11

Managing Procurement and Logistics of Managing Procurement and Logistics of HIV/AIDS Drugs and Related SuppliesHIV/AIDS Drugs and Related Supplies

Abuja, Nigeria, May 30 - June 4 2005Abuja, Nigeria, May 30 - June 4 2005

Module1: Module1: Intellectual Property RightsIntellectual Property Rights

byby

Dr. Atangcho Nji AkonumboDr. Atangcho Nji AkonumboSenior Lecturer in LSenior Lecturer in Lawaw

22

Objectives of the moduleObjectives of the module

To understand how an Intellectual To understand how an Intellectual Property Right (IPR) - patent - can Property Right (IPR) - patent - can impede medical supplies for the impede medical supplies for the treatment of HIV/AIDS.treatment of HIV/AIDS.

To explore avenues by which To explore avenues by which governments and supply agencies governments and supply agencies can can obtain quality low-priced, safe, and obtain quality low-priced, safe, and effective HIV/AIDS medicines by effective HIV/AIDS medicines by lawfullylawfully surmounting obstacles created by surmounting obstacles created by patents.patents.

33

Preliminary IssuesPreliminary Issues The Intellectual Property (IP) / Right The Intellectual Property (IP) / Right

to Health nexus to Health nexus ((for a better for a better understanding of the underlying understanding of the underlying issues and concerns to be discussed issues and concerns to be discussed furtherfurther).).- - IPRs and right to health as human rights IPRs and right to health as human rights consecrated in the relevant international consecrated in the relevant international human rights instruments: human rights instruments: UDHR/ICCPRUDHR/ICCPR

- Incompatibility- Incompatibility Competing claims on Patents: some Competing claims on Patents: some

arguments for and against patentsarguments for and against patents

44

Rules governing IPRsRules governing IPRs

The WTO’s TRIPS Agreement sets down The WTO’s TRIPS Agreement sets down the minimum rules or standards for the the minimum rules or standards for the protection of IPRs to be complemented by protection of IPRs to be complemented by national or regional laws, where necessarynational or regional laws, where necessary. . Thus minimum standards agreement – Thus minimum standards agreement – article 1 provides for more extensive article 1 provides for more extensive protection of IP in member countriesprotection of IP in member countries..

These rules/standards apply to all WTO These rules/standards apply to all WTO member countries no matter the level of member countries no matter the level of development: LDC, Dg C or Dd C.development: LDC, Dg C or Dd C.

55

IPRs relevant to IPRs relevant to Pharmaceutical Pharmaceutical Products/NatureProducts/Nature

PatentsPatents- A Patent is an exclusive right granted for the protection of an - A Patent is an exclusive right granted for the protection of an invention (invention (NOT A DISCOVERYNOT A DISCOVERY) of a technological product or ) of a technological product or process that is new (or novel), useful ( or capable of process that is new (or novel), useful ( or capable of industrial application) and involves an inventive sep (or is industrial application) and involves an inventive sep (or is non-obvious). non-obvious). -The protection is against the unauthorised, -The protection is against the unauthorised, making, using, making, using, offering for sale or selling or importingoffering for sale or selling or importing the patented item. the patented item. The period of protection is at The period of protection is at least 20 yearsleast 20 years from the date of from the date of filing of the application for the patent. The patent is filing of the application for the patent. The patent is valid valid only in the country or regiononly in the country or region where protection is sought in where protection is sought in the application.the application.

Undisclosed informationUndisclosed information-Article 39 of the TRIPS Agreement: members are allowed to -Article 39 of the TRIPS Agreement: members are allowed to protect trade secrets from being disclosed to or acquired or protect trade secrets from being disclosed to or acquired or used by others. Members requiring submission of used by others. Members requiring submission of undisclosed test or data before marketing of pharmaceutical undisclosed test or data before marketing of pharmaceutical products which utilize new chemical entities should protect products which utilize new chemical entities should protect them against unfair commercial use (except in 2 cases). them against unfair commercial use (except in 2 cases).

