“Using Competition Law to Promote Access to Health Technologies” Access to Innovation: Making Generic Versions of Newer ARVs Affordable 24 July 2014 Melbourne, Australia Mandeep Dhaliwal, Tenu Avafia & Catherine Kirk HIV, Health and Development Group, UNDP

Global Commission on HIV and the Law Broad range of issues on HIV and law Bad laws & practices hinder effective AIDS responses e.g. TRIPS plus, anti-counterfeiting law Good laws exist and must be replicated 6 key recommendations on IP and treatment access Countries must proactively use other areas of law and policy such as competition law, price control policy and procurement law which can help increase access to pharmaceutical products

UNDP guide on competition law Covers – Competition law under international law – Anticompetitive behaviors and remedies – Market dominance and market definition – Challenges facing developing countries Includes – Model provisions principles for inclusion in national legislation being developed – Country case study examples

Sample of anti-competitive practices in the pharmaceutical sector Patent thickets to extend monopolies (1300 patents and applications in EU for individual medicine) Excessive or spurious litigation at the Patent Office or Health Agency Restrictive licensing practices – Exclusive grant-back clauses in licensing agreements – Pay for delay Abuse of dominance – Excessive/predatory pricing – Denying a competitor access to an essential facility – Exclusionary act Market collusion – Carving up markets – Price fixing Merging/acquiring generic competitors in large MICs India, Brazil, Egypt others

Advantages and challenges of using competition law to increase treatment Advantages Less multilateral regulation with competition policy More flexibility in TRIPS than patent laws Broader range of interested parties can use competition law – Civil society/Patient groups – NGOs – Generic companies Requirements/challenges Under-utilized flexibility, insufficient information on using competition law Can require complex enabling legislation and regulations Capacity constraints at competition authorities National level policy coherence Developing countries more susceptible to market concentration

Using competition law to increase treatment in South Africa Section 49 of the Competition Act of South Africa’s allows “any person” to submit a complaint to commission People living with HIV lodged a complaint against GSK and BI for excessive pricing of select ARVs, leading to the premature deaths – Hazel Tau and Others v GlaxoSmithKline and Boehringer Ingelheim Competition Commission found anticompetitive behaviour present. On grounds: – excessive pricing, and – denying competitor access to an essential facility Out of court settlements with the companies resulted in reduced royalties (from 30 % to 5%)

More examples from South Africa 2005: Competition law was again used by TAC against BMS differential pricing on Fungizone. – Result: 90 per cent price reduction 2007: Complaint by TAC and AIDS Law Project of excessive pricing on Efavirenz – Eventually, granted royalty-free licenses for efavirenz to 6 South African generic manufacturers.

Conclusion Access to health technologies is a fundamental human right. Competition remains underutilized public health TRIPS flexibility Cut and paste model from developed to developing countries not recommended Policy coherence is essential between competition, patent, drug regulatory, procurement officials to build stronger competition frameworks. Competition law should form part of the toolkit used by countries in developing sustainable treatment policy responses.

THANK YOU Mandeep Dhaliwal United Nations Development Programme