The Emerging Paradigm of Global IP Enforcement in FTAs and TRIPS-plus Agreements: Implications for Access to Medicines

Mr. Anand GroverSenior Advocate, Supreme Court of India,

Director- Lawyers Collective and the UN SpecialRapporteur to the Right to Health

MHRD IP Chair Roundtable Symposium on IP and Pharmaceutical Policy, NLU- Jodhpur

17th and 18th March, 2012

RIGHT TO HEALTH

• Art 12 ICESCR: “the right of everyone to the enjoyment of the highest attainable standard of physical and mental health”.

• Meaning of ‘highest attainable standard of physical and mental health’

• It does not mean merely absence of diseases or right to health care.

• General Comment No.14 on Art 12 of ICESCR interprets it to mean:

“right to health embraces a wide range of socio-economic factors that promote conditions in which people can lead a healthy life, and extends to the underlying determinants of health, such as, food and nutrition, housing, access to safe and potable water and adequate sanitation, safe and healthy working conditions and a healthy environment, access to health related education and information, including on sexual and reproductive health”

RIGHT TO HEALTH• Medical care and treatment which are dependent on

medicines are key features of the right to health.• Access to medicines is an integral part of the right to

health. • The States have an obligation under the right to health to

ensure that:– medicines are available;– financially affordable and– physically accessible on a basis of non-discrimination to

everyone within their jurisdiction. • The developed States also have a responsibility to take steps

towards the full realization of the right to health through international assistance and cooperation. [E/CN.4/2004/49/Add.1, para. 28]

• Participation of the community and Civil society is an important in decision making, implementing and monitoring and implementing is an important principle in right to health framework

RIGHT TO HEALTH: INDIA• The right to health, enshrined in numerous international and

regional human rights treaties and in many national constitutions. [Article 25, UDHR,1948; Article 12, ICESCR, 1966]

• Right to life [Article 21] has been interpreted by the Supreme Court of India to include the right to health. [Vincent Panikurlangara v. Union of India (1987) 2 SCC 165; and State of Punjab v. Ram Lubhaya Bagga (1998) 4 SCC 117.]

• Article 21 read with Article 14 obliges the State to provide health services, including, testing, diagnostic facilities as well as medicines to protect life without any discrimination.

• International Law

International covenants and conventions and other international agreements signed onto or ratified by India can be read into fundamental rights to interpret it and expand its scope.

ICESR are incorporated domestically in India in the Protection of Human Rights Act

• Accessibility of medicines has different dimensions one of which is financial affordability. In this regard intellectual property (IP) laws as they impact on the affordability of medicines can have a significant bearing on access to medicines.

• Cost of medicines is one of the key factors that affect the access to medicines. In low and middle income countries, medicines account for 60% of the healthcare cost. [The World Medicines Situation, WHO, 2004].

• In India, 70% of household out of pocket expenditure on health is set aside for buying drugs. [Report of National Health Accounts of India]

• Millions will be pushed into poverty by purchasing high cost medicines, especially branded medicines. [Niëns LM, et al, “Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-Country Comparison of the Affordability of Medicines in the Developing World”, PLoS Med 7(8) e1000333 (2010)]

AFFORDABILITY AND COST OF MEDICINES

IMPACT OF GENERIC MEDICINES AND THEIR COST

• Presently, India is the largest supplier of low-cost, high quality medicines for the entire developing world.

• Countries across the developing world have been able to upscale treatment access for persons living with HIV primarily because of domestic production of generic anti-HIV medicines in India.

• In 2008, about 89% of adult ARV purchases for the donor funded programmes in developing countries was from the Indian generic market.

• While there has been a huge fall in prices of first-line ARVs, the cost of second-line and third-line drugs are very high.– For instance, the cost of tenofovir-based regimens range from

$246 to $309 per patient per year. This is about 3.3 to 4 times higher than the price for the older regimens.

[Brenda Waning, et al, “A lifeline to treatment: the role of Indian generic manufacturers in supplying antiretroviral medicines to developing countries”, Journal of the International AIDS Society, 2010, 13:35]

IMPACT OF GENERIC MEDICINES AND THEIR COST

• Apart from India, China, Brazil, Thailand and South Africa also produce a significant amount of generic drugs.

• Brazil, Russia, India and China have capacity to produce active pharmaceutical ingredients (APIs). [As reported by Thomson Reuters, 2008]

• However, the trade agreements seeking higher intellectual property protection undermines the capacity of countries like India, Brazil, China, Thailand etc. to manufacture low cost generic medicines.

WHY ARE WE CONCERNED?

1980s to 1994• Multilateral trade

negotiations.• Developed countries

pushed for and obtained inclusion of intellectual property rights (IPRs) in Agreement establishing WTO.

• Developing countries were able to obtain flexibilities.

1995•TRIPS came into force.•Lays down minimal standards of IP protection and enforcement •Contains flexibilities.•It, inter alia, refers to protection and enforcement of IPRs in a manner conducive to social and economic welfare of people, balance of rights and obligations and transfer of technology.

