Health, Trade & TRIPS: Current Work at the WTO and How it - - PowerPoint PPT Presentation

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15th Annual IGPA Conference Kyoto, Japan, 5 December 2012

The Interface Between Public Health, Trade & TRIPS: Current Work at the WTO and How it Relates to the Generic Industry

Roger Kampf, WTO Secretariat ฀

฀ ฀ The views expressed are personal and cannot be attributed to the WTO, its Secretariat, or any of its Member governments.

I. Introduction: The Interface Between IPRs and Public Health

Where Do We Come From: the Interface between IPRs and Public Health

• Since last decade:

– Impact of IPRs on innovation of and access to medicines moved to centre of cross-cutting debate between separate policies

• TRIPS-related issues (as confirmed by Doha

Declaration):

– IPR as an important factor for development of new medicines, but: concerns expressed about effect on prices → How best to reconcile the need for incentives to invest in R&D and access to medicines? – Importance of flexibilities recognized, but: need to preserve balance of rights and obligations → How is optimal balance between IPRs and public health best achieved? – TRIPS as part of wider national and international action to address health problems, but: cannot solve issues on its

• wn

→ How to ensure capacity to deal with innovation-access cycle in a holistic manner?

From Boundaries to Synergies: Bringing Together Distinct Policies

Access to Medical Technologies

Innovation & public research policies International Trade & Domestic Economic Settings IP Law, Management and Administration Human Rights Quality, Safety, Efficacy Regulation Public Health Framework

An Issue Addressed at Various Levels & By Different Actors

Multilateral Framework:

• WHO
• WIPO
• WTO

Free Trade Agreements Regional Framework:

• ARIPO
• OAPI
• thers

Domestically:

• IP policy &

strategy

• Legislation
• Courts

Key actors:

• IGOs
• Regional

Organizations

• Governments
• Private Sector
• Civil Society

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Key Provisions Affecting Pharmaceutical Sector in Selected FTAs Notified to WTO

FTA Provision on Patentability Patent term extension Compulsory licensing Exhaustion Test data exclusivity Patent linkage Enforcement Side letter or /reaffirmation of Doha Declaration EFTA - Albania, Chile, Colombia, Egypt, Korea, Peru, Serbia, Singapore, Tunisia, Ukraine (10 in total) Mandatory (7) Optional (2) 5 to 8 years (7) Reasonable period (normally five years) (2) Adequate number of years or financial compensation (1) 4 2 EFTA - Jordan, Morocco Protection of patents on a level similar to that prevailing in the European Patent Convention EC – Turkey, Stabilisation and Association Agreements with FYROM, Albania, Croatia, Montenegro Level of protection similar to common body of EU legislation and jurisprudence EC – Chile, Mexico, South Africa and Association Agreements with Algeria, Israel, Jordan, Morocco, Tunisia, Lebanon (Interim Agreement) Protection in accordance with highest international standards EC – Cariforum (pending as of 8/2012) √ √ EC – Korea (provisional application) √ 5 years √ √ US - Australia, Bahrain, CAFTA/DR, Chile, Colombia, Jordan, Korea, Morocco, Oman, Panama, Peru, Singapore (12 in total) 8 Mandatory (11) Optional (1) 3 2 Five years (8) Reasonable period (normally 5 years) (3) 12 11 8

The Generic Industry: An Active User of the IP System

• As IP rightholder - for example:

– Trademarks for branded generic products – Enforcement of trademarks and other IPRs

• As voluntary licensee

– Increased number of voluntary licensing programmes (new / pipeline products, broader range of countries) – Different types of partnerships:

• Extended partnership, including acquisition of shares,

right to distribute partner products, acquisition of manufacturing facility by generic partner (ex: GSK/Aspen)

• One licence agreement to manufacture a single product
• Reliance on generic companies as distributors (ex: Gilead)

– Medicines Patent Pool and WIPO Re:Search

• As compulsory licensee
• As user of litigation procedures
• As stakeholder in policy-making process

→ Interest in balanced and well-functioning IP system

II. WTO’s Mandate and Role in the Pharmaceutical Sector

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General Overview

• Trade (rules) intersect with public health
• bjectives in many ways:

– Positive link: trade - higher living standards – improved public health conditions – Defensive link: right to take trade-restricting measures to protect public health recognized in all WTO agreements

• The WTO’s role is to:

– Offer a forum for discussion of the interface between trade rules and public health – Settle disputes:

