[Ip-health] Bridges Weekly - Rwanda becomes first country to try to use WTO procedure to import patented HIV/AIDS drugs [25 July 2007]

[Richard Elliott]

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http://www.ictsd.org/weekly/07-07-25/story2.htm

Bridges Weekly, Vol 11 (27), 25 July 2007

RWANDA BECOMES FIRST COUNTRY TO TRY TO USE WTO PROCEDURE TO IMPORT PATENTED
HIV/AIDS DRUGS

Nearly four years after WTO Members agreed on a procedure for poor countrie=
s
to import generic versions of patented medicines that they are unable to
produce themselves, Rwanda has become the first country to notify the globa=
l
trade body that it intends to use it.

The notification (IP/N/9/RWA/1), filed on 19 July, is the first in several
steps that will have to be taken before the affordable drugs reach patients
in the African country.

Rwanda informed the WTO that it expected over the next two years to import
260,000 packs of the HIV/AIDS drug TriAvir, manufactured in Canada by
Apotex, a major generics producer headquartered in Toronto. It specified,
however, that it might modify this quantity, as "it is not possible to
predict with certainty the extent of the country's health needs." As a
least-developed country (LDC), Rwanda did not have to prove that it lacked
manufacturing capacity. Under WTO rules, LDCs are not required to provide
patent protection to pharmaceutical products until 2016.

The WTO Agreement on Trade-related Aspects of Intellectual Property Rights
(TRIPS) allows governments to issue 'compulsory licences' - effectively
suspending patents - to permit the generic production of essential medicine=
s
without the consent of patent holders. However, it stipulates that drugs
thus produced should be "predominantly" for the domestic market, providing
little to help countries that have little or no pharmaceutical manufacturin=
g
capacity. To address this, governments agreed in August 2003 on how to waiv=
e
the domestic consumption requirement to allow poor countries to import drug=
s
produced under compulsory licence elsewhere.

Supporters of the '30 August Decision' hailed it as proof that the trading
system could take into account humanitarian and development concerns.
However, critics have consistently charged that the administrative
procedures set out in the deal are unnecessarily onerous, as a result of
which not a single pill has been exported under the accord thus far.

Requirements set out in the WTO decision and Canada's domestic legislation
implementing it mean that the way is not yet clear for Apotex to actually
start exporting pills to Rwanda, explains Richard Elliott, deputy director
of the Canada HIV/AIDS Legal Network.

First, Apotex will have to acquire a licence to produce the medicine Rwanda
wants to import. TriAvir is a fixed-dose combination of the patented
antiretroviral drugs zidovudine, lamivudine, and nevirapine. Patents on the
components are held by GlaxoSmithKline and German-based Boehringer
Ingelheim. Fixed-dose medications, which combine multiple drugs in a single
pill, make treatment regimes simpler and thus easier to expand to more
patients.

Apotex has already secured regulatory approval in Canada for its own versio=
n
of the combination, as part of a thus-far unsuccessful attempt in
cooperation with M=E9decins Sans Fronti=E8res (MSF) to export the drug unde=
r the
30 August Decision.

One of the reasons that Apotex has not managed to receive a licence to
produce and export the drug, said Elliott, was that the Canadian
implementing legislation required a formal request from a would-be importin=
g
country for the compulsory licence process to be set in motion.

Indeed, one of the stumbling blocks that MSF faced in Canada was that no
developing country government it worked with was willing to be named as
seeking to import generic versions of patented drugs. This may have been du=
e
to fear of censure: Brazil and Thailand were heavily criticised by the
pharmaceutical industry as well as by some governments when they recently
used other flexibilities in TRIPS rules to suspend patents on drugs for
domestic public health programmes (see BRIDGES
<http://www.ictsd.org/weekly/07-05-09/story4.htm>  Weekly, 9 May 2007).

Following Rwanda's WTO notification, Apotex is believed to be seeking a
voluntary licence - permission to manufacture generics in exchange for a
negotiated royalty payment - from the two companies that hold the patents
related to TriAvir.

As per Canadian law, Elliott said, if they cannot come to an agreement
within 30 days, Apotex would be eligible to apply to the country's patents
commissioner for a compulsory licence and the determination of a royalty to
be paid to the patent holders.

If Apotex ultimately receives a compulsory licence to produce TriAvir for
export to Rwanda, before shipments can start, Canada would have to provide =
a
notification of its own to the WTO TRIPS Council, detailing information
about the licence, such as the two-year duration, the products involved, an=
d
the importing country.

