[Ip-health] India, TRIPS, TRIPS+, and new paradigms

[James Love]

http://www.cptech.org/blogs/ipdisputesinmedicine/2006/10/india-trips-
trips-and-new-paradigms.html

IP Disputes in Medicine
Tuesday, October 10, 2006
India, TRIPS, TRIPS+, and new paradigms
by James Packard Love

India is now engaged in a debate over the appropriate implementation
of Article 39.3 of the TRIPS.  The Indian government is proposing a
nuanced system that combines exclusive rights to rely upon data,
combined with a set of limitations and exceptions to those rights.
Although not public yet, the outlines of the proposal have been
widely reported.  In some of these reports, the government will allow
generic competitors to use data for drug registration if they
contribute to the costs of the data.  The procedures and standards
for determining remuneration do not appear to be established at this
time.

Much of the criticism about the Indian government's proposals focuses
on the fact that they exceed the obligations of the TRIPS
agreement.   Of course they do.   Indeed, virtually every
intellectual property regime we have ever looked at can be described
as TRIPS plus, if not in the area of data protection, certainly in
the areas of patent, copyright or plant varieties protection.  The
TRIPS agreement contains many areas where protection can be narrowed
and limited, and few countries come close to taking full advantage of
this.

We think it is a mistake for critics of the Indian government
proposals to reject the steps toward a system of remuneration for use
of test data.   First, consider the political realities.  No country
that has engaged in serious bilateral negotiations on the data issue
with the US or the EU has been able to maintain a system of no
economic rights in the data.  If this were not the case, we would
join those who lobby exclusively for a minimalist implementation of
Article 39.3 -- a position we think is entirely justified on policy
and fairness grounds.   But for now there is no evidence that hard-
line positions, however meritorious on moral or policy grounds, are
working.

What India is considering is a something new -- a system that would
implement data protection as a right of remuneration in what appears
to be a wide set of cases, including not only important cases like
drugs for AIDS, but for any case where it is unethical to repeat
clinical testing.   Public health groups should be focusing on the
implementation of the new remuneration right -- rather than opposing it.

The implementation (of 39.3) should avoid as much as possible any
notion of exclusive rights to rely upon data, and to provide for
limited remuneration rights in a set of narrow circumstances, such as
the first approval of a new molecular entity (NME).[1]

Critics of a compensatory liability/remuneration right approach
correctly point out that such an approach can be combined with
complicated and onerous procedures, with that excessive remuneration
could be a burden on the poor.  This is of course one possibility.
A different possibility is that India could implement remuneration
rights with simple procedures and quite reasonable levels of
remuneration.   Public health groups should focus on the second
possibility -- and not act as if there are no good ways to implement
remuneration rights.

Any remuneration right for data is TRIPS plus, and WTO members have
plenty of flexibility in determining how to approach this.   For
example, the US government provides for no appeals of remuneration
decisions in its regime for cost sharing on agricultural data.  India
could take a similar approach for test data, narrowing or eliminating
injunctions or appeals, or providing than any review of remuneration
could only provide for forward looking changes.

Indian could embrace a system of cost sharing, along the lines that
<a href="http://www.cptech.org/publications/policybrief-no1-cost-
sharing.pdf">we have advocated elsewhere</a>, or it could provide for
a simple (low) royalty on product sales.  There is no reason to
design a system that would not work. [2]

In 1999, Rob Weissman and I drafted section 601 in the Hope for
Africa bill.  It sought to restraint the US government from calling
for TRIPS plus rules in Africa.

-------begin indent
HR 772.  Sec. 601  Requirements Relating to Sub-Saharan Africa
Intellectual Property and Competition Law

Funds appropriated or otherwise made available to any department or
agency of the United States may not be used to seek, though
negotiation or otherwise, the revocation or revisions of any sub-
Saharan African intellectual property or competition law or policy
that is designed to promote access to pharmaceuticals or other
medical technologies and such law or policy, as the case may be,
complies with the Agreement on Trade-Related Aspects of Intellectual
Property Rights referred to in section 101(d)(15) of the Uruguay
Round Agreements Act.
------end indent

This proposal was criticized by some in 1999, because Rob and I
appeared to be endorsing the TRIPS agreement, which was controversial
then.  But Rob and I had decided that we could win a no-TRIPS plus
approach at that time, and not a no TRIPS approach.  We never
endorsed the TRIPS.  We just asked the Congress to stop the executive
branch from going further than TRIPS, in Sub-Saharan Africa.

No TRIPS+ was, in 1999, a very successful campaign.  By May 10, 2000,
President Clinton signed Executive Order 13155, "Access to HIV/AIDS
Pharmaceuticals and Medical Technologies", and on November 14, 2001,
the WTO adopted the Doha Declaration on TRIPS and Public Health,
which called upon countries to use the full flexibilities of the
TRIPS to protect access to medicine for all.

Since 2001, things have gotten much tougher.  One only needs read the
depressing text the many US/EU/FTA agreements concluded in the past
four years, and to look at various WTO accession agreements, if not
the US's unilateral <a href="http://www.ustr.gov/assets/
Document_Library/Reports_Publications/2006/2006_Special_301_Review/
asset_upload_file473_9336.pdf">301 list</a> and <a href="http://
www.ustr.gov/Document_Library/Reports_Publications/
2006/2006_NTE_Report/Section_Index.html">NTE reports</a>.

In the short run, public health groups have to choose their battles.
We are focusing on the US's proposals for (1) drug registration-
patent linkage, (2) protection of test data, and (3) remuneration on
compulsory licenses as the three key intellectual property issues.
We are not taking a hard line on the test data issue.  We are asking
countries to implement systems of limited remuneration rights/
compensatory liability, and opposing exclusive rights.  We think this
is achievable.  We also think we can win in the US Congress on
limiting bad FTA provisions on linkage or compulsory licensing
remuneration.

There is plenty to room for countries to improve systems for non-
voluntary licensing of patents or data.   Important in this regard
would more attention to models for the collective management of
intellectual property rights, such as variations on the proposed
patent pool for essential medicines.  This can greatly enhance the
capacity to utilize various compulsory licensing options.

In the longer term, we are looking to new paradigms, to restore
public health priorities.  One is to push for R&D treaties/agreements
to replace trade agreements on IP or drug prices.  Another is to push
the notion of prizes linked to health outcomes as a replacement for
marketing monopolies, as the chief "pull" incentive for drug
development.   We think these ideas are also achievable, and hugely
important.   They are also quite relevant and appealing for India, a
country that seeks to reconcile its dual role as a home to hundreds
of millions of very poor persons, and a growing high technology
biomedicine industry.

The attempt to separate the markets for innovation from the markets
for medicines is the longer and more sustainable strategy for
fairness.   We can and should make the point, loud and clear, that it
is a mistake to link R&D incentives to the prices of medicines.
The markets for the products (medicines and vaccines) should be
competitive, driving prices toward marginal costs.   But there can be
new mechanisms (such as the prize fund approach) to reward
innovations that improve health care outcomes.   This big idea needs
greater buy-in from health care advocates.

Notes:

[1] The current government proposals reportedly start with a notion
of exclusive rights, and then provide for exceptions.   This could be
changed, so that non-voluntary use of the data would always be
possible, subject in some cases to remuneration.

[2] See:   May 18, 2006. Judit Rius Sanjuan, James Love & Robert
Weissman. <a href="http://www.cptech.org/publications/policybrief-no1-
cost-sharing.pdf">"A cost sharing model to protect investments in
pharmaceutical test data," CPTech Policy Brief No. 1.

---------------------------------
James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
tel. +1.202.332.2670 / mobile +1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton