Cuba’s Pharmaceutical Advantage

Marguerite Rose Jiménez

On May 6, 2002, thanks to then Undersecretary of State John Bolton, Cuba’s biotechnology industry made headlines around the world. Bolton charged that Cuba, just 90 miles away, was now a bio-terror threat. The United States had the duty to prevent Cuba from sharing its bio-weapons know-how with other rogue nations throughout the world, Bolton said. Five days later Fidel Castro appeared on Cuban national television together with members of Cuba’s medical and scientific elite to respond to the accusations. The only truth to Bolton’s claims, Castro said, was that Cuba is, in fact, just 90 miles away from the United States.

Although there was nothing to substantiate Bolton’s claims, Cuba does have superior biotech capacity, which it shares with other countries. Cuba has become a global leader in the South-South transfer of technology, helping low-income countries develop their own domestic biotech capabilities, providing technical training, and facilitating access to low-cost lifesaving drugs to combat diseases such as meningitis B, polio, and hepatitis.

As recently as the 1990s, this seemed far-fetched. In those years, promising industries like biotechnology were not yielding significant economic gains in Cuba and showed no potential to compete with other industries, especially tourism, as a revenue source. Meanwhile, Cuba economist Pedro Monreal and others argued that Cuba needed to reindustrialize the economy. This could be accomplished in part through continued development of Cuba’s “exports within borders” (domestic industries operating in hard currency linked to the tourist industry), and through export substitution, whereby exports that relied on natural resources would be replaced by high-tech and human-capital-intensive exports.1

Today, biotechnology is fulfilling that role after the government invested more than $1 Billion in the industry. In 2007 pharmaceutical exports earned an estimated $350 million, surpassing the traditional Cuban exports of sugar, rum, and tobacco, and ranking second only to nickel as the country’s leading export earner.2 After significant investment and slow entry into international markets, Castro’s “billion dollar gamble” now seems poised to pay off. How has a country in the midst of an enduring economic crisis and under the thumb of an economic embargo imposed by a global pharmaceutical leviathan managed to develop one of the most innovative biotech industries in the world?

Dr. Agustín Lage Dávila, director of Cuba’s Center for Molecular Immunology (CIM), wrote in 2004 that the success of Cuba’s biotech industry is largely due to several underlying factors.3 To begin with, he wrote, the industry is organized around a closed or complete cycle model, whereby research, development, production, marketing, and follow-up evaluations for a given product are carried out within the same administrative unit. Lage Dávila suggested that this approach stimulates shared responsibility for the success of the entire process. Whereas the dominant practice among larger pharmaceutical companies in industrialized countries is to outsource manufacturing, the Cuban system maintains local production facilities, creating additional employment opportunities at home.

An additional key to Cuba’s success has been the coexistence of export orientation, domestic distribution, and international cooperation. The Cuban approach to research and development relies on collaboration among institutes rather than competition, and works under the auspices of the Ministry of Health to determine development priorities. Cuban biotech capacity meets 80% to 90% of domestic demand, minimizing Cuba’s dependency on pharmaceutical imports and helping to maintain the country’s health standards during periods of economic crisis.

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This system has its origins in a brief meeting in 1980 between two presidents. Cuban president Fidel Castro and oncologist Richard Lee Clark, president of MD Anderson Hospital in Houston, Texas (the first cancer hospital in the United States), met while Clark traveled with a North American delegation touring the island. After hearing Clark discuss his groundbreaking research on interferon, a “wonder drug” in the battle to cure cancer, Castro was more convinced than ever that biotechnology was the future of Cuban science. Shortly after their fateful encounter, Clark hosted two Cuban scientists at his hospital in Houston, sharing his research and expertise.4

After Houston, the next stop for Cuban researchers was the Helsinki-based laboratories of Dr. Kari Cantell. Clark had visited Cantell in 1979, shortly before his trip to Cuba, and directed the Cuban scientists to seek Cantell’s expertise. Cantell was the first person to isolate interferon from human cells in the 1970s. He was renowned not only for his scientific discovery, but also for his humanitarian approach to research, exemplified by his decision not to patent his interferon procedure. In 1981 a group of Cuban scientists headed by Manuel Limonta spent a week working with Cantell and his colleagues learning the procedure to reproduce interferon in large quantities.5

