FREE TRADE AGREEMENTS Prathibha Siva Lawyers Collective HIV/AIDS Unit, India East Africa Consultation, 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 non- compliance with agreement

DATA EXCLUSIVITY Requirements: satisfy patentability criteria Right to prevent others from making, using, selling, offering for sale and importing patented medicine; no automatic right to market the medicine PATENT SYSTEM (private property) Requirements: establish safety and efficacy of medicine through clinical trials or bioequivalence Approval to market a medicine DRUG REGULATORY SYSTEM (consumer protection)

DATA EXCLUSIVITY v. DATA PROTECTION During the data exclusivity period: –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 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 –In Guatemala, data exclusivity has resulted in an anti- fungal medicine being % more expensive and flucanazole being % more expensive [See “A Trade Agreement’s Impact On Access To Generic Drugs”, Health Affairs, 28, no. 5 (2009): w957-w968 (25 August 2009)Health Affairs

PATENT LINKAGE Patent granted / rejected Patent application examined Patent system Marketing approval granted / rejected on the basis of safety and efficacy Application for marketing approval examined Drug regulatory system

PATENT LINKAGE Drug Regulatory System Drug patented Consent of patent holder  marketing approval granted No consent  marketing approval withheld 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.