[Ip-health] Submissions of KFHR and IPLeft to WHO Public Hearing

[heeseob nam]

Full document: http://www.who.int/entity/public_hearing_phi/summary/15Nov06HeeseobNam.pdf

Summary

When medicines are developed and distributed primarily based on the
market needs not on the health needs, the medicines are no longer
public goods: they are just commodity traded and sold in the market.
We believe that the global strategy and plan of actions, which will be
discussed in the proposed intergovernmental working group, should be
focused on recovering and preserving the nature of public goods of
medicines.

Intellectual property rights (IPRs) systems that were globalized by
trade-related aspect of intellectual property (TRIPS) agreement and
forced to be much higher protection regimes by US-driven FTAs are one
of the key factors to turn the public goods into commodities. Further,
as put by the Report of the Commission on Intellectual Property
Rights, Innovation and Public Health, there is no evidence that the
implementation of the TRIPS agreement in developing countries will
significantly boost R&D in pharmaceuticals.

Rather, the incentive mechanism of IPRs to promote the medical
development and innovation is questionable in our experiences, that
tell that the incentive system based on IPRs fails to promote the
local development and innovation even in a country having some level
of domestic market and R&D capacity, and simply leads to the increase
of pharmaceutical prices.

Independent Review of Patent Validity

The premises that most patents are issued through perfect examination
processes and well-defined legal rights are on incorrect assumption.
Vast majority of patents are never litigated, and roughly half of
those patents that are fully litigated are found to be invalid.
Actually in the US, patent infringement lawsuits under the
Hatch-Waxman Act, generic applicants prevailed in 73% of the cases. Of
the decisions favoring the generic applicant, roughly half of drug
patents of brand-name companies were decided to be invalid (See
Federal Trade Commission, Generic Drug Entry Prior to Patent
Expiration, 2002). In Korea, 48% of drug patents issued from 1980 to
2005 through the examination in the Patent Office were found to be
invalid in the first stage of invalidation trial.

In any actions and strategies to enhance innovation, research and
development to address diseases disproportionately affect developing
countries, it is necessary to prevent the patent holders from "rolling
the dice". For doing so, we may consider establishing a review center
for evaluating the issued patents that are the subject of benefit of
WHO's actions. If we view that the examination of national patent
office is preliminary filtering of problematic patents, the evaluation
of the review center may be the secondary filtering. The review
center's main role may be the evaluation of novelty and inventive step
of inventions, independently from the WIPO or national patent offices.
The determination of novelty and inventive step are not mere legal
issues but they largely depend on the evaluation of invention in terms
of technical advancement.

Public Funding on R&D, Manufacturing and Distribution on Medicines

The role of government or intergovernmental organization should be
expanded beyond the financing R&D for public or private sectors. For
priority setting for innovation in public health needs, supply and
distribution of medicines as well as financing R&D are handled by the
public.

We think that public support for R&D should be based not only on the
budget of the administration, but also should be related to the
finance of public health insurance. In many countries that provide
public health insurance, major expenses are paid for medicine, and it
is rising faster than any other items. For example, in South Korea,
29.2% of the budget of all social health insurance is paid for
medicine, and it is rising 14% each year. Some part of the rise may be
due to inevitable natural course such as aging of the population, but
most of the rise comes from elevation of drug price and the shift of
prescription to expensive substitute or composite medicines. If
essential medicines are not developed, we would have to pay more to
treat diseases by buying more expensive drugs, and the medical cost
would rise unnecessarily.

In case of South Korea, public health insurance gives incentive to the
doctors who prescribe cheap and essential medicines. The civil
societies of South Korea have been requesting to expand the incentives
for prescribing essential medicines. We also suggest that the cost for
public R&D to be funded by a certain proportion of the total budget of
social health insurance, or a certain proportion of its expenditure on
medicine (for example, 1-2%).

We also claim that it is essential for the public to pay attention to
the process of approval, production, distribution as well, for these
are the bases for the stabilization of public R&D. Most of the study
of innovative medicines are made by national or non-profit institutes.
At present, support from private sector is inevitable, partly because
public support is insufficient. However, supports by private sector on
small institutes can result in biased outcome of the research. The
private corporation can influence the direction of research in various
ways. South Korean civil society has asked for the foundation of
public enterprise to produce essential medicines and vaccines, and
also to organize public distributing centers of these essential
medicines and vaccines.

We are also putting our eyes on the relationship between the public
and private sectors. Considering the relation between the two sectors,
merely increasing public funding on R&D cannot reach its full effect
if it is not supported with public control on production and
distribution of medicine.

We conclude that enforcing public interest on the whole system, which
includes R&D, production, and distribution of medicine is needed. This
will ensure public access to medicine, and this will stabilize the
relationship between R&D and public interest. We should look carefully
on the R&D of public institutes, which might be influenced by private
corporations, and we should study more on how to reform the production
and distribution of medicines to ensure the effect of public funding
on R&D.

--
HeeSeob Nam
IPLeft (www.ipleft.or.kr)
Tel.: +82 2 6050 1621
Mobile: +82 11 470 1180
Fax: +82 2 6050 1700
hurips@gmail.com