The Emerging Paradigm of Global IP Enforcement in FTAs and TRIPS-plus Agreements: Implications for Access to Medicines Mr. Anand Grover Senior Advocate, Supreme Court of India, Director- Lawyers Collective and the UN Special Rapporteur to the Right to Health MHRD IP Chair Roundtable Symposium on IP and Pharmaceutical Policy, NLU- Jodhpur 17 th and 18 th March, 2012

RIGHT TO HEALTH Art 12 ICESCR: the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. Meaning of highest attainable standard of physical and mental health It does not mean merely absence of diseases or right to health care. General Comment No.14 on Art 12 of ICESCR interprets it to mean: right to health embraces a wide range of socio-economic factors that promote conditions in which people can lead a healthy life, and extends to the underlying determinants of health, such as, food and nutrition, housing, access to safe and potable water and adequate sanitation, safe and healthy working conditions and a healthy environment, access to health related education and information, including on sexual and reproductive health

RIGHT TO HEALTH Medical care and treatment which are dependent on medicines are key features of the right to health. Access to medicines is an integral part of the right to health. The States have an obligation under the right to health to ensure that: –medicines are available; –financially affordable and –physically accessible on a basis of non-discrimination to everyone within their jurisdiction. The developed States also have a responsibility to take steps towards the full realization of the right to health through international assistance and cooperation. [E/CN.4/2004/49/Add.1, para. 28] Participation of the community and Civil society is an important in decision making, implementing and monitoring and implementing is an important principle in right to health framework

RIGHT TO HEALTH: INDIA The right to health, enshrined in numerous international and regional human rights treaties and in many national constitutions. [Article 25, UDHR,1948; Article 12, ICESCR, 1966] Right to life [Article 21] has been interpreted by the Supreme Court of India to include the right to health. [Vincent Panikurlangara v. Union of India (1987) 2 SCC 165; and State of Punjab v. Ram Lubhaya Bagga (1998) 4 SCC 117.] Article 21 read with Article 14 obliges the State to provide health services, including, testing, diagnostic facilities as well as medicines to protect life without any discrimination. International Law International covenants and conventions and other international agreements signed onto or ratified by India can be read into fundamental rights to interpret it and expand its scope. ICESR are incorporated domestically in India in the Protection of Human Rights Act

Accessibility of medicines has different dimensions one of which is financial affordability. In this regard intellectual property (IP) laws as they impact on the affordability of medicines can have a significant bearing on access to medicines. Cost of medicines is one of the key factors that affect the access to medicines. In low and middle income countries, medicines account for 60% of the healthcare cost. [The World Medicines Situation, WHO, 2004]. In India, 70% of household out of pocket expenditure on health is set aside for buying drugs. [Report of National Health Accounts of India] Millions will be pushed into poverty by purchasing high cost medicines, especially branded medicines. [Niëns LM, et al, Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-Country Comparison of the Affordability of Medicines in the Developing World, PLoS Med 7(8) e (2010)]

IMPACT OF GENERIC MEDICINES AND THEIR COST Presently, India is the largest supplier of low-cost, high quality medicines for the entire developing world. Countries across the developing world have been able to upscale treatment access for persons living with HIV primarily because of domestic production of generic anti-HIV medicines in India. In 2008, about 89% of adult ARV purchases for the donor funded programmes in developing countries was from the Indian generic market. While there has been a huge fall in prices of first-line ARVs, the cost of second-line and third-line drugs are very high. –For instance, the cost of tenofovir-based regimens range from $246 to $309 per patient per year. This is about 3.3 to 4 times higher than the price for the older regimens. [Brenda Waning, et al, A lifeline to treatment: the role of Indian generic manufacturers in supplying antiretroviral medicines to developing countries, Journal of the International AIDS Society, 2010, 13:35]

IMPACT OF GENERIC MEDICINES AND THEIR COST Apart from India, China, Brazil, Thailand and South Africa also produce a significant amount of generic drugs. Brazil, Russia, India and China have capacity to produce active pharmaceutical ingredients (APIs). [As reported by Thomson Reuters, 2008] However, the trade agreements seeking higher intellectual property protection undermines the capacity of countries like India, Brazil, China, Thailand etc. to manufacture low cost generic medicines.

