Overview: The South African IP Policy Review

1. 13 September 2012 MacDonald Netshitenzhe: Chief Director- Policy and Legislation Overview: The South African IP Policy Review

2. Background • The IP system is one of the factors that directly and negatively/positively impacts on access to healthcare. Other constraints to access to medicines/drugs in developing countries are amongst others, lack of resources (skilled personnel, funds and time) and the absence of a suitable health infrastructure, e.g. hospitals, clinics, health workers, equipment and adequate distribution/supply of drugs to administer medicines safely and efficaciously. Nevertheless, a developing country like South Africa may develop and adopt other national policies that can directly affect the direction of access to medicines, e.g. taxes on medicines. • Compulsory licensing may also be of assistance as a bargaining tool in price negotiations with producers of patented medicines e.g. the United States envisaged this possibility when negotiating the price of cipro (a drug) following the anthrax attack after “9/11/2001” (9/11).

3. There should be a balance between trade and health issues in relation to patents and IP protection. During the Doha trade negotiations access to public health and IP was eminent on the agenda.

4. Access to medicines has been debated and concluded at the WTO during the Doha Round of Talks of the Development Agenda (Doha Development). A Doha Decision (Paragraph 6) was taken that gives countries the right to access medicines. Compulsory licensing should be introduced in South Africa in line with international treaties such as Doha Decision 6. Patents Act will be amended in order to facilitate this. • One of the options is to allow countries with no manufacturing capacities to issue a Compulsory Licence against an existing patent. A country with manufacturing capacity can manufacture on behalf of other countries and deliver such under a secured environment. Such drugs should not be diverted to unintended destinations. The WTO Council should be notified. Canada has passed a legislation that allows it to manufacture drugs under this scheme. Compulsory Licensing under the current Patents Act is cumbersome and cannot assist in accessing to medicines.

5. Voluntary Licensing mostly happens when innovators license third parties such as generic companies to produce drugs under agreed terms. In South Africa Voluntary Licensing is taking place, in particular after the “Parallel Importation case” between the Government and the 39 Pharmaceutical Companies. • Parallel Importation of drugs is allowed under the Medicines Control and Substances Act, but not under the Patents Act. The Trade Marks act should also be amended to allow parallel importation. • Competition Act has been used to force innovators to license third parties to produce drugs.

6. Other issues that fall outside IP regime need to be addressed, e.g. Manufacturing capacity, Distribution of drugs and Pricing of drugs, creation of competition in the market place by applying competition legislation. In this regard, there is a need to undertake an advocacy role to the department of Health. • Section 4 of the Patents Act allows expropriation of a patent to take place. Substantive Search and Examination of Patents • It is said that the depository system of Patents at CIPC leads to weak patents being granted. It is planned that a dual system be utilised, being both the depository system and substantive search and examination with special focus on areas that SA is strong in , e.g. Pharmaceuticals, Machinery, Chemicals etc

7. Data Protection • Article 39 of TRIPS provides for the mandatory data protection for both pharmaceutical and agricultural chemical entities. SA should invoke this by undertaking legislative amendments to the Medicines and Substances Control Act and the Health Practitioners Act, etc. Patent Restoration and/or extension. • Regulatory delays during clinical trials at the (MCC)MRA tend to encroach on the lifespan of a patent thereby limiting the time for exploiting the patent. Other jurisdiction allow the extension, case in point, the US. SA is not intending to extend the patent protection period unless harmonization takes place the world over.

8. Counterfeit Medicines and Generic medicine • Generic medicines are not counterfeit as they are a result of expired patents and these should be treated not as adulterated medicines. • Policy space allows the working on an unexpired patent to be done on in order to produce a generic drug as long as that drug is not sold/marketed while patent protection subsists in the other drug. • Generic medicines that are transshipped through developed countries get to be confiscated under the pretext that they are counterfeit. SA does confiscate goods (Generic medicines) in transit as it views them as legal products that are not counterfeited. IP is territorial in nature !

9. Trademarks and labeling • After a patent has expired the name of the manufacturer’s company should not be on the label of the expire drug as this has a tendency to have an unfair advantage over the generic medicine manufacturer in the market place. Trade agreements (BITS) • BITS that will undermine the discretionary measures( Flexibilities and exceptions) that are allowed in multilateral agreements such as TRIPS should not be entered into by SA. These agreements

10. Trade secret • Trade secrets are a customary way of protecting technological innovation. Confidential commercially valuable information is protected as long as reasonable steps to protect the information are taken and there is no disclosure – trade secret will subsist • SA should allow the co - existence of trade secrets with the IP system and users should have a choice of which system to use.

11. END END THANK YOU