Photo: The Ayaan Chawla - Photo: 2016

Right to Health Must Prevail Over All Property Rights

By South Centre*

GENEVA (IDN-INPS | South Bulletin) – A High-Level Panel on Access to Medicines convened by the UN Secretary-General is currently considering a number of proposals to address the policy incoherence between intellectual property (IP) rights, human rights, trade rules and access to medicines.

The final report of the High-Level Panel will be submitted to the UN Secretary-General, who will present the report to the UN General Assembly to take further action.

The South Centre has made the following three contributions (Nos 67, 112 and 113) to the Panel based on the premise that the right to health for all must prevail over trade and intellectual property rules.

1 – The Need to Assert the Primacy of the Right to Health over Trade and IP Rules

The attainment of good health and well-being is an objective as well as a human right, whereas trade or intellectual property (IP) are means. Thus there should be primacy of health over trade or IP. In this context, the South Centre has submitted a series of recommendations.

Among others, developing countries should tailor their intellectual property regimes to their own domestic technical, economic and social needs and capacities. For achieving this, these countries should incorporate flexibilities under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) into national patent law to enhance access to medical products.

A key flexibility is that countries are free to determine in their own way the definition of an invention, the criteria for judging patentability and patentable subject matter, the rights conferred on patent owners and what exceptions to patentability are permitted, subject to meeting the minimum standards laid down in the TRIPS Agreement.

Countries should take measures to control anti-competitive practices and abuse of intellectual property rights in their jurisdictions, and developed countries should stop the use of unilateral trade measures and free trade and investment agreements as a means to pressure countries to undertake TRIPS plus commitments. The recent rise of bilateral and multilateral FTAs threatens public health and access to affordable medicines.

Less-developed countries (LDCs) should make – and be provided assistance to do so – effective use of the current transition period that allows them to not apply pharmaceutical patent protection, test data protection or exclusive marketing rights; and recommend that the current waiver be made permanent until the time an LDC graduates from that status.

2 – A Binding International Treaty on Medical Product R&D under the Auspices of the UN

The current incentive model for pharmaceutical research and development (R&D) has failed to incentivise R&D for new medicines to treat a number of diseases that do not offer substantially profitable markets to private firms.

On one hand, there is little investment in R&D in relation to diseases that are prevalent in developing countries, since large pharmaceutical firms focus efforts on developing products to satisfy the demand of wealthy markets. On the other hand, products that are subject to patents and other forms of exclusive rights are normally sold at prices that are out of reach for large sectors of the population, both in developing and developed countries.

In April 2012, the WHO Consultative Expert Working Group (CEWG) on R&D Financing and Coordination recommended WHO Member States to start negotiations on a binding international instrument on health R&D as the best way to create an appropriate framework to ensure priority setting, coordination, and sustainable financing of affordable medicines for developing countries. However, this recommendation has still not been adequately considered by WHO Member States owing to political opposition from developed countries to the idea of an alternative R&D mechanism.

A binding international instrument or international treaty on R&D can be negotiated under the auspices of the UN to provide an adequate framework to define medical R&D priorities and ensure the coordination and sustainable financing of R&D on drugs that could be made available at affordable prices.

Such a binding international R&D instrument would provide a global framework for financing R&D in a way that delinks costs from prices for new medical products and for improved coordination to avoid the fragmentation of medical R&D efforts.

3 – Limitations of the Paragraph 6 System of the TRIPS Agreement

Pursuant to paragraph 6 of the 2002 Doha Declaration on TRIPS and Public Health, the WTO General Council adopted a decision on August 30, 2003, allowing WTO Member States with insufficient or no pharmaceutical manufacturing capacity to import generic medicines under a compulsory licence (CL), as a waiver from the general requirement under Article 31 (h) of TRIPS that a CL can be issued only predominantly for being used by domestic manufacturers.

While the Paragraph 6 system has been celebrated as a ‘solution’ to the problems faced by developing countries and LDCs in accessing affordable medicines, in actual practice it has not contributed to addressing such problems. Only a limited number of countries have adopted legislation to implement the 2003 Decision as an exporting country. Moreover, there has been very limited use of the system. This is largely due to the fact that the system is unnecessarily burdensome and complicated.

Among others, the Paragraph 6 system places obligations on importing countries making use of the system that are more onerous than those for countries that can issue a CL to supply the domestic market.

The experience in making use of the system also suggests that there are hurdles within the Decision that make it difficult for countries to import a generic drug under a CL, and also make it difficult for generic manufacturers to export a drug under a CL.

The Decision comprises a succession of complex procedural steps. First, a potential purchaser has to forecast the need for a medicine and identify a generic producer willing to participate in the process and fill the drug order. Second, the manufacturer has to try to negotiate a voluntary licence with the patent holder. Third, if the negotiations are unsuccessful, a CL application must be filed in the home country of the generic producer. Fourth, if a patent exists in the country of export, the generic producer also has to apply for and obtain a CL in that country. Each of these steps is time-consuming, involves substantial financial expense and holds no guarantee of success.

There is also substantial scope for patent holders to undermine the system. For example, the patent holder may decide at any time to offer the medicines at lower cost or for free, thus frustrating any efforts made to use the system in that particular case. This creates a huge uncertainty and additional risk and disincentives for potential suppliers. In view of these limitations of the paragraph 6 system, WTO Member States should be dissuaded from ratifying the protocol to the TRIPS Agreement incorporating the system under Article 31bis of TRIPS and should instead undertake a comprehensive review and evaluation of the paragraph 6 system.

* This document is being reproduced courtesy of the South Centre. The Centre’s South Bulletin carried it on 18 June 2016 with the headline Improving Access to Medicines: What needs to be done. [IDN-InDepthNews – 29 June 2016]

Photo: The Ayaan Chawla

IDN is flagship agency of the International Press Syndicate.

2016 IDN-InDepthNews | Analysis That Matters|

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