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]

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[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.

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[1]http://www.hindu.com/2004/12/10/stories/2004121002361000.htm