Compulsory Licensing

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Transcript Compulsory Licensing

Drug Patents, HIV & International Law
TRIPS
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
Protect IP rights on
an International Level
Least Develop countries expected
to comply by Jan 1st 2006
extended to July 1st 2016
or date that state is
no longer LDC country.
Developing countries
expected to comply
by Jan 1st 2001
Trade Related Aspects of
Intellectual Property
Agreement
Negotiated in 1994 at the
Uruguay Round of the
General Agreement on
Tariffs and Trade treaty
WTO members required
To ratify upon entry
to WTO organisation
(148 States)
TRIPS
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Requires states to enforce their IP rights laws to a
minimum standard
• This include IP rights in broad areas:
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Technology
Process
Books
Pharmaceuticals/Medicine
• IP: Copyright, trademark, patents, etc.
• To provide patent protection for invention whether it is
• Product (medicine)
• Process (method of producing a drug)
• Usually lasting 20 years
Definitions
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Generic Drugs
– A drug without a trademark brand name eg. paracetamol
– Copies of drugs of which patents have expired
• Sold under another brand name different from the patented name
• Sold under chemical name
– Generics are not infringing IP rights if
• They were manufactured after the patent expired
• They were manufactured under voluntary/compulsory license
• Patents
• Legally prevents others from making using or selling the new
invention for a period of time.
Exceptions to TRIPS
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
1. Exceptions to grant patents
2. Voluntary Licensing
3. Compulsory licensing
4. Parallel Imports
5. Doha Declaration – ‘Paragraph 6’ waiver
Exceptions to grant patents
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Governments may refuse to grant patents if
various criteria is not fulfilled
• Governments may make limited exceptions to
patents under Article 30 of TRIPS agreement
– Anti competitive provision
– Research exception
– Regulatory exception (Bolar Provision)
Voluntary Licensing
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Patent holder allows other people to copy their drugs
(generic versions) under certain conditions
• Should be used as a first resort before applying for a
compulsory license
• Some pharmaceuticals may prefer to grant voluntary
licenses to compulsory licenses because they can
negotiate conditions and royalties
– GlaxoSmithKline in South Africa case 1997
Compulsory licensing
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Government allows someone else to produce
the patented product or process without the
consent of the patent owner
“Predominantly for the supply
of the domestic market”
Compulsory licensing Conditions
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
1. Applicant must have first tried to apply for a
voluntary license
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Exceptions:
“national emergencies”
“other circumstances of extreme urgency”
“governmental use”
2. “Adequate remuneration” must be paid to
patent owner
Parallel Imports
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
“These are products marketed by the patent owner (or
trademark- or copyright-owner, etc) or with the patent
owner’s permission in one country and imported into
another country without the approval of the patent
owner”
• Legal principle of ‘exhaustion’
• Only ‘non-discrimination’ provision can be used to
address parallel imports
Doha Declaration on TRIPS
and Public Health - 2001
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• “TRIPS should be interpreted in a way that supports
public health
– by promoting both access to existing medicines and the creation
of new medicines”
• TRIPS should not prevent measures taken to protect
public health (including flexibilities under TRIPS)
Doha Declaration –
‘Paragraph 6’ Waiver 2003
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Compulsory licensing could be granted for generic
copies to be produced and exported to countries who
are unable to manufacture the drugs themselves
• 23 developed countries have pledged not to use this
system to import
• Only Canada, Netherlands and Norway have altered
legislation to allow export under this waiver
• No country has operated as an importer under this
system
National Emergency?
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Article 31b – ‘Other Use Without Authorization of the Right
Holder’:
“[Voluntary License] may be waived by a Member in the case of a
national emergency or other circumstances of extreme urgency or
in cases of public non-commercial use.”
• Dispute over definition
– Who has the right to define?