• Few cases challenged appropriateness of measure chosen to

achieve public health objectives, not the right to protect public health

– Raise awareness and build capacity

• The WTO’s mandate is NOT to interpret TRIPS

provisions or to assess use of TRIPS flexibilities

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WTO Is Not “Just” About TRIPS ! (1): Tariffs

• Growing importance of international trade for

supply of public health goods:

– +12%/year, from 92 bn. USD (1995) to 500 bn. USD (2010) – Amounts to 4.2% of global merchandise trade

• Applied tariffs on health-related products:

– Affect both access and domestic production – Pharmaceutical Sector Initiative (1994) – selected WTO Members liberalize markets for >6500 products and ingredients (= estimated 79% of global trade) – Sectoral initiative for open access to enhanced health care (2006)

• For detailed study see WTO Staff Working Paper:

More Trade for Better Health ? International Trade and Tariffs on Health Products (October 2012)

Imports of Health-Related Products:

in bn. USD for 2010 Average Annual Growth 1995-2010

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9,775 +9.6% 26,910 +6.4% 72,052 +7.9% 86,933 +11.9% 97,545 +11.3% 202,703 +16.0% A2 - Bulk medicines A3 - Specific inputs B - General inputs C1 - Hospital inputs C2 - Medical equipment A1 - Dosified medicines

Bound vs. Applied Tariffs

• n Health-Related Products

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WTO Is Not “Just” About TRIPS ! (2): Public Procurement

• Procurement policies and practices:

– Maximize competition in procurement process – Helps to achieve “best value for money”

• The WTO’s plurilateral GPA (42 Members):

– Ensures non-discrimination and transparency – Magnitude of health-related procurement:

• US statistical report (2008): 40 bn. USD for hospitals,

50 bn. USD for health sector in general, 30 bn. USD for goods/services procured by Department of Health

• EU statistical report (2007): 11 bn. EUR for medical

technologies covered by GPA

• Japan statistical report (2010): 1.8 bn. USD for

contracts awarded by MoH – Revised agreement signed in 2012

Health Sector Coverage by Selected GPA Parties

Party Coverage of health-related entities at the central government level Coverage of health-related entities at the sub- central government level Coverage of goods Coverage of health-related services Canada √ √ √ X European Union √ √ √ X Hong Kong, China √ N/A √ X Israel √ X √ X Japan √ X √ X Korea √ X √ X Norway √ √ X Singapore √ N/A √ X Switzerland √ √ √ X Chinese Taipei √ √ √ X United States √ √ √ √

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WTO Is Not “Just” About TRIPS ! (3): SPS and TBT Agreements

• Avoid unnecessary barriers to international trade

– Human health or safety recognized as legitimate

• bjective
• Use internationally-established health and safety

standards

• Almost half of the issues raised in TBT

Committee relate to human health and safety

• Directly affects the pharmaceutical sector:

– Health products, including herbal medicines (regulation and inspection) – Medical devices

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Examples from TBT Committee

Brazil (2009) European Union (2009) Measure: GMP certificate

required when applying for registration of certain health products at ANVISA Measure: imported products, including APIs, required to be produced according to GMP equivalent to those of the EU, confirmed by written declaration

• f competent authority in

exporting country

Objective: Protection of human

health and prevention of deceptive practices Objective: Prevention of entry into supply chain of falsified medical products

Concerns (selection):

• Acceptance of ISO certification as

evidence of compliance?

• Availability of sufficient inspection

resources at ANVISA?

Concerns (selection):

• Unjustifiable burden for competent

body in exporting country

• Acceptance of WHO API GMP

certificate?

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WTO Is Not “Just” About TRIPS ! (4): Competition Law and Policy

• No multilateral framework at WTO, but:

– Art. 40, 31, 8 TRIPS (anti-competitive practices/ IPR abuse) – Article 10bis Paris Convention (unfair competition)

• Relevant for:

– innovation and access – generic companies (e.g. patent settlement agreements, agreements between generic companies, mergers)

• Objective:

– inform regulatory and other policy choices – Corrective tool where needed to ensure competition from innovation to delivery

• Country experiences:

– South Africa: cases at Competition Authority – EU: Commission pharmaceutical sector inquiry

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WTO Is Not “Just” About TRIPS ! (5): Conclusion

• Many of the other WTO disciplines directly affect

the generic pharmaceutical industry, in particular:

– Bound and applied tariffs – Government procurement – TBT and SPS – etc.