WHY ARE WE CONCERNED? 1980s to 1994 Multilateral trade negotiations. Developed countries pushed for and obtained inclusion of intellectual property rights (IPRs) in Agreement establishing WTO. Developing countries were able to obtain flexibilities TRIPS came into force. Lays down minimal standards of IP protection and enforcement Contains flexibilities. It, inter alia, refers to protection and enforcement of IPRs in a manner conducive to social and economic welfare of people, balance of rights and obligations and transfer of technology. Since 1995 Through trade agreements, developed countries have been attempting to: Obtain additional IP protection and enforcement provisions beyond TRIPS. Dilute TRIPS flexibilities These agreements are negotiated secretly without transparency without consulting community

TRADE AGREEMENTS Trade Agreements: Bilateral or regional trade agreements or economic partnership agreements – EU FTAs with India, Malaysia – US FTAs with Bahrain, Chile, Peru, Columbia, Jordan. – EU FTAs with ASEAN, MERCOSUR Plurilateral agreements Trans-Pacific Partnership Agreement Anti-Counterfeiting Agreement

NEGOTIATING POSITIONS AND INTERNATIONAL PRESSURE EU, US and other developed countries are negotiating to increase access to developing country markets for its multinational corporations and to secure maximal profits for them. –For this, they are seeking increased IP protection and enforcement standards. –Increased IP protection and enforcement higher profits USTR in its Special 301 report has placed India, Brazil, Thailand, countries with capacity to manufacture generic medicines, in the Priority Watch List threatening to take actions for inadequately protecting intellectual property even though the countries are TRIPS compliant. EU demands for TRIPS-plus intellectual property provisions is based on the European Commissions strategyGlobal Europe: Competing in the World (2006)which sets an aggressive trade and investment agenda for expanding the competitiveness of the EUs industries.

NEGOTIATING POSITIONS AND INTERNATIONAL PRESSURE…..contd Reports that industry associations in EU and their Indian counterparts are setting the agenda [Trade Invaders. How big business is driving the EU-India free trade negotiations, Corporate Europe Observatory, 2010]. India is a socio-economic welfare State established by its Constitution and has to secure the fundamental rights (right to life, right to health, etc) of its peoples. Brazil [Art.196, Brazilian Constitution] and Thailand [Section 51, Constitution of the Kingdom of Thailand,2007] have a constitutional obligation to protect right to health of its citizens. Developing countries are being pushed to accept provisions that will benefit a few and harm a vast majority of people.

FREE TRADE AGREEMENTS:COUNTRIES INVOLVED The United States has 12 FTAs in force with 17 countries AUSTRALIA, BAHRAIN, CHILE, OMAN, PERU, SINGAPORE, ISRAEL, JORDAN, MOROCCO CAFTA COSTA RICA, DOMINICAN REPUBLIC, EL SALVADOR, GUATEMALA, HONDURAS, & NICARAGUA NAFTA: CANADA & MEXICO In addition, the United States has negotiated FTAs with Korea, Panama and Colombia, but these agreements have not yet entered into force. [ agreements] United States : UNDER NEGOTIATION ASIA: INDIA, SINGAPORE, MALAYASIA, ASEAN, MERCOSUR EASTERN EUROPE: UKRAINE EPA WITH AFRICAN, CARIBEAN AND PACIFIC COUNTRIES CONCLUDED: CENTRAL AMERICA [COSTA RICA, DOMINICAN REPUBLIC, EL SALVADOR, GUATEMALA, HONDURAS, & NICARAGUA] AND ANDEAN COMMUNITY [COLUMBIA AND PERU] SUSPENDED: LIBYA and GCC [ European Union:

SUBSTANTIVE ISSUES Stated objective TRIPS: Balance of rights and obligations, social and economic welfare, transfer of technology EU: Protection and enforcement of IPR and its commercialization Protection of data TRIPS: Data protection EU: Data exclusivity (will delay entry of generic competition, affect compulsory license, etc) Patent term extension TRIPS: 20 years protection inclusive of time taken for patent and regulatory approval EU: Patent term extension

PATENT LINKAGE Drug Regulatory System Drug patented Consent of patent holder marketing approval granted No consent marketing approval withheld Drug not patented Marketing approval granted Requirement of patent linkage is a standard clause in many bilateral FTAs negotiated by US. US FTAs with Singapore, Chile, Morocco, Bahrain Pressure from US Trade Representative and pharma companies on developing countries for higher IP standards. In the Bayer matter patent linkage was not accepted

ENFORCEMENT IPRs are private rights. In case of patents and trademarks, IP holders have exclusive right to enforce them. EU FTAs seek stronger enforcement mechanisms that: –Harmonize laws of developing countries with its own internal trade rules –Shift burden of enforcement of private rights to State

ENFORCEMENT EU FTAs seek stronger enforcement mechanisms that: –Facilitate litigation to deter competitors by obtaining: Injunctions more easily to thwart competition Injunctions against intermediaries Far-reaching information-gathering provisions that undermine freedom of trade and private and confidential data Compulsory damages and under expanded heads of damage Orders to seize and destroy goods

ENFORCEMENT TRIPS only requires border measures at point of import in cases of copyright piracy and counterfeit trademarks [Article 51]. EU FTAs seeking stronger enforcement mechanisms that: –Expands scope to patents, the infringement of which cannot be determined by visual inspection; –Require mandatory border measures by State not only: at import, but also for export, re-export, goods in transit; for copyright piracy and counterfeit trademarks, but also for patents.

