Transcript PHARMACEUTICAL APARTHEID: PATENTS, TRADE, AND …

Overview: The International
Intellectual Property Regime
and Access to Medicines
Prof. Brook K. Baker
UKZN – IP and Access to Medicines
2010
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Patent
TRIPS
A territorial right granted by a government to exclude others from
making, using, distributing, or importing patented product/process
WTO Agreement on the Trade Related Aspects of Intellectual
Property Rights (1994)
Doha Declaration
Clarifies TRIPS flexibilities and asserts the primacy of public health
and access to medicines for all (2001)
Para. 6 Decision
Grants waiver for countries with insufficient manufacturing capacity
to import medicines pursuant to an export compulsory license.
Parallel Importation
Comparison shopping for a patented medicine sold more cheaply
abroad (int’l exhaustion) (Kenya – applicable to C.L. imports)
Compulsory License
and Government Use
Involuntary permission from government to bypass a patent based
on certain procedures and a royalty payment to the patent holder
Voluntary License
An agreement negotiated between the patent-holder and another
company concerning the manufacture/distribution of a medicines
Limited Exception
Additional exceptions to patent-holders’ exclusive rights (best know
examples – early working, research rights)
Drug Registration
Drug regulatory agency confirms that a medicine is safe, effective
and of good quality and authorizes that it can be marketed.
Data Exclusivity
Restricted access to confidential drug registration dossier submitted
to secure drug registration; can result in market exclusivity.
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What is a patent?
A right, granted by a government, to exclude
others from making, using, distributing, or
importing patented product/process (Art.
28.1).
Patents are granted based on applications
filed in a particular country or territory only,
usually after “examination” – there are no
international patents.
Clearing houses – WIPO, ARIPO
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What is the short history of patents?
Monopoly franchises
Major investments required, wouldn’t be
made by anyone if there was competition
Examples, grist mills, roads, bridges but
with price controls & revocation
Industrial development policy
Benefit/attract innovators and exclude
competitors, esp. foreigners
Granted as a form of royal favor/patronage
Evolved to support innovation, not merely investment
Flexibilities re abuses, e.g., non-working
Substituted compulsory licenses for
revocation
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Why do governments grant patents?
More recently, patents have been granted on
an exchange theory –
exclusivity as a reward for innovation and
commercialization
in exchange for disclosure encouraging follow-on
inventions and eventual competition.
As patent holders gained power, they lobbied
governments for stronger patent rights.
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How are patents granted and
revoked?
Application filed (fees)
Priority (first to file vs. first to invent)
Examination
Granting (fees)
Pre- & Post-grant opposition procedures
Revocation
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What kinds of patents are there?
Product patents
Process patents
Subsidiary patents
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What are the basic requirements of
patentability? Art. 27.1
Novelty
Inventive step
Industrial applicability
Adequate disclosure
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Historically, patent regimes varied
greatly
Patents were often granted only to domestic
inventors – industrialization policy.
Colonial patent regimes protected mothercountry monopolies, discouraging indigenous
industrialization.
Pre-1994, there was an enormous variability
in patent regimes worldwide:
length of the patent term,
fields of technology covered and excluded,
methods and grounds for terminating or licensing
patents.
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Medical patent regimes also varied.
Over 50 countries, including countries in
Europe, did not provide patent
protections for medicines and/or food
products.
Why?
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PhRMA fights back
In the 1980’s the U.S. IP industries
(pharmaceutical, publishing, software,
recording/film) banded together to try to
achieve a globalized standard of baseline
protections for patents, copyright, and
trademarks.
The U.S. pharmaceutical industry, esp. Pfizer,
led the charge for strong patents on
medicines.
Forum shifting from WIPO to GATT.
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The WTO TRIPS Agreement increased
intellectual property rights worldwide
Created a global baseline of patent, copyright, and
trademark protection.
Floor, not a ceiling (Art. 1.1).
National treatment, foreign nationals must be treated
equally (Art. 3).
Most favoured nation – all WTO member must be
treated equally (Art. 4).
20-year term of patent protection
Protection of clinical trial data (Art. 39.3).