66

Relevant IPRs cont’dRelevant IPRs cont’d

Trademarks/trade namesTrademarks/trade names

CopyrightCopyright

77

IPRS: obstacles to IPRS: obstacles to medicines?medicines?

1. Patents1. Patents Since Patents are only valid where Since Patents are only valid where

protection is sought, a medicine may be protection is sought, a medicine may be under a patent in one country and not in under a patent in one country and not in another.another.

Also, the availability of off-patent Also, the availability of off-patent medicines (medicines (generic medicinesgeneric medicines) in a country ) in a country (importing country) depends on whether (importing country) depends on whether patenting exists in that country and in the patenting exists in that country and in the potential exporting countries.potential exporting countries.

88

IPRs obstacles? cont’dIPRs obstacles? cont’d

If a medicine is not under a patent in a If a medicine is not under a patent in a country, there is no legal restriction as to country, there is no legal restriction as to its being produced and sold or bought or its being produced and sold or bought or its generic version imported there.its generic version imported there.

However, if the medicine is under a However, if the medicine is under a patent in a country, the production, sale patent in a country, the production, sale or importation of generic versions in that or importation of generic versions in that country is not authorised, save where its country is not authorised, save where its government undertakes the necessary government undertakes the necessary measures (measures (asas it is to be seen later). it is to be seen later).

99

IPRs obstacles? cont’dIPRs obstacles? cont’d2. Undisclosed information2. Undisclosed information

National authorities requiring the submission National authorities requiring the submission of undisclosed information under article 39 of of undisclosed information under article 39 of the TRIPS in order to authorize the the TRIPS in order to authorize the importation of drugs for the treatment of importation of drugs for the treatment of HIV/AIDS are not engaging in unfair HIV/AIDS are not engaging in unfair commercial use; but protection of the commercial use; but protection of the information against unauthorized disclosure information against unauthorized disclosure use and acquisition by third parties should be use and acquisition by third parties should be guaranteed, else that would constitute unfair guaranteed, else that would constitute unfair commercial use.commercial use.

Although article 39 does not expressly refer Although article 39 does not expressly refer to patents, it may, nonetheless, be applied to to patents, it may, nonetheless, be applied to protect existing drugs or data.protect existing drugs or data.

1010

IPRs obstacles? cont’dIPRs obstacles? cont’d

3. Trademarks and Copyright 3. Trademarks and Copyright are lesser are lesser obstacles to access to HIV/AIDS medicines obstacles to access to HIV/AIDS medicines since they can be easily avoided by generic since they can be easily avoided by generic manufacturers. But manufacturers. But trademarks and trademarks and copyright copyright may be evoked by holders may be evoked by holders thereof, to object thereof, to object parallel importationsparallel importations where international where international exhaustion of rightsexhaustion of rights is is inapplicable. inapplicable.

In the case of copyright, for exampleIn the case of copyright, for example, , resale resale rightsrights («droits de suite») («droits de suite») may be evoked to may be evoked to defeat exhaustion of rights.defeat exhaustion of rights.

1111

Principal Worries of patent Principal Worries of patent holdersholders

Registration and authorisation concernsRegistration and authorisation concerns- Nearly every country requires that - Nearly every country requires that pharmaceutical products should first be pharmaceutical products should first be registered or submitted for commercialization registered or submitted for commercialization authorisation with a national or regional authorisation with a national or regional regulatory body. regulatory body.

Although the goal of this process is essentially to Although the goal of this process is essentially to ensure the biosafety and bioequivalence of a ensure the biosafety and bioequivalence of a generic version of a drug, it may , however, be generic version of a drug, it may , however, be varied, tedious and costly.varied, tedious and costly.

There concerns about the adequate protection There concerns about the adequate protection of submitted undisclosed information in the of submitted undisclosed information in the process of registration or authorization.process of registration or authorization.

Possible violations of patents, trademarks and Possible violations of patents, trademarks and copyrightcopyright

1212

Principal concern(s) of Principal concern(s) of governments and supply governments and supply

agenciesagencies IPRs system and particularly, patents, IPRs system and particularly, patents,

restrict access to essential medicines restrict access to essential medicines against HIVAIDS especially in the poorer against HIVAIDS especially in the poorer regions due to the high prices they regions due to the high prices they engender. engender.

