ACCESS TO MEDICINE AND PATENT LAWS
-DHARA DOSHI, NALSAR UNIVERSITY
On May 6, 1981, Indira Gandhi declared India's
policy when she said her "idea of a better world is one in which medical
discoveries would be free from patent and there will be no profiteering from
life and death." What happened to this policy? How did India — a champion
of the world's poor and a major supplier of cheap medicine — miss the wood for
the trees? [1]
In
fact, the veryexistence of the TRIPs Agreement is due to the pressure from the
big pharmaceuticalcompanies on the US government, which in turn insisted that
this issue should be onthe agenda of the Uruguay Round negotiations. There are
several reasons for the importance of patents for the pharmaceutical industry:
·
The costs of
pharmaceutical R&D are high. While the actual amount is being disputed, it
is in any case significant;
·
There is a disclosure
requirement, at registration;
·
Usually, imitation is
relatively easy; therefore the patent is important to protect theInvention;
·
It allows the company
to make extra profits. Because of the monopoly rights thePatentconfers, the
company can charge a higher price and earn more than would have been possible
in case of free competition.
With
regard to impact on development, two aspects of development can be
distinguished: economic aspects and social or human aspects. Ultimately, the
latter are the most important, so intellectual property rights should be looked
at from this angle.
Pharmaceutical
patents are a clear example: the inherent effect of patents is to increase the
price, which will reduce access. Therefore, in terms of social development, the
impact of pharmaceutical patents is negative. On the other hand, however,
patents may have positive 'dynamic effects' so far as they foster the
development of new products that benefit society.
GLOBAL
PHARMACEUTICAL CHALLENGES[1]
“The
global regime of intellectual property rights requires a new look. TheUnited
States prevailed upon the world to toughen patent codes and cut down on
intellectual piracy. But now transnational corporations and rich-country institutions
are patenting everything from the human genome to rainforest biodiversity. The
poor will be ripped off unless some sense and equity are introduced into this
runaway process.”
Jeffrey
Sachs, The Economist, 14 August 1999
At
the beginning of the 21st century, too many people still lack access to
essentialdrugs. WHO estimates that more than one third of world's population
lacks regularaccess to the medicines they need. In developing countries, 10.3
million childrenunder five years of age died last year; 8.6 million of these
deaths could have beenprevented if those at risk would have had access to
essential drugs. Today, in 32countries, more than half the population lacks
regular access to basic, essential drugs.The reasons for this are multiple and
complex, and include the following factors:
·
Public spending for
healthcare in general and for drugs in particular is insufficient,and decreasing.
·
Health insurance is
non-existent or has very limited coverage; most people,especially in developing
countries, have to pay for drugs out-of-pocket.
·
New essential drugs are
costly.
·
Supply systems are
often unreliable and poorly managed, leading to wastage andshortages.
Ensuring
access to essential drugs depends on several factors, such as rationalselection
of the drugs allowed on the market, affordable prices, sufficient
andsustainable financing for drugs and a reliable health care and drug supply
system.Price is only one of the factors in ensuring access to essential
medicines; however, especially for countries and
populations with limited resources, it is an importantfactor. One of the most
effective strategies for promoting affordable prices is toincrease competition
. Previously, many developing countries did not, oronly to a limited extend,
grant patents for pharmaceutical products, in order toencourage generic
competition. The TRIPs Agreement makes the granting of patents for
pharmaceutical products and process inventions obligatory, for a minimum period
of 20 years. For most developing countries, these new standards represent a
considerable increase in the protection granted for pharmaceuticals. They fear
therefore an increase in prices of medicines, and a further reduction in their
population's already limited access.
On 17 august 2000 the UN sub
commission for the Protection and Promotion of Human Rights, noting that – “
…actual or potential conflicts exists between the implementation of the trips
agreement and the realization of economic social and cultural rights in
relation to, inter alia, impediments to the transfer of technology to
developing countries, the consequences for the enjoyment of the right to food
of plant variety rights and the patenting of genetically modified organisms,
‘bio-piracy’ and the reduction of communities (especially indigenous
communities ) control over their own genetic and natural resources and cultural
values, and restricting on access to patented pharmaceuticals and the
implications of the enjoyment of the right to health”
The
resolution noted “the apparent conflicts” between the Intellectual Property
Rights embodied in the TRIPS agreement and international human rights law,
particularly that “the implementation of the TRIPS agreement does not
adequately reflect the fundamental nature and indivisibility of all human
rights including the right of everyone to enjoy the benefits of scientific
progress and its applications, the right to health, the right to food and the
right to self-determination” (Article 2).
The
resolution reminded “all governments of the primacy of human rights obligations
over economic policies and agreements” (Article3)
On the other hand, the
guarantee in Article in 27(2) of Universal Declaration of Human Rights[2]
that “everyone has the right to protection of moral and material interest
resulting from any scientific, literally or artistic production of which he is
the author” suggests that the protection of intellectual property might itself
be a human right. This is also emphasised in similarly worded Article 15.1.c of
the international convention on economic social and cultural rights.[3]
The
apparently conflicting intellectual property implications of these human rights
conventions can be reconciled by contrasting the role of human rights as a foundational
justification for intellectual property protection and the impact of human
rights in shaping existing intellectual property rights.