Since 1995•Through trade agreements, developed countries have been attempting to:•Obtain additional IP protection and enforcement provisions beyond TRIPS. •Dilute TRIPS flexibilities•These agreements are negotiated •secretly•without transparency •without consulting community

TRADE AGREEMENTS• Trade Agreements:

• Bilateral or regional trade agreements• or economic partnership agreements

– EU FTAs with India, Malaysia – US FTAs with Bahrain, Chile, Peru, Columbia,

Jordan. – EU FTAs with ASEAN , MERCOSUR

• Plurilateral agreements •Trans-Pacific Partnership Agreement•Anti-Counterfeiting Agreement

NEGOTIATING POSITIONS AND INTERNATIONAL PRESSURE

• EU, US and other developed countries are negotiating to increase access to developing country markets for its multinational corporations and to secure maximal profits for them. – For this, they are seeking increased IP protection and enforcement

standards.– Increased IP protection and enforcement higher profits

• USTR in its Special 301 report has placed India, Brazil, Thailand, countries with capacity to manufacture generic medicines, in the Priority Watch List threatening to take actions for inadequately protecting intellectual property even though the countries are TRIPS compliant.

• EU demands for TRIPS-plus intellectual property provisions is based on the European Commissions’ strategy—Global Europe: Competing in the World (2006)—which sets an aggressive trade and investment agenda for expanding the competitiveness of the EU’s industries.

NEGOTIATING POSITIONS AND INTERNATIONAL PRESSURE…..contd

• Reports that industry associations in EU and their Indian counterparts are setting the agenda [“Trade Invaders. How big business is driving the EU-India free trade negotiations”, Corporate Europe Observatory, 2010].

• India is a socio-economic welfare State established by its Constitution and has to secure the fundamental rights (right to life, right to health, etc) of its peoples.

• Brazil [Art.196, Brazilian Constitution] and Thailand [Section 51, Constitution of the Kingdom of Thailand,2007] have a constitutional obligation to protect right to health of its citizens.

• Developing countries are being pushed to accept provisions that will benefit a few and harm a vast majority of people.

FREE TRADE AGREEMENTS:COUNTRIES INVOLVED

• The United States has 12 FTAs in force with 17 countries

• AUSTRALIA, BAHRAIN, CHILE, OMAN, PERU, SINGAPORE, ISRAEL, JORDAN, MOROCCO

• CAFTA COSTA RICA, DOMINICAN REPUBLIC, EL SALVADOR, GUATEMALA, HONDURAS, & NICARAGUA

• NAFTA: CANADA & MEXICO • In addition, the United States has negotiated FTAs

with Korea, Panama and Colombia, but these agreements have not yet entered into force. [www.ustr.gov/trade-agreements]

United States:

• UNDER NEGOTIATION• ASIA: INDIA, SINGAPORE , MALAYASIA,

ASEAN, MERCOSUR• EASTERN EUROPE: UKRAINE • EPA WITH AFRICAN, CARIBEAN AND PACIFIC

COUNTRIES • CONCLUDED:

• CENTRAL AMERICA [COSTA RICA, DOMINICAN REPUBLIC, EL SALVADOR, GUATEMALA, HONDURAS, & NICARAGUA] AND ANDEAN COMMUNITY [COLUMBIA AND PERU]

• SUSPENDED:• LIBYA and GCC [http://trade.ec.europa.eu]

European Union:

SUBSTANTIVE ISSUES

Stated objective

TRIPS: Balance of rights and

obligations, social and economic

welfare, transfer of technology

EU: Protection and enforcement of IPR

and its commercialization

Protection of data

TRIPS: Data protection

EU: Data exclusivity (will delay entry of

generic competition, affect compulsory license,

etc)

Patent term extension

TRIPS: 20 years’ protection inclusive

of time taken for patent and

regulatory approval

EU: Patent term extension

PATENT LINKAGEDrug Regulatory System

Drug patented

Consent of patent holder marketing approval granted

No consent marketing approval withheld

Drug not patented

Marketing approval granted

• Requirement of patent linkage is a standard clause in many bilateral FTAs negotiated by US.

• US FTAs with Singapore, Chile, Morocco, Bahrain

• Pressure from US Trade Representative and pharma companies on developing countries for higher IP standards.In the Bayer matter patent linkage was not accepted

ENFORCEMENT

• IPRs are private rights. • In case of patents and trademarks, IP holders

have exclusive right to enforce them.• EU FTAs seek stronger enforcement

mechanisms that:– Harmonize laws of developing countries with

its own internal trade rules– Shift burden of enforcement of private

rights to State

ENFORCEMENT• EU FTAs seek stronger enforcement

mechanisms that:– Facilitate litigation to deter competitors by

obtaining:• Injunctions more easily to thwart competition • Injunctions against intermediaries• Far-reaching information-gathering provisions that

undermine freedom of trade and private and confidential data

• Compulsory damages and under expanded heads of damage

• Orders to seize and destroy goods

ENFORCEMENT• TRIPS only requires border measures at point of import in

cases of copyright piracy and counterfeit trademarks [Article 51].