Within less than a year of their travels, a small team of Cuban scientists working out of an old converted villa known only as House no. 149 had developed the capacity to reproduce the wonder drug. Interferon was used in Cuba almost immediately afterward during a dengue outbreak in 1981.6 The obvious potential for drugs like interferon was not lost on Castro, who in 1981 established the Biological Front, an interdisciplinary forum to facilitate greater involvement of a broad range of scientists in developing Cuba’s biotechnology sector.

In 1986, with the directors of both the World Health Organization and Pan American Health Organization in attendance, the Center for Genetic Engineering and Biotechnology (CIGB) was inaugurated just west of Havana. During the next decade the Cuban government would invest more than $1 billion in the Western Havana Scientific Pole, a cluster of 52 institutions and enterprises related to biotechnology that would serve as the epicenter of Cuba’s growing industry. Beyond the CIGB, the Western Havana group has come to include, among others, the Finlay Institute, specializing in vaccine research and infectious diseases; the Center for Molecular Immunology (CIM), dedicated to monoclonal antibodies and cancer immunotherapies; and the National Center for Scientific Research, founded in 1965.

The history of Cuba’s biotechnology industry is marked by episodes of acute crisis and unparalleled innovation. The health needs of the population drive industry priorities and have led to some of Cuba’s most noteworthy breakthroughs. This was the case even before the development of the country’s contemporary biotech sector. In the late 1970s an outbreak of meningitis B threatened to derail Cuba’s progress in reducing mortality among children, leading researchers at the Finlay Institute to develop the world’s first vaccine for the disease in 1985 and, subsequently, the first campaign to distribute it nationwide. In 1986, the inventors of the vaccine received a Gold Medal Award from the World Intellectual Property Organization (WIPO). Since 1985 Cuba has reduced morbidity from meningococcal diseases (meningitis B and C) by over 95%.

In 1999, after launching its first campaign against Haemophilus influenzae type B (Hib) and paying $3 per imported vaccine dose, Cuba began researching a possible alternative to the expensive vaccine. With more than 500,000 children dying annually from Hib and vaccines costly and complex to produce, Cuba took up the call. Four years later, with collaboration from researchers from the University of Ottawa, Cuba became the first country in the world to successfully produce a synthetic vaccine for the virus. After extensive clinical trials conducted with the Canadians, the Cuban vaccine showed a 99.7% success rate. In 2004 it was introduced into the national vaccination campaign, and in 2005 Cuba won its sixth WIPO Gold Medal.

Most recently, in March 2011, Cuba received a WIPO Gold Medal for Heberprot-PE, a breakthrough treatment for diabetic foot ulcers, a common complication of diabetes, which an estimated 300 million people live with worldwide. Cuban medical trials conducted between 2000 and 2008 have found Heberprot-PE to be effective in treating advanced ulcers where no other conventional treatments have worked.7 Clinical trial results published by CIGB report that the drug is effective 66% of the time in preventing amputation. The trials were conducted according to internationally recognized best practices and were evaluated and approved through a series of European audits. To date more than 6,000 people suffering from diabetic foot ulcers in Cuba have been successfully treated using the new innovation. Commercial agreements for Heberprot-PE have been signed with foreign companies in Brazil, China, the European Union, Mexico, and Russia, among others.

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Domestic successes aside, international market access has proved difficult for the Cuban industry. Indeed, it has had to wage a constant battle for recognition and credibility in a global pharmaceutical arena heavily dominated by U.S. corporations. Cuba’s biotech pioneers and promoters have had their work cut out for them but have gradually gained the confidence of the World Trade Organization’s international regulatory bodies, among others. On April 20, 1995, Cuba signed on to the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), marking its official entry into the global pharmaceutical market. Among other things, the TRIPS agreement establishes basic standards for intellectual property rights that all WTO members are expected to abide by. Exceptions are allowable in the case of national health emergencies, when countries are allowed to violate patents to provide access to potentially life-saving drugs that TRIPS restrictions might otherwise make cost-prohibitive.

