1. Patents On Medicines And Access To Medicines
TRIPS Flexibilities
Patents On Medicines And Access To Medicines
Ellen ‘t Hoen
Medicines Law & Policy
September 2014

2. What is intellectual property?
Intellectual property (IP) refers to the legal rights which result from intellectual activity in the industrial, scientific, literary and artistic fields. IP has two branches:
Industrial property e.g.:
Inventions (patents)
Trademarks
Industrial designs
Geographical indications
Copyright
Related rights

3. Intellectual Property Law
intellectual property law aims at safeguarding creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions.

4. What is TRIPS?
World Trade Organization Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
Sets out minimum standards for IP protection all WTO members have to comply with.

5. TRIPS requirements most relevant for medicines
Patents
Process patents
Product patents
Data protection
Maybe you could be more specific, i.e. pharmaceutical test data protection?

6. Patent
Right to exclude others from making, using, offering for sale, selling, and importing the patented product (or a product made with a patented process)
Right granted by a national or regional authority for a certain period of time (minimum 20 years)
Patents are national – global patent application procedures exist through the WIPO PCT but a global patent does not exist.

7. History of TRIPS
TRIPS negotiations started in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT ‘86 – ’94)
‘86 Drug companies established an elite, high powered lobby group to ensure intellectual property issues would be part of the GATT framework
TRIPS contentious
49 of the 98 members of the Paris Convention excluded medicines from patentability or had shorter protection periods
Andean Community excluded WHO essential medicines from patents ( )
Medicines patent introduction: France ‘60, Switzerland ‘77, Italy ‘78, Sweden ‘78, Spain ’92, India ’05
Inclusion of TRIPS in the GATT took place under threat and after application of trade sanctions by the US.
HIV pandemic and access to medicines crisis led to reconsideration in 2001 and the adoption of the Doha Declaration on TRIPS and Public Health.

8. Purpose of Patents
… to encourage inventors to make an investment in time and money in research and development by providing exclusive rights for a limited time in exchange for a public disclosure of the invention.
Key public policy purpose underlying patent laws is to facilitate the dissemination and advancement of technical knowledge
Patent system is a social policy tool meant to create benefits for society.

9. Patents and Medicines
Patents may be used to delay competition of generic medicines and create market exclusivity/monopoly
Without generic competition medicines prices remain high
No relation to cost of production and price of patented products
For example sofosbuvir:
Estimated cost of production
US$
Price per treatment
US$ 84,000

10. Price of imatinib (Gleevec)

11. Pre/post TRIPS patenting of HIV medicines

12. Flexibilities of TRIPS
TRIPS scope of obligation (Article 1)
Protection against TRIPS +
Article 6: Parallel import (exhaustion of rights)
TRIPS objectives and principles (Article 7 &8 )
Basic standards for patentability and a limited list of exceptions to patentable subject matter (Article 27)
Exceptions to patent rights (Article 30)

13. Flexibilities in TRIPS (non exhaustive)
Compulsory licensing and Government Use (Article 31)
August 30, 2003 Waiver: CL for export
Data protection (Article 39.3)
Transition periods
DCs (Article 65)
LDCs (Article 66)

14. Nature and Scope of Obligations
TRIPS art 1.1
Nature and Scope of Obligations
Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

15. TRIPS art. 7
Objectives
The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

16. TRIPS article 8 Principles
Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.
Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

17. 2001 Doha Declaration on TRIPS and Public Health
Boost to TRIPS flexibility for Public Health
4. We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, 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.
In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

18. Doha Declaration on TRIPS and Public Health
Singled out public health as a special area of attention
Boost to TRIPS flexibilities (par 4 and 5)
Recognised the need to lift the export restrictions of TRIPS on compulsory licensing (par 6)
Created new flexibilities by extending implementation deadlines of medicines related provisions for LDCs (par 7)

19. Transition periods 1995 Developed countries.
2000 Developing countries.
2005 for developing countries that did not provide product patent protection in a given area of technology, especially to pharmaceutical or agricultural chemical inventions could delay this until 2005.
Least Developed Countries 2006
In 2002 extended to 2016 for Section 5 (Patents) and Section 7 (Protection of Undisclosed Information) of Part II of TRIPS
In 2013 TRIPS Council decision to extend LDCs deadline for implementing entire TRIPS Agreement to July 2021.

