It eliminates competition from generic drugs by facilitating ever-greening of patent rights
The signing of the Trans-Pacific Partnership (TPP) agreement in New Zealand on February 4 by the US and 11 other countries clearly had a celebratory ring around it. However, we need to reflect on the damage that the implementation of TPP is likely to inflict on public health policies in the world. Many provisions in the TPP are designed specifically to protect and further enhance the windfall profits of pharmaceutical MNCs in the US, while overriding the legitimate concerns on access to affordable medicine.
By eliminating competition in the market from generic drugs, the TPP tilts the balance significantly in favour of the Big Pharma in at least six different ways. First, the TPP lowers the bar on patentability by mandating that any new use of a known substance or a new process or a new method of using a known substance would become eligible for a patent. Thus, a drug molecule that has already benefited from 20 years of patent protection can become a viable patentable subject matter for yet another 20 years if a new use is found of the same substance. Sustained release forms of existing molecules and fixed dose combinations of drugs, could be some of the other channels for repeated grant of patent protection on essentially the same medicine.
Second, the TPP provides for patent protection beyond 20 years for supposedly compensating the applicant for delays in patent office. It is important to recall that two decades earlier, using the very same argument, Big Pharma, had secured the 20-year term for patent protection under the WTO TRIPS Agreement. Clearly, there appears to be no limit to the number of times the same argument can be flogged by the Big Pharma to enjoy monopoly protection in the market. What is worse is that this will also lead to differing periods of patent term depending on delays in country jurisdictions.
Third, TPP mandates countries to provide data exclusivity for 5 years for pharmaceuticals which can be extended by 3 years if new clinical information is submitted and 8 years for biologics from the time it is registered in the concerned country. During the period of data exclusivity, clinical trial data submitted by the originator company establishing safety and efficacy of the medicine cannot be relied upon by the regulator to grant approval to another applicant showing bioequivalence with that medicine. Data exclusivity, which is a TRIPS Plus measure, will delay the entry of generic drugs in the market.
Fourth, data exclusivity protection will also apply to sustained release or fixed dose combinations of molecule, paediatric dose or for developments that improve the administration of the same medicine. As small improvements in existing formulations is a continuous process, even marginal changes which satisfy the conditions for application of data exclusivity will get protected. This will lead to yet another form of ever-greening the monopoly rights enjoyed by the Big Pharma.
Fifth, the TPP mandates that the principles developed by the International Conference on Harmonization (ICH) be adhered to by the TPP members while considering applications for marketing authorisation for pharmaceutical products. ICH standards for drugs have been extremely controversial. Even the WHO has observed that the adverse impact of withdrawal of certain drugs might well be “far more dramatic than that of any hypothetical risk posed by failing to achieve the ICH standards.” This should ring alarm bells among developing countries that are parties to the TPP, as well as other nations that may be contemplating to join TPP.
Sixth, the TPP has opened a window for preventing new generic drugs from being listed as a pharmaceutical eligible for reimbursement under national health care programmes operated by different countries. The TPP requires that companies be allowed to intervene and seek remedy if they are dissatisfied with the process of listing of eligible pharmaceutical products and the amount of reimbursement. This has raised concern among many quarters of the possible influence that the Big Pharma may employ to exclude new generics from national health care programmes.
Overall, the TPP will critically reduce, if not totally eliminate, competition from generic pharma companies and adversely impact access to medicines. The repercussions of a regime that would be created by the TPP can be visualized from the example of the drug ‘Sofosbuvir’. For a three-month treatment in the US for Hepatitis C, this medicine costs $80,000. If patients in developing countries are deprived of generics and instead have to pay this price, bursting of family budgets on account of medical treatment would become a common crushing reality.
The TPP would also disincentivise path-breaking medical research and future development of technologies. Investing resources in new research would be more expensive and risky, while an easy alternative of ensuring high profits would exist through ever-greening of patents. If more countries become party to the TPP, the magnitude of the unpredictability, uncertainty and fragmentation of the market due to differing terms of patent protection and data exclusivity would make it unviable for generic manufacturers to invest in new manufacturing facilities.
In conclusion, it would not be an exaggeration to state that some of the rules under the TPP for the protection of intellectual property are clearly written by MNC pharma companies. With medicine prices set to surge significantly as a consequence, even the middle-class in most countries may get deprived of life saving drugs. Is this the world that trade negotiators wish to bequeath to our future generations? World leaders have a moral obligation to prevent this human tragedy from unfolding.
The author is professor, the Centre for WTO Studies, Indian Institute of Foreign Trade. Views are personal