Ideas in Development The Potential Impact of WTO Accession, FTAs and Partnership & Cooperation Agreements (PCAs) on Access to Medicines in the CIS Region Sisule F. Musungu, IQsensato Regional Meeting on Access to Medicines, HIV and Intellectual Property Kiev, Ukraine, 21 – 22 September 2009 Ideas in Development

Ideas in Development Presentation Outline Summary of findings Summary of study recommendations Background: IP, trade and access to medicines TRIPS flexibilities in the laws of CIS Potential Impact of WTO accession on access to medicines in the CIS Potential impact of FTAs and PCAs on access to medicines in CIS

Ideas in Development Summary of Findings in the Background Paper (1) The level of access to HIV/AIDS treatment in the CIS remains low at about 17% though the rate of HIV infections has risen rapidly and doubled between 2001 and Massive scaling up of treatment is required to address both the current gap in treatment and the future rise in demand. Availability and pricing of ARVs will be a key factor in determining the extent to which the CIS region tackles the treatment challenge of today and in the future. Patent laws in the CIS will affect the extent to which certain measures, such as production or import of generics, are used to increase availability and access to HIV/AIDS treatment. Whether these laws play a positive or negative role depends on how TRIPS flexibilities are used in the CIS. TRIPS flexibilities are relevant because all the CIS members, except Turkmenistan, have joined or are in the process of joining the World Trade Organization (WTO).

Ideas in Development Summary of Findings in the Background Paper (2) Concessions in WTO accession process, the provisions of partnership and cooperation agreements (PCAs) and free trade agreements (FTAs) between the members of CIS and the European Union (EU) have an important influence on the use of TRIPS flexibilities in the CIS. There is evidence that TRIPS-plus demands have been made and, in a number of cases, concessions given by some members of the CIS with important implication for how the members of the CIS can use TRIPS flexibilities to increase availability and access medicines. This is the case, for example, of Ukraine with respect to pharmaceutical test data protection. In addition to addressing challenges that arise with respect to WTO accession, there is need to think about strategies for influencing on-going and future negotiations on FTAs to ensure that the use of TRIPS flexibilities for improved access to medicines in CIS is encouraged.

Ideas in Development Summary of Study Recommendations In a number of laws in the members of CIS there is need for introducing specific and/or clearer language to permit uninhibited use of TRIPS flexibilities to improve access to medicines. A number of legal provisions in the laws are ambiguous while in other cases the law is silent on key flexibilities. For the members of CIS which have acceded to the WTO and undertaken additional IP commitments all is not lost. There is still the opportunity to craft implementing legislations and policies that ensure continued or improved access to HIV/AIDS treatment. For countries in the region in the process of acceding to the WTO, strategies have to be devised to assist these countries to avoid TRIPS-plus commitments especially on test data protection. Increased public awareness and technical data and analysis will be an important part of these strategy. Similarly, strategies to avoid TRIPS-plus commitments in FTAs need to be developed.

Ideas in Development Background: Intellectual Property, Trade and Access to Medicines A contested field due to: trade interests; concerns about socio-economic development; concerns about access to technology and knowledge-based goods; concerns relating to encouraging follow-on innovation; ethical concerns; and governance concerns. The importance of TRIPS flexibilities, the Doha Declaration on the TRIPS Agreement and Public Health and the erroneous caricature that only ‘poor countries’ need TRIPS flexibilities. Three reasons why TRIPS flexibilities are relevant for all WTO Members and acceding countries: –A new global consensus on strategies to promote innovation and access concurrently – the World Health Organization (WHO) Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. –Increased recourse to TRIPS flexibilities in developed countries and countries in transition. –Transnational health risks and the imperative of a global response.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (1) Patenting of pharmaceuticals in CIS – new uses of known products; exemptions from patentability and patent term extension –The Kyrgyz Republic, Moldova, Ukraine and Georgia all permit the patenting of new uses of known products including pharmaceuticals. –Most laws in the CIS do not have specific exemption with respect to patenting of diagnostic, therapeutic and surgical methods for the treatment of humans or animals. Only the Georgian law has a specific exclusion. –Except for Georgia, most patent laws in the CIS permit patent term extensions for pharmaceutical product patents to compensate for delays in marketing approvals.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (2) Exhaustion of patent rights and parallel importation –Armenia has adopted an international exhaustion regime. –The laws of Russia and Georgia are rather ambiguous on whether or not parallel imports are permitted. –In Belarus parallel imports are not permitted. –In all the other countries whose laws were reviewed the situation on parallel importation could not be ascertained.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (3) Compulsory Licensing –All the laws in the CIS that were reviewed for this paper contain provisions on compulsory licensing, underscoring, at least in theory, the importance attached to this policy tool. –The grounds for the issue of compulsory licenses in the CIS include: public interest (e.g., under Armenian law); abuse including anti-competitive practices (e.g., the Armenian and Moldovan laws); insufficient supply of the patented products or services to the domestic market (e.g., Russian law); and dependent patents (e.g., the Kyrgyz Republic’s law). –The prerequisites for issuing compulsory licenses in the region are the standard conditions of Article 31 of TRIPS. –The treatment, in a number of laws, of use of patents in emergency situations as an exception to patent rights is notable.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (4) Government use of patents –The right of the government or state agencies to use patents without the authorisation of the patent holder for purposes such as national defense to protect human health or promote vital economic interests is widely recognised in the laws of the members of the CIS. –Among the laws reviewed for this study, only the Armenian law did not have specific provisions on government use.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (5) Exception to patent rights – The research and early working (Bolar) exceptions –All the laws of the members of CIS reviewed for this study recognise exceptions to patent rights. The specific approaches, however, vary from country to country. –In a number of countries, such as Russia and Moldova, a single broad exception which can be read to cover both commercial and non-commercial acts and both the research and early working exception is provided for. –In other countries, such as Ukraine, a limited exception for non-commercial purposes is what is allowed. There is no clarity on the early working exception in these cases. –In Armenia, the law provides for both the research exception and the early working exception in separate legal provisions.

