved by the World Health Assembly. Dr. Chiriboga was the keynote speaker at the European Union Conference in Global Health held in Brussels in 2010. His interests include global health equity, the development of affordable universal health care systems, as well as multi-sectorial prevention strategies.