INTERFACE BETWEEN PATENTS AND ACCESS TO MEDICINES

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CHAPTER 2 INTERFACE BETWEEN PATENTS AND ACCESS TO MEDICINES

Introduction

In this era of globalisation it is the goal of every business enterprise to maximise profits. Indeed globalisation affects every area of human endeavour including the area of intellectual property. Every developing country wants to take advantage of the benefits arising from globalisation, the incentives from developed countries such as foreign direct investment (FDI) and the introduction of technology into almost every sphere of life.42
In the area of IP, the introduction of patents for pharmaceuticals has placed profit before human life. The TRIPS Agreement43 was introduced in 1995. It introduced IP law into the international trading system for the first time and applies to all members of the WTO. Because it was recognised that the implementation of the TRIPS Agreement was set to have a major effect on generic drug production, the majority of DCs were allowed a ten-year transition period within which to comply with its provisions.44 This means that DCs (India, for example) were able to continue developing generic drugs until 2005, whilst least-developed countries (‘LDCs’) now have until 2021 to do so.45
The argument put forward by the drug manufacturers is that IP protection is essential for securing investment for research into new medicines46 and that the patenting of medicines is not an impediment to accessing medicines in DCs.47 This chapter opens with an overview of the patent system and discusses the history and genesis of the introduction of product patents for pharmaceuticals, and the justification for its introduction.

Overview of the patent law system

Intellectual property rights (‘IPRs’) usually refer to the ‘property rights recognised on distinct types of creations of the mind’.48
In IP law certain rights are given to owners to enable them distribute inventions, to enter different markets and to initiate legal proceedings to challenge infringed rights. These various types of exclusive intellectual property rights include patents, trademarks, trade secrets and industrial designs.49
A patent is defined as ‘the right granted to an inventor by a state, or by a regional office acting for several states, which allows the inventor to exclude anyone else from commercially exploiting his or her invention for a limited period, generally twenty (20) years’.50 This definition covers ‘any invention, whether product or processes in all fields of technology provided that they are new, involve an inventive step and are capable of industrial application’.51 This implies that the new product or processes described in the patent application must be something that has not previously been disclosed anywhere in the world ÷ something that would not be obvious to a person of ordinarily skill in the field involved: and something that has a functional utility for commercialisation.’52 Other procedural requirements include public disclosure and maintenance fees.
A patent application involves a request for the grant of the patent, an abstract which gives information about the invention, and a description of the invention also termed a ‘specification’.
53 The specification ‘is the part of the application that contains: (i) a description of the invention; (ii) the claim or claims as to what has been invented and what monopoly is sought; and (iii) drawings referred to in the description.’54 Once a patent has been granted, the owners are empowered to prevent others from using the protected invention without their authorisation.55 The scope of rights under patents further extends to the ability to prosecute third parties for damages or to seek injunctive relief in the event of infringement.56 However, patent rights are not absolute in that they remain limited in space, time, and content.57
Patent law is domestic in nature. The geographical limitation of patent protection implies that rights are enforceable only in the country or countries where protection has been granted.58 A single filing of an international application with a receiving office is possible. In that case, the patent owner automatically designates contracting states where protection is sought. This filing procedure is known as ‘international patent application’.59 Even here, patent holders must seek enforcement of their rights in each designated country.60 As for duration, patent rights last only for a specified period, the global standard being twenty years from the application filing date.61 This means that the protected subject matter falls into the public domain after that period and may be commercially exploited without the patentee’s permission.62
Patents are also limited in content as they protect only what is set out in the specifications. It follows that they can only be enforced to the extent that application has been made. .63It must also be noted that the patent law system reflects a difficult balance between access and innovation.