Becoming TRIPS-compliant was necessary to increase both investor and consumer confidence in Cuban products. In addition, as Cuba’s research-and-development profile expanded, active participation in international forums like the WIPO and the WTO was also viewed as a way of protecting Cuban innovations. In 1998 Cuba applied for 16 international patents. In 2008 Cuban innovators applied for 333 patents, 39 of them in the United States.8 The WIPO notes, “Cuba has linked scientific skill with [intellectual property] awareness in order to promote economic growth and further fuel its innovation cycle.”9 Meanwhile, Cuban biotech has had much less success winning over the bureaucrats and officials within the U.S. Office of Foreign Assets Control (OFAC), as well as the scientists and protocols established by the Food and Drug Administration.10

In 2004 CancerVax, a small California-based biotech company, applied to OFAC for a license to negotiate with the Cuban government over a joint research initiative concerning possible cancer vaccines. CancerVax enlisted the help of high-powered Washington lobbyists to make their case on Capitol Hill, and found bipartisan support from both members of Congress and administration officials. Senators Christopher Dodd (D-Conn.) and Diane Feinstein (D-Calif.), along with other members of Congress, wrote letters of support to Secretary of State Colin Powell urging that the license be approved and arguing that “saving lives shouldn’t be a political issue.” CancerVax chief executive David Hale noted that State Department officials had expressed concern over the possible transfer of technology from the United States to Cuba, which might inadvertently bolster Cuban capacity for bio-weapons. Hale assured officials that the transfer was, in fact, from Cuba to the United States.11

On July 13, 2004, after several years of negotiations, the formal cooperation agreement was signed in Havana with Fidel Castro and members of Cuba’s biotech and medical elite on hand to witness the historic event. The agreement signed by CancerVax and the marketing arm of Cuba’s Center for Molecular Immunology (CIMAB) was the first of its kind. During the ceremony, CIM director Lage Dávila commented, “Dissatisfaction is the scientist’s natural state of being, and it is known that what remains to be done is much more than we have done so far.”12 As scientists from both Cuba and the United States commented on the complex process that had led to the agreement, Lage Dávila noted the “additional complications” that accompanied the negotiation process and a long list of reasons that the negotiation might not have been possible.

The official agreement signed by the two parties has some odd inclusions that one would not expect to find in a legally binding multimillion-dollar contract. The initial agreement stipulated that CancerVax would pay CIMAB $6 million over the course of three years. If the clinical trials were successful and the products licensed and marketed internationally, Cuba would be entitled to an additional $35 million and royalties from future sales.13 However, because of restrictions pertaining to all business transactions with Cuba, the country would not receive payment in cash but rather in kind. The term “barter” is included as the official payment mechanism, with “barter goods” including only those qualifying under the Trade Sanctions Reform and Export Enhancement Act of 2000, and only those that are to be used specifically for the public health purposes of the Cuban people.14

Progress evidenced by the licensing aside, if trials like those proposed by CancerVax were successful and the one-of-a-kind drug approved, the drug would not be available for sale in U.S. markets without a change in the legislation under the embargo. When questioned about the possibility of the life-saving drug being withheld from U.S. citizens as a consequence of the embargo, chief of staff for then Cuban American congressman Lincoln Diaz-Balart (R.-Fla.) stated: “The medical trials for this drug will take several years. Diaz-Balart hopes that by then the Cuban people will be free.”15

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Access to U.S. markets would undeniably be a huge gain for Cuba’s biotech industry, but Cuba has made due without it. Cuba’s contributions in the field of health biotechnology are widely recognized by international organizations and countries all over the world that happily import Cuban products at affordable prices. On April 5, Cuba’s Public Record of Clinical Trials became among the first entities of its kind in the Americas to earn accreditation from the Pan American Health Organization and the World Health Organization. The accreditation should boost international confidence in Cuban biotech and pharmaceutical industries and products, and serve as a model in scientific research for credibility and transparency throughout the hemisphere.