Patents promote monopoly & secrecy of Patents promote monopoly & secrecy of information.information.

IP and patents are a barrier to public IP and patents are a barrier to public health objectives those regions.health objectives those regions.

1313

Striking the balance: the TRIPS Striking the balance: the TRIPS flexibilitiesflexibilities

Voluntary licensingVoluntary licensing Compulsory licensing (CL) /government use: Article Compulsory licensing (CL) /government use: Article

3131* * GroundGround: : Where the law of a member allowsWhere the law of a member allows for other use of the subject of the for other use of the subject of the patent without authorisation of the right holder, including use by the patent without authorisation of the right holder, including use by the government or other third parties authorised by the government.government or other third parties authorised by the government.* * There must be an effort first to obtain voluntary license from the right holder There must be an effort first to obtain voluntary license from the right holder under reasonable conditions and period of time, except for:under reasonable conditions and period of time, except for:1) national emergency or circumstances of extreme urgency1) national emergency or circumstances of extreme urgency2)public non-commercial use 2)public non-commercial use

* Conditions of Compulsory licensing/government use* Conditions of Compulsory licensing/government use ( (to safeguard the to safeguard the legitimate interests of the patent holderlegitimate interests of the patent holder).).- granted on individual merits- granted on individual merits- non exclusive right- non exclusive right- non assignable- non assignable- limited duration and for purposes for which granted- limited duration and for purposes for which granted- termination on seizure of circumstances and unlikelihood or recurrence. - termination on seizure of circumstances and unlikelihood or recurrence. - predominantly for supply of domestic market- predominantly for supply of domestic market- adequate remuneration - adequate remuneration - legal validity of authorization to use and remuneration are subject to judicial - legal validity of authorization to use and remuneration are subject to judicial review, etc.review, etc.

1414

Striking the balance (cont’d)Striking the balance (cont’d)

• The problem of Article 31(f)The problem of Article 31(f)The implication of paragraph (f) is that CL can only be resorted to by The implication of paragraph (f) is that CL can only be resorted to by countries that do not have the requisite or no technological capacity at countries that do not have the requisite or no technological capacity at all to produce the subject matter of the patent for which CL is sought. all to produce the subject matter of the patent for which CL is sought. Consequence?Consequence?

moratorium (transition period) for LDCs and DCsmoratorium (transition period) for LDCs and DCs- - 10 years (from Jan. 1, 1995 date of entry into force of the TRPS Agreement) = 10 years (from Jan. 1, 1995 date of entry into force of the TRPS Agreement) = Jan 1. 2005. + possibility of extension for LDCs.Jan 1. 2005. + possibility of extension for LDCs.

Exhaustion of rights and parallel importsExhaustion of rights and parallel imports

Problems of interpretations of flexibilities and they Problems of interpretations of flexibilities and they way to DOHAway to DOHA

1515

The DOHA Declaration on the The DOHA Declaration on the TRIPS and public healthTRIPS and public health

BackgroundBackground – – The African Group led by Zimbabwe.The African Group led by Zimbabwe.

PurposePurpose of the Declaration: of the Declaration:- - Expiration of the transitional period for some countries Expiration of the transitional period for some countries and the and the constraints of Article 31 (f)constraints of Article 31 (f)- Respond to concerns that heightened IPRs protection - Respond to concerns that heightened IPRs protection would undermine and frustrate health needs due to would undermine and frustrate health needs due to reduced access to essential medicines in poorer countries.reduced access to essential medicines in poorer countries.- The drastic reduction of patented (generic drugs) by Jan - The drastic reduction of patented (generic drugs) by Jan 1, 2005 due to 1, 2005 due to the mail box systemthe mail box system and the application of and the application of patents for new drugs produced bypatents for new drugs produced by WTO membres. WTO membres.