ENFORCEMENT Border measures – How they affect access? –Generic drugs seized [Late-2008]: Drug: WHO per-qualified ARVs for Clinton Foundation funded treatment project purchased by UNITAID Source: India Transit: Amsterdam Destination: Nigeria 17 other such seizures; in some cases, drugs released after a few months, either forwarded to destination or returned to India.

INDIA TAKES EU TO WTO India and Brazil sought consultation under the WTO Dispute Settlement Mechanism. Thereafter countries such as Canada, China, Japan, Turkey and Ecuador requested to join the consultations. July 2011: India and EU entered into an understanding that EU would amend its rules and replace Regulation 1383/2003. Meanwhile India has agreed not to proceed with case further. However, the case has not been withdrawn.

INVESTMENT Definition of Investment : inclusion of intellectual property rights This will enable investors (private corporations) to sue the Government of India at international arbitral bodies if their investment (intellectual property) is affected. This would deter India from: –enacting laws or policies aimed at securing access to medicines. –Controlling prices of medicines –Regulating foreign investment in local production Available records show how several developing countries have been taken to arbitral bodies by multinational corporations for having adopted policies to protect public health, environment and public security system.

INVESTMENT: HOW IT WILL AFFECT Uruguay : 80% of the bottom portion of all cigarette packages should contain prescribed health messages. Switzerland-Uruguay BIT: Philip Morris, a US based tobacco company, filed a claim at the International Centre for Settlement of Investment Disputes (ICSID), a World Bank branch. Phillip Morris claimed that Uruguays tobacco control policies are damaging their trademark rights (IPR), which is their investment. It sought damages /compensation from Uruguay.

TRANS-PACIFIC PARTNERSHIP AGREEMENT TPPA: is a multilateral free trade agreement that aims to further liberalise the economies of the Asia-Pacific region. Countries involved: United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. The TPP contains a chapter on Intellectual Property (copyright, trademarks, patents and perhaps geographical indications) which extends beyond TRIPS Agreement. TPP is intended to harmonize laws of TPP member countries to that of US IP and trade laws.

TRANS-PACIFIC PARTNERSHIP AGREEMENT TPP seeks increased IP protection and eliminates TRIPS flexibilities. –Extends scope of patentability to [Art. 8.1 and 8.2]: new use, forms or methods of using a new products diagnostic,therapeutic and surgical methods –Extends the term of patent beyond 20 years to compensate for the delays [Art. 8.6]: in granting patents or granting regulatory approvals to medicines. –Mandates the adoption of patent linkage system [Art.9.5] –Provides for Data Exclusivity for [Art. 9.2]: New Pharmaceutical product Extends the scope of DE to drugs registered in another territory New use or form of an approved chemical entity

TRANS-PACIFIC PARTNERSHIP AGREEMENT Eliminates pre-grant opposition provision [Art. 8.7] Mandates countries to allow patent applicants to make multiple amendments to their patent claims prior to approval on merits. [Art.8.9]Thus making it harder to challenge the patent. Minimizes the duty of patent applicant to make required disclosure [Art.8.10 and 8.11] Obligation relating to Enforcement: –Mandates a presumption of validity of patents in any proceeding involving patents. [Art. 10.2] –Mandates the judiciary to measure damages based on retail price or other measure suggested by the patent holder. [Art. 12.3] So the damage could be based on the high price fixed by the Patent holder

HOW WILL BI-,MULTI-LATERAL AND REGIONAL TRADE AGREEMENTS AFFECT ACCESS TO MEDICINES? Data Exclusivity, Patent Term Extension and Patent Linkage: –would increase IP protection for medicines and will result in extension of monopolies ; Enforcement provisions: –would allow IP holders to take steps that would deter or delay generic competition; –curtailing the discretionary powers of municipal Courts in the adjudication of disputes relating to private rights; –prioritizes private rights over public health and public interest. Investment provisions would undermining the sovereign rights of Governments to take steps to ensure that the right to health is protected and promoted; Delay in entry of generic competition will keep prices of medicines at higher level

RECOMMENDATIONS Advocate and encourage countries to use TRIPS flexibilities. Resist TRIPS-Plus provisions into domestic legislation through regional and bilateral trade agreements. To collaborate and develop a South-South Intellectual Property road map.