Medicines

WTO AND THE TRIPS AGREEMENT

The World Trade Organization (WTO) is the international organization dealing with the rules of trade between nations. As of February 2005, 148 countries are Members of the WTO. In becoming Members of the WTO, countries undertake to adhere to the 18 specific agreements annexed to the Agreement establishing the WTO. They cannot choose to be party to some agreements but not others (with the exception of a few "plurilateral" agreements that are not obligatory).

Of these agreements, Trade-Related Aspects of Intellectual Property Rights (TRIPS) is expected to have the greatest impact on the pharmaceutical sector and access to medicines. The TRIPS Agreement has been in force since 1995 and is to date the most comprehensive multilateral agreement on intellectual property. The TRIPS Agreement introduced global minimum standards for protecting and enforcing nearly all forms of intellectual property rights (IPR), including those for patents. International conventions prior to TRIPS did not specify minimum standards for patents. At the time that negotiations began, over 40 countries in the world did not grant patent protection for pharmaceutical products. The TRIPS Agreement now requires all WTO members, with few exceptions, to adapt their laws to the minimum standards of IPR protection. In addition, the TRIPS Agreement also introduced detailed obligations for the enforcement of intellectual property rights.

However, TRIPS also contains provisions that allow a degree of flexibility and sufficient room for countries to accommodate their own patent and intellectual property systems and developmental needs. This means countries have a certain amount of freedom in modifying their regulations and, various options exist for them in formulating their national legislation to ensure a proper balance between the goal of providing incentives for future inventions of new drugs and the goal of affordable access to existing medicines.

Key Provisions of TRIPS

Patent protection

Patent protection The TRIPS Agreement requires WTO Members to provide protection for a minimum term of 20 years from the filing date of a patent application for any invention including for a pharmaceutical product or process. Prior to the TRIPS Agreement, patent duration was significantly shorter in many countries. For example, both developed and developing countries provided for patent terms ranging from 15 to 17 years, whilst in certain developing countries, patents were granted for shorter terms of 5 to 7 years. The TRIPS Agreement also requires countries to provide patent protection for both processes and products, in all fields of technology.

Before TRIPS, many countries provided only process — but not product — patents. Product patents provide for absolute protection of the product, whereas process patents provide protection in respect of the technology and the process or method of manufacture. Protection for process patents would not prevent the manufacture of patented products by a process of reverse engineering, where a different process or method from that which has been invented (and patented) is used. For example, national legislation requiring only process patent protection has enabled manufacturers in certain countries to make generic versions of patented medicines. These countries have opted to make use of the transition period that permitted countries to delay, until 2005, patent protection in the areas of technology that had not been so protected before the TRIPS Agreement. (See transition periods below).

Protection of data submitted for the registration of pharmaceuticals

As a condition for permitting the sale or marketing of a pharmaceutical product, drug regulatory authorities require pharmaceutical companies to submit data demonstrating the safety, quality and efficacy of the product. The TRIPS Agreement requires that WTO Members protect undisclosed test data, submitted to drug regulatory authorities for the purposes of obtaining marketing approval, against unfair commercial use. Since countries have considerable discretion to define “unfair commercial use”, it is argued that countries can meet their obligations to protect test data by prohibiting “dishonest” use of data. Use by government authorities to assess the efficacy and toxicity of a pharmaceutical would not be affected, in this case.

However, it is now argued that data exclusivity is a requirement of the TRIPS Agreement. The data exclusivity approach grants the originator exclusive rights over their test data and prevents regulatory authorities from relying on the test data to register generic substitutes. Prior to the TRIPS Agreement coming into force, most countries allowed reliance on originator test data to approve generic products. Once test data was submitted by the originator company, the regulatory authorities could rely on the data to approve subsequent applications on similar products, or to rely on proof of prior approval of a similar product in another country. Generic manufacturers need only to prove that their product is chemically identical to the brand-name, original product, and in some countries, that it is bioequivalent. This approach enabled swift introduction of generics into the market without registration data-related costs. Within the data exclusivity approach, once a company has submitted original test data, no competing manufacturer is allowed to rely on these data for a period of time. Data exclusivity could thus pose an obstacle to effective use of compulsory licences, as the entry of the generic product would be delayed for the duration of the exclusivity period or for the time it takes to undertake a new compilation of test data. The public interest in limiting data protection is to promote competition and ensure that data protection does not become the means to block timely entrance of affordable generic medicines of public health importance.

Transition periods

The TRIPS Agreement provides for transition periods, permitting developing countries additional time to bring national legislation and practices into conformity with TRIPS provisions. There are three main transition periods. First was the 1995–2000 transition period, at the end of which countries were required to implement the TRIPS Agreement. The 2000–2005 transition period allowed certain countries to delay providing product patent protection in the areas of technology that had not been so protected at the time of the TRIPS Agreement coming into operation in that country. These countries were allowed a further 5 years to put in place a product patent regime for technologies and products, which they had not thus far provided patent protection, such as pharmaceuticals and agro-chemicals. During the transition period, these countries are required to accept patent applications from 1995 onwards and to keep such applications pending, in a patent "mailbox" until the mailbox is opened in 2005 when the applications will be assessed. The third transition period allows least-developed countries (LDCs) until 2006 to implement their obligations under the TRIPS Agreement in view of their economic, financial and administrative constraints. This period may still be extended by the TRIPS Council on request of an LDC Member. LDCs now have a further extension of time, until 2016 with respect to patents on pharmaceutical products and exclusive marketing rights by the Doha Declaration on the TRIPS Agreement and Public Health. Thus, LDCs need not provide for, nor enforce patents and data protection with respect to pharmaceutical products until 1 January 2016 (see below). The transition periods have meant that pharmaceuticals or medicines patented before developing countries implemented their TRIPS obligations will not receive patent protection, and thus generic competition is possible. Medicines patented after developing countries have implemented their TRIPS obligations are progressively coming onto the market and will constitute an increasing share of marketed medicines. A substantial change is expected after 2005, when all developing countries will be required to provide patent protection for pharmaceutical products and the mailbox patents are processed.

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