Title: TRIPS, Doha and Access to Medicines: Recent Lessons
1TRIPS, 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
2Overview
- 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?
3Introduction the pharmaceutical industry,
intellectual property and drug prices
4The 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
5Two 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
6Intellectual 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
7Public 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
8TRIPS what came out of the Uruguay Round
9TRIPS 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
10Key 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
11TRIPS 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.
12Where 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
13Doha Declaration on TRIPS and Public Health
14Context
- 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
15Political 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
16Extension 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
17Negotiating 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
18Paragraph 6 negotiations and the August 2003
Decision
19Paragraph 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
20August 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
21Other 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?
22Use 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
23What's next?
24Evolving 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?
25Concern 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