Transcript mutual health pharma

The Inequals of Uruguay
Srividhya Ragavan
University of Oklahoma College of Law
The TRIPS Agreement
• Two important aspects marked the signing
of the TRIPS agreement in 1992
– Victory over the proposal of a harmonized
patent regime
– Our compassion (?) in providing a protective
transition period for developing and least
developed nations.
• The course of the TRIPS agreement has
forced us to reiterate our dedication to the
objectives (as opposed to the terms) of the
agreement because of:
– AIDS crisis
– Insensitivity of TRIPS to local economic realities
The Tenth Anniversary of TRIPS
• The proposal to introduce Article 31bis
• Failure of the WTO negotiations in July
• End of the transition period for developing
nations
The Problems of Transition
• Developing nations are scrambling to
establish an unfamiliar system:
– Transitioning from the EMR regime to a
product patent regime has proved to be more
expensive than what was originally conceived.
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Infrastructural issues
Technical issues
Social effects
Economic effects
India as an example
• Population: One billion people
• The new (and the first) patented medication for
treating Hepatitis C costs Rs.10,000 per patient
per year
• Statistics reveal that about a 100 million (10% of
the population) are capable of availing private
health care at the above cost
• Is trade so exclusive that 900 million
people should be left out of the game
– Especially considering that trickle down is not
the most effective economic model
• Was such exclusion envisaged under
TRIPS?
• The presentation posits that the exclusion
resulting from the transition contravenes
the TRIPS objectives as well as the
Constitutional guarantees of member
nations
• Article 7 of TRIPS
Objectives
• The protection and enforcement of intellectual
property rights should contribute to the
promotion of technological innovation and to the
transfer and dissemination of technology, [to the
mutual advantage of producers and users of
technological knowledge and]
in a manner conducive to social and economic
welfare, and to a balance of rights and
obligations.
• Posits that pre-TRIPS policy options
embraced by countries like India should be
revisited as options to jump start ailing
economies into trade
• With this as background, the presentation
looks at two aspects:
– Historical development of India’s
pharmaceutical industry
– Why the development is a viable option falling
with the TRIPS requirements
First Five Year Plan (1951)
• Income from industries: 6.6% of the gross
national income
• Total labor force employed in industries:
8%
• Population below poverty levels: 50%
• Highest rate of epidemic diseases in the
world
– Mortality from epidemic diseases: 5.1%
– Low life expectancy
Drugs Scenario
• Cost of medication was one of the highest
in the world
• Central (federal) government imported
drugs
– Lack of a domestic pharmaceutical industry
– Heavy reliance on foreign companies which
formed 90% of India’s drug industry
Promoting a Domestic
Pharmaceutical Industry
• Agreement with the UNICEF to locally
manufacture antibiotics
• Setting up the Ayyangar Committee to
establish an indigenous drug policy
• The Committee’s Objectives were to:
– Ensure availability of food, chemical and
pharmaceutical inventions to the poor
– Aid the development of an indigenous
pharmaceutical industry
Distinguishing Features of the
Indian Patent Act, 1970
• Process Patents
• Compulsory Licensing
• Local Working
Distinguishing Features of the
Indian Patent Act, 1970
• Process Patent for food, chemicals and
pharmaceutical innovations
– Objective: Balancing monopoly rights with
access to medication
– Limited to process patents
– Unhindered monopoly period was restricted to
three years
– Promoted process innovations
Distinguishing Features of the
Indian Patent Act, 1970
• India’s system derived from the following examples:
• German patent law of 1877
– Within 30 years Germany’s process patent enabled a growth of
chemical industries
• British Patent Amendment Act of 1919 incorporated a process
patent regime to tackle food crisis at the end of WWI
– Sargant Committee Recommendations
• French law of 1844
• Belgian patent law of 1854
• Denmark, Switzerland, Sweden, Spain and Japan did not allow
product patents for food or medicine
• Italian Patent Act of 1957 prohibited patenting medicinal products
• Except for the US, most countries imposed
restrictions on food and medicine patents
Compulsory Licensing
• Recommended compulsory licensing as
an option to promote industrialization
– 1901 England introduced compulsory
licensing following the Edward Fry Committee
recommendation to tackle food shortage
issues
– After WWI several European countries
introduced compulsory licensing
Local Working Requirement
• Compulsory License was plugged in with
the local working requirement that
necessitated patent holders to work the
patent within the country
Pre- Grant Opposition
• Saves valuable time and resources
expended in acquiring a patent
– Novartis issue in India
Other Policies
• Drug Price Control Order, 1970 (DPCO)
• Foreign Exchange Regulation Act, 1973
(FERA)
• The DPCO meant to:
– Enable public access to medication
– Provide a reasonable rate of return to companies
– Ensure quality medication
• Allowed for government control over prices of
pharmaceutical products
– Restricted pre-tax profit for pharmaceuticals to 15% of
sales
DPCO Amendments
• DPCO Amendments decreased price control
• 1979:
– Compartmentalized drugs into 3 categories being life
saving, Essential and Less essential
– Prices of 370 bulk drugs and 4000 formulations
controlled
– Concept of Maximum Allowable Post Manufacturing
Expenses Used to calculate potential market value of
medication
Liberalization of Pharmaceutical
Sector
• India’s drug policy influenced by Kelkar Committee Report of
1984
• Drug policy of 1986 established a new price control regime
– Reduced the extent of price control
– Reduced the number of categories for exercising price control to 2
• 1991: Industrial policy further reduced price control
• 1995- Introduced a Uniformed MAPE for all formulations under
price control
• 1996: Foreign investment up to 51% was allowed
• 1997: National pharmaceutical pricing authority was created to
review and revise existing price control
• 2000: FEMA replaced FERA
• Currently, 28 drugs under price control
• 2002: 100% foreign participation allowed
• 2004: Indian genetic companies feature
among the top companies in the world
• The Pharma industry placed 4th in the
world in terms of volume and 13th in terms
of value
• More than 70% of India’s 1 billion people
have full access to drugs within the period
from independence until the new patent
regime
• Why did we move away from a process
patent regime?
• Generic drug industry copied wholly from
the west
– Why that may not be a correct proposition.