The UN sub commission’s concern was
addressed primarily to the possible adverse impact of intellectual property
rights upon access to medicines. In this context the signatories of November
2001 Doha declaration on public health had indicated that patent rights in
relation to anti-HIV AIDS drugs, should yield to the untrammelled availability
of those products.
However,
the TRIPs Agreement contains a number of safeguards, which may be usedto
protect public health and promote competition, such as compulsory licensing
andexceptions which facilitate the marketing of generic drugs. These safeguards
can be used to mitigate the potential negative impact of the TRIPs Agreement on
access to drugs. However, in order to use these safeguards, countries have to
incorporate them in their national legislation.
TRIPS ANDPHARMACEUTICAL IP AGENDA
[4]
The interaction process through
which the advanced pharmaceutical industry in Europe, as well as in US, strives
to secure its interests as regard to the international intellectual property
system is ultimately linked to the WTO agreement on trade related aspects of intellectual
property rights (TRIPS). Signed in Marrakesh ( 15 April 1994) as Annex 1 C to
the Final Act establishing the WTO , the trips agreement came into effect in
January 1995,it was one of the most innovative and important subjects to be
included in the multi-lateral negotiations of the Uruguay round. With respect
to intellectual property rights, specifically, the TRIPS agreement represents a
significant increase in global level of intellectual property protection. Some
scholars, such as Reichmann, consider it to be a “revolution in international intellectual
property law”.[5]
The
statement by the then Director General of the United Nations, Kofi Annan in
2001, that “IPR protection is the key to bring forward new medicines, vaccines
and diagnostics urgently needed for the health of the world’s poorest people”
was soon refuted at the Inter-Ministerial Conference in Doha in 2001,
representatives of the developing countries stated that IPR has stood in the
way of access to drugs for the poor. It further held that “the TRIPS Council
has to find a solution to the problems countries may face in making use of
compulsory licenses if they have too little or no pharmaceutical manufacturing
capacity” and authorised the General Council to take action by bend of 2002.
The TRIPS agreement may be regarded
both as an agenda-setting tool and binding legal contract. As an agenda setting
tool it established a highly favourable environment for pharmaceutical
intellectual property owners. This is also the case with TRIPS as a contract.
Yet, like any other agreement TRIPS provisions are also open to interpretation
and hence to dispute, the results of which are not always compatible with the
interests of advanced pharmaceutical industry. Naturally, the two dimensions
are linked not least because the agenda setting dimension defines the range of intellectual
property issues that are subject to interpretation.
The most significant achievement
for the advanced pharmaceutical industry concerning the TRIPS agreement is the
granting of patent protection for pharmaceutical products and processes. It
should be noted that prior to TRIPS, more than 50 countries did not grant
patent protection to pharmaceutical product and processes at all but granted
patentability only to pharmaceutical processes. Elements such as patentable
subject matter, exclusive rights and exemptions deriving from TRIPS,patents
increased term of patent protection, compulsory licensing, special provisions
relating to pharmaceutical and agro-chemical patents, etc. are important to the
TRIPS patent regime.
TRIPS BUILT-IN FLAWS
Though in essence TRIPS’S major
objective is to increase a global level of protection granted to intellectual
property owners, TRIPS provisions also aims to protect the public in general,
and countries with low intellectual propertycapabilities in particular, form
the negative consequences of an international regime of intellectual property
rights. The two most flawed aspects of TRIPS are as follows-
Firstly a regime of intellectual
propertyrights may trigger anti-competitive and even abusive behaviour. Practices
may include exploiting intellectual property rightsin order to create a cartel,
the creation of an advantage outside the market where the innovation took place
the purchase and selling of technologies for reduced or excess prices,
restriction on the use of license technologies and so on. Intellectual propertyholders
can also adopt strategies aimed at expanding the scope and duration of their,
market monopolies. According to Machlup[6],
patentees may choose to engage in the “successive patenting of strategic
Improvements which make the unimproved inventions commercially unusable after
the expiration of the original patent. Furthermore, some practices, such as
corporate mergers, which are not directly related to the field of intellectual
property rights, may have a profound effect on the state of competition in the given
intellectual property area. For instance, the Ciba-Geigy/Sandos merger (now
Novartis) raised serious questions about the overall competitive and innovative
structure of the market for gene therapy in Europe. The merger was approved
only after both companies, which at the time were dominant intellectual
property players in that field, agreed to certain compulsory license
conditions. Facing the risk of abusive behaviour on the one hand, and the
difficulty in identifying such phenomenon on the other, the TRIPS agreement
lacks efficacy in the elimination of anti-competitive practices.
