TRIPS, Doha and Access to Medicines: Recent Lessons - PowerPoint PPT Presentation

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TRIPS, Doha and Access to Medicines: Recent Lessons

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As reported by Frontline documentary 'The other drug war', June 19, 2003 ... Text of FTAs and legal analyses suggest TRIPS-plus provisions: ... – PowerPoint PPT presentation

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Title: TRIPS, Doha and Access to Medicines: Recent Lessons


1
TRIPS, Doha and Access to Medicines Recent
Lessons
Globalization, Intellectual Property Rights and
Social EquityChallenges and Opportunities of
Free Trade AgreementsBogotá, Colombia, July 21
22, 2004
  • CARSTEN FINK

2
Overview
  • Introduction the pharmaceutical industry,
    intellectual property and drug prices
  • TRIPS what came out of the Uruguay Round
  • Doha Declaration on TRIPS and Public Health
  • Paragraph 6 negotiations and the August 2003
    Decision
  • Whats next?

3
Introduction the pharmaceutical industry,
intellectual property and drug prices
4
The pharmaceutical industry
  • Long and expensive RD process
  • Research, development, clinical testing,
    regulatory approval
  • Risky process only a small share of promising
    chemical entities make it to the market
  • Up to 10 years before drugs are marketed
  • Without intellectual property protection, new
    chemical entities can easily be copied by
    competing firms

5
Two main industry players
  • Research-based companies
  • Create intellectual property
  • Multinational in scope, limited number of firms
  • Generic drug companies
  • Produce drugs of which intellectual property
    rights have expired
  • Large number of firms, competitive market
    structure
  • Efficient developing country producers

6
Intellectual property and prices
  • Main intellectual property instruments
  • Patent exclusivity
  • Protection of pharmaceutical test data
  • Significant price falls documented upon expiry of
    pharmaceutical patents
  • Example wholesale price of Pfizers blockbuster
    drug Prozac fell from 240 to less than 5 per
    bottle within six months after patent expiry

As reported by Frontline documentary The other
drug war, June 19, 2003
7
Public policy considerations
  • Trade-off between incentives to invent and
    competitive provision of drugs
  • Optimal intellectual property policies may
    differ from country to country, depending on
    average incomes as well as nature and extent of
    health burden
  • Effectiveness of intellectual property rights
  • Market-oriented decision-making on RD
  • Crude policy tool, exploitation of market power

8
TRIPS what came out of the Uruguay Round
9
TRIPS Agreement
  • Negotiated during Uruguay Round of Trade
    Negotiations (1986-94)
  • One of three multilateral pillar agreements
    that set out the trading rules of the World Trade
    Organization
  • Provisions apply to all 147 WTO members and newly
    acceding countries
  • International law, subject to WTOs dispute
    settlement provisions

10
Key TRIPS obligations
  • Article 27
  • Patents to be awarded without discrimination
    among fields of technology
  • Patents to cover both processes and products
  • Patents to be protected for 20 years from the
    date of filing
  • Article 39
  • Protection of undisclosed test data against
    unfair commercial use, where such data is
    submitted to regulatory authorities

11
TRIPS transition periods
  • Developing countries without product patent laws
    have until January 1, 2005 to comply, but must,
    nonetheless, grant market exclusivity to newly
    invented pharmaceutical products
  • Least developed countries were given until
    January 1, 2006 to comply.

12
Where TRIPS is flexible
  • TRIPS allows the use of compulsory licenses
  • In case of emergencies, compulsory licenses can
    be granted without an attempt to obtain voluntary
    license from patent holder
  • No obligation on legality of parallel imports
  • Members are free to impose price regulations

13
Doha Declaration on TRIPS and Public Health
14
Context
  • Issued at the WTO Doha Ministerial Meeting in
    2001
  • Growing concern that TRIPS obligations could
    undermine access to medicines in poor countries
  • Three elements
  • Political statement
  • Extension of deadlines for LDCs
  • Negotiating mandate

15
Political statement
  • We agree that the TRIPS Agreement does not and
    should not prevent Members from taking measures
    to protect public health (paragraph 4).
  • The Doha Declaration confirms key TRIPS
    flexibilities

16
Extension of deadlines for LDCs
  • Least-developed countries have until 2016 to
    implement the pharmaceutical patent provisions of
    TRIPS
  • Do not need to enforce existing patent rights
    until 2016
  • Deadline can be further extended

17
Negotiating mandate
  • Can countries with insufficient manufacturing
    capacities in the pharmaceutical sector make
    effective use of compulsory licenses?
  • For example, Article 31(f) mandates that
    compulsory licenses shall be authorized
    predominantly for the supply of the domestic
    market.
  • Paragraph 6 of Doha Declaration calls for an
    expeditious solution to this problem

18
Paragraph 6 negotiations and the August 2003
Decision
19
Paragraph 6 Negotiations
  • Economic case for importation under CL is
    straightforward its about free trade
  • Long and acrimonious negotiating process
  • United States alone opposed December 2002
    compromise text, seeking to limit the scope of
    diseases to which importing mechanism can be
    applied
  • Attempt to forge consensus in February 2003 failed

20
August 2003 Decision
  • Two elements
  • Decision on Implementation of Paragraph 6
  • Chairmans Statement
  • Waives Article 31(f)
  • No scope of diseases limitation, mechanism not
    limited to emergencies

21
Other elements
  • Voluntary opt outs by certain countries not to
    use the mechanism or to only use the mechanism in
    emergency situations
  • Understanding that mechanism would not be used to
    promote industrial policy objectives
  • Transparency obligations and safeguards to
    minimize risk of drug diversion
  • More burdensome than necessary?
  • Create opportunities for political abuse?

22
Use of August 2003 Decision
Can the drug be manufactured domestically?
No
Is the drug protected by a patent in the
exporting market?
No
Has a compulsory license on the drug been issued?
No
Yes
Would a predominant share of production be
exported?
Need for August 2003 mechanism to import generic
drugs
Yes
23
What's next?
24
Evolving patent situation
  • Generic sources still exist for virtually all
    medicines (in particular from India)
  • Increased patent conflicts, use of compulsory
    licenses (e.g., Malaysia, Mozambique)
  • Starting in 2005, the share of patented medicines
    in developing countries will rise
  • What will happen in India?
  • Will LDCs emerge as sources of generic drugs?

25
Concern about bilateral agreements
  • Recent US bilateral FTAs with Australia, Central
    America, Chile, Jordan, Morocco, Singapore
  • Text of FTAs and legal analyses suggest
    TRIPS-plus provisions
  • Protection of undisclosed test data
  • Registration of pharmaceutical products
  • Restrictions on parallel importation
  • US Government maintains that bilateral FTAs do
    not compromise Doha flexibilities
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