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Tenu Avafia HIV/AIDS Practice, UNDP

Tenu Avafia HIV/AIDS Practice, UNDP.

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Tenu Avafia HIV/AIDS Practice, UNDP

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  1. Tenu Avafia HIV/AIDS Practice, UNDP Patents & Access to medicines: Key public health Related TRIPS flexibilities and how they have been used to reduce medicine pricesACCESS TO ESSENTIAL MEDICINES, HIV AND INTELLECTUAL PROPERTY RIGHTSRegional Meeting Sponsored by UNDP/OSI21-22 September 2009 Kyiv, Ukraine

  2. HIV prevalence (%) in adults (15–49) in Eastern Europe and Central Asia, 2007 2.16

  3. Comparison of 2005 and 2007 percentage coverage of antiretroviral therapy for people with advanced HIV and percentage coverage of antiretroviral drugs for HIV positive pregnant women by region Prevention of Mother to Child Transmission Antiretroviral Therapy 100 2007 2005 2007 2005 80 60 Percent (%) 40 20 0 Sub-Saharan Africa Latin America and the Caribbean East, South and South-East Asia EasternEurope and Central Asia North Africa and the Middle East GLOBAL Source: UNAIDS/UNICEF/WHO

  4. The Global distribution of patents Source: Worldmapper.org

  5. Why do TRIPS flexibilities continue to be important? • Only 17% of People needing ART in region are receiving treatment • Treatment programs expected to be strained by Global economic crisis • Anticipated scale-down of funding for GFATM treatment Programmes in region by 10% from next year • Most commonly used 1st line of AZT 3TC, EFV cost $ 357 in middle income countries • Less than 5% of patients currently on ARVs are receiving 2nd line treatment • Most commonly used 2nd line ARV (didanosine, abacavir and ritonavir-boosted lopinavir) cost U$ 3306 in middle income countries • Cost of treatment will increase with the introduction of 2nd line treatment and different medicine combinations • MSF reported that treating 58 patients on 2nd line ARVs cost the same as treating 550 patients on 1st line

  6. Key TRIPS Flexibilities • General principles (Articles 7 & 8) • Patentability criteria • Compulsory licensing and Government use • Parallel importation • Limited exceptions to patent rights • Use of Competition law

  7. TRIPS Agreement Objectives (Article 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 tosocial and economic welfare, and to balance of rights and obligations”

  8. TRIPS Agreement Principles (Article 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”

  9. Criteria for patentability Article 27.1 of TRIPS: “Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial Application”

  10. Criteria for Patentability (Article 27) What can be patented? • Invention - Inventive step; novel (new); capable of industrial application • Under TRIPS – obligation to ONLY 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 • Lax/loose patentability standards…..result in too many secondary patents (new combinations, new uses of existing substances….negative implications on access to medicines…..it will prolong monopoly/ ever-greening • New molecules or new innovative medicines are now rare, yet pharmaceutical patents number in the thousands each year. This raises questions as to the number of patents that may be granted for minor modifications. • 12 year period of 1988 – 2000, only 35% of the 1, 035 drugs approved by the United States Food and Drugs Administration contained a new active ingredient

  11. Example of public health interpretation of Article 27 Section 3(d) of Indian Patents Amendment Act of 2005 • The amended patent law seeks to prevent the ever-greening of medicines or the patenting of “me too” products i.e. the patenting of a drug that is structurally very similar to known patented drugs, with only minor differences such as new uses of existing substances, combinations etc • This reduces significantly the grant of patents on pharmaceutical products that do not fulfill the standards of novelty and inventive steps, both prerequisites for obtaining a patent. • Section 3 (d) of 2005 Act excludes from patentability: “ the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant”

  12. Parallel Importation Article 6 TRIPS “For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights” • Entitles countries to import patented product from any other WTO Member state where product is under patent for cheaper price • 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 • Recommendation: International exhaustion

  13. Examples of other State Practices on Parallel Importation Kenya: The Industrial Property Act (2001) Section 58.2: Limitation of Rights: The rights under the patent shall not extend to acts in respect of articles which have been put on the market in Kenya or in any other country or imported into Kenya” Clause 37 of the Industrial Property Regulations (2002): The limitation on the rights under a patent in section 58(2) of the Act extends to acts in respect of articles that are imported from a country where the articles were legitimately put on the market. India: 107A Indian Patent Act “Certain acts not to be considered as infringement. For the purposes of this Act – importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product, shall not be considered as an infringement of patent rights”