Secondly, the TRIPS agreement is
highly problematic with respect to the technological, technical and financial
assistance provided to countries with low intellectual property capabilities,
particularly LDCs. TRIPS provisions offer little information about the ways,
methods, time tables and the level of assistance that should flow from
developed countries to developing countries and LDCs. Inadequate assistance to
these countries is particularly acute in the light of the considerable short
term and medium term cost that countries with low intellectual propertycapabilities
should expect from implementing a strong intellectual propertyregime such as TRIPS.
TRIPS
itself contains many ambiguities. Much remains unclear about just how much
flexibility there is in interpreting and applying the TRIPS Agreement. Few cases
have been brought to the WTO that offer clear interpretations, although the decision
in the Generic Medicines case[7]is
cause for concern. But how the TRIPS Agreement is legally interpreted, and how
it isused politically, will have a significant impact on whether and how
countries can protect and promote access to affordable medicines. Despite some
recent encouraging developments, there is still a need for vigorous advocacy in
support of maximum flexibility under TRIPS for countries to address health
needs.
At the end of 16 years since the
setting up the WTO, it is interesting to evaluate the impact of trips on some
of the growth parameters which were intended and promised, particularly in the
less developed countries of the world. The fact that the least developed
countries (LDCs) have so far not benefited and are still not ready to join the
mainstream was well recognised at the Doha Summit in 2001. That was the reason
for extending the time for implementation of the TRIPS agreement by5 years from
2011 for all LDCs.
How effective has WTO been in
dealing with regulation of trade among the member countries monitoring
implementation of the terms of the various agreements and providing a base for
negotiated settlements on disputes between the members? After all it is claimed that the members of
WTO constitute 97 per cent of global trade and hence should indeed be the
premier agency responsible for an effective, fair and equitable global trade
order.
While the global trade had
increased multi-fold over the years from 1995, not necessarily due to the
efforts of WTO ( until recession hit global economics since 2008), there is
still no evidence that foreign direct investments or levels of innovation has
increased as a consequence of implementing better protection of intellectual
property rights systems in developed or developing countries. However what is
clear is that lack of an effective intellectual property rightssystem would
have affected investor confidence in enlarging the scope and resources
allocation in innovation which is the life line for new products discovery and
development. It has also not been possible to identify a direct relationship
between intellectual property rightsprotection and economic growth as measured
by common parameters such as income distribution.[8]
IMPLEMENTATION
OF TRIPS PATENT REGIME
In
2005, India amended its Patents Act, 1970 to introduce TRIPS compliant product
patent
regime.
Generally speaking, law and policy makers in India during the time of the
amendment were confronted with two major concerns viz. the future of the Indian
pharmaceutical industry and access to affordable medicines in India and other
developing countries. To address these concerns India along with many other
developing countries attempted to incorporate TRIPS flexibilities in their
domestic law. However, the success of the TRIPS flexibilities in addressing the
question of access to affordable medicines mainly depends on three factors:
a)
the incorporation of flexibilities in the domestic law;
b)
the manufacturing capability of a country; and
c)
the political will to use the public interest safeguards provided in the
domestic law.
There
are only a few countries like India, which satisfy the above-mentioned
conditions to a certain extent.[9]
[1]THE TRIPS AGREEMENT
AND PHARMACEUTICALS - Report of an ASEAN Workshop on the TRIPs Agreement and
its Impact on Pharmaceuticals, Jakarta, 2-4 May 2000
[2]Universal Declaration of Human Rights :
Everyone has the right to a standard of
living adequate for the health and well-being of himself and of his family,
including... medical care. - Article 25
Everyone has the right... to share in
scientific advancement and its benefits. - Article 27
[3]Intellectual Property in the New Millennium (Essays in honour of
William.R.Cornish edited by D.Vaver and L.Bently) - Cambridge University Press
2004
[4]International
political economy of RIGHTS : Meir Perez Pugatch(New Horizons in INTELLECTUAL PROPERTY
-Edward Elgar 2004) – Page No. 128
[5]Reichmann (1998:585)
[6]Machlup (1958:10)
[7]The Generic Medicines case at the WTO
(2000)-In
1997, the EuropeanUnion (EU) challenged asection of Canada’sPatent Act intended
tomake it easier for cheaper,generic drugs to come tomarket as soon aspossible.
The section inno way limited an originaldrug company’s marketmonopoly during
its 20 year patent term, butsimply allowed genericdrug companies tostockpile
their product forthe last 6 months of thepatent term, for sale assoon as the
patentexpired.Among other things,Canada argued that thepublic interest in
earlieraccess to more affordable drugs was a legitimate basis for this limited
exception to exclusive patent rights. Theoretically, these exceptions are
allowed under Article 30 of TRIPS. The EU dismissed these arguments,
complaining of “discrimination” against the pharmaceutical industry. The WTO
panel ignored Canada’s public interest argument. It took a very narrow approach
to deciding what were acceptable limitations on patent rights, looking only at
the private patent owner’s expectation of profits and not considering what
other, social benefits were to be gained by limiting this monopoly.
[8] TRIPS and Access to Affordable Drugs By M. D. Nair
[9]Product
Patents and Access to Medicines in India: A Critical Review of the
Implementation of TRIPS Patent Regime ByGopakumar K. M.
