FLEXIBILITIES IN WTO’S TRIPS AGREEMENT FOR ACCESS TO MEDICINES by Sangeeta Shashikant THIRD WORLD NETWORK at ASIAN REGIONAL WORKSHOP ON FREE TRADE AGREEMENT 26-28 August Kuala Lumpur, Malaysia

What is TRIPS? Agreement on Trade-Related Aspects of Intellectual Property Rights sets minimum standards for: Copyright and Related Rights, Trademarks, Geographical Indications, Protection of Undisclosed Information, Industrial Designs Patent – is a monopoly given by a country to a person/entity for an novel innovative invention as a reward/privilege for a fixed period of time. TRIPS set minimum standards for patents such as duration (20 years), rights given to patent holders, when the right can be taken away and on what grounds etc.

Key Provisions Art.1: “Members MAY BUT SHALL NOT be obliged to, implement in their law more extensive protection than is required by this Agreement…… Members SHALL BE FREE to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice…..

Objectives (Art. 7) “The protection and enforcement of IPRs should contribute to the promotion of technological innovation and to the transfer and dissemination of technology knowledge and in a manner conducive to social and economic welfare, and to balance of rights and obligations”

Principles (Art 8) “Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this agreement Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of IPRS by the right holders”

TRIPS FLEXIBILITIES

TRIPS FLEXIBILITIES TRIPS-consistent policy options for affordable medicines Patentability Criteria Exceptions to patent rights (e.g., Bolar exception) Parallel Importation Compulsory License Government Use

Criteria for Patentability What can be patented? Inventive step; novel (new); capable of industrial application Under TRIPS – obligation to patent products and processes Ample Flexibility in defining/scope…. national governments should be guided by development priorities; need to encourage more R & D and innovation and public interest considerations AVOID bad or trivial patents AVOID grant of patents on NEW USES of existing substances…..it will prolong monopoly/evergreening

PARALLEL IMPORT Article 6 TRIPS Chapter 4, pg 37 of the Manual on Good Practices It is the import and resale in a country of a patented product that has been legitimately put on the market of the exporting country. No need consent of patent holder Doha Declaration on TRIPS and Public Health affirms the right to choose Exhaustion of rights: national, regional or international regimes

COMPULSORY LICENCE (CL) Article 31 TRIPS (Reaffirmed in Doha Declaration on Public Health) Chapter 7, pg 69 of the Manual on Good Practices Govt grant of licence to 3rd party to use patent without consent of patent holder Right to determine grounds for compulsory licence (reaffirmed in the Doha Declaration on Public Health) - negotiations to obtain a license on reasonable terms and conditions from the patent holder failed - public interest, national emergencies, - to remedy anti competitive practices (Article 40) NOT just for emergencies and NOT limited to certain diseases (reaffirmed in Doha Declaration on Public Health)

Conditions for grant of CL Prior negotiations to obtain license under reasonable terms from the patent holder failed Except when CL issued in cases of national emergency situation of extreme urgency including public health crises Remedy anti-competitive practices Payment of “adequate remuneration” CL has to be “predominantly for the supply of the domestic market”

GOVERNMENT USE Article 31 TRIPS Chapter 5, pg 45 of the Manual on Good Practices "Public non-commercial use” Government right (govt. agency, dept. or contractor) to use patent in the public interest Fast-track approach to compulsory licences No need prior negotiation with patent holder Payment of “Adequate Remuneration” to patent holder State practice: US and UK legislation

EXCEPTIONS TO PATENT RIGHTS Article 30 TRIPS Chapter 6, pg 55 of the Manual on Good Practices Limited exceptions to exclusive rights Allows a third party to make specified and limited use of patent No need consent of the patent holder…..automatically applicable if provided for in legislation e.g. Research, Experimental, Production for export e.g. "Bolar" exception: use of patent prior to expiry for approval for generic product NO specific conditions to use Article 30

USE OF FLEXIBILITIES IN UNITED STATES

Compulsory Licenses in US Many compulsory licenses have been issued by the US for a wide range of patented inventions. There are very broad grounds to grant compulsory licenses in the US. Any employee of the United States government can authorize a compulsory license for a patented product to anyone without even holding a hearing.

Compulsory Licenses in US Meprobamate (1974): The United States Army wanted supplies of a tranquilizer, meprobamate. Carter-Wallace, the American patent holder, sold it for $34.25 for 500 capsules, while a Danish supplier sold the same amount for $1.55. The United States issued a compulsory license, bought it from Denmark and paid Carter-Wallace a modest royalty. The anthrax scare (2001). Secretary Thompson to seek a large enough stockpile of ciprofloxacin (Cipro) to treat 10 million people. This quantity was far greater than the supply, and Bayer lacked the capacity to produce such a large quantity in a timely manner. On October 16, a senator asked the government to issue a compulsory licenses to generic manufacturers.