• EU FTAs seeking stronger enforcement mechanisms that:– Expands scope to patents, the infringement of which

cannot be determined by visual inspection;– Require mandatory border measures by State not only:

• at import, but also for export, re-export, goods in transit; • for copyright piracy and counterfeit trademarks, but also

for patents.

ENFORCEMENT

• Border measures – How they affect access?– Generic drugs seized [Late-2008]:

• Drug: WHO per-qualified ARVs for Clinton Foundation funded treatment project purchased by UNITAID

• Source: India Transit: Amsterdam Destination: Nigeria

• 17 other such seizures; in some cases, drugs released after a few months, either forwarded to destination or returned to India.

INDIA TAKES EU TO WTO

• India and Brazil sought consultation under the WTO Dispute Settlement Mechanism.

• Thereafter countries such as Canada, China, Japan, Turkey and Ecuador requested to join the consultations. 

• July 2011: India and EU entered into an understanding that EU would amend its rules and replace Regulation 1383/2003.

• Meanwhile India has agreed not to proceed with case further.

• However, the case has not been withdrawn.

INVESTMENT• Definition of Investment : inclusion of “intellectual property

rights”

• This will enable investors (private corporations) to sue the Government of India at international arbitral bodies if their investment (intellectual property) is affected.

• This would deter India from: – enacting laws or policies aimed at securing access to

medicines.– Controlling prices of medicines – Regulating foreign investment in local production

• Available records show how several developing countries have been taken to arbitral bodies by multinational corporations for having adopted policies to protect public health, environment and public security system.

INVESTMENT: HOW IT WILL AFFECT

• Uruguay : 80% of the bottom portion of all cigarette packages should contain prescribed health messages.

• Switzerland-Uruguay BIT: Philip Morris, a US based tobacco company, filed a claim at the International Centre for Settlement of Investment Disputes (ICSID), a World Bank branch.

• Phillip Morris claimed that Uruguay’s tobacco control policies are damaging their trademark rights (IPR), which is their investment. It sought damages /compensation from Uruguay.

TRANS-PACIFIC PARTNERSHIP AGREEMENT

• TPPA: is a multilateral free trade agreement that aims to further liberalise the economies of the Asia-Pacific region.

• Countries involved: United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

• The TPP contains a chapter on Intellectual Property (copyright, trademarks, patents and perhaps geographical indications) which extends beyond TRIPS Agreement.

• TPP is intended to harmonize laws of TPP member countries to that of US IP and trade laws.

TRANS-PACIFIC PARTNERSHIP AGREEMENT

• TPP seeks increased IP protection and eliminates TRIPS flexibilities. – Extends scope of patentability to [Art. 8.1 and 8.2]:

• new use, forms or methods of using a new products• diagnostic ,therapeutic and surgical methods

– Extends the term of patent beyond 20 years to compensate for the delays [Art. 8.6]:

• in granting patents or granting regulatory approvals to medicines.

– Mandates the adoption of patent linkage system [Art.9.5]– Provides for Data Exclusivity for [Art. 9.2]:

• New Pharmaceutical product• Extends the scope of DE to drugs registered in another territory• New use or form of an approved chemical entity

TRANS-PACIFIC PARTNERSHIP AGREEMENT

• Eliminates pre-grant opposition provision [Art. 8.7]• Mandates countries to allow patent applicants to make multiple

amendments to their patent claims prior to approval on merits. [Art.8.9]Thus making it harder to challenge the patent.

• Minimizes the duty of patent applicant to make required disclosure [Art.8.10 and 8.11]

• Obligation relating to Enforcement: – Mandates a presumption of validity of patents in any

proceeding involving patents. [Art. 10.2]– Mandates the judiciary to measure damages based on retail

price or other measure suggested by the patent holder. [Art. 12.3] So the damage could be based on the high price fixed by the Patent holder

HOW WILL BI-,MULTI-LATERAL AND REGIONAL TRADE AGREEMENTS AFFECT ACCESS TO MEDICINES?

• Data Exclusivity, Patent Term Extension and Patent Linkage: – would increase IP protection for medicines and will result in

extension of monopolies ;• Enforcement provisions:

– would allow IP holders to take steps that would deter or delay generic competition;

– curtailing the discretionary powers of municipal Courts in the adjudication of disputes relating to private rights;

– prioritizes private rights over public health and public interest.• Investment provisions would undermining the sovereign rights of

Governments to take steps to ensure that the right to health is protected and promoted;

• Delay in entry of generic competition will keep prices of medicines at higher level

RECOMMENDATIONS

• Advocate and encourage countries to use TRIPS flexibilities.

• Resist TRIPS-Plus provisions into domestic legislation through regional and bilateral trade agreements.

• To collaborate and develop a South-South Intellectual Property road map.