Ideas in Development TRIPS Flexibilities in the Laws of CIS (6) Pharmaceutical test data protection –The different members of the CIS whose laws were reviewed approach the issue of test data protection against unfair competition in a variety of ways. In most cases, the relevant applicable legislations are not patent or industrial property law but rather competition or monopoly laws. –In the main, most of the laws, except that of Moldova, are vague in terms of the regime of test data protection. Even in the case of Moldova, the language used is similar to the wording in Article 39.3 of the TRIPS Agreement which means that courts could interpret the law to impose data exclusivity.

Ideas in Development The Potential Impact of WTO Accession on the Use of TRIPS Flexibilities in the CIS (1) Due to the consensus rule in WTO, meaning that any new member to the organisation has to receive the approval of all other existing members, acceding countries have had to undertake TRIPS-plus obligations in a number of instances (see Abbott and Correa, 2007). In the CIS region there are two notable examples of TRIPS-plus obligations that have been taken on by countries or proposed. –The most important is the case of the obligations undertaken by Ukraine with respect to pharmaceutical test data protection. Essentially, Ukraine undertook, among other things to introduce data exclusivity for pharmaceutical test data for at least five years. –The other case relates to the Kyrgyz Republic, which forfeited its entitlement to the transition period provided to economies in transition under Article 65 of the TRIPS Agreement.

Ideas in Development The Potential Impact of WTO Accession on the Use of TRIPS Flexibilities in the CIS (2) In the case of the countries that are currently in the process of negotiations, there is clear evidence that the most important TRIPS- plus demand will relate to pharmaceutical test data protection. How Ukraine implements its commitments and their impact on access to HIV/AIDS treatment and other essential medicines should be carefully monitored as it will offer valuable lessons to other CIS members.

Ideas in Development Potential impact of FTAs and PCAs on access to medicines in CIS (1) Eight of the members of the CIS (Armenia, Azerbaijan, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Ukraine and Uzbekistan) have concluded partnership and cooperation agreements (PCAs) with the EU, which contain intellectual property provisions. Under the PCAs, IP obligations for the members of CIS are at three levels: –Requirement to improve the levels of IP protection to reach those similar to what obtains in the EU. –The requirement to make efforts to accede to six multilateral treaties administered by WIPO and UPOV. –The conditioning of scientific and technological cooperation activities on the existence of adequate levels of protection of IP in the CIS partners.

Ideas in Development Potential impact of FTAs and PCAs on access to medicines in CIS (2) Generally, PCAs with the EU were negotiated for initial periods of 10 years. At expiry of these initial periods the agreements operate year-to-year pending the establishment of new comprehensive agreements. These new agreements take the form of association agreements and FTAs. In this context, countries such as Ukraine are already in negotiations. At a minimum, the association agreements and FTAs negotiated with the EU will have similar obligations as the PCAs. Looking at the approach of the EU to bilateral trade arrangements in the recent past (e.g., the economic partnership agreements – EPAs and other FTAs with developing countries) the demand might go even further especially on pharmaceutical test data protection.