Transcript TRIPS, Doha and Access to Medicines: Recent

TRIPS, Doha and Access to
Medicines: Recent Lessons
Globalization, Intellectual Property Rights and Social Equity:
Challenges and Opportunities of Free Trade Agreements
Bogotá, Colombia, July 21 & 22, 2004
CARSTEN FINK
Overview
Introduction: the pharmaceutical industry,
intellectual property and drug prices
TRIPS: what came out of the Uruguay Round
Doha Declaration on TRIPS and Public Health
“Paragraph 6” negotiations and the August
2003 Decision
What’s next?
Introduction: the pharmaceutical
industry, intellectual property
and drug prices
The pharmaceutical industry
Long and expensive R&D process:
Research, development, clinical testing, regulatory
approval
Risky process: only a small share of promising
chemical entities make it to the market
Up to 10 years before drugs are marketed
Without intellectual property protection, new
chemical entities can easily be copied by
competing firms
Two main industry players
Research-based companies:
Create intellectual property
Multinational in scope, limited number of firms
Generic drug companies
Produce drugs of which intellectual property rights
have expired
Large number of firms, competitive market
structure
Efficient developing country producers
Intellectual property and prices
Main intellectual property instruments:
Patent exclusivity
Protection of pharmaceutical test data
Significant price falls documented upon expiry
of pharmaceutical patents:
Example: wholesale price of Pfizer’s blockbuster
drug Prozac fell from $240 to less than $5 per
bottle within six months after patent expiry*
*As
reported by Frontline documentary “The other drug war”, June 19, 2003
Public policy considerations
Trade-off between incentives to invent and
competitive provision of drugs
“Optimal” intellectual property policies may differ
from country to country, depending on average
incomes as well as nature and extent of health
burden
Effectiveness of intellectual property rights:
Market-oriented decision-making on R&D
Crude policy tool, exploitation of market power
TRIPS: what came out of the
Uruguay Round
TRIPS Agreement
Negotiated during Uruguay Round of Trade
Negotiations (1986-94)
One of three multilateral “pillar” agreements
that set out the trading rules of the World
Trade Organization
Provisions apply to all 147 WTO members and
newly acceding countries
International law, subject to WTO’s dispute
settlement provisions
Key TRIPS obligations
Article 27:
Patents to be awarded without discrimination
among fields of technology
Patents to cover both processes and products
Patents to be protected for 20 years from the date
of filing
Article 39:
Protection of undisclosed test data against unfair
commercial use, where such data is submitted to
regulatory authorities
TRIPS transition periods
Developing countries without product patent
laws have until January 1, 2005 to comply,
but must, nonetheless, grant “market
exclusivity” to newly invented pharmaceutical
products
Least developed countries were given until
January 1, 2006 to comply.
Where TRIPS is flexible
TRIPS allows the use of compulsory licenses
In case of emergencies, compulsory licenses
can be granted without an attempt to obtain
voluntary license from patent holder
No obligation on legality of parallel imports
Members are free to impose price regulations
Doha Declaration on TRIPS and
Public Health
Context
Issued at the WTO Doha Ministerial Meeting
in 2001
Growing concern that TRIPS obligations could
undermine access to medicines in poor
countries
Three elements:
Political statement
Extension of deadlines for LDCs
Negotiating mandate
Political statement
“We agree that the TRIPS Agreement does
not and should not prevent Members from
taking measures to protect public health”
(paragraph 4).
The Doha Declaration confirms key TRIPS
flexibilities
Extension of deadlines for LDCs
Least-developed countries have until 2016 to
implement the pharmaceutical patent
provisions of TRIPS
Do not need to enforce existing patent rights
until 2016
Deadline can be further extended
Negotiating mandate
Can countries with insufficient manufacturing
capacities in the pharmaceutical sector make
effective use of compulsory licenses?
For example, Article 31(f) mandates that
compulsory licenses “… shall be authorized
predominantly for the supply of the domestic
market.”
Paragraph 6 of Doha Declaration calls for an
expeditious solution to this problem
“Paragraph 6” negotiations and
the August 2003 Decision
“Paragraph 6” Negotiations
Economic case for importation under CL is
straightforward: it’s about free trade
Long and acrimonious negotiating process
United States alone opposed December 2002
compromise text, seeking to limit the scope
of diseases to which importing mechanism
can be applied
Attempt to forge consensus in February 2003
failed
August 2003 Decision
Two elements:
Decision on Implementation of Paragraph 6
Chairman’s Statement
Waives Article 31(f)
No scope of diseases limitation, mechanism
not limited to emergencies
Other elements
Voluntary opt outs by certain countries not to
use the mechanism or to only use the
mechanism in emergency situations
Understanding that mechanism would not be
used to promote “industrial policy objectives”
Transparency obligations and safeguards to
minimize risk of drug diversion
More burdensome than necessary?
Create opportunities for political abuse?
Use of August 2003 Decision
Can the drug be manufactured domestically?
No
Is the drug protected by a patent in the exporting market?
No
Has a compulsory license on the drug been issued?
No
Yes
Would a predominant
share of production be
exported?
Yes
Need for August 2003
mechanism to import
generic drugs
What's next?
Evolving patent situation
Generic sources still exist for virtually all
medicines (in particular from India)
Increased patent conflicts, use of compulsory
licenses (e.g., Malaysia, Mozambique)
Starting in 2005, the share of patented
medicines in developing countries will rise
What will happen in India?
Will LDCs emerge as sources of generic drugs?
Concern about bilateral agreements
Recent US bilateral FTAs with Australia, Central
America, Chile, Jordan, Morocco, Singapore
Text of FTAs and legal analyses suggest TRIPSplus provisions:
Protection of undisclosed test data
Registration of pharmaceutical products
Restrictions on parallel importation
US Government maintains that bilateral FTAs do
not compromise Doha flexibilities