TRIPS must be monitored closely, both in countries with strong generic industries and those relying on imports of generic substitutes.
Public health has once again come to the centre-stage of world economy, with the US FDA’s Margaret Hamburg vociferously preaching about the quality of the medicines that can be exported to America. Medicines that do not confirm to the standards of FDA are not to enter the US market as they may result in various health issues. In fact, affordability of public health has become a vital issue of concern the world over, especially in the wake of major epidemics like HIV/AIDS, malaria, tuberculosis and a host of other diseases. More importantly, the issue has assumed critical proportions once public health came under the Trade-Related Aspects of Intellectual Property Rights (TRIPS), currently governed under the World Trade Organisation (WTO). As the issue is of immense concern to developing countries, it is useful here to analyse it in detail.
TRIPS and public health, for the first time, caught the attention of the world in WTO’s development round of negotiations, which popularly came to be known as the Doha Round in 2001. It embodies several concerns for developing countries. Since launch of Doha in 2001, many developmental issues have surfaced in WTO negotiations. One of the most significant and intricate one has been the interface between TRIPS and the objective of universal and equitable access to public health. The overriding importance of this subject can be gauged from the fact that there was a separate Ministerial Declaration on TRIPS and Public Health at the time of announcement of Doha.
The TRIPS Agreement, in 1995, set down minimum standards and universally applicable benchmarks on intellectual property (IP) to be administered in all WTO member countries. While certain relaxation in implementation was given to developing countries and least developed countries as they were in nascent state of IP development, within years of operation of the Agreement it was felt that the avowed intent of universally equitable and affordable access to health could be severely compromised unless concessions were made by amending the TRIPS Agreement.
On December 6, 2005, the TRIPS Agreement was amended to incorporate specific safeguard measures to ensure that public health concerns were not compromised keeping in view the issue of affordability and accessibility for a large section people who live in developing countries. These amendments are yet to come into force as two-third members of the WTO have not yet ratified them, as required under WTO provisions. The deadline to amend was postponed to December 31, 2013, by the General Council. However, the latest General Council decision of November 26, 2013, extended the deadline to December 31, 2015.
Perhaps the most controversial issue surrounding TRIPS is its impact on the price and availability of new medicines. If patents are obtained and enforced in developing countries, TRIPS could reduce the availability of copies of patented medicines, thus adversely affecting a de facto price control on medicines in these countries. The manufacture of products that were unprotected by patents led to competition that played a key role in determining prices for HIV antiretrovirals in Brazil, India, South Africa and other countries.
Accordingly, the price effects of implementing TRIPS should be monitored closely, both in countries with strong generic industries and in countries relying on imports of generic substitutes. But there are other underlying structural impediments to access, besides price. These include equity and efficiency of healthcare financing and drug/vaccine distribution systems, the availability of evidence-based analysis to improve current practice, and local community involvement. An instructive and often-cited example of delivery failure is the uneven access to medicines on the World Health Organisation’s list of essential drugs, of which less than 5% are on-patent. To accurately measure access requires carefully considering the historical and social contexts of drug delivery.
Apart from the potential effects of patents on post-TRIPS pricing and availability, the comparative therapeutic benefits of new chemical entities over available generics will have health implications. So, in assessing TRIPS over time, the rate of pharmaceutical innovation will be a key variable in measuring the health impact of strengthened patent regimes.
IP management skills will need to be developed so that TRIPS can be adapted to a nation’s advantage. Developing countries that choose to invest in science and technology must, of necessity, address IP issues to participate in the international marketplace. IP competencies will enable these countries to gain access to emerging tools, technologies and resources. Indeed, an acute need exists to establish policies and procedures, and to train staff in effectively managing IP. Priorities include training in contract negotiation, statutory protection, patent searching and filing, technology valuation and business strategy development, as well as the development and implementation of IP policies and strategies at the institutional level, especially within public research institutions and universities. To provide the most useful and accurate information, the evaluation of costs and benefits of TRIPS should consider investments in capacity building as an important variable.
A significant part of the current debate relating to TRIPS compliance by developing countries in general, and India in particular, has focused on the establishment of a product patent regime. It has been contented seriously that a product patent regime would encourage innovation and FDI in a developing country, but it would also severely undermine the capability and growth of the domestic generic drug manufacturing industries. Such a regime would not only make public health more expensive, but also push it out of reach of a large section of the poor living in the developing countries.
The author is a Professor, Lal Bahadur Shastri Institute of Management, Delhi.