Compulsory licenses in the US Apparatus for controlling the orientation of satellites Hughes Aircraft Company (1996). Compulsory license was granted for a royalty of 1%. Protective eyewear (1997): a compulsory license was issued on a patent for commercial eyeware so that American Optical could provide the US Army with several thousand pairs of ballistic/laser protective spectacles. Camouflage screens(1998): the US government imposed a compulsory license on Brunswick Corporation patent to expand its industrial base for the production of camouflage screens

DOHA DECLARATION ON TRIPS & PUBLIC HEALTH

What does Doha Declaration say? Recognizes the “gravity” of public health problems in developing/least developed countries esp. those resulting from HIV/AIDS, tuberculosis, malaria…. Recognizes concerns of IP and its effects on prices AGREES that the TRIPS Agreement “DOES NOT and SHOULD NOT prevent Members from taking measures to protect public health” Affirms “the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement which provide flexibility” which include “the right to grant compulsory licenses and the freedom to determine the grounds upon which such licences are granted”

What does Doha Declaration Say? “Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”

Paragraph 6 Doha Declaration Recognized problem: Post 2005…..TRIPS Agreement is fully implemented by major generic producing countries e.g. in India…..these countries can only produce under a compulsory license “predominantly for the supply of the domestic market” [Art. 31 (f) TRIPS Agreement] What does this mean? – 100 % production. 51% must be for supply to domestic market. 49% can be exported (non- predominant portion) Problem is 49% may NOT be sufficient to meet all the needs of countries importing because they lack manufacturing capacity

To resolve problem: The Doha Decl directed TRIPS council “to find an expeditious solution to this problem and to report to the General Council before the end of 2002. Decision reached on 30 August 2003 - waiver of Article 31(f) for countries producing under a compulsory license - entire production can be exported - BUT many procedures have to be followed by exporting and importing countries - many of the view that procedures are cumbersome and may be a disincentive to use the decision

Debate: Permanent Solution Para 11 - TRIPS Council to initiate work to amend the TRIPS Ag. by June 2004….deadline missed African Group submitted proposal in Dec. 2004 Proposal sought simple solution amendment of TRIPS agreement…..waive Art. 31(f) i.e. the waiver of “predominantly for the supply of the domestic market” without notification and other procedures Africa Group proposal received overwhelming support from other developing countries but it is opposed by some of the major developed countries with large pharmaceutical industries Developed countries want the entire August Decision and the Chairman’s statement to be part of the amendment and accuse the Africa Group of reopening the entire debate Africa Group says: developing countries were pressured to accept the deal. Many promises were made by developed countries that their concerns will be taken into account during the discussion on the permanent amendment but now going back on the promises.

Debate: Permanent Solution Currently: - impasse between developing and developed countries Consultations are to continue BUT No consensus in sight

RECENT EXAMPLES IN DEVELOPING COUNTRIES OF USE OF TRIPS FLEXIBILITIES

Some Recent Compulsory Licenses for AIDS drugs

TRIPS FLEXIBILITIES FOR LEAST DEVELOPED COUNTRIES

TRIPS Flexibilities for LDCs (1) For pharmaceuticals and undisclosed information, the period has been further extended in Paragraph 7 Doha Declaration “We also agree that the least developed country Members WILL NOT BE OBLIGED, with respect to PHARMACEUTICAL PRODUCTS, TO IMPLEMENT OR APPLY Sections 5 (on Patents) and 7 (on Protection of Undisclosed Information) of Part II of the TRIPS agreement OR TO ENFORCE RIGHTS provided for under these Sections UNTIL 1 JANUARY 2016 WITHOUT PREJUDICE TO SEEK OTHER EXTENSIONS of the transition periods as provided for in Article 66.1 of the TRIPS Agreement.”

National Experience CAMBODIA Art 136: Cambodian Patent Law: “The pharmaceutical products mentioned in the Article 4 of this Law shall be excluded from patent protection until 1 January 2016 according to the Declaration on TRIPS and Public Health of the Ministerial Conference of the WTO dated November 14, 2001 in Doha of Qatar”

TRIPS flexibilities for LDCs (2) Article 66.1: “The Council for TRIPS SHALL, upon duly motivated request by a least developed country Member, accord extensions of this period” For all the provisions of the TRIPS Agreement, Patents, Copyright, Trademarks etc ….LDCs have the option to make a request for further extensions beyond 2006 Country Experience: Maldives applied for extension to TRIPS Council and has obtained the extension

PROTECTION OF UNDISCLOSED DATA versus DATA EXLUSIVITY

What is it? For a pharmaceutical company to register its drug to get marketing approval from the drug regulatory authority, it has to demonstrate the efficacy and safety of the drug by showing test data When generic manufacturers apply to register the generic version of an already registered medicine, they only have to domenstrate that their product is therapeutically equivalent to the original. To fulfill the efficacy and safety requirements, the DRA relies on the registration file of the original manufacturer

Does TRIPS require Data Exclusivity? NO Art. 39 is about ‘Protection of Undisclosed Information’. Article 39.3 Requires ONLY to "protect … test data against unfair commercial use … [and] disclosure" - Only "undisclosed test or other data“ - Only for "products which utilize new chemical entities” - Only for “origination of [the data] involves considerable effort” Governments have flexibility to define NO MENTION OF GRANT OF EXCLUSIVE RIGHTS over test data to the originator for a fixed period of time. So WTO Members DO NOT have an obligation under the TRIPS Agreement to confer exclusive rights over test data for any fixed period of time Waiver for LDCs until 2016 Developing countries have a position...see WTO Comm. IP/C/W 296

CURRENT TREND TRIPS Flexibilities and Doha Declaration on TRIPS and Public Health are being eroded by TRIPS plus provisions in FTAs in many ways...