Non-retroactivity
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Additional TRIPS provisions
Art. 27.1: TRIPS prevents discrimination based on:
Place of invention (no favoring of local inventors),
Field of technology (i.e., patenting of medicines),
Importation (no favoring of locally produced drugs).
Adopted baseline enforcement mechanisms, requiring
in-country judicial remedies.
Requires country-to-country dispute resolution and
authorization of trade sanctions against targeted, not
necessarily involved, sectors (Art. 41-64).
TRIPS granted transition periods, but most
importantly non-product-patent countries, e.g., India,
were required to become TRIPS-compliant by Jan. 1,
2005 (Art. 65-66).
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Important IPR dates post-TRIPS
Pre-1995 drugs
(“older drugs”)
TRIPS has no retroactivity, meaning that drugs that were not
patented in a Member before 1995 need not be patented
retroactively.
1995 “mailbox” drugs
(“newer drugs”)
Developing countries are required to accept patent applications
on post-1995 innovations and keep them in a patent-queue
“mailbox.” Most developing countries started processing these
mailbox applications in 2000, but some countries like India,
which didn’t have product patents, can wait until 2005. (Note:
least developed countries – LDCs - have until 2016). As part of
the IP tradeoff, the patent applicant might be given 5-years of
marketing exclusivity once it registered the “mailbox” drug. This
exclusivity does not apply to LDCs.
2005 drugs
(“newest drugs”)
Except for LDCs, all WTO members, including India and other
major generic suppliers will have to grant patent protection for
drug products as well as processes.
2006
2016
LDCs must become TRIPS-compliant unless they get extension.
Transition period for patents on medicines automatically
extended, Para. 7 of Doha Declaration, but nat’l laws still apply.
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Patents restrict access to medicines
Because patents give rights to exclude others,
patents ordinarily result in monopoly prices
(ARVs = $10,000/year, newest ARV =
$20,000/year).
Although HIV-related patents have not been
filed everywhere in Africa and Asia, they have
been filed in the larger markets and in those
few countries with capacity to produce
medicines.
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Trademark protections can also
affect access to medicines
The TRIPS Agreement also imposes minimum
protections for trademarks.
Drug companies have argued that that countries
cannot require drug prescribers to use a generic
name for their drugs or allow automatic generic
substitution for a script specifying the brand name.
Brand recognition is a major barrier to entry and
facilitates companies claiming higher quality.
Even the shape and color of a medicine can be “trade
dress” protected requiring pill differentiation that
confuses consumers and may affect equivalency.
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Important interpretive principles
Art. 8.1:
Countries may adopt measure necessary to protect public
health and nutrition and to promote the public interest
provided they are TRIPS-compliant.
Art. 7:
TRIPS should contribute to technology transfer, mutual
advantage of producers and users, social and economic
welfare, and a balance of rights and obligations.
Art. 8.2
Countries may act to prevent abuse of intellectual
property rights, including via competition policy (
Art. 40.1-.2:
Countries can regulate licensing practices or conditions
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TRIPS permits challenges to patents and
flexible implementation
Pre-grant opposition
Post-grant opposition
Revocation (rights of appeal – Art. 32)
Adjudications of non-infringement or
invalidity
Implementation and enforcement of
IPRs can be determined within own
legal system (Art. 1).
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Art. 27.2-.3:
Exclusions from patentability
To protect the public order or morality
To protect human, animal or plant life
or health
Diagnostic, therapeutic and surgical
methods
Plants and animals other than microorganisms (plant varieties require a sui
generis system)
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Art. 30: limited exceptions
Research exception
Education exception
Bolar (early working exception)
Allows a generic producer of a follow-on medicine
to develop the medicine and the required
registration dossier and even to file for registration
before the patent expires (but final marketing
approval awaits patent expiration)
Private use
Prior use
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Art. 6: exhaustion/parallel importation
“Parallel importation” allowed based on
exhaustion of IPRs (exhaustion regime may
not be the subject of dispute resolution)
Allows comparison shopping and importation of
originator drugs lawfully produced and sold more
cheaply elsewhere.