• August 2003: Egypt declared a public-health emergency in Erectile
Dysfunction and broke the patent on Viagra
• Large Generic Manufacture will be allowed to produce generic drug
under this article and export it to foreign countries
Western Countries
Exploitation
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Africa accounts only for 1.3% of global drug market (not just AIDS)
• Sub-Saharan Africa: 26mn out of 33mn are HIV positive
• 20% of revenue going into R&D
African countries are therefore insignificant to Pharmaceutical Company
• Government that funds many research
• Pharmaceutical company expenditure:
– 10.8 Bn in advertising
– 74.8 Mn to lobby federal governments
– 12 Mn on campaign distributions
Priority for profit over saving lives
Patenting Old Drugs
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Pharmaceutical Company use tactics to extend patents
• E.g. Combivir®
– AIDS drug
– First line drug commonly used in Africa, generics manufactured in
India
– Post-TRIPS drug using lamivudine and zidovudine combination
→ both pre-TRIPS drugs
• Both drugs can be legitimately copied
– Original manufactures seeking patents
→ this would increase price, and deprive HIV patients
Patenting Old Drugs
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Patent Amendment Act 2002
– Based on 1970 patent act
– 2002 Act follows TRIPS closely
– Tradition knowledge to be excluded from patent
ability
– Knowledge already in public domain cannot be
patented
Patents Increase Prices
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• First-line vs second-line
• First line is cheaper
– Expired patent
– Existing Generics
– US$277 per person, per year
• Second line is patented, very few generics
– People with HIV, build resistance to First line drug, therefore
Second line is introduced
– US$4,763 per person, per year
– Often out of reach for poor people
– Prices of drug is a lot higher than costs of drug
• Again questions the priority: Profit vs. Life?
TRIPS Plus
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Developed world & Pharmaceutical companies answer to
flexibility of TRIPS
– Mainly the USA
• Bilateral Treaty (sometimes regional treaties)
– e.g. USA and Developing Country
– Country that copies drugs may risk a lack of investment from that nation and
potential cuts in bilateral aid.
– US offer trade investment in return for better protection for IP rights (e.g. no
compulsory license and parallel imports, no generics manufacturing)
• Generic Drug companies retaliate:
– India & Brazil helping African countries to build generic drug plants
– Ghana, Tanzania, Mozambique and Uganda
– Zimbabwe have already achieved this
Compulsory Licensing
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Compulsory licensing
→ never been used before
• South Africa tried to use in 1997
• 39 companies brought law case
• Eventually S. Africa removed compulsory license
• Complicated and long procedure that require long paper
work (unless national emergency).
Outlook of generic drugs
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Delay in the entry of genetic drugs for at least a few
years until the earliest patent expires
• Pricing of second line therapy drugs will be a major
issue in developing countries
• Clinton Foundation: negotiated agreements for lower
prices of second line drugs for various nations
Development Options
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
1. Parallel imports as a means to gain access to
drugs at a cheaper cost
• Requires import permits, potential sub-standard
products and recall implications, administrative and
human resource capacity to monitor lawful
importation of drugs and quality control
Development Options
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
2. Utilize compulsory licensing for local pharmaceutical
production
• TRIPS Article 67: developed countries must provide
technical assistance "on request and on mutually agreed
terms and conditions" to developing and least developed
countries
• Requires technical and production capacity as well as
human resources
• Even threat of compulsory licensing could give more
bargaining power e.g. Brazil and Abott
Development Options
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
3. Public – Private Partnerships
• TRIPS Article 7:
"The protection and enforcement of intellectual property
rights should contribute to technological innovation and
to transfer and disseminate technology”
• Private sector companies provide technology and
expertise
• Private sector partners provide development funding and
access to medication
Conclusion
TRIPS
Flexibilities & Exceptions
Controversies
Conclusion
• Radical changes such as abolishing TRIPS unlikely
• Influence of governments of developing countries, drug
manufacturers, campaigners, NGOs to force prices of
drugs down
• Ensure that Intellectual Property laws and treaties comply
with human right obligations