• Need for generic industry to take a holistic, multi-

dimensional approach, and not to focus exclusively on TRIPS matters

III. IPRs and Public Health: TRIPS and later instruments

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The Starting Point: Key TRIPS Provisions (1)

• Objectives and principles – the “shoulds” under

the TRIPS Agreement:

– Promotion of technological innovation – Transfer and dissemination of technology – Balanced approach, adapted to domestic policy

• bjectives
• Patents – a wide range of flexibilities:

– Definition of patentability criteria – Disclosure requirement – Exclusions – Exceptions, including compulsory licences

• Exhaustion – national vs. international:

– freedom to choose regime which best fits domestic policy objectives – Illustrates need to think holistically within and beyond IP system

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The Starting Point: Key TRIPS Provisions (2)

• Test data – mandatory protection against unfair

commercial use and disclosure:

– But: how to protect is not prescribed – Application of pro-public health interpretation of TRIPS provisions under the Doha Declaration

• Enforcement – important links to public health:

– Terminology: what is a counterfeit medicine – Guided by objective to achieve a balance: preserve legitimate trade, important safeguards

• Transition periods for LDCs:

– 2013 in general: further extension requested by LDCs – 2016 in pharmaceutical sector

→ Need to address interface IPRs-public health not new, already recognized by TRIPS 1995

The Turning Point: What the Doha Declaration Achieved

The Doha Declaration 2001

Guidance: interplay IPRs and health Extension

• f LDC

transition period to 2016 Adoption of Paragraph 6 System Landmark in WTO and elsewhere Framework for multilateral cooperation Vision of TRIPS: supportive

• f balanced

framework Clarifies TRIPS flexibilities: CL and exhaustion Support of countries using TRIPS flexibilities

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An Additional Flexibility: Para. 6 System

• Designed to address difficulties of Members with

insufficient or no manufacturing capacities in the pharmaceutical sector in effectively using CL:

– Removes specific legal obstacles: waiver of certain TRIPS conditions otherwise applicable to CL

• Makes an additional flexibility available:

– Procedures are designed by national implementing legislation – Only applies to narrowly defined circumstances – Forms part of wider national/international action – Requires further reflection on commercial incentives for generic manufacturers to engage in production

• First ever amendment proposed to a WTO

agreement:

– Reflects importance that Members attach to intersection between IPRs and public health

• Has been endorsed by various other UN bodies:

– e.g.: Element 5.2 of WHO’s GSPA-PHI

IV. Relevant Work in the WTO

Discussing and Informing

• Making available a forum for debate of IP issues:

– Assessment of LDC priority needs – Technology Transfer (to LDCs) – Enforcement trends (in-transit generic medicines, ACTA) – New directions:

• Early discussion of draft agreements/legislation:

Australia’s Plain Packaging Bill for tobacco products

• Move towards a forum for policy debate - new agenda item
• n IP and innovation, introduced by Brazil and the US:

– Concept of innovation vs. invention – Evidence for causal connection between IP & innovation – Call for a balanced IP regime – Recognition that IP policy must form part of wider national innovation strategy, is only one among many factors

– But not discussed in detail:

• Test data protection
• Counterfeit medicines
• Providing factual information and empirical data

Solving disputes (1)

• Regulatory review exception permitted as limited

exception to patent rights (WT/DS114/R)

• Australia’s Plain Packaging Bill (DS434/435/441)

raises interesting questions, including for the generic industry:

– Link with public health debate in general: priority for public health or industrial policy objectives ? – Can pro-public health measures addressed in Art.8 TRIPS override substantive trademark provisions ? – Is there a positive right to use a trademark ? – Burden of proof: what does the defendant need to provide in order to show that use of trademark is not unjustifiably encumbered ? – Repercussions on open question of application of non-violation and situation complaints to TRIPS ?

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Solving Disputes (2): In-Transit Generic Medicines

• What happened ?
• Principal measure at issue: EU Regulation

concerning customs enforcement of IPRs

– goes beyond TRIPS requirements, as applicable to goods in transit and patent infringing goods

• Discussed in TRIPS Council, followed by DS

consultations (India, DS408 & Brazil, DS409)

• Alleged violations include GATT (Art.V), TRIPS

(Art.1.1, 7, 8, 31, 41, 42, 51) and Doha Declaration

• Mostly about cases of alleged patent (and not

trademark) infringement in transit country

• State of play:
• mutually agreed arrangement in summer 2011
• ECJ judgment in December 2011
• Commission Guidelines of February 2012

– What is the right approach ?

