Transcript UNDP on TRIPS & Tanzania - About Trade, TRIPS and Access to

Patents, access to medicines and the
WTO’s TRIPs Agreement
Consultative meeting on incorporation
of TRIPs Flexibilities
Morogoro, Tanzania 24 July 2006
Tenu Avafia
Regional Service centre
UNDP
What does this have to do with patents
and the WTO TRIPs Agreement?
What is the link between the TRIPs Agreement
and access to ARVs?
To answer this question, it is
necessary to explore the relationship
between Intellectual Property Right
Holders and consumers
Intellectual Property Rights / Patents
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What are patents?
A patent gives the inventor the exclusive
right to make, use, import, export, sell or
market an invention in the country where
the invention is patented.
patenting an invention gives the patent
owner a temporary monopoly over the
invention.
Patents governed by domestic and
international law, particularly the TRIPs
Agreement
Patent Criteria
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In order to qualify for a patent, an
invention has to meet three criteria:
• it must be something new;
• it must not be obvious but actually involve
some sort of “inventive step,”
• it must be usable.
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Both products and processes can be
patented
Indian generic companies rely on
process patents
New use patents have been common
e.g. AZT or Viagra
Are patents necessary to stimulate R & D?
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Need to balance rights of inventor and consumer
Drug research and development extremely costly
Some companies claim that a new successful
drug can cost as much as US$ 800 million
Actual costs unknown, US$150 million theory
Companies would not engage in R&D if there was
no incentive for them to do so.
Patent/temporary monopoly is reward to patent
holder for investing money, time and resources
the WHO has noted that of the 1223 new drugs
developed between 1975 and 1996, only 11 were
for tropical diseases
Are high costs of drugs justified?
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The high profit margins for patented drugs
cannot be justified if we consider:
drugs commercialized by multinational
companies have often been developed with
significant public subsidies,
There are often large tax breaks for R&D
Often, the research is done by public institutions
like universities who sell patent to drug
companies at clinical trial phase
5 first line drugs invented by universities
There are proposals in circulation to allow
governments to pay inventors for essential
medicines and then to own the IPR
UK Government suggestion of prize fund
The problem with profit driven
patent system
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all of Africa accounts for the consumption of
about 2% of global pharmaceutical profits
a profit driven system based on private patent
rights provides an incentive to develop money
making drugs
Even Indian generic companies are shifting
their efforts to Western diseases for greater
profit
Initiatives other than patent incentives are
required to stimulate R&D into diseases
affecting mainly developing countries.
Medical R&D Treaty proposal
Who can afford a vigorous patent system?
50000
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15000
10000
5000
0
ia
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20000
hi
op
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25000
ol
a
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Et
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30000
An
g
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35000
SA
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40000
Ja
p
Au an
st
ra
l
Po ia
rtu
ga
l
Br
az
il
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1 Luxembourg U$ 45 778
4 USA
U$ 36 731
7 Japan
U$ 31 433
22 Australia
U$ 22 462
31 Portugal
U$ 12 200
66 Brazil
U$ 2 610
68 South Africa U$ 2 408
107 Angola
U$ 892
163 Ethiopia
U$ 191
US
A
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45000
Lu
x
Global Ranking of GDP in
2003
Problems with “one size fits all” patent system
Country
Patents per
million
(1998)
Japan
994
USA
Netherland
s
South
Africa
Brazil
Mexico
289
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196
2.5
2
1
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Graph clearly shows
where a strong system
of patent protection is
most advantageous
Participation in patent
system has had largely
negative results for
developing countries to
date
Few developing country
patent offices conduct
patent examinations
In most instances,
development objectives
in African countries are
constrained by IP
protection
Patents & Access to treatment
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Domestic laws that favour patented drugs over
generic drugs can stifle competition
Less competition = higher prices
Higher prices = less access
Patents are one of the bottlenecks inhibiting
access
Many countries still use patented drugs instead of
generics
Sustainability of programs sustained by donations
of patented drugs e.g. PEPFAR
What is TRIPs?
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Agreement on Trade-Related Aspects of
Intellectual Property Rights
One of 3 principle agreements of the World Trade
Organization (WTO )
Sets out rules for intellectual property rights that
all countries who belong to the WTO
Not optional
Article 33 protects the rights of patent holders for
a MINIMUM period of 20 years
patents must be individually registered in the
Country where protection is sought.
TRIPs and Generics
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If a particular drug is:
Not patented; or
“off patent” i.e. patent has expired
someone else may legally make, import or sell
that drug or its equivalent
Generic drugs are interchangeable versions of
patented (brand name) drugs.
Generics almost always result in reduced drug
prices
Less R&D costs involved
Quality varies but WHO EML includes several
generics
Developing country views of TRIPs
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TRIPs only 10 years old
Developing countries still coming to terms
with TRIPs implementation
Not aware of far reaching implications of
TRIPs during negotiations
Most developed countries did not
implement pharmaceutical patents until
industries were developed
Patent rights were often ignored for
technological advances e.g. Wright
brothers
Options under TRIPs to improve Treatment
Access – “flexibility”
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Exclusions from or limitation of patentability
Article 65 transitional period until 2016 for LDCs
Pre-grant oppositions
Parallel importation
General exceptions (e.g. Bolar provision and
experimental use)
Anti-Competitive remedy
Compulsory Licensing (clarified by Doha
Declaration)
30 August Agreement
Doha Declaration on TRIPs and Public Health
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Before Doha Declaration, every attempt to use
TRIPs flexibility fiercely opposed by Research
based drug companies
PMA v President of South Africa; US- Brazil WTO
dispute are examples
Doha Declaration adopted at a Ministerial
meeting, November 2001
TRIPS "can and should be interpreted and
implemented in a manner supportive of WTO
Members' right to protect public health and, to
promote access to medicines for all.“
Officially allowed compulsory licensing
What if you do not have manufacturing capacity?
30 August 2003 Agreement
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Doha Declaration on TRIPs was not useful to most countries
in Africa
Most African countries do not have manufacturing capacity
30 August 2003 WTO General Council Decision allowed
countries without manufacturing capacity to import
generics produced under compulsory license
WTO notification mechanism under 30 August has not been
used to date for the possible reasons:
i)
Mechanism deemed to be administratively burdensome
ii) Fears of adverse impact on aid and FDI; and
iii) lack of capacity to comply with Decision e.g. to prevent
re-exportation
Nonetheless, it has allowed countries to negotiate lower
prices with patent producing companies
Article 31 amendment of December 2005
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30 August 2003 Decision formed basis of Article 31
amendment of TRIPs
Agreed just few days before Hong Kong Ministerial
Controversial as it endorses a system that has not been
proven to work
Exporting member must:
a) export entire production to importing member
b) products must bear distinctive features
c) licensee must post on website quantities being supplied
to each destination
d) exporting member must notify WTO about specifics of
license and conditions attached
Both countries are expected to ensure that adequate
compensation is paid in exporting member
Ratification of Amendment deadline set for 2007, must get
2/3 WTO membership approval which is unlikely
But for now, this is the only available mechanism