StatusStatus: : The Declaration is not an amending Act: it did not amend The Declaration is not an amending Act: it did not amend the TRIPS; it barely explained how the flexibilities of the the TRIPS; it barely explained how the flexibilities of the TRIPS could be implemented i.e. used effectivelyTRIPS could be implemented i.e. used effectively..

1616

Clarifications of DOHAClarifications of DOHA Note Paras. 1-4:Note Paras. 1-4: Preamble acknowledgements and remarks + Preamble acknowledgements and remarks +

language style.language style.

WTO member WTO member has the right to grant CLhas the right to grant CL and the freedom to determine and the freedom to determine the the groundsgrounds upon its grant upon its grant (Para 4 (b)(Para 4 (b)..

Each member Each member has the right to determine what constitutes national has the right to determine what constitutes national emergency or circumstances of extreme urgencyemergency or circumstances of extreme urgency, it being understood , it being understood that public health crises including those relating to HIV/AIDS, that public health crises including those relating to HIV/AIDS, tuberculosis, malaria, and other epidermis can represent such tuberculosis, malaria, and other epidermis can represent such situations of situations of national emergency or circumstances of extreme urgency national emergency or circumstances of extreme urgency (Para. 4 (c)(Para. 4 (c)

Each member is Each member is free to establish its own regime of exhaustion of free to establish its own regime of exhaustion of rights rights Subject to NT and MFN Subject to NT and MFN (Para. 4 (d)(Para. 4 (d)

InstructInstruct council of TRIPS to find a solution before the end of 2002 to council of TRIPS to find a solution before the end of 2002 to the Article 31 (f) problematic i.e. countries with insufficient or no the Article 31 (f) problematic i.e. countries with insufficient or no manufacturing capacities in the pharmaceutical industrymanufacturing capacities in the pharmaceutical industry . . ((Famous Famous para. 6)para. 6)..

Members agree to Members agree to extend the transitional periodextend the transitional period for LDCS from Jan 1, for LDCS from Jan 1, 2006 to 2006 to Jan 1,2016Jan 1,2016 for patents and undisclosed information (pursuant for patents and undisclosed information (pursuant to Art. 66(1) of TRIPS) + further possibilities of extension to Art. 66(1) of TRIPS) + further possibilities of extension theretothereto(Para. 7)(Para. 7)

1717

Post DOHA flexibilitiesPost DOHA flexibilities Implementation of para. 6Implementation of para. 6

** Decision of the General Council of the TRIPS of August 30, 2003 on the Decision of the General Council of the TRIPS of August 30, 2003 on the implementation of para 6 of the DOHA declaration on the TRIPS and Public implementation of para 6 of the DOHA declaration on the TRIPS and Public Health. Health. - The Council acknowledges that circumstances exist that justify waivers - The Council acknowledges that circumstances exist that justify waivers relating to Art 31 (f) and adequate compensation (31 (h)relating to Art 31 (f) and adequate compensation (31 (h)- - Any member country is an “eligible importingAny member country is an “eligible importing” in addition to LDCs, if it ” in addition to LDCs, if it has notified the Council of TRIPS of its intention to use the system as an has notified the Council of TRIPS of its intention to use the system as an importer. An exporting member is a member that uses the CL system in importer. An exporting member is a member that uses the CL system in the Decision to produce pharmaceutical products for and export them to the Decision to produce pharmaceutical products for and export them to an eligible importing member.an eligible importing member.- obligations of exporting member under Articled 31(f) of TRIPS is waived - obligations of exporting member under Articled 31(f) of TRIPS is waived where: where: 1)1) eligible importing country has notified the TRIPS Council as to the eligible importing country has notified the TRIPS Council as to the specifications of the names and expected quantities of the pharmaceutical specifications of the names and expected quantities of the pharmaceutical product, that it has not got the requisite manufacturing capacity where its product, that it has not got the requisite manufacturing capacity where its is not an LDC or developed country.is not an LDC or developed country.2)2) the CL issued by the Exporting member shall contain the following the CL issued by the Exporting member shall contain the following conditions:conditions:manufacture only the necessary amount to meet the demands of the manufacture only the necessary amount to meet the demands of the importing country; specific identification of products (labelling or marking, importing country; specific identification of products (labelling or marking, packaging colouring shaping etc.); posting on the web before shipment packaging colouring shaping etc.); posting on the web before shipment quantities supplied to each destination and specifications.quantities supplied to each destination and specifications.3)3) remuneration is not payable by importing country where it has granted remuneration is not payable by importing country where it has granted CL for the same products as the exporting country if the latter has already CL for the same products as the exporting country if the latter has already paid.paid.4)4) prevention of re-exportation of the products into other markets prevention of re-exportation of the products into other markets

1818

Post DOHA flexibilities Post DOHA flexibilities cont’dcont’d

Implementation of para 7Implementation of para 7*Decision of TRIPS Council *Decision of TRIPS Council extending transition period extending transition period to 2016 for LDCsto 2016 for LDCs

1919

Apportioning flexibilitiesApportioning flexibilities

The fact that a product is not The fact that a product is not patented in a country does not imply patented in a country does not imply that it can be freely imported; it that it can be freely imported; it depends on the legal framework of depends on the legal framework of the importing countrythe importing country

Also, if a product is patented in a Also, if a product is patented in a country, the possibilities of avoiding country, the possibilities of avoiding the IPR obstacles would depend on the IPR obstacles would depend on whether it is an LDC or a DC. whether it is an LDC or a DC.

2020

Flexibility options for LDCsFlexibility options for LDCs Not to introduce patentingNot to introduce patenting until the end of the moratorium i.e. 2016. until the end of the moratorium i.e. 2016.

this would facilitate the importation of generic medicines.this would facilitate the importation of generic medicines. A A voluntary patentvoluntary patent may be sought from the owner of the patent may be sought from the owner of the patent Compulsory licensingCompulsory licensing by government for government use or by by government for government use or by

Private generic producers under government authorization to Private generic producers under government authorization to produce and commercialize pharmaceutical products, may be produce and commercialize pharmaceutical products, may be sought. sought.

Parallel importationParallel importation (authorised under national legislation) through (authorised under national legislation) through international exhaustion of rights. The patent holder’s rights fade international exhaustion of rights. The patent holder’s rights fade with a first legal sale and so he/she cannot object to the importation with a first legal sale and so he/she cannot object to the importation (second sale) of the product because the benefits have already (second sale) of the product because the benefits have already accrued with the first sale. The product can also be purchased accrued with the first sale. The product can also be purchased where it is sold cheaper abroad and imported “in parallel”.where it is sold cheaper abroad and imported “in parallel”.

To enable suppliers operate in legalityTo enable suppliers operate in legality and without fear of and without fear of infringing patents over products they may want to commercialize, infringing patents over products they may want to commercialize, governments in LDCs could undertake a clear policy indicating that governments in LDCs could undertake a clear policy indicating that for health reasons, patenting will not be applied on their territories.for health reasons, patenting will not be applied on their territories.

comparing and negotiating pricescomparing and negotiating prices with patent holders on the basis with patent holders on the basis of prices of generic drugs under special price reduction agreement of prices of generic drugs under special price reduction agreement schemes.schemes.

Negotiating pricesNegotiating prices with manufacturers on the understanding that it with manufacturers on the understanding that it is possible to resort to CL or generic versions. is possible to resort to CL or generic versions. NB: CL may be used to produce or import patented products but it NB: CL may be used to produce or import patented products but it may also be used as a pressure tool during price negotiations.may also be used as a pressure tool during price negotiations.

2121

Flexibility options for DCsFlexibility options for DCs The situation of DCs is more complex that that of The situation of DCs is more complex that that of

LDCSLDCS DCs continue to be wholly governed by the TRIPS DCs continue to be wholly governed by the TRIPS

Agreement subject to the transitory provisions, the Agreement subject to the transitory provisions, the DOHA Declaration and other flexibilities.DOHA Declaration and other flexibilities.

