Lead Author: Brigitte Tenni
Additional Author: Dr Deborah Gleeson- La Trobe University
Organization: People's Health Movement (PHM) - Australia
SECTION 1. ABSTRACT
In recent years, several developed nations including the United States, Japan and the European Union have pursued bilateral and or multi-lateral free trade agreements that include measures that adversely impact on access to medicines. These include intellectual property measures that are up and beyond what are required by the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and investor state dispute settlement (ISDS) clauses that can be applied to intellectual property and threaten countries’ sovereign ability to defend decisions with regard to the granting of patents. This submission highlights the need for trade agreements to be consistent with TRIPS and the Sustainable Development Goals in order to preserve and expand access to medicines globally. Currently, FTAs prioritise the rights of inventors over the right to health and access to medicines. This imbalance needs to be redressed.
SECTION 2- CALL FOR CONTRIBUTIONS
1. IMPACT ON POLICY COHERENCE
The rules that govern and determine the minimum standards of intellectual property (IP) regulation applicable to World Trade Organization (WTO) Member countries are enshrined in the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)(1)
This agreement aimed to balance the rights of inventors with human rights and public health objectives. Although TRIPS is often criticised for being a barrier to access to medicines (2), many Free Trade Agreements (FTA) and Economic Partnerships have introduced intellectual property standards that are beyond what is required by TRIPS. These TRIPS plus measures are inconsistent and incongruent with the WHO, UNDP (3) and human rights groups call for equitable access to medicine and undermine global public health efforts. TRIPS plus measures are in opposition with the goals of the 2030 Agenda for Sustainable Development. In particular, Sustainable Development Goal 3 (4), that aims to improve the health and wellbeing for all. Many of the targets of goal 3 are undermined by FTAs, specifically:
Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all
Support the research and development of vaccines and medicines for the communicable and non-communicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade-Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all
FTAs must be consistent with the goals of the SDGs and public health principles and must not seek additional intellectual property privileges beyond what is required by TRIPS.
2. IMPACT ON PUBLIC HEALTH
In recent years, many high income countries such as Japan, the United States, and the EU have pursued bilateral and multi-lateral Free Trade Agreements (FTAs) that contain standards that compromise access to medicines and curtail governments’ ability to legislate to protect public health.(5) FTAs that contain TRIPS plus measures strengthen drug patents and delay the entry of affordable generics. (5) Generic drugs reduce the price of medicines which creates savings for individuals and health care systems. Upon market entry, generics are substantially cheaper than originator medicine and their price continues to fall over time.(6)
US led FTAs include several chapters that impact on access to medicines including the Intellectual Property (IP) chapter, The Transparency chapter and the Investment chapter. These will be discussed in more detail below.
The demands in the intellectual property chapter of FTAs have the potential to strengthen patents and delay the market entry of affordable generic medicine. These demands are beyond what is required by TRIPS and can include but are not limited to:
- The extension of patentability to cover new forms, uses and methods of using an existing product (despite a lack of evidence of any increase benefit, enabling ‘evergreening’ and lengthening patent terms);
- patents for diagnostic, therapeutic and surgical methods, requiring royalties to be paid for diagnostic and treatment procedures;
- patent term extension to allow for delays in the granting of patents and or marketing approval
- the removal of pre- grant opposition (a safeguard that can be used to prevent patents from being granted in error);
- data exclusivity extension – the provision of at least five years of data exclusivity for new medicines and an additional three years for new uses of existing drugs, and longer periods for biologics
- patent linkage- linking generic drug marketing approval to the patent status of the originator drug (7)
These TRIPS plus measures have shown to be detrimental to access to medicines in developing countries. An Oxfam study that examined the effects of TRIPS plus provisions in the US-Jordan FTA on medicine prices found a 20 percent overall increase in medicine prices over a five year period. (8) Guatemala also experienced dramatic price increases after signing the Central America Free Trade Agreement (CAFTA). (9)
A recent study analysed the potential impact of the 2014 US proposals for the recently signed for the Trans Pacific Partnership (TPP) Agreement on access to anti retro viral (ARV) medication for people living with HIV (PLHIV) in Vietnam. This twelve country agreement includes the US, Canada, Mexico, Japan, Australia, New Zealand, Peru, Brunei, Malaysia, Chile and Singapore and Vietnam. The study found that only 30% of eligible PLHIV in Vietnam would have access to ARVs under the US TPP proposal compared with the current 68% of eligible PLHIV receiving ARV. (10)
An annex to the Transparency chapter in the TPP requires signatories to comply with measures relating to pharmaceutical pricing and pharmaceutical reimbursement schemes. As the TPP is often touted as a “21st century regional trade agreement” and a template for future agreements this annex is of concern as it has the potential to derail existing pharmaceutical reimbursement programs and hamper their establishment in countries who are yet to introduce such schemes.
The initial US initial proposal included:
- challenges to therapeutic reference pricing
- arduous levels of disclosure in the name of ‘transparency’ that allow for pharmaceutical company input
- direct to consumer advertising of medicines which has be shown to undermine rational prescribing
- avenues for pharmaceutical companies and manufacturers of medical devices to be a part of decisions regarding listing, pricing and reimbursement;
- review and appeals processes that allowed for challenges to decisions made by independent health experts in regard to pharmaceutical listing and price. (11)
Collectively these clauses curtail a government’s ability to ensure cost effectiveness in the procurement of drug and medical devices.
Many FTAs now contain an Investor State Dispute Settlement (ISDS) clause that has profound ramifications for access to affordable medicines. This clause allows foreign companies to sue governments over perceived harm to their investment. American pharmaceutical company Eli- Lilly is currently suing the Canadian government under the North America Free Trade Agreement (NAFTA) in response to Canada’s decision to overturn previously granted patents on two medicines, Zyprexa and Strattera on the grounds that they failed to fulfil Canadian criteria for patentability. (12)
TPP’s investment chapter also includes an ISDS clause and defines intellectual property as ‘investment’. (7) This could potentially enable foreign pharmaceutical companies to sue TPP member nations over unfavourable patent decisions. This has dire implications for the price of medicines and can create a ‘chilling effect’ and deterring governments from making decisions that might trigger an ISDS case. (13)
3. IMPACT ON HUMAN RIGHTS
The right to health, enshrined in the Universal Declaration of Human Rights, is undermined by free trade agreements that contain TRIPS plus measures.
Strengthening drug patents results in high prices which create a significant barrier to medicines both for governments and individuals. Groups already disadvantaged are often the most severely impacted by rising costs such as the elderly, those with chronic illness and the poor. Studies show prescription medicine use declines when co-payments increase, especially for those already marginalised.(14)
The UN has already recognised the potential for free trade agreements and IP regimes to run counter to human rights. The 2012 UNDP publication “HIV and the law: Risks, rights and health” recommended
To ensure an effective, sustainable response to HIV that is consistent with human rights obligations:
6.2. High-income countries, including donors such as the United States, European Union, the European Free Trade Association countries (Iceland, Liechtenstein, Norway and Switzerland) and Japan must immediately stop pressuring low- and middle-income countries to adopt or implement TRIPS-plus measures in trade agreements that impede access to life-saving treatment (5)
Additionally, the 2009 Report of the UN Special Rapporteur on the Right to Health specified that
‘Developed countries should not encourage developing countries and LDCs to enter into TRIPS-plus FTAs and should be mindful of actions which may infringe upon the right to health.’ (15)
The 2001 Doha Declaration reaffirms member state’s right to use the flexibilities enshrined in TRIPS including compulsory licensing. It explicitly states that least developed country members have until 1 January 2016 (which has since been extended to 2033) to apply the TRIPS Agreement and therefore do not have to grant pharmaceutical patents until this time. It reiterates member states’ responsibility to protect the right to health.
We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all. In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose. (16)
FTAs that contain TRIPS plus measures restrict the use of TRIPS flexibilities and pressure least developed countries to lock in IP regimes not required by TRIPS. This strengthens patent protection which in turn creates and maintains high medicine prices and favours the rights of inventors over the right to health.
FTAs must ensure that IP demands are compliant and consistent with the TRIPS agreement. Countries should not be pressured to sign on to TRIPS plus measures and least developed countries should not be pressured to provide patent protection for pharmaceuticals until 2033.
To facilitate access to medicines FTAs should not include:
• extension to patent terms delaying the market entry of generic drugs
• extended data protection periods which can compromise the ability to issue compulsory licenses.
• patent linkage
• the patenting of new forms, new uses or new methods of using an existing product;
• patents for diagnostic, therapeutic and surgical methods; and
• restrictions on pre-grant opposition.
