Access to Medicines and Intellectual Property rights (IPRs)

By Sophie Bloomen from Health Action International (HAI)


1.1 Medicines and Intellectual Property Rights (IPRs) 

Intellectual Property (IP) protection is currently seen as core to the knowledge economy. IPRs protection has been very uneven in the world, and has grown in the last 20 years. Many developing countries did not have this protection. But since the Trade Related Aspects of Intellectual Property (TRIPS) Agreement of the World Trade Organization (WTO) was signed in 1995, all WTO member states have had to harmonize their IPRs. One effect of TRIPs was decreased access to cheap generic medicines for developing countries. The agreement has some “flexibilities” designed to protect public health in developing countries.

The TRIPS PLUS rules exceed the minimum WTO obligations and create new barriers that impede access to medicines in developing countries. Having failed to introduce stricter IP rules at the WTO, the pharmaceutical industry now relies heavily on litigation, lobbying, FTAs and other agreements to impose TRIPS PLUS rules in developing countries.


1.2 EU Intellectual Property (IP) Policy

The Lisbon agenda tries to make the EU more competitive by 2010 with a “knowledge based” economy. In the Global Europe Strategy Paper, IP is indicated as one of the priorities. This means new IPRs enforcement and regulations. The EU has tried to introduce TRIPS PLUS in its trade agreements since 2002. The pharmaceutical industry is important for the EU, inside and outside.

The Paper of Oxfam and HAI “Trading Away access to medicines” mentions three main measures used by the EU to strengthen IPRs:
      1. FTAs.
      2. Bilateral pressure, e.g. the EU was very clear to hold up Thailand when it took up compulsory licenses to product cheaper medicines. On the watch list that the EU issues every 2 years, countries that show deficiency in IP protection are named.
      3. The enforcement agenda (ACTA, Internal EU regulation having effect on transit medicines, IMPACT, WIPO SECURE, etc), that was the cause of the seizure of legal generic medicines in transit in different EU countries (Netherlands, Germany, France).

Some years ago the EU was less aggressive in IPRs on the Trade Agreements, while since 2004 USA got very strong on IPRs. Lately the EU has become also very aggressive on IPRs proposing: adherence to other treaties; data exclusivity; patent extensions; enforcement chapter with border measures (seizures of legitimate generics), and moves to limit the use of flexibilities, like with Thailand.

Data exclusivity enhances protection for clinical trial data, by providing up to 11 years of exclusive use of such data (while USA has 5 years) to obtain marketing approval. A generic company only needs to refer to the original medicine, by showing its bioequivalence to this. Clinical trial data are very expensive, making them exlusive is effectively extending the monopoly protection of medicines.

Patent extensions extend patent protection through supplementary protection certificates. The extension will be equal to the time elapsed between the filing of the application for a patent and the date of the first market authorisation (keeping protection at minimally 15 years). By giving patent extension you can keep it for 15 or 14 years (5 years extra)

The enforcement chapter potentially obstructs the import, transit or export of legitimate generic medicines. The implementation of enforcement measures is very costly and means dedicating public resources to the benefit of business and industry. Public resources are used to protect the rights of western right holders multinationals. The implementation of these measures will force developing countries to channel government resources into protection of trademarks and patents of multinational pharmaceutical companies. Enforcing private rights will place a significant burden on developing countries and impede countries to address more pressing public policy priorities.
When TRIPS was negotiated studies were made to estimate the cost of IPRs implementation for developing countries and a balance was found. Despite these studies rich countries have decided to go on with TRIPS PLUS in bilateral agreements.

The enforcement of IPRs puts a chill on cheap generic medicines. Under such a framework the position of the IPRs holder would be strengthened, to the detriment of generic competitors, leading to extended monopolies in developing countries. Generic companies would be less able to challenge patents and would risk having their medicines seized as they would not challenge the seizure by fear of having their name associated with counterfeit medicines. An example of the framework: in order to speed up dispute proceedings the alleged infringer is not given the opportunity to be heard. This means that sentences can be passed based merely on presumptions. Another example is the Border measures, like the seizures of generic medicines in EU countries. An environment that fails to encourage competition leads to high prices.

Flexibilities are safeguards to protect public health.

Patentability criteria. Some countries, like India, are very strict on patentability criteria.

Under Compulsory licensing a company is forced to give a license to a generic producer in exchange for a small payment for royalties. Typically a country will first ask to the innovator company to sell the medicine at a cheaper price. Data exclusivity can prevent compulsory licensing.

There are no commitments on technology transfer, except a very small EU commitment. In the EU – Colombia negotiations, Colombia wanted to be protected against the data exclusivity for compulsory licenses. The flexibilities are important for negotiations as they can be a bargaining power for developing countries.

The Doha Declaration on public Health confirms the importance of Public Health for Developing countries and the rights to favour public health and use flexibilities. Paragraph 6 amendment of Doha Declaration emphasizes that countries that export to developing countries may issue compulsory license, but this is too complicated and has only been used once by Canada to send medicines to Rwanda. The EU refers often to the Doha declaration and to paragraph 6, but this is very cynical as Doha does not take into account data exclusivity and other aspects.

Some Important Trade agreements with regard to IP and Access are: EU-India, as India is the main Pharmacy of the developing world (67% of its generic medicines and 80% of ARVs are exported to developing countries). This FTA would have significant consequences on millions in India and around the world. The EU – Peru / Colombia; the EU – Central America; and the EU – ASEAN.

The CAN1 - EU Alliance was established in May 2008. At the request of civil society in the Andean region, HAI Europe joined Latin American NGOs to form a coalition to protect public health. The publication: Health Protection in the European and Andean Community Association Agreement by Xavier Seuba (Jan 2009) and the Impact studies on the IP chapter envisioned by EU for Colombia and Peru are a result of this collaboration. The study estimated the impact of IPR changes on access to medicines based on the US Trade Promotion Agreement. Based on the February 2009 negotiating round it studied alternative scenarios: Supplementary Protection Certificate (Patent extension of 4 years); data exclusivity (10 years) and a combination of the two measures. The study forecasts, at different moments in time, the impact of the trade agreement on: Level of exclusivity of medicines in the market; Impact on the average price in the market; Impact on pharmaceutical expenditures; Impact on consumption of medicines. The research found that the effect of the combined scenario in 2025 for Peru will increase pharmaceutical expenditure in 459 million USD (to maintain current consumption levels), or there will be a 20% decrease in consumption due to the 26% increase in medicines’ prices because of 11% increase in the number of IPR protected medicines.

Conclusion of the study. Current EU policy and ambition on IP enforcement towards third countries are not fair and hurt access to medicines. The EU has done much to advance health care in developing countries in recent years and yet… EU’s trade policy witness now of a severe lack of policy coherence, not in line with its health & development objectives, neither with the position of the EP and of some Member States.

When civil society is engaged & well organized, raising awareness and providing strong public pressure, problematic measures can be prevented.

1     CAN = Comunidad Andina de Naciones (Andean Community of Nations)

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