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IP and Public Health
William New
Intellectual Property Watch
Geneva
Finding Balance in Costs, Access
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Key public policy debate
Various efforts in recent years to ensure
wide access while supporting IP rights
for innovation
WTO, WHO, WIPO, UNCTAD, etc
Bigger changes seen in FTAs, national
courts
WHO and IP
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WHO has been working on problem for
years. Target is neglected diseases,
mainly affecting poor populations for
which there is no market
Cit. new WTO-WHO-WIPO report
2006 Commission on IP, Innovation &
Public Health (CIPIH)
2008 Global Strategy & Plan of Action
Several Working Groups (EWG, CEWG) –
ongoing
WHO R&D cont.
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WHO in financial crisis, concern about
influence of funding sources on policies
(Gates Fdn, US)
CEWG tasked w finding new models for
financing neglected disease R&D,
proposed an R&D treaty, requiring
countries to give .01% of GDP to cause.
But quietly rejected in Nov 2012, now
discussion of voluntary contributions
WHO R&D cont.
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CEWG cont’d – meanwhile initiatives
favouring industry and patent system
continue to move ahead
Eg, product development partnerships
Companies, foundations taking own
initiative to create research facilities
Question of sustainability
WHO - Pandemics
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May 2011 Pandemic Preparedness
Framework – aims at concern from
developing countries about sharing their
virus strains for research and having the
resulting treatments patented and not
accessible at affordable prices.
Review of framework this week at WHA
Partnership Contribution - private sector
required to pay for use of virus-sharing
system
Substandard, Fake Medical Products
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“substandard/spurious/falsely labelled/
falsified/counterfeit medical products –
difficult issue
New Member State Mechanism –
collaboration on supply chains, trends
Focus on public health, not IP
Noncommunicable Diseases (NCDs)
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Soared to top of agenda in 2011 w UN
Political Declaration
Focus on 4 NCDs: cancer, diabetes,
cardiovascular, chronic respiratory
diseases
Actions on WHA agenda – adopt Global
Monitoring Framework, endorse Global
NCD Action Plan 2013-2020?
Vaccines
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Focus on vaccines now ramped up since
2010 launch of Decade of Vaccines by
WHO, Gates Fdn
Focus on health and delivery systems
WHA to take note of Global Vaccine
Action Plan, review Monitoring and
Evaluation Framework (provides
indicators, targets for Decade of
Vaccines)
WHO Reform
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Biggest reform of WHO ever
WHA to approve program of work 20142019 – includes MDGs, NCDs,
International Health Regulations, access
to medicines, social determinants of
health
WHA will approve entire budget for
2014-2015 (not just assessed
contributions from member states)
Questions of role of non-state actors
World Intellectual Property
Organization
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Recently moved into “global issues” such
as public health, seeking relevance
within UN context
Standing Committee on Law of Patents
proposals – developing countries out
front of issue, proposed study of
flexibilities (opposed by dev’d countries)
WIPO Re:Search project – targets LDCs
for royalty-free use of patents, not midsized developing countries
Problems in Developed Countries Too?
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Signs that US, EU citizens increasing
demand for cheaper drugs
Online pharmacies, Obama 2014
proposed budget
Stories of cancer patients in Greece,
AIDS patients in Spain unable to afford
treatments
Switzerland recently announced deal
with pharma industry to reduce drug
prices in return for faster approval
India Supreme Court - Novartis
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Decision on imanitib, under Art 3(b)
against “evergreening” of patents
Harm or Help Innovation?
Most people in India already use generic
version, not Novartis’ Glivec
Every one of top 20 most valuable meds
in US market is available as generic in
India. Only 2 of which originator
company brought the drug to India first,
some still have not come
WTO TRIPS Agreement
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Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS)
Encouraging trade and investment
through IPR protection
Providing certainty and security
Raising levels of IPR protection,
innovation, economy for all WTO
members
Flexibilities in the TRIPS Agreement
TRIPS contains several flexibilities designed to help developing countries,
no direct mention of compulsory licencing.
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Para 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.
Art 30: “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.”
TRIPS Flexibilities cont.
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Art 31 – use w/o authorization of right holder
Art 31(b) – “such use may only be permitted if, prior to such use, the
proposed user has made efforts to obtain authorization from the right
holder on reasonable commercial terms and conditions and that such
efforts have not been successful within a reasonable period of time. This
requirement may be waived by a Member in the case of a national
emergency or other circumstances of extreme urgency or in cases
of public non-commercial use. In situations of national emergency or
other circumstances of extreme urgency, the right holder shall,
nevertheless, be notified as soon as reasonably practicable. In the case of
public non-commercial use, where the government or contractor, without
making a patent search, knows or has demonstrable grounds to know that
a valid patent is or will be used by or for the government, the right holder
shall be informed promptly;”
Doha Declaration on TRIPS and Public Health
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At 2001 WTO Ministerial in Doha, members’ declaration: « the TRIPS
Agreement does not and should not prevent members from taking
measures to protect public health. »
Agreed 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. »
Paragraph 5: “In applying the customary rules of interpretation of public
international law, each provision of the TRIPS Agreement shall be read
in the light of the object and purpose of the Agreement as expressed, in
particular, in its objectives and principles.
Each member has the right to grant compulsory licences and the
freedom to determine the grounds upon which such licences are
granted.
Each member has the right to determine what constitutes a national
emergency or other circumstances of extreme urgency, it being
understood that public health crises, including those relating to
HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a
national emergency or other circumstances of extreme urgency.
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 & 4.”
Compulsory Licensing and TRIPS
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In Doha Declaration, members also agreed « Each member has
the right to grant compulsory licenses and the freedom to
determine the grounds upon which such licences are granted. »
WHO definition of CL: « Governments may issue a compulsory
licence to allow the use of an invention (e.g. a patented drug)
without the consent of the patent holder on grounds of public
interest.” Compulsory licensing has been used by the public sector
to introduce price-lowering competition and to ensure the
availability of needed medicines, the WHO says.
Expenditure on medicines accounts for a major proportion of
health costs in developing countries and access to treatment is
heavily dependent on the availability of affordable medicines,
WHO says. Most trade in medicines is increasing rapidly, with
most of this trade taking place between industrialised countries.
Developing countries account for 17 % of imports and 6 % of
exports.
Effect of CLs on Prices
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Prices of generic medicines are much lower than branded drugs.
A story in the Business Standard on 4 April gives a comparison
between branded and generic drugs (in Indian Rupees, eg
R125,000 = CHF 2100)
Compulsory Licensing and Prices
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According to Médecins Sans Frontières, (in 2011) generic prices on HIV/AIDS
medicines were notably cheaper than branded drugs:
Example of Savings: Malaysia
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In 2003, Malaysia issued “government use” compulsory
licenses on three patented AIDS medicines, and began
importing generic versions of the drugs from India
Reduced the cost to Malaysian Ministry of Health of treating
an HIV/AIDS patient by 81% - from $315 to $58 per month
Savings enabled Malaysia to increase number of AIDS
patients treated in govt hospitals from 1,500 to 4,000
In recent years, Indonesia, Mozambique, Zimbabwe, South
Africa, Zambia, Eritrea, and Thailand issued compulsory
licenses to promote access to medicines
World Bank estimated Thailand could reduce cost of
second-line therapy by 90% with CLs for all the drugs it
needed in second-line therapy, saving itself $3.2 billion
over the next 20 years
Brazil CL Issued
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Brazil – 2007 on ARV efavirenz under Merck
patent, sharp criticism similar to Novartis case
Treated 77,000 patients, 42% of all patients
under govt HIV program
Brazil said Merck selling drug cheaper in
comparable countries
Indian generic versions brought after patent
found lacking technical information
Merck injunction against Indian generics rejected
by Brazil courts
CL saved 58% of Brazil govt program resources,
2007-2012
Use of CLs cont.
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Since TRIPS took effect on 1 Jan 2005,
at least 12 developing and leastdeveloped countries have granted CLs
Mostly for HIV/AIDS treatments
Others: cancer (India, Thailand),
cardiovascular disorders (Thailand),
avian flu (Taiwan)
Others have threatened to use CLs
WTO Disputes vs National CL Laws
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Brazil 2001, Argentina 2000, both by US
Said Brazil’s CL authorization
inconsistent w TRIPS, for failure to work
the patent
US withdrew, possibly concerned about
setting negative precedent on TRIPS
interpretation
Argentina= reached settlement
confirming must show abuse of dominant
position
Use of Threat of CL
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Lowers prices if company responds
Brazil - used threat for two ARVs for
AIDS, 2001, lowered price 40% and 70%
Colombia – 2008 on ARVs, govt declined
CL, but filed a class action lawsuit that
Abbott violated govt pricing order. Govt
ordered reductions of 54-68%.
Doha Declaration: Paragraph 6
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Doha Declaration Paragraph 6 :
“We recognize that WTO members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in making
effective use of compulsory licensing under the TRIPS Agreement. We
instruct the Council for TRIPS to find an expeditious solution to this
problem and to report to the General Council before the end of 2002.”
WTO members on 30 August 2003 agreed to waive some restrictions from
the TRIPS agreement by making it easier for countries to export drugs
made under compulsory licensing to countries unable to manufacture the
medicines themselves.
Dec 2005 agreed to first TRIPS amendment - need two-thirds of members
to ratify. For remaining members, the waiver will continue to apply until
that member accepts the amendment and it takes effect.
45 member states (including the EU) have agreed to the amendment. But
waiver only used once since 2003.
The amendment will become Article 31bis, after Article 31 and an annex
will be added to the TRIPS agreement after Article 73
2003 TRIPS Waiver
Here is what the «Paragraph 6» waiver says in particular:
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The decision waives countries’ obligations under TRIPS Art 31(f)
which says production under compulsory licensing must be
predominantly for the domestic market. This effectively limited
the ability of countries that cannot make pharmaceutical products
from importing cheaper generics from other countries.
In the decision, WTO member governments agreed that the
temporary waiver will last until the TRIPS article is amended.
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TRIPS Council review of Paragraph 6 solution leads nowhere
Branded Drugs Too Expensive For
Developed Countries?
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According to an MSF paper published by the BBC:
Sorafenib tosylate is a drug for liver cancer patented by German
pharmaceutical company Bayer and marketed as Nexavar.
Bayer priced the drug at nearly £3,500 per month
India granted a compulsory license on the drug which slashed the price of
the drug by 97% - generic versions of sorafenib in India cost to around
£84 per month.
In the UK, where an affordable generic version isn't available, the price is
around £3,000 per month, which drug regulators say is "simply too high"
to justify making it available on the NHS.
The National Institute for Health and Clinical Excellence rejected Nexavar
for NHS use based on its cost-benefit calculation
According to MSF: « We need to move to a system where new drugs are
priced as close to the cost of production as possible - and where
innovation is paid for and rewarded separately. We need innovation and
affordable access.”
CLs Seen Hindering Innovation by Pharma
Companies
According to the International Federation of Pharmaceutical
Manufacturers & Associations:
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The research-based pharmaceutical industry undertakes different
access initiatives to facilitate access to medicines for those who
cannot afford them.
Given the different mechanisms currently available for developing
countries, the use of “TRIPS flexibilities” would not improve
access to medicines and could act as negative incentive for the
R&D and marketing of new drugs
Pharma worried about eroding earlier forecasts for emergingmarket sales growth
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According to FiercePharma, a report from the market research
firm GlobalData found that a convergence of intellectual property
worries, price controls and budget cuts eroded earlier forecasts for
emerging-market sales growth.
Among causes are China and Russia using European prices as
benchmarks for their drug spending as those prices have been
slashed, and « the threat of compulsory licensing »
According to the story, « while governments may not actually
force generic licenses on many companies, just a few could induce
drugmakers to cut their own prices as a defensive move. »
« This isn't to say that emerging markets aren't worth the effort.
They are still the fastest-growing on the planet. But profiting from
them promises to be a much more complicated effort than
drugmakers may have expected. »
More CLs Issued
Other Health Issues at WTO
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WTO Disputes over Australia plainpackaging of tobacco products:
- Said to violate TRIPS on trademarks, et
al
- Raises bigger questions about interplay
of health and trade