To date, Cuba has signed biotech and pharmaceutical cooperative agreements with a wide range of countries and exports its products to more than 50 of them. China has a biotech production plant dedicated to producing Cuba’s synthetic Hib vaccine. Algeria is participating in clinical trials for Heberprot-PE. South Africa and Cuba have collaborated since 2001 when Fidel Castro offered South African president Thabo Mbeki research and technology support to enhance South Africa’s domestic capacity to produce low-cost antiretroviral drugs for the one out of every nine South Africans currently living with AIDS. Cuban pharma business with Vietnam increased 20% since 2010. EMS, Brazil’s leading pharmaceutical company, has an agreement with Cuba’s Heber Biotec to support global distribution of Cuban pharmaceutical products. These are only a handful of examples from an increasingly diverse international business portfolio developing for Cuba’s biotechnology industry—one that is likely to expand in the near future if Cuba is able to continue attracting foreign investment and collaboration from strategic international partners.

Lage Dávila once remarked, “With the hindsight of 20 years we can see how precocious Cuba was in developing an industry that was only beginning to emerge in a few very industrialized countries.”16 In the case of Cuba’s “billion dollar gamble,” there is reason to believe that precocity is starting to pay off.

 


 

Marguerite Rose Jiménez is a doctoral candidate in Comparative Politics at American University in Washington. She is co-editor of A Contemporary Cuba Reader: Reinventing the Revolution (Rowman & Littlefield, 2008).

 


 

1. “Exports without borders” is referred to in Pedro Monreal, “Development as an Unfinished Affair: Cuba After the ‘Great Adjustment’ of the 1980s,” Latin American Perspectives 29, no. 3 (May 2002): 83.

2. Cuba Health Reports, “Cuba’s Pharmaceutical Exports Top Tourism, Sugar, and Tobacco,” July 28, 2008, available at medicc.org.

3. Agustín Lage Dávila, “Socialism and the Knowledge Economy: Cuban Biotechnology,” Monthly Review 58, no. 7 (December 2006): 53–55. Originally published as “La economía y el socialismo,” Cuba Socialista (November 2004).

4. Kari Cantell, The Story of Interferon: The Ups and Downs in the Life of a Scientist (Singapore: World Scientific Publishing Company, 1998), 145–46.

5. S.M. Reid-Henry, The Cuban Cure: Reason and Resistance in Global Science (University of Chicago Press, 2010), 14–16.

6. Ibid., 16.

7. Lilliam Riera, “Gold Medal for Cuban Biopharmaceutical Heberprot-PE, Ninth Cuban Invention to Receive WIPO award,” Granma International, April 7, 2011.

8. World Intellectual Property Organization, patent application statistics for 1995–2009, available at www.wipo.int.

9. World Intellectual Property Organization, “Intellectual Property as a Lever for Economic Growth: The Latin American and Caribbean Experience (Part II),” WIPO Magazine (Geneva), March–April 2004.

10. Reid-Henry, The Cuban Cure, 153.

11. Ibid.

12. Granma International, “First Cuban-U.S. Cooperation Agreement for Production of Anti-cancer Vaccine,” July 17, 2004.

13. Penni Crabtree, “Carlsbad Biotech in Cancer Deal With Cuba,” The San Diego Union-Tribune, July 15, 2004.

14. Cancervax, “License, Development, Manufacturing And Supply Agreement,” July 13, 2004, techagreements.com/agreement-preview.aspx?num=536908.

15. Anita Gutierrez-Folch, “Could a Cuban Cancer Drug Improve US-Cuba Relations?,” September 3, 2009, findingdulcinea.com/news/health/2009/september/Could-a-Cuban-Cancer-Drug-Improve-US-Cuba-Relations-.html.

16. Lage Dávila, “Socialism and the Knowledge Economy,” 52.

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