The need for the protection of patent rights

The essence of IPR and patents in particular, is to provide the incentives necessary for research and technological development.65
The main justification for conferring patent on a patent holder is to compensate the inventor. The patent holder can then benefit from the right to commercialise the invented product and has the right to prevent others from doing so. This in essence runs against the principle of free trade because it is only the inventor who has the right to gain economic benefit from the invention. He also has the right to prevent others from using it without his consent.66
There are two basic justifications for the need for intellectual property right protection. One involves the theory of fair compensation, while the other relates to incentives to encourage invention.67 The theory of fair compensation asserts that one owns the fruits of one’s labour.68 69 The second theory, supporting the need for the protection of IPRs, asserts that few incentives to innovate exist where people are allowed to be rewarded for their inventions at little or no cost. This is the so-called ‘free rider’ phenomenon.70

The interface between patents and access to medicines

As stated above, patents serve as an incentive for the development of the private sector pharmaceutical industry.
The rationale for granting exclusive rights on patented medicines as stated in the preceding paragraph is that while the development of new drugs is a costly process, it is relatively easy to copy an existing drug. Despite the private industry’s plea for patent protection, a number of developed and developing countries have traditionally imposed restrictions on the patenting of drugs on public policy grounds.72 While patents on drugs are now the norm in developed countries, even those with significant interests in the pharmaceutical sector such as Switzerland, have introduced product patents on drugs only relatively recently.73 The Indian Patents Act of 1970, introduced restrictions on product patents for medicines to limit commercialisation in the health sector.74 The adoption of the TRIPS Agreement forced countries like India which had patent restrictions to amend their patents laws fundamentally to comply with their WTO-related legal obligations.75
Patents undoubtedly play a major role in the health sector. First, they are a precondition for private sector involvement in the development and production of new essential medicines.76 Secondly, patents offer exclusive rights to patent holders who benefit from a monopoly situation in the market. This implies that companies selling patented drugs have an important say in determining their price. The result from the perspective of individual patients is that patented drugs are usually significantly more expensive than generic drugs (drugs not protected by patent). The central role of patents does not imply that they are the only determinant of patients’ access to drugs. In fact, a host of other factors play vital roles in shaping people’s access to medicines. These include issues linked to the distribution of drugs as well as legal and policy instruments that a government can use to regulate prices, such as the Drug Price Control Order (DPCO of India 2013).
As far as innovation is concerned, it is clear that the existence of patents in developed countries has not led pharmaceutical companies to develop drugs for DC-specific diseases.77
In 2001, a commission set up by the UK government on IP and development noted that:
‘For most developing countries any benefits in terms of the development of new treatments for diseases that afflict them will be, at best, long term, while the costs of implementing a patent system are both real and immediate.’78
It then recommended a variety of measures that countries could consider adopting. These included that developed countries strengthen parallel importation, provide international exhaustion of rights, establish workable laws and procedures to give effect to compulsory licensing, apply the ‘early working’ exception to patent rights, and avoid granting data exclusivity.79
Nearly ten years after its independence India had one of the highest prices for drugs but can now boast of one of the lowest price of drugs in the world.80

