Transcript Prathibha- LCHAU_FTAs

FREE TRADE
AGREEMENTS
Prathibha Siva
Lawyers Collective HIV/AIDS Unit, India
East Africa Consultation, 10-12 September 2010
POST-TRIPS
• TRIPS was a compromise.
• Since then, developed countries and
multinational pharmaceutical companies
have been:
– posing barriers to utilisation of TRIPS
flexibilities by developing countries
– pushing for additional levels of intellectual
property protection and enforcement
BARRIERS TO TRIPS FLEXIBILITIES
• Setting higher patentability criteria:
– India’s section 3(d) challenged by Novartis AG as
violating Constitution and TRIPS
• Compulsory licensing:
– Thailand subjected to US 301 pressure
– Brazil’s judicial decision not to issue compulsory
licence because of US 301 pressure
• Parallel importation
– South Africa placed on US 301 watch list
– South Africa’s law challenged by multinational
pharmaceutical companies
PUSHING FOR ADDITIONAL
PROTECTION
• Attempts to:
– obtain additional levels of intellectual property
protection and enforcement
– dilute TRIPS flexibilities
THROUGH
free trade agreements / economic partnership
agreements, which may be:
– Bilateral
– Regional
• These agreements are negotiated in secret,
without transparency and without consulting
stakeholders.
ISSUES OF CONCERN
• Substantive TRIPS-plus provisions:
– Data exclusivity
– Patent linkage
– Patent term extensions
• Procedural TRIPS-plus provisions:
– Enforcement measures
– Border measures
– Increased criminalisation of intellectual property
infringement
ISSUES OF CONCERN
• Inclusion of intellectual property as investment,
allowing intellectual property holders to seek
damages
• Dispute resolution mechanisms that allow
private actors to challenge State for alleged noncompliance with agreement
DATA EXCLUSIVITY
PATENT SYSTEM
(private property)
DRUG REGULATORY SYSTEM
(consumer protection)
Right to prevent others from making,
using, selling, offering for sale and
importing patented medicine; no
automatic right to market the medicine
Approval to market a medicine
Requirements: satisfy patentability
criteria
Requirements: establish safety and
efficacy of medicine through clinical
trials or bioequivalence
DATA EXCLUSIVITY v. DATA PROTECTION
•
During
period:
the
data
exclusivity
– Authorities may not use or rely
`on clinical trial data to register
generic equivalents
– Generic manufacturers will
have to submit their own data
to prove safety and efficacy/
repeat clinical trials
– Alternatively, they can only
enter the market after expiry of
data exclusivity period
•
Data protection
– TRIPS requirement: protect
from unfair commercial use
– Publication of the clinical trial
data is not allowed.
– Drug
regulatory
authority
(DRA) can rely on data
submitted by the originator to
grant or reject subsequent
approval. In some cases, the
DRA relies on data published
elsewhere.
– DRA cannot share the data
with generic companies.
– A generic manufacturer does
not have access to and does
not use the originator’s data.
DATA EXCLUSIVITY: PROBLEMS
• Ethical concerns: Clinical trials should not be
conducted again on humans when a medicine is
already proved to be safe and efficacious.
• Allows creation of monopolies even in case of
non-patentable or off-patent drugs or for new
use.
• Allows extension of monopoly beyond patent
term in some cases.
• Adversely affects operation of TRIPS flexibilities
such as compulsory licensing
DATA EXCLUSIVITY: PROBLEMS
• Delays entry of generic competition.
– Eg: Post Jordan-US FTA, data exclusivity delayed the
introduction of generic versions of 79% of drugs.
[See Oxfam study at
http://www.oxfam.org/en/files/bp102_jordan_us_fta.pdf/download]
• Increases costs of medicines
– Prices for certain drugs are two to ten times higher in
Jordan, which provides for DE, than in Egypt, which
does not
[See Oxfam study at
http://www.oxfam.org/en/files/bp102_jordan_us_fta.pdf/download]
– In Guatemala, data exclusivity has resulted in an antifungal medicine being 845600% more expensive and
flucanazole being 120800% more expensive
[See “A Trade Agreement’s Impact On Access To Generic Drugs”, Health
Affairs, 28, no. 5 (2009): w957-w968 (25 August 2009)
PATENT LINKAGE
Patent system
Drug regulatory system
Patent application
examined
Application for marketing
approval examined
Patent granted /
rejected
Marketing approval granted /
rejected on the basis of safety
and efficacy
PATENT LINKAGE
Consent of patent
holder  marketing
approval granted
Drug patented
No consent 
marketing approval
withheld
Drug Regulatory
System
Drug not patented
Marketing approval
granted
PATENT LINKAGE: PROBLEMS
• Delays marketing approval of generic drugs in the market until
after patent expires
• Affects working of compulsory licences
• Enforcement of private rights through State machinery
• Overburdens drug regulatory authorities of developing countries
PATENT LINKAGE: ANALYSIS
• In several countries, patents are not conclusive in
nature.
– In the US, approx. 73% patents that were challenged were
invalidated. [Source: Federal Trade Commission study]
• What constitutes patent infringement?
– Making, using, selling, offering for sale or importing
the patented product
• TRIPS allows exceptions to patent rights, such as
research exemption and Bolar-like exception
• The following acts do not constitute patent infringement:
– Using patented product as reference product to obtain
bioequivalence data [allowed under TRIPS]
– Submission of bioequivalence data to DRA as data is
independent of patent
– Approval by DRA for generic version of patented drug
PATENT TERM EXTENSION
• Under TRIPS, countries are required to provide 20 year
patent terms.
• Patent term extensions require countries to provide
extension of a patent for a period beyond 20 years to
compensate for the delays in granting patents or
granting regulatory approvals to medicines.
• Patent term extension will result in longer monopolies
and also increase expenditure on medicines.
– Eg: It is estimated that extending patent term by 4 years in Peru
on account of proposed EU-Andean FTA “would lead to a 159
million USD increase in pharmaceutical expenditure in 2025”.
[Impact of EU-Andean Trade Agreements on Access to
Medicines in Peru, HAI and IFARMA, 2009]
ENFORCEMENT
• Civil Remedies
– Compulsory damages
– Expanding various heads of damages
– Expands injunction to intermediaries whose services are
used to infringe IPR (eg bulk drug supplier)
– Expanding powers of seizure and destruction of goods
– Expanding right to information from alleged infringers
• Criminal Sanctions
– TRIPS mandates criminal sanctions only for wilful
commercial-scale trademark counterfeiting and copyright
piracy [Article 61]
– TRIPS-plus: criminal sanction for patent infringement
ENFORCEMENT
• Border Measures
– TRIPS only requires border measures at point of import
copyright piracy and counterfeit trademarks [Article 51].
– Expands scope to patents, the infringement of which
cannot be determined by visual inspection
– Applies not only to import, but to export, re-export, goods
in transit
– Imposes obligation on intermediaries to disclose
information
– Action by State is mandatory
ENFORCEMENT
• Border measures – How they affect
access?
– Generic drugs seized [Late-2008]:
• Drug: WHO per-qualified ARVs for Clinton
Foundation funded treatment project purchased by
UNITAID
• Source: India  Transit: Amsterdam 
Destination: Nigeria
• 17 other such seizures; in some cases, drugs
released after a few months, either forwarded to
destination or returned to India.