Apotex itself would have to create a website indicating the quantity of
medicine being supplied to Rwanda, as well as details of the distinguishing
characteristics - packaging, shaping, or colouring - aimed at ensuring that
the generic drugs are not illegally diverted into markets where they might
displace the full-price name-brand versions. During the course of its work
with MSF to try to export TriAvir, Apotex already developed alternative
packaging that has been approved by Canadian regulators.

After the WTO notification and the creation of the Apotex website, the path
would become clear for 260,000 packs of generic TriAvir to be sent to Rwand=
a
over a period of two years.

Elliott, of the Canada HIV/AIDS Legal Action Network, spoke to Bridges from
Toronto and welcomed Rwanda's WTO notification of intent to import, but
noted that the long time gap since August 2003 suggested that something was
amiss with the functioning of the waiver.

"This is great, and we hope it comes to pass," he said, referring to the
Apotex drug being sent to Rwanda. However, "this actually proves that the
system is much more cumbersome than it needs to be." Elliot's group is
pushing for "streamlining" Canada's implementing law - currently even more
stringent than the 30 August Decision - to make it easier for compulsory
licences to be issued more quickly, and for more drugs.

Notably, Rwanda could have avoided the use of the 30 August Decision
altogether by importing the same combination treatment at comparable cost
from India, where the components are not patented. Indian pharmaceutical
companies have already been approved by the World Health Organisation and
the US government to export generic versions of the fixed-dose combination.
In fact, after it proved unable to secure the export of TriAvir from Canada=
,
MSF sourced the drug from India for its treatment projects. Rwandan
government officials could not be reached for comment.

MSF said that it was pleased that Rwanda appeared poised to benefit from th=
e
Apotex combination drug. However, it cautioned that even if Rwanda does
import the HIV/AIDS drug from Canada via the WTO flexibility, this alone
would not be enough to instantly resolve broader concerns about the
relationship between intellectual property protections and access to
medicine. This compulsory licence would be "just for one country, for one
product, and for a limited period," pointed out Alexandra Heumber, a
Brussels-based spokesperson. "Unless several other countries do the same,
for several key drugs, for a sufficient amount within a short time period,"
the first import notification would not signal a decisive shift.

Wide-scale generic competition helped lower prices for many of the older
HIV/AIDS drugs, as they did not receive patent protection in
pharmaceutical-producing developing countries like India. However, MSF has
found signs that the cost of newer medicines with fewer side effects may be
substantially higher, in part because developing countries had to start
enforcing pharmaceutical product patents in January 2005, thus limiting the
extent of generic production.

WTO Members agreed in December 2005 to make the 30 August Decision a
permanent amendment to the TRIPS Agreement. However, this would require
ratification by about 100 governments before 1 December. Only seven have
approved the agreement thus far. The amendment is being hotly debated in
Europe, where the European Parliament has refused to ratify it until EU
member states commit to do more to help developing nations manufacture and
import medicines at affordable rates (see BRIDGES
<http://www.ictsd.org/weekly/07-07-18/story3.htm>  Weekly, 18 July 2007).

In any event, the 30 August Decision is not the only avenue available under
WTO rules for exporting drugs produced under compulsory licence, noted Jame=
s
Love, the director of Knowledge Ecology International.

Love observed that since 2005, Italy has issued compulsory licences for
three drugs, and authorised the export of the generics thus produced to
other EU member states. Italy did this by invoking TRIPS Article 31(k)
provisions allowing compulsory licensing to combat anti-competitive
practices, after patent holders Glaxo and Merck refused to licence their
products to Italian generics manufacturers. The standard export restriction=
s
did not apply, since that article waives the domestic market requirement in
cases where licences are issued to remedy anti-competitive measures.

The generic medicines Italy exported within the EU's customs union are used
primarily to treat prostate disease, migraine headaches, and male pattern
baldness.

ICTSD reporting; "New Report Raises Concerns Over Price of New AIDS Drugs,"
VOICE OF AMERICA, 23 July 2007.





_________________________________

Richard Elliott

Deputy Director

Canadian HIV/AIDS Legal Network

+1 (416) 595-1666 ext. 229



Directeur adjoint

R=E9seau juridique canadien VIH/sida

+1 (416) 595-1666 poste 229



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