[Ip-health] InPharma.com - EU could allow generics of patented drugs for countries in need

[Mike Palmedo]

http://www.inpharma.com/news/news-ng.asp?n=3D55859-eu-could-allow

EU could allow generics of patented drugs for countries in need

InPharma.com
04/11/2004

The European Union has put forward new legislation that would allow
generic manufacturers to make drug products with in-patent active
pharmaceutical ingredients, provided that they are intended for use in
developing countries, reports Phil Taylor.

The move would bring the EU into line with World Trade Organisation
recommendations that allow patented drugs to be copied and exported to
poorer countries in the world that do not have the infrastructure in
place to produce the drugs themselves.

Under this system, countries notify the WTO of the medicines they need,
and generic manufacturers would be able to apply to meet the demand.
This would involve contacting their national authorities for a
'compulsory license' from the holder of the drug=92s patent.

The WTO agreed last summer to extend the system of compulsory licenses
to foreign manufacturers in order to improve access to medicines in the
third world. Prior to this, only domestic companies could seek this form
of patent suspension.

The system will make it possible for generic manufacturers to develop
the processes required to make APIs and secure an immediate market for
the products, ahead of the expiration of the originator=92s patents in Euro=
pe.

This could accelerate the introduction of generics once the intellectual
property for a drug expires in Europe, but has also raised concerns that
the products could be diverted from their intended recipients and
re-imported for sale in the EU.

The Commission has suggested measures to prevent medicines produced
under the compulsory licensing scheme from re-entering the EU. Customs
authorities would be authorised to take action against the
re-importation of goods and the patent holder could use existing
national procedures to reinforce its rights, and the license could be
terminated if re-importation occurs.

Meanwhile, the UK-based aid agency Oxfam has welcomed the move but says
this legislative change will have to be monitored carefully to see how
it works in practice.

"The legal mechanism agreed by the World Trade Organization is complex
and, even if a developing country fights through the red tape, its
market may not be large enough to allow generic companies to offer lower
prices, " said the group in a statement.

Oxfam believes the proposal could be improved by doing away with
time-consuming negotiations with the patent holder in the event of a
public health emergency in a developing country.

The longer-term solution is for generic production to be the norm, and
not the exception, in developing countries, said Oxfam, although it
conceded that this development would require major reform of the WTO
Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement.