WHO/UNICEF Technical Briefing Seminar on Essential Medicines Policies (19-23 September 2005) TRADE, TRIPS AND ACCESS TO MEDICINES Cecilia Oh Department of Technical Cooperation for Essential Drugs and Traditional Medicine (TCM)

A GLOBAL CAMPAIGN FOR ACCESS TO MEDICINES

Patents and prices The cost of originator/brand name antiretroviral therapy in US$10,439 per patient per year, or approx US$30 a day. But, more than 2 billion people live on less than US$2 a day. Examples of GDP per capita (for 2002) in some developed and developing countries: Norway/ US$41,974 Sierra Leone/ US$150 US/ US$36,006 Mozambique/ US$195 UK/ US$26,444 Zambia/ US$361

Patents and prices Introduction of generic versions of antiretroviral therapy is credited with triggering off price reductions from multinational drug companies: effect of market competition. Cipla's offer of triple therapy in February 2001 was for US$350 per patient per year. Current prices for triple therapy is approx. US$168 in January 2005 (Hetero triple therapy). What are countries and patients paying now?

Patents and prices

Why patent? A patent gives the patent holder a temporary monopoly; e.g., 20 years, on the invention as a reward for publishing the details of the invention. The public pays a higher price but then has free access to the invention. What amounts to a good invention to deserve the reward?

Patents and access The patent system is intended to be a public policy tool – to encourage innovation and technological advancement for society's benefit Governments should have the ability to determine the appropriate balance, between patent protection and other public policy interests A patent for a new pen is quite different from a patent for a new (essential) medicine

Patents and pharmaceutical R&D Many of the new patented medicines may not entail a genuine pharmaceutical progress – " me-too " drugs developed to emulate successful, blockbuster drugs of rival companies. Out of 1035 drug applications approved by US FDA in the only 135 (15%) were medicines using new active ingredients, providing significant clinical improvement (NIHCM). Patents may also block certain innovations; e.g., fixed dose combinations of ARVs.

WTO/TRIPS Agreement Trade Related Intellectual Property (Rights) TRIPS sets minimum standards for patent (IP) protection and WTO Members are bound to comply. Before TRIPS, countries did not have to grant patents for medicines. Before TRIPS, diversity in approaches to patent protection – scope, patent term, exceptions, etc. After TRIPS, all WTO Members have to grant patents for medicines (subject to transitional dates).

The Doha Declaration Doha Declaration on the TRIPS Agreement and Public Health, 2001 " We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health … we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and in particular, to promote access to medicines for all ".

What are public health safeguards? Measures that limit exclusive patent right to allow access to affordable medicines, consistent with the TRIPS Agreement and the Doha Declaration The "anthrax crisis" helped shift balance to public interest. US and Canadian governments considered granting compulsory licences for Ciprofloxacin (patent held by Bayer) in 2001, to seek cheaper alternatives and adequate supplies.

WTO August Decision Countries without local manufacturers cannot effectively use compulsory licences. Importing is the next option but TRIPS restricts exports 30 August 2003 Decision adopted a system for import and (production for) export of generic medicines under compulsory licences. No use of system as yet. A drug-by-drug, country-by-country, case-by-case system?

Public health safeguards - 1 Compulsory licences permit 3 rd parties to use an invention, without the patent holder's consent on grounds of public interest. Local pharmaceutical companies may produce generic versions of patented medicines, or there can be importation of generic versions of medicines from foreign manufacturers

Public health safeguards - 2 Government use of patents allow government agencies to use an invention, for public, non- commercial purposes. This could enable public sector production of generic medicines, or importation of generics for use in, and distribution by, public hospitals.

Public health safeguards - 3 Parallel import is the import and resale of patented product in another country. Import of patented medicine sold by a pharmaceutical manufacturer at different prices in different markets. E.g., product sold in country A for US$5.00 can be imported into country B, where same product is sold at a higher price (e.g., at US$15.00).

Public health safeguards - 4 Exceptions to patent rights allow for limited use of a patent in specific circumstances. The "Bolar" exception allows for the production of generic medicine for testing and approval, to enable speedy introduction of generic product once patent expires.

Implementing the Doha Declaration Most developed countries already have TRIPS safeguards and have used them (e.g. US, Canada and others have rich compulsory licensing experience). Not all developing countries have included TRIPS safeguards in their national laws. Challenge is to make sure that flexibility and policy space are available to countries that need them.

Implementing the Doha Declaration Review, compare and amend laws to incorporate all safeguards; e.g., CL and GU, PI and exceptions. Least-developed countries need not provide for pharmaceutical patents until However, legal reform is a necessary but insufficient condition for use of safeguards Is there willingness to use the safeguards?

Using TRIPS safeguards Compulsory licences - Zambia issued a compulsory licence in Sept 2004 for local production of first-line ARV triple combinations Mozambique, in March 2004, granted a compulsory licence for local manufacture of the first-line triple ARV combination Zimbabwe declared period of emergency in May 2002, in light of AIDS epidemic to allow for production or import of antiretroviral medicines

Using TRIPS safeguards Government use - Indonesian Presidential Decree, in 2004, authorising local production of nevirapine and lamivudine Malaysia, in October 2003, authorised government use for import of didanosine, zidovudine and lamivudine+zidovudine combination from India, for supply to government (public) hospitals

Challenges to use of safeguards Lack of appropriate and adequate administrative and legal infrastructure in developing countries, makes it difficult to determine patent status of medicines. Changes to national laws to incorporate TRIPS safeguards are slow or inadequate. Coordination and cooperation needed between Ministry of Health, drug regulatory authorities and patent offices.

Patent status of key ARVs

"Tightening TRIPS" Recent Free Trade Agreements require TRIPS- plus provisions by requiring data exclusivity, patent-term extension, linking drug approvals to patent status, and restrictions on compulsory licensing and parallel imports WIPO – negotiations on Substantive Patent Law Treaty which seek to further harmonise patent rules.

Post-2005 and access to medicines Post-2005 environment – when nearly all countries have to implement TRIPS in full, supply of generic medicines will be affected. Means to promote generic production (raw material production and formulation) in developing countries; e.g., India, China, Brazil. Effective use of TRIPS safeguards and August Decision will become crucial to enable generic competition.

Prices of 1 st vs. 2 nd line ARVs

A formula for fairness? ADVOCACY for effective use of TRIPS safeguards + BALANCE in patent, trade and development policies + COOPERATION and coherence between national governments, international organizations and civil society