With permission only (Kenya)?
Use of PI challenged by the U.S. and the drug
industry, most famously in South Africa.
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Art. 31: involuntary use/
compulsory licenses
“Unauthorized use” aka compulsory licenses
Granted on any grounds whatsoever, including public health,
for any all diseases, in any and all countries,
Permits government use – public, non-commercial use
Special provisions for emergencies, public, non-commercial
use, and competition-based licenses (Art. 31(b))
Procedural requirements
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Non-exclusive and non-assignable (Art. 31(d),(e))
Individual determinations (Art. 31(a))
Durational limits (Art. 31(g))
Appeal rights (Art. 31(i),(j))
Adequate remuneration based on economic value of the
authorization (Art. 31(h))
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Prior negotiation for licenses and exceptions
“The proposed user has made efforts to obtain
authorization from the right holder on reasonable
commercial terms and conditions and that such
efforts have not been successful within a reasonable
period of time.”
In practice, trying to negotiate voluntary licenses can take a
long time and is often futile.
“This requirement [of prior negotiation] may be
waived by a Member in the case of a national
emergency or other circumstance of extreme urgency
or in cases of public non-commercial use. ...”
Also waived in competition cases (Art. 31(k).
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Compulsory licenses:
domestic production & importation
Compulsory licenses and government use
licenses can be granted for local production
or for importation.
Although a C.L. for import is perfectly lawful,
there may well be patent and data
restrictions on exporters that limit the right to
export or to market in the importing country.
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Exports rights are limited by TRIPS
“Right” to import generics is illusory because products
produced pursuant to a compulsory license must be
“predominantly for domestic use” (Article 31(f)).
This might mean that 51% must be consumed locally.
Alternatively, it might means that production has to
predominantly benefit local consumption.
The only exception to this rule arises when licenses are issued to
remedy anti-competitive practices.
This was a major defect in the TRIPS Agreement:
U.S. and Europe could use C.L. loopholes to access medicines
because they have local capacity and large rich markets;
Poor, small countries that could not produce domestically might
be barred from importing key medicines.
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Many developing countries lack capacity to
produce medicines
Limited technical expertise and
manufacturing capacity.
Small internal markets.
Countries, with or without patents, but
with limited pharmaceutical capacity
needed a way to import cheaper generic
medicines of assured quality.
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Who can produce cheaper generics
of assured quality?
Major generic producers – India, Brazil, S. Korea,
and China – can produce base ingredients and
finished products at a fraction of U.S. prices.
Thailand and South Africa are increasingly
capable of doing so as well.
Finishers – a few other developing countries have
capacity to formulate.
Most developing countries have no capacity
whatsoever, except maybe to package and label.
Technology transfer and South/South cooperation
may help in the long run.
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Global distribution of
pharmaceutical production
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Art. 39.3: data protection
Countries should protect required drug
registration data from “unfair commercial
use.” Applies only to:
New chemical entities
Undisclosed data, the origination of which
required considerable effort
Countries should also protect such data
against disclosure, except where necessary to
protect the public.
Does not expressly require data exclusivity or
patent/registration linkage.
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Developing countries sought greater
attention to public health needs
In 2001, recognizing an impending crisis in
access to AIDS medicines, African countries
demanded that public health needs receive
higher priority.
That fall, the U.S. threatened to override Bayer’s
patent on ciproflaxin in response to the post
9/11 anthrax scare.
These conditions created a perfect storm for the
passage of the Doha Declaration on the TRIPS
Agreement and Public Health, (Doha, Qatar Nov.
14, 2001)
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The Doha Declaration prioritizes
public health ¶ 4
“We agree that the TRIPS Agreement does
not and should not prevent Members from
taking measures to protect public health. …
[W]e affirm that the Agreement can and
should be interpreted and implemented
in a manner supportive of WTO Members'
right to protect public health and, in
particular, to promote access to
medicines for all. ”
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The Doha Declaration also clarifies
existing TRIPS-compliant flexibilities
5(b) Each Member has the right to grant compulsory
licences and the freedom to determine the
grounds upon which such licences are granted.