If a drug is not patented in the DC, it can import or If a drug is not patented in the DC, it can import or produce it locally. But the problem is that all DCs produce it locally. But the problem is that all DCs are out of the transitional period and are now are out of the transitional period and are now required (since 1 Jan, 2005) to introduce patenting.required (since 1 Jan, 2005) to introduce patenting.

If the drug is patented, then the DC can issue an If the drug is patented, then the DC can issue an authorisation for government use or CL and /or authorisation for government use or CL and /or authorise parallel importationauthorise parallel importation. . NB: CL for government use involves less NB: CL for government use involves less cumbersome procedures than CL accorded to third cumbersome procedures than CL accorded to third parties.parties.

A A voluntary licensevoluntary license can be negotiated with the can be negotiated with the owner of the patentowner of the patent

Price negotiationPrice negotiation may may also be undertaken with the also be undertaken with the patent owner for a reduction thereof.patent owner for a reduction thereof.

2222

Further flexibilities for both Further flexibilities for both LDCs and DCsLDCs and DCs

Under the 2003 TRIPS Council Decision, an authority in Under the 2003 TRIPS Council Decision, an authority in charge of supply may require a foreign government to deliver charge of supply may require a foreign government to deliver a CL in order to supply a drug which is under a patent in its a CL in order to supply a drug which is under a patent in its country, to the authority in question . An LDC, a DC and a country, to the authority in question . An LDC, a DC and a developed country may be supplier here. However, developed country may be supplier here. However, a non-a non-LDC seeking this system must prove that it has not got the LDC seeking this system must prove that it has not got the requisite manufacturing capacity. requisite manufacturing capacity. Also,the safeguards of the Also,the safeguards of the TRIPS Council Decision of 2003 must be complied with.TRIPS Council Decision of 2003 must be complied with.

For both LDCs and DCs generic versions can still be available For both LDCs and DCs generic versions can still be available from producers in countries where there is no patent from producers in countries where there is no patent protection.protection.

For both LDCs and DCs antiretroviral and other drugs that For both LDCs and DCs antiretroviral and other drugs that have not been patented or whose patents have expired and have not been patented or whose patents have expired and are now within the public domain shall be available from are now within the public domain shall be available from generic producersgeneric producers

A foreign generic producer may be issued CL by the country A foreign generic producer may be issued CL by the country where it resides and legally export a non-predominant where it resides and legally export a non-predominant quantity of its productionquantity of its production..

2323

ConclusionConclusion IPRs, particularly, patents may be obstacles to access to IPRs, particularly, patents may be obstacles to access to

essential medicines against HIV/AIDS, but there are flexibilities essential medicines against HIV/AIDS, but there are flexibilities within the international patent system that could be explored if within the international patent system that could be explored if used tactfully by LDCs and DCsused tactfully by LDCs and DCs

The TRIPS does not really obviate countries from taking the best The TRIPS does not really obviate countries from taking the best advantage of the flexibilities. It was, perhaps, a problem of advantage of the flexibilities. It was, perhaps, a problem of interpretation by the strong to the detriment of the weak and interpretation by the strong to the detriment of the weak and the poor. DOHA has now paved the way for better the poor. DOHA has now paved the way for better understanding of the flexibilities and it is for national authorities understanding of the flexibilities and it is for national authorities in charge of supply of HIV/AIDS drugs tp: in charge of supply of HIV/AIDS drugs tp: -assess the country’s status and IPRs landscape to know if and -assess the country’s status and IPRs landscape to know if and

how to apply the flexibilities;how to apply the flexibilities;- follow-up; the issue of patenting and the rules thereof, work follow-up; the issue of patenting and the rules thereof, work

with the relevant government ministries (health, with the relevant government ministries (health, industry/commerce, customs etc) as well as supervise industry/commerce, customs etc) as well as supervise registrations or authorisations of drugs entering the country registrations or authorisations of drugs entering the country to ensure easy effiient procedures and quality controlto ensure easy effiient procedures and quality control

- serve as pressure groups in reminding government not de-serve as pressure groups in reminding government not de-prioritize the HIV/AIDS sector. prioritize the HIV/AIDS sector.

2424

Thank youThank you

Je vous remercieJe vous remercie