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Reviewing the Operation of Para.6 System

• TRIPS Council looks into narrow and broader

aspects (see annual reviews 2010-11)

• Narrow aspects focus on operation of System as

such, in particular whether it is delivering effective and expeditious results

• Broader aspects discussed include:

– Funding – Partnerships – Pricing (including transparency mechanisms) – procurement practices – Competition policies – Taxes, tariffs and mark-ups – Quality, safety and efficacy

• Discussion contributes to better understanding
• f interplay between IPRs and public health

Intensifying Cooperation

• Essentially among WHO, WIPO, WTO, but also

involving other IGOs

• “Traditional” fields of cooperation, in particular

through capacity building activities:

– Example: jointly designed workshops dedicated to the interplay between IPRs and public health

• Series of joint technical symposia on:

– Pricing and procurement policies (July 2010) – Patent information and Freedom to operate (February 2011)

• WHO/WIPO/WTO study on “Promoting Access

and Medical Innovation: Intersections Between Public Health, IP and Trade”

Trilateral Study (1): Purpose

• Aims at assisting decision-makers by providing

information on:

– legal and policy options (IPRs: particular focus on

• ptions/practices regarding patents)

– interplay between trade, IP and health rules – empirical data

• Illustrates the need to adopt a holistic approach:

– from research and discovery to delivery: need to take innovation and access equally into account – encompassing health, trade and IP dimensions

• Forms an integral part of technical co-operation
• ffered by WHO/WIPO/WTO

– in response to growing and diversified demands – strengthening policy coherence

Trilateral Study (2): Content

Policy Context (Chapter II)

• Analyses key intersections between innovation & access
• Provides data on global burden of disease
• Discusses various dimensions: public health, trade and IP
• Sets out the economics of innovation and access

Innovation Dimension (Chapter III)

• Describes historical pattern

and current landscape of medical R&D

• Looks at the role of IPRs in

innovation cycle

Access Dimension (Chapter IV)

• Sets out WHO access framework

for essential medicines

• Analyses access determinants:
• Health systems
• IP system
• Other trade-related aspects

Introduction (Chapter I)

• Need for international co-operation and policy coherence
• Overview of international key stakeholders

V. Conclusions

Trends in the Pharmaceutical Sector

• Rethinking the business model:

– How will stronger links between R&D companies and generic manufacturers impact on IP regime ?

• New molecular entities:

– How will generic industry be affected by significant decline since late 1990s?

• Patent cliffs:

– A changing perspective for generic companies ?

• Biologics:

– Will more complex technologies and higher development costs slow down entry of generics / limit price reductions ?

• Counterfeit medicines:

– What can the generic industry contribute to minimize the risk, in particular in view of strong reliance on API imports?

• Domestic IP legislation takes different directions:

– Is diversity better for business than uniformity of rules? How to handle diversity from the user’s perspective?

• FTAs and non-discrimination principles:

– What are the implications of existing and future agreements for generic companies?

Where Do We Stand ?

• According to progress indicators GSPA-PHI:

Coordination of IGO work TRIPS flexibilities in national law IPR application & management capacities Access Policies Techtransfer initiatives/strategies Monitoring & reporting

Why WTO Matters to the Generic Industry

• Clarify TRIPS flexibilities through capacity

building activities (example: what is required under Article 39.3 to protect clinical test data)

• Ensure that legitimate trade can take place (as

stipulated in Article 41)

• Raise and settle sensitive issues (example in

transit generic medicines – clarify that generics are not counterfeit products – warn against dilution of narrow meaning of counterfeiting under TRIPS Agreement)

• Provide information sources and empirical data

to facilitate well-founded decisions and to promote holistic approach (example: trilateral study; notification of legislation, TPR reports)

• Ensure coherence, co-operation and dialogue at

all levels

What the Generic Industry Can Do

• Make constructive contribution to ongoing

debate on functioning of the Paragraph 6 System:

– What is needed to make production under mechanism commercially viable for generic manufacturer?

• Support the WTO’s efforts to promote a balanced

IPR regime and a holistic approach, involving all relevant dimensions

• Actively participate in capacity building activities

to share the generic industry’s perspective

• Offer a well-structured interlocutor that can

represent the generic industry’s common interests at international level