5(c) Each Member has the right to determine what
constitutes a public emergency … (including
HIV/AIDS, TB, malaria, and other epidemics).
5(d) [TRIPS leaves] each member free its own
regime for exhaustion [of intellectual property
rights] without challenge … (International
exhaustion/parallel importation permitted)
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Production-for-export problem ¶ 6
“We recognize that WTO Members with
insufficient or no manufacturing capacities in
the pharmaceutical sector could face
difficulties in making effective use of
compulsory licensing under the TRIPS
Agreement. We instruct the Council for
TRIPS to find an expeditious solution to this
problem and to report to the General Council
before the end of 2002.”
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Post-Doha, the U.S. blocks
production-for-export solution
Despite agreeing to find an expeditious and
efficient solution to the production-for-export
issue by the end of 2002, the U.S. unilaterally
blocked a tentative agreement reached by the
other 143 WTO members. U.S. wanted to:
limit the number of eligible importing countries
limit covered diseases
impose strict anti-diversion rules
impose multiple procedural hurdles.
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Paragraph 6 Implementation Decision
30 Aug. 2003/Art. 31bis Dec. 2005
Ad Hoc reviews “insufficiency of manufacturing
capacity.”
45 countries opt out, thereby reducing incentives to
generic producers.
Impractical and costly anti-diversion measures.
Onerous, ten-step procedural labyrinth country-bycountry, drug-by-drug, quantity-by-quantity.
Only one license has been issued in four years,
Apotex, Canada to Rwanda.
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Procedural Traps
It is easier to apply for a patent in many
countries via the:
WIPO Patent Cooperation Treaty (PCT)
Africa Region Intellectual Property Office
(ARIPO)
Joining the PCT or being in ARIPO is likely
to increase the number of patent
applications your country receives and
therefore the number of medicines
patented
Threat of TRIPS-plus provisions in bilateral
and regional trade agreements
Forum shifting & IPR rachet
U.S., Europe, Japan, and EFTA (Iceland,
Liechtenstein, Norway, and Switzerland)
seek expanded IP rights in bilateral and
regional trade agreements
Take-it or leave-it proposals
Bilateral investment treaties (BITS)
Implementation pressures
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Other IPR pressures
USTR "Special 301" Report details "the
adequacy and effectiveness of intellectual
property protection" in countries throughout
the world.
WTO accession negotiations
Generalized System of Preferences - trade
pressure by offering or threatening to
withdraw special (non-tariff) trade
preferences.
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Recent developments
U.S. New Trade Agenda
Congressional Democrats have recently
attempted to ease IPR barriers to more
affordable generic medicines
Public health exceptions
Limits on data exclusivity (limited concurrency)
Elimination of patent/registration linkage
No mandatory extensions of patent terms for
regulatory delay
Required renegotiation of IPR provisions in
Peru, Panama, and Columbia FTAs.
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New Enforcement Agenda
Enhanced enforcement of private IP rights by governments
through enhanced civil and criminal procedures;
Authorizes customs authorities to seize goods in-transit, even
when they do not infringe any laws of the producing or
importing countries;
Intermediary liability, implicating active pharmaceutical
ingredient suppliers whose APIs may be used downstream in
infringing products without their knowledge;
Limiting key flexibilities on injunctions, including in patent cases,
that are necessary for government use, for court-ordered
royalties, and for innovation prizes and other policies that delink cost of research and development from the price of
products.
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Sowing Counterfeit Confusion
Creates confusion between willful trademark
counterfeiting on a commercial scale and the issue of
unsafe medicines.
Seeks to impose anti-counterfeiting/border control
measures on developing countries, e.g., anticounterfeiting legislation in Kenya, Uganda, Tanzania.
Tries to establish a new international standard of
heightened IP enforcement threatening access to
medicine first through ACTA and then through trade
agreements.
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Victories thus far
AIDS/Africa exceptionalism
Discount pricing for AIDS drugs
Some voluntary licenses
Cheaper generic sources of supply for
older AIDS medicines
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