20. Compulsory Licensing and Government Use
Compulsory licensing (art. 31)
CL for export ( Doha par 6 )
Government Use (art.31)

21. Compulsory licensing and Government use
TRIPS art. 31 Other use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government ("Other use" refers to use other than that allowed under Article 30: exceptions to rights conferred.)
Conditions:
Individual merits
to first seek a voluntary licence on reasonable commercial terms (except in case of emergency/extreme urgency, to remedy anti-competitive practices or for non commercial government use)
Scope and duration limited to the purpose
Remuneration (royalty payable)
Predominantly to supply the domestic market. TRIPS art. 31 (f)
Judicial review opportunities

22. CL for export
2001 Doha par 6 recognised that the restriction ‘predominantly for the supply of the domestic market’:
Limits the amount producing countries can export.
Puts serious restrictions on the effective use of CL by countries that do not have production capacity;
August TRIPS Waiver adopted.
2005 permanent amendment to TRIPS: 31bis.
Will go into force once 2/3 WTO members ratify.
‘Waiver’ stays in force until then.

23. CL for export/Waiver/31bis
Three waivers:
Exporting countries’ obligations under Article 31(f) are waived — any member country can export generic pharmaceutical products made under compulsory licences to meet the needs of importing countries.
Importing countries’ obligations on remuneration to the patent holder under compulsory licensing are waived to avoid double payment. Remuneration is only required on the export side.
Exporting constraints are waived for developing and least-developed countries so that they can export within a regional trade agreement, when at least half of the members were categorized as least- developed countries at the time of the decision. That way, developing countries can make use of economies of scale.

24. CL for export/Waiver/31bis
Case by case basis
Notification requirements:
Notify intention to use the mechanism in TRIPS Council (except LDCs)
Notification to the WTO each time the mechanism is used:
the names and expected quantities of the product(s) needed;
confirmation that the eligible importing member in question — other than a least developed country Member — has established that it has insufficient or no manufacturing capacity in the pharmaceutical sector for the product(s) in question
where a pharmaceutical product is patented in the member’s territory, confirmation that it has granted or intends to grant a compulsory licence in accordance with Article 31 of the TRIPS Agreement and the provisions of the decision.

25. Indian Patents Act Section 92A
Compulsory licence for export of patented pharmaceutical products in certain exceptional circumstances (1) Compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory licence has been granted by such country or such country has, by notification or otherwise, allowed importation of the patented pharmaceutical products from India. (2) The Controller shall, on receipt of an application in the prescribed manner, grant a compulsory licence solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him. (3) The provisions of sub-sections (1) and (2) shall be without prejudice to the extent to which pharmaceutical products produced under a compulsory license can be exported under any other provision of this Act. Explanation.—For the purposes of this section, 'pharmaceutical products' means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.

26. Government Use (public non-commercial use)
Type of compulsory license.
Government makes use of the patent without consent of the patent holder and against payment of a reasonable royalty.
No prior negotiations required.
Does NOT require urgent or emergency situation.
Can be part of routine procurement procedures.

27. Exhaustion of rights Article 6
TRIPS Article 6 Exhaustion For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights. Doha 5(d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4. Allows parallel import of patented products that may be available at a lower price in other territories.

28. Patentable Subject Matter Article 27
Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.
Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.
Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

29. Patentability criteria
Not discriminate between fields of technology. E.g. excluding medicines or food from patentability not allowed under TRIPS.
Inventions patentable provided that they are new, involve an inventive step and are capable of industrial application.
Limited list of exceptions (ordre public, treatment methods, plants, animal and biological processes)
TRIPS is mute on how to implement scope/requirements of patentability which offers flexibility to adopt a pro-health approach.
Eg India has implemented strict patentability criteria to prevent evergreening patents on medicines.
Brazil Drug Regulatory Agency was consulted on public health repercussions of the grant of medicine patent
Relevant for patent law reform (South Africa).