  14. Compulsory License Article 31 • Government grant of licence to 3rd party to use patent without consent of patent holder • Right to determine grounds for compulsory licence (reaffirmed in Doha Declaration) • Grounds for granting compulsory license include: - negotiations to obtain a license on reasonable terms and conditions from the patent holder failed - public interest, - national emergencies, - public health nutrition, - failure to exploit or insufficiency of working - to remedy anti competitive practices (Article 40) - to establish pharmaceutical industrial base or in line with trade/industrial policy objectives • must be predominantly for the supply of the local market 31(f) • Compulsory licenses have been issued in several developed and developing countries (10 000 issued in the United States alone since 1950)

  15. Conditions for grant of CL • Need to show 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” Article 31 (f)

  16. Government use orders Article 31 of TRIPS • Government utilization of compulsory licenses • "Public non-commercial use” • Government right (govt. agency, dept. or contractor) to use patent in the public interest without the consent of the patent holder • Fast-track approach • No need prior negotiation with patent holder 31(b) • Payment of “Adequate Remuneration” to patent holder

  17. Thailand compulsory licenses 2006-2008 • In 2001 Thailand introduced the Universal health coverage • Since 2003 government has a policy of universal access to antiretroviral drugs • From 2001 to 2007 Thailand increased spending ten-fold on access to HIV/AIDS drugs and leads lower middle income developing countries • 2006 World Bank Report on Thailand documented the failure of price negotiations • November 2006, Thailand issued government use order for effavirenz (1st line ARV), • January 2007, Government issued Government use order for Kaletra (2nd line ARV combination of lopinavir+ritonavir) and clopidogrel (for heart disease) • Thailand faced rigorous protest by patent holding pharmaceutical companies • Use of TRIPS flexibilities was welcomed by several UN Agencies and NGOs • January 2008, Government issued government use order for Letrozole, Docetaxel, Erlotinib and Imatinib (all medicines for treatment of cancer)

  18. Projected Cost savings of medicines in Thailand in 2007-2012(Source: Ministry of Public Health and the National Health Security Office 2007) http://www.hitap.net/backoffice/project/pdf_projects/2009-05-20_Final%20report%20-06-301-2551.pdf

  19. General exceptions to patent rights TRIPS Article 30: “Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties” • 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 national legislation • Justified as in certain circumstances limited use of the patented inventions is required to achieve public policy purposes of encouraging innovation, facilitate production of generic medicines and protecting other interests Examples include: • Research, Experimental use for scientific or commercial purposes • Early Working/Bolar" exception: use of patent prior to expiry of the patent period for approval for generic products • Teaching/Education Exception • Prior Use • Individual Prescriptions

  20. Anti-competitive remedies • Article 40.1 “Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology” • Article 40.2 “Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market” • Article 31(k) “Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive” • i.e. A compulsory license issued for anti-competitive behavior does not require prior negotiation with patent holder or requirement that medicines produced be primarily for local consumption

  21. Competition law as a TRIPS flexibility: the South African experience • Section 49 of the competition Act of South Africa’s allows “any person to submit a complaint against an alleged prohibited practice” • PWAs lodged a complaint against GSK and BI for excessive pricing of select ARVs making them directly responsible for the premature deaths of PWAs • Hazel Tau and Others v GlaxoSmithKline and BoehringerIngelheim • Complainants alleged that even when R&D costs were considered, the prices being charged were excessive • Competition commission found that the prices being charged constituted excessive pricing, referred to competition tribunal for ruling • GSK and BI settled matter “out of court” by negotiating new voluntary licenses • New “voluntary” had good conditions, reduction of royalties from 40% to 5% • Restrictions on domestic use removed, generic companies can now export to sub-Saharan African countries

  22. conclusions • TRIPS Agreement has minimum obligations for countries in CIS but also contains many flexibilities • Incorporation of flexibilities into domestic legislation should be guided by strategic domestic objectives • Legislative incorporations can sometimes be used as negotiating tool to reduce prices (e.g. Brazil Kaletra and Kenya) • Using flexibilities can keep national treatment programs affordable • Countries should be mindful when signing free trade agreements which contain provisions restricting use of flexibilities

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