[Ip-health] Kenya: Reprieve As Karua Acts to Keep Aids Drugs Cheap

[Mike Palmedo]

http://allafrica.com/stories/200607280349.html

Kenya: Reprieve As Karua Acts to Keep Aids Drugs Cheap

The Nation
July 28, 2006
Philip Ngunjiri
Nairobi

The cost of ARVs and other medicines would have shot up three-fold if
proposed Bill were passed - four years after a similar one was rejected
by MPs for being too hasty

Thousands of Kenyans using anti-retroviral drugs faced uncertainty over
their ability to buy them - until the Government's decision to delete
sections of the Bill that sought to alter the Intellectual Property Act.

The Government yielded to pressure to delete a proposal that would have
increased the cost of essential drugs by over 1,000 per cent.

Justice minister Martha Karua announced in Parliament yesterday that the
proposed amendment to the Industrial Property Act would neither help the
Government nor the public.

Before then, the amendment would have barred importation of cheap
generics used in hospitals countrywide in favour of expensive, patented
drugs. For instance, amendment of section 58.2 will surrender the
autonomy of the Government to make decisions on use of patents
registered in the country.

Just three days ago, Aids activists marched on Nairobi streets
protesting against the proposed amendment. They said it would make HIV
treatment and management unaffordable.

The Tuesday demonstration - organised by the United Civil Society
Coalition on HIV and Aids, Tuberculosis and Malaria; Medecins Sans
Frontieres; and Women Fighting Aids in Kenya - said access to cheap
drugs is a basic human right.

The Bill was slotted for debate in Parliament this week. If it sails
through, patent owners will have to give express consent to importation
of generic versions of their drugs.

The demonstrators said prices of all medicine would go up if the Bill is
passed. The country would also not be able to shop around for cheaper
medicine.

"It completely negates the President's recent announcement that fees
would be waived for anti-retroviral drugs in Government hospitals," says
Cheyenne Krishan, Medecins Sans Frontiers (MSF) spokesperson on HIV and
Aids.

The move will roll back the advances made in HIV management over the
past four years. Control of the drugs market would be left to a few
foreign pharmaceuticals.

The Statue Law (Miscellaneous Amendment) Bill, 2006, also proposes the
deletion of section 80 (1A), (1B) and (1C) of the Kenya (2001) IPA.

Currently, section 58.2 of the Kenya (2001) Industrial Property Act
provides for an exhaustion of rights, including parallel importation.
This allows aggressive international approaches so that Kenyans can
access the best prices available for products anywhere in the world.

If passed, the amendment will see a three-fold increase in the cost of
first-line anti-retroviral therapy in Kenya, Ms Krishan said. It costs
about Sh1,283 ($17.81) to treat one Kenyan per month with a first-line
anti-retroviral (ARV) regimen currently. Using brand medicine, or
separate tablets, would cost Sh4,292.

In 2002, following hue and cry from the public and the civil society,
the same amendment was rejected by Parliament as unprocedural and
against the interests of Kenyans. The amendment had been hastily taken
to Parliament on May 1 - late at night that year when most of the
House's health committee members were out of the country.

The section in question allows access to the full range of products -
both brand names and generics. It helps keep prices down and ensures
regular supply of drugs by allowing multiple independent distributors in
the market.

The section does not affect quality control of products. It applies only
to products that are legitimate in their country of origin. Kenya's
regulations on pharmaceutical standards and product information still apply.

Once a product has entered the market, intellectual property rights that
allow control of a product are exhausted. The product is then traded
freely," says Krishan.

Speaking during this year's 43rd Madaraka Day (June 1), President Kibaki
said the Sh100 per month (US $1.40) charged for ARVs at public health
facilities would be waived immediately.

All provincial and 70 district hospitals in Kenya provide comprehensive
HIV care, including counselling, testing and ARVs. The National Aids
Control Council says an estimated 54,000 Kenyans were receiving ARVs by
September 2005, up from just 3,000 in 2002.

The amendment, which also proposes to delete section 80(1A), (1B) and
(1C), will lead to surrender of autonomy of the Government to decide on
use of patents registered in Kenya. Except during formally declared
national emergencies, negotiation with, and consent of, patent holders
will be required.

Krishan says there is no legal definition of the word "exhaustion" in
any international agreement. World Trade Organisation (WTO) agreements
say they do not address the issue. "The price of the same medicine can
vary widely around the world. Parallel importation allows Kenya to shop
around for the cheapest, legitimate product," she says.

The proposed amendment will limit all commercial activity in a product
to activities by the owner of the patent, or with his express consent,
whereby one company will control import, stocking and sale of any
pharmaceutical patented in Kenya.

This is the exact opposite of the current law as it provides the maximum
possible control to patent holders, she says. "This big impact, or even
the amendment, is not mentioned in the memorandum accompanying the Bill.

"Prices will increase because less generic alternatives will be
available and due to the effects of lengthy and bureaucratic negotiations."

Procurement would also be delayed or interrupted owing to mandatory
negotiations with the patent holder.

Section 80 of the Intellectual Property Act dwells on "government use".
This is a licence authorising the Government or its official agent to
exploit a patent for non-commercial purposes in the public interest.
This is because patents are economic privileges granted by the
Government and "government use" ensures these privileges are neither
abused nor used against the interest of Kenyans.

Currently, section 80 outlines the Government's right to access generic
medicines in one of two specific situations, either to satisfy the
health needs of the population or to remedy anti-competitive practices
by the patent holder.

Sections 80(1A), (1B) and (1C) allow the Government to act immediately,
without consulting or seeking the consent of the patent holder. Sections
80(1A), (1B) and (1C) do not provide for compensation to the patent holder.

The proposed amendment that deletes sections 80(1A), (1B) and (1C) will
require the Government to negotiate with patent holders even where they
have abused their rights.

"We foresee a major problem. The Government's ability to address serious
problems of supply or abuse of rights will be limited unnecessarily,"
says Krishan. Significant and unnecessary delays in issuing a government
use (GU) licence, owing to the required consultations and negotiations,
would ensue."

Krishan said a simple amendment stating that the Government must provide
for adequate compensation in any GU licence would satisfy all
constitutional requirements.