30. Exceptions to patent rights
Article 30 TRIPS
Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.
allows governments to provide for limited exceptions to the exclusive rights conferred by a patent, to define acts that would not be deemed as infringing when made without the authorization of the patent owner.

31. Examples of exceptions to patent rights
Research exception: “the exception under which use of the patented product for scientific experimentation, during the term of the patent and without consent, is not an infringement”.
Regulatory review exception – “Bolar”
Allows to carry out equivalency tests for the regulatory approval of generic medicines before the expiration of the relevant patent.
TRIPS does not provide a list of/puts limits on allowed exceptions. For example article 30 exception could be used to produce for export (to circumvent 31.f) and the case by case requirements of the current ‘August 30 Waiver’.

32. Data Protection
TRIPS 39.3
Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use.  In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

33. Data Protection
TRIPS 39.3
Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use.  In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.’

34. Data Protection
Often interpreted as a time-limited ban on the Drug Regulatory Agency to refer to the originator file when assessing efficacy and safety of a generic version the same medicine, thereby preventing generic medicine market introduction for a certain period of time.
Article 39.3 TRIPS – does not require such market exclusivity.
Implemented often in medicines law rather than patent law.

35. Post TRIPS/Doha use of flexibilities
India section 3(d) => successful ground for pre-grant opposition by public health advocates.
Compulsory licensing/GU of medicines (HIV):
Brazil, Cuba, Ecuador, Egypt (erectile dysfunction) Gabon, Georgia, Ghana, Guatemala, Guyana, Honduras, India (including cancer), Indonesia, Ivory Coast, Kenya, Malaysia, Philippines, Rwanda (par 6 CL) South Africa (competition case), Swaziland, Taiwan (oseltamivir), Thailand (incl. cancer and cardiovascular), Zimbabwe.
Italy (anticompetitive practice)
Par 7 Doha suspend granting/ recognition of product patent
24 LDCs (of the 32 WTO LDC Members)
Sources; ‘t Hoen (2009), Beall and Kuhn (2012)

36. Pre TRIPS use of patent law flexibilities
Canada UK
USA

37. Canada CL regime
1923 – 1993 CL regime for medicines and food to promote price competition and local production.
1969 Import to satisfy a CL permitted because Canadian market not large enough.
From 1969 – 1992 Canada issued 613 CLs saving 211 million USD p/a (total market 1.6 Bn USD).
1987 CL regime restricted and abolished in 1993 as a result of NAFTA.
Drug prices doubled in that period.

38. Access to patented medicines in the UK in 60/70ties
Medicines for the NHS bought through international tendering.
MoH required the supplier to disregard patents and offer at the lowest price regardless of the patent status.
Patent holder had a right to remuneration but could not stop generic supply.
Pfizer vs. MoH 1965.

39. UK Crown Use
“Although this power of the Ministry of Health to purchase drugs and medicines from sources independent of the patentee has been much criticised by the pharmaceutical industry, it is not likely to be affected by such criticism. Such power will be exercised if the patentee is alleged to maintain unduly high prices for these products
(Stephen Ladas,1975).”

40. US Government Use of Pharmaceutical Patents
1950 – 60ties
Government procurement of medicines
European companies often cheaper because of absence of patents
E.g. Italian generic tetracycline 0.08 USD per capsule – Pfizer price 0.17 USD
International tendering in combination with CL brought price down to USD per capsule (1/10 Pfizer’s price)
2001 High price and shortage of patented ciprofloxacin in anthrax scare made US move towards CL

41. Some examples French CL law – specific reference to high drug prices
Indian Patents Act section 3 (d) – patentability criteria
Indian Patents Act section 92 A – CL for export

42. CL for Public Health _ France
Article L Modifié par Loi n° du 8 décembre art. 10 JORF 9 décembre 2004
Si l’intérêt de la santé publique l’exige et à défaut d’accord amiable avec le titulaire du brevet, le ministre chargé de la propriété industrielle peut, sur la demande du ministre chargé de la santé publique, soumettre par arrêté au régime de la licence d’office, dans les conditions prévues à l’article L , tout brevet délivré pour : 
Un médicament, un dispositif médical, un dispositif médical de diagnostic in vitro, un produit thérapeutique annexe ;
Leur procédé d’obtention, un produit nécessaire à leur obtention ou un procédé de fabrication d’un tel produit ;
Une méthode de diagnostic ex vivo. 
Les brevets de ces produits, procédés ou méthodes de diagnostic ne peuvent être soumis au régime de la licence d’office dans l’intérêt de la santé publique que lorsque ces produits, ou des produits issus de ces procédés, ou ces méthodes sont mis à la disposition du public en quantité ou qualité insuffisantes ou à des prix anormalement élevés, ou lorsque le brevet est exploité dans des conditions contraires à l’intérêt de la santé publique ou constitutives de pratiques déclarées anticoncurrentielles à la suite d’une décision administrative ou juridictionnelle devenue définitive.
Lorsque la licence a pour but de remédier à une pratique déclarée anticoncurrentielle ou en cas d’urgence, le ministre chargé de la propriété industrielle n’est pas tenu de rechercher un accord amiable.

43. CL for Public Health - France
Article L Modifié par Loi n° du 8 décembre art. 10 JORF 9 décembre 2004
Si l’intérêt de la santé publique l’exige et à défaut d’accord amiable avec le titulaire du brevet, le ministre chargé de la propriété industrielle peut, sur la demande du ministre chargé de la santé publique, soumettre par arrêté au régime de la licence d’office, dans les conditions prévues à l’article L , tout brevet délivré pour : 
Un médicament, un dispositif médical, un dispositif médical de diagnostic in vitro, un produit thérapeutique annexe ;
Leur procédé d’obtention, un produit nécessaire à leur obtention ou un procédé de fabrication d’un tel produit ;
Une méthode de diagnostic ex vivo. 
Les brevets de ces produits, procédés ou méthodes de diagnostic ne peuvent être soumis au régime de la licence d’office dans l’intérêt de la santé publique que lorsque ces produits, ou des produits issus de ces procédés, ou ces méthodes sont mis à la disposition du public en quantité ou qualité insuffisantes ou à des prix anormalement élevés, ou lorsque le brevet est exploité dans des conditions contraires à l’intérêt de la santé publique ou constitutives de pratiques déclarées anticoncurrentielles à la suite d’une décision administrative ou juridictionnelle devenue définitive.
Lorsque la licence a pour but de remédier à une pratique déclarée anticoncurrentielle ou en cas d’urgence, le ministre chargé de la propriété industrielle n’est pas tenu de rechercher un accord amiable.

44. Non-TRIPS measures Voluntary licensing
Medicines Patent Pool (MPP) for ARVs
Seychelles can benefit from MPP licenses and source medicines for the treatment of HIV and HBV (TDF) from generic producers that have sublicenses from the MPP.

45. Medicine
South Africa –private sector
South Africa – public sector
India – generic price
Imanitib mesylate
R863 /400 mg
n/a
R46.20 /400 mg
Sorafenib
R /200 mg
R8.55 /200 mg
Bortezomib
R11, per 3.5 mg vial
R2,980 per 3.5 mg vial
Oxaliplatin
R2, per 50mg / 10ml inj. R4, per 100mg / 20ml inj.
R702 for 50 mg injection for infusionR1, for 100 mg injection for infusion
50 mg price not sourcedR585 per 100 mg vial for injection
Rituximab
R2, per 10mg / ml infusionR13,947 per 500 mg injection
R1, for 100 mg injection R 7, for 500mg injection
R1,542 per 100 mg vialR6,173 per 500 mg vial
Temozolomide
R per 100 mg tablet
R per 100 mg tablet
R /100 mg Cipla announced reduction to R74 per 100 mg tablet)
Source: TAC

46. Patent System
If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it. Fritz Machlup, 1958