• ISDS clauses that allow pharmaceutical companies to challenge patent decisions of sovereign states.
• Include measures that undermine the establishment or the sustainability of pharmaceutical reimbursement schemes
• Low standards for the granting of patents
Currently only select pharmaceutical and other multinational corporations have privileged access to the draft text. (17) FTA negotiations must be transparent and allow for civil society and public input and public scrutiny of the draft text. FTAs must be consistent with the drive to create alternatives to the current patent system such as the WHO Consultative Expert Working Group’s recommendation to establish a Global Health R&D Observatory and the negotiation of a binding treaty on R&D. (18)
Bibliography and References
REFERENCES AND BIBLIOGRAPHY
1. World Trade Organization. Trade Related Aspects of Intellectual Property Rights (TRIPS). 1995. https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm
2. Milstien J, Kaddar M. Managing the effect of TRIPS on availability of priority vaccines. Bull World Health Organ. 2006 May;84(5):360-5.
3. UNDP, UNAIDS The potential impact of free trade agreements on public health. Issue Brief, Geneva. May 2012. http://www.unaids.org/en/ media/unaids/contentassets/documents/unaidspublication/2012/JC2349_Issue_Brief_Free-Trade- Agreements_en.pdf
4. United Nations. Sustainable Development Goals. https://sustainabledevelopment.un.org/sdgs
5. United Nations Development Programme Global Commission on HIV and the Law, Risks, Rights, and Health. New York, NY. 2012 http://www.hivlawcommission.org/resources/report/FinalReport- Risks,Rights&Health-EN.pdf,
6. IMS Institute for Healthcare Informatics Price Declines after Branded Medicines Lose Exclusivity in the U.S. January 2016.
7. Department of Foreign Affairs and Trade (DFAT). Trans Pacific Partnership Agreement. FTA text and associated documents. http://dfat.gov.au/trade/agreements/tpp/official-documents/Pages/official-documents.aspx
8. Oxfam International. All Costs, No Benefits: How TRIPS-plus Intellectual Property Rules in the US-Jordan FTA Affect Access to Medicines. Oxfam Briefing Paper. 2007.
9. Shaffer, E.R. and Brenner, J.E. A trade agreement’s impact on access to generic drugs. Health Affairs 2009. 28(5):w957-968.
10. Moir, H.V.J., Tenni, B., Gleeson, D.H., and Lopert, R. Assessing the impact of alternative patent systems on the cost of health care: the TPPA and HIV treatment in Vietnam' paper presented at 5th Asia-Pacific Innovation Conference, University of Technology, Sydney 2014. (http://ssrn.com/abstract=2536254).
11. Trans Pacific Partnership. Transparency Chapter Annex on Transparency and Procedural Fairness for Healthcare Technologies. Leaked draft dated June 22, 2011. http://www.citizenstrade.org/ctc/wp-content/uploads/2011/10/TransPacificTransparency.pdf
12. Eli Lilly and Company v. The Government of Canada, UNCITRAL, ICSID Case No. UNCT/14/2 http://www.italaw.com/cases/1625
13. UNITAID. The Trans-Pacific Partnership Agreement: Implications for Access to Medicines and Public Health. March 2014.
14. Kemp, A. et al. From the city to the bush: increases in patient co-payments for medicines have impacted on medicine use across Australia. Australian Health Review, 37: 4-10; Searles, A., et al. The affordability of prescription medicines in Australia: are copayments and safety net thresholds too high? Australian Health Review, 2013. 37: 32-40.
15. United Nations. Report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, Anand Grover: Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development. 2009. Available from: http://www.ifhhro.org/images/stories/ifhhro/documents_UN_special_rapporteur/3_4_1_en.pdf
16. World Trade Organization. Ministerial Declaration on the TRIPS Agreement and Public Health, Doha, November 14, 2001. http://www.wto.org/english/thewto_e/minist_e/ min01_e/mindecl_trips_e.htm
17. Médecins Sans Frontières. Trading Away Health: What to Watch Out for in Free Trade Agreements. Briefing note – MSF Access Campaign – www.msfaccess.org – February 2013. https://www.msfaccess.org/sites/default/files/Access_Briefing_WhattoWatchFTAs_ENG_2013.pdf
18. World Health Organization. Research and development to meet health needs in developing countries: strengthening global financing and coordination. Report of the consultative expert working group on research and development: financing and coordination. Geneva: World Health Organization 2012.