Special mechanism for the importation of pharmaceutical products under the TRIPS Agreement

1. Special mechanism for the importation of pharmaceutical products under the TRIPS Agreement Carlos M. Correa

2. Pagragraph 6, Doha Declaration on the TRIPS Agreement and Public Health • WTO Decision of 30 August, 2003 • Amendment to the TRIPS Agreement, article 31 bis (pending)

3. Context for using the system • Access to needed product refused • Existence of patents on the product (or process) in the exporting and importing countries • Possibility of granting a compulsory license in the importing country • Implementation of a waiver on compensation (Article 31 (h) of the TRIPS Agreement • Possibility of obtaining a compulsory license exclusively to export in the supplying country

4. Steps for granting a compulsory license in the importing country (1) • Notification of intention to use the system • Establishing lack of or insufficient manufacturing capacity • Notification of product's name and quantities, and of the intention to grant or the granting of a compulsory license

5. Steps for granting a compulsory license in the importing country (2) • Application for and granting of a compulsory license (before or after the notification) • Confirmation of the compulsory license in case it is challenged • Registration of products with the health authority in the importing country • Measures to prevent trade diversion to other markets

6. Steps for granting a compulsory license in the exporting country (1) • Prior negotiation with the patent owner (except in cases of anti-competitive practices, national emergency, government use) • Application for a compulsory license • Granting of a compulsory license including determination of compensation to patent owner • Confirmation of the compulsory license in case it is legally challenged

7. Steps for granting a compulsory license in the exporting country (2) • Notification by the exporting country • Production and product differentiation • Notification by the supplier before shipment, information in a web page

8. National implementation of the WTO Decision Canada Netherlands Norway India European Union China Switzerland South Korea

9. Are there sufficient incentives for potential suppliers? • Production of active ingredients • Formulation of medicines • Approval in the exporting and/or importing country • May the patent owner's test data be used? • What economies of scale can be attained?

10. Actions by manufacturer • Obtain compulsory license • Develop the chemistry and formulate the drug (when produced by the licensee for the first time) • Differentiate the shape, colouring, labelling or packaging of the product • Information on web site before shipment • Compliance with national laws for export/import of medicines/data protection

11. Current situation… • 28 countries + European Union approved amendment to the TRIPS Agreement (article 31bis) of December 6, 2005 • One notification of compulsory license (Canada; first shipment Sept. 2008, 2nd. in Sept. 2009)

12. Are the incentives provided by the Decision right? • Complexity of procedures • Lack of economies of scale • Approval in the exporting and/or importing country • May the patent owner's test data be used?

13. Disincentives in the Canadian experience • Need to negotiate a voluntary license with potentially multiple patent holders (lengthy, complex and expensive process • Compulsory license limited to only two years, subject to a one-year renewal • The quantity of the license is limited to that which was originally applied for by the country • Heavy front-end investment • Little incentive particularly if a company would need to adjust and/or increase their manufacturing infrastructure for products which are not normally part of their product portfolio • Jillian C Cohen-Kohler , Laura C Esmail and Andre Perez Cosio, Canada's implementation of the Paragraph 6 Decision: is it sustainable public policy?, Globalization and Health 2007, 3:12doi:10.1186/1744-8603-3-12

14. Apotex about supply to Rwanda • "We've spent millions of dollars on the [research and development], we've spent lawyers' time at our cost, just because it's the right thing to do. It would be difficult to do again unless the legislation is made simpler" • "Imagine if ... another country, like Malawi, comes forward asking for the drugs, we'd have to start this whole process again."

15. Rwanda’s notification- 19 July 2007 • Based on Rwanda's present evaluation of its public health needs, we expect to import during the next two years 260,000 packs of TriAvir, a fixed-dose combination product of Zidovudine, Lamivudine and Nevirapine (hereinafter referred to as the "Product") manufactured in Canada by Apotex, Inc. However, because it is not possible to predict with certainty the extent of the country's public health needs, we reserve the right to modify the foregoing estimate as necessary or appropriate. • __________

16. Rwanda’s notification- 19 July 2007 • Pursuant to Paragraph 7 of the Doha Declaration and implementation thereof by the TRIPS Council (Decision of the Council for TRIPS of 27 June 2002), we have decided that we will not enforce rights provided under Part II Section 5 of the TRIPS Agreement that may have been granted within Rwanda's territory with respect to the Product.

17. Apotex about supply to Rwanda • “…I'm going to get to a point where someone else comes along, like [NGO], and say "we want this other compound", I'm not going to be able to develop it, because I'm in business to make money and I can only do so many products."