ACKNOWLEDGEMENTS
ABSTRACT
CHAPTER 1: INTRODUCTION
1.1 Background and context
1.2 Definitions
1.3 Research problem
1.4 Aims and objectives
1.5 Research methodology
1.6 Theoretical framework
1.7 Scope of study
1.8 Literature review
1.9 Thesis overview
1.10 Assumptions
CHAPTER 2: INTERFACE BETWEEN PATENTS AND ACCESS TO MEDICINES
2.1 Introduction
2.2 Overview of the patent system
2.3 The need for the protection of patent rights
2.4 The interface between patents and access to medicines
2.5 Conclusion
CHAPTER 3: AN OVERVIEW OF THE HUMAN RIGHTS FRAMEWORK
3.1 Introduction
3.2 Conflict between patents and access to medicines
3.3 The international framework
3.4 The constitutional framework
3.5 Limitation clauses
3.6 The impact of competing human and intellectual property rights on access to medicines
3.7 Analysis of the court’s approach to cases bordering on access to medicines in South Africa
3.8 Conclusion
CHAPTER 4: THE TRIPS AGREEMENT
4.1 The historical development of the TRIPS Agreement
4.2 The legitimacy of the TRIPS Agreement
4.3 Concerns of the developing countries before and during the negotiation of the TRIPS Agreement
4.4 How the concerns of the developing countries were reflected in the TRIPS Agreement
4.5 The scope, objectives and general principles of the TRIPS Agreement
4.6 Patents under the TRIPS Agreement
4.7 Analysis of the TRIPS flexibilities
4.8 Policy options for the implementation of TRIPS flexibilities
4.9 Special provisions of the TRIPS Agreement relating to medicines
4.10 Conclusion
CHAPTER 5: COMPULSORY LICENSING OF PHARMACEUTICAL PATENTS
5.1 Introduction
5.2 Compulsory licensing under the TRIPS Agreement
5.3 Grounds for grant of compulsory licences
5.4 Scope and duration
5.5 Preconditions for exploiting compulsory licences
5.6 Obstacles to the use of compulsory licensing provisions under the TRIPS Agreement
5.7 Examples of compulsory licensing of medicines in developed countries
5.8 Use of compulsory licensing by selected developing countries
5.9 Compulsory licenses issued by some Sub-saharan Africa countries
5.10. Compensation of the patent owner under article 31(h) of the TRIPS Agreement
5.11 Conclusion
CHAPTER 6: THE DOHA DECLARATION
6.1 Introduction
6.2 The WTO Doha Declaration on Access to Medicines
6.3 The negotiating history of the Doha Declaration
6.4 Analysis of the Doha Declaration
6.5 Paragraph 6 of the Doha Declaration on production for export under a compulsory licence
6.6 The 30 August 2003 Decision
6.7 Analysis of the Paragraph 6 problem: Does the decision provide answers to the problems identified during the Doha Declaration on the TRIPS and public health?
6.8 The Chairman’s statement
6.9 Conditions of use
6.10 Procedural requirements
6.11 Proposals for the amendment of the TRIPS Agreement
6.12 The Protocol amending the TRIPS Agreement
6.13 Conclusion
CHAPTER 7: INDIA: THE PHARMACY OF THE DEVELOPING WORLD
7.1 Introduction
7.2 The Indian Patents Act of 1970 (2005)
7.3 Limitations imposed by the Indian Patents Act on the exercise of patents rights
7.4 Compulsory licensing provisions under the Indian Patents Act
7.5 Limitations imposed by parallel imports
7.6 Conclusion
CHAPTER 8: PATENTS AND ACCESS TO ESSENTIAL MEDICINES: THE SOUTH AFRICAN EXPERIENCE
8.1 Introduction
8.2 The effect of the conflicts between patents and the right of access to medicines
8.3 Are patents constitutional properties?
8.4 Section 27 of the Constitution of the Republic of South Africa, 1996: The constitutionality of access to medicines
8.5 Legislation on access to medicines in South Africa
8.6 Competition policy reform: An analysis of the South African situation
8.7 The South African draft IP Policy
8.8 Conclusion
CHAPTER 9: CONSTRAINTS ON THE IMPLEMENTATION OF THE DOHA DECLARATION AND THE 2003 DECISION
9.1 Introduction
9.2 Compulsory licensing and parallel importation
9.3 Data exclusivity and regulatory approval
9.4 Bolar provisions (early working)
9.5 The need for national laws on compulsory licensing
9.6 Research and development
9.7 The ambiguities under the Doha Declaration.
9.8 The undermining of public health protection through bilateral and regional trade agreements.
9.9 Trade in counterfeit drugs
9.10 Conclusion
CHAPTER 10: CONCLUSIONS AND RECOMMENDATIONS
10.1 Introduction
10.2 Findings and Conclusions
10.3 Recommendations
10.4 Suggestions for further research
BIBLIOGRAPHY
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