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AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS IN DEVELOPING AND LEAST-DEVELOPED COUNTRIES

REVISING TRIPS FOR PUBLIC HEALTH AN IDEAS CONTEST FROM MSF. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS IN DEVELOPING AND LEAST-DEVELOPED COUNTRIES. ALIFAR is a non-profit, private international association, absolutely independent from any state or interstate organization.

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AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS IN DEVELOPING AND LEAST-DEVELOPED COUNTRIES

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  1. REVISING TRIPS FOR PUBLIC HEALTH AN IDEAS CONTEST FROM MSF AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS IN DEVELOPING AND LEAST-DEVELOPED COUNTRIES

  2. ALIFAR is a non-profit, private international association, absolutely independent from any state or interstate organization. • ALIFAR was established in 1980 • ALIFAR is composed of locally-owned boards, associations and companies belonging to the Latin-American pharmaceutical sector. • ALIFAR assembles over 400 companies belonging to 14 Latin-American countries. • Reasons to participate in the MSF’s Ideas Contest.

  3. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • OVERVIEW • The Doha Declaration on TRIPs Agreement and Public Health has led the way in implementing TRIPs according to the needs of developing and least-developed countries. • WTO Members have not generally used TRIPs Agreement flexibilities. • TRIPs Agreement should be reformed to introduce specific exceptions to patent rights.

  4. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • OVERVIEW • ALIFAR supports an ALS for prescription medicines in DC and LDC. • ALS main axes • LC and LDC help to finance R&D costs required to invent and approve new drugs. • More access to prescription medicines.

  5. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • MAIN CHARACTERISTICS • DC and LDC shall be authorized to establish an ALS for patents related to prescription medicines. • Patentees and licensees shall negotiate and mutually agree on the royalty. • If they do not reach an agreement, licensees shall be entitled to exploit the patent according to the ALS.

  6. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • MAIN CHARACTERISTICS • The royalty rate shall be calculated using the following formula: • R = [(CR+D . MSC) / PT] . MSL PT represents the remaining patent protection term in such specific country. MSL represents the licensee market share for the patented invention. Rrepresents the royalty rate. CR&Drepresents the cost of the research and development (R&D) investment for the patented invention. MSCrepresents the specific country world market share for the prescription medicine.

  7. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • ROYALTY RATE EXAMPLE • R&D costs = USD 1 billion • Specific DC world market share for a prescription medicine = 0.5% • Remaining patent protection = 8 years • Proposed licensee market share in such DC country = 15% • USD 93,750 = [ (USD 1 billion . 0,5% MSC ) / 8 years PT ] . 15% MSL • The annual royalty rate should be USD 93,750.

  8. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • MAIN CHARACTERISTICS • DC and LDC shall be entitled to determine the administrative or judicial authority which shall establish the royalty. • The royalty rate may be duplicated if the prescription medicine represents a major therapeutic improvement. • The licensee must pay the royalty until the patent expiration.

  9. AUTOMATIC LICENSE SYSTEM FOR PHARMACEUTICAL PATENTS • ALS LEGAL COHERENCE • ALS is coherent with Article 8 of TRIPs Agreement. • ALS fulfills TRIPs Agreement’s Article 30 requirements: • It is a limited exception. It is not an illegitimate discrimination. • It does not unreasonably conflict with the normal exploitation of the patent and does not unreasonably prejudice the legitimate interests of the patentee. • It takes into account the legitimate interest of third parties. • ALS could be implemented adding a new Article to TRIPs Agreement – Article 31 ter.

  10. REVISING TRIPS FOR PUBLIC HEALTH AN IDEAS CONTEST FROM MSF Thank you.

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