[Ip-health] Export of under patent medicine by Bangladeshi pharmaceutical industries

[Anne St. Martin]

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[ Picked text/plain from multipart/alternative ]
Dr Md Sayedur Rahman Khasru,

I have provided some answers to your queries to the best of my knowledge,
but I welcome any comments criticisms ect from the list serve for
clarification of certain issues. Bangladesh is in a very unique and
unprecedented position as the only LDC with pharmaceutical manufacturing
capability.
I was in Bangladesh last spring for public health conference with
Gonoshasthaya Kendra, and I must say you have a very beautiful country.

Sincerely,

Anne


1. Can Bangladesh as an LDC, produce and export medicines (to LDCs or
Developing
countries or all countries) until 2016 that are still under patent without
any
royalties or any agreement with the patent holder?

    Although Bangladesh is a WTO member and signatory to the Trade Related
Aspects of Intellectual property Rights Agreement (TRIPS) since 1995, the
2001 Doha Waiver granted Least Developed Countries (LDC's) an extension
until 2016 to implement the TRIPS agreement. Bangladesh is currently the
only LDC with Pharmaceutical manufacturing capability, and has been
approached by developed countries with Bilateral Trade Agreements that
contain some of the intellectual property standards required under TRIPS.
However, under WTO law Bangladesh is not required to maintain these
standards, and is not subject to the WTO Trade Dispute Mechanism for any
actions that would be in violation of TRIPS if performed by WTO signatory
developing and developed countries. So essentially, Bangladesh is free to
manufacture and export drugs legally under the WTO even if such actions in
any other pharmaceutical producing country would not be allowed. This puts
Bangladesh in a very unique position. However, if Bangladesh is party to
Bilateral Investment Treaties (BITs) with any other country that includes
TRIPS or TRIPS plus intellectual property standards, the production of under
patent medicines would likely draw Bangladesh into arbitration with the BIT
party. I was unable to find any existing BIT's with Bangladesh and a major
developed country, but not all BIT's are public and I must point out the
possibility.
With specific respect to WTO law, as a result of the 2003 waiver and the
succeeding 2005 TRIPS amendment, WTO members who have sufficient
pharmaceutical manufacturing capability are now allowed to apply for
compulsory licenses to produce medicines for either 1) distribution within
their individual boarders, or 2) for export to another country who has also
issued a compulsory license for that product. Correspondingly, a WTO member
with no production capability can issue a compulsory license and then import
from a manufacturing member state who has also issued a compulsory license
on the named product.
However, due to the 2001 Doha waiver, all 50 Least Developed Countries
(LDC's) have until 2016 to implement the TRIPS agreement, and therefore need
not issue a compulsory license for production, but would need to issue a
compulsory license if they wished to import from a developing country that
produced the desired medicine under compulsory license. However, Bangladesh
is the only LDC with pharmaceutical manufacturing capability. This puts
Bangladesh in a very promising position of being allowed to manufacture
medicines for use within its own boarders or exportation to other LDC's
without having to first issue a compulsory license. However, in order to
export to a developing country that has adopted TRIPS, Bangladesh would have
to issue a compulsory license or such an action would violate WTO and the
importing country would be subject to WTO trade dispute settlement.

2. Does the importing country, if an LDC; needs to issue any license
(voluntary
or compulsory) or negotiation with the patent holder?
3. Does the importing country, if NOT an LDC; needs to issue any license
(voluntary or compulsory) or negotiation with the patent holder?

The importing country would need to issue a compulsory license if it is a
developing country or if it is a LDC who has adopted TRIPS or TRIPS plus
provisions through BITs or Multilateral agreements. However, if it has not
signed any IP related trade agreements, an LDC would not have to issue any
license.

As reinforced by the Doha Declaration, WTO member states "have the right to
grant compulsory licenses and the freedom to determine the grounds upon
which such licenses are granted." (1)  In essence, a compulsory license is
authorization by a national government given to a person or entity to
exploit the subject matter protected by a patent with or without the consent
of the patent holder (2).  Article 31 of the TRIPS Agreement titled "Other
Use Without the Authorization of the Right Holder" outlines the conditions
necessary for the granting of compulsory licenses, including the obligation
of the licensing member to make efforts to "obtain authorization from the
right holder on reasonable commercial terms and conditions" for a reasonable
period of time before issuing a voluntary license. However, this requirement
"may be waived by a member in the case of a national emergency or other
circumstance of extreme urgency or in cases of public non commercial use."
According to the Doha Declaration, "every member has the right to determine
what constitutes a national emergency or other circumstances of extreme
urgency, it being understood that public health crisis, including those
relating to HIV/AIDS, TB, malaria, and other epidemics, can represent a
national emergency or other circumstances of extreme urgency." Therefore,
countries are free under TRIPS to define threats to public health as
national emergencies and introduce compulsory licenses into their
legislation in the case of an extreme urgency without having to first
negotiate with the patent holder for a voluntary license.
Regardless of prior negotiation before issuing of the compulsory license
(3), TRIPS Article 31 states that "the right holder shall be paid adequate
remuneration in the circumstances of each case, taking into account the
economic value of the authorization," however it does not define "adequate
remuneration" or "economic value," and countries are free to make this
determination provided they follow a reasonable process. Royalty rates
around the world for pharmaceutical products vary from 5 percent to less
than one percent, and the following royalty guidelines have been recommended
by the Indian domestic competitive industry: Innovative products 3 to 5
percent; Production with modest Innovation 2 to 3 percent; Minor Patents 1
percent or less (4).

4. Can Bangladeshi pharmaceutical industries utilize (import) raw materials
of
under patent medicines procured from any developing countries (like India or
China) for export purpose?

With respect to the importation of raw materials of under patent medicines,
Bangladesh would have to issue a compulsory license through the mechanism
outlined above if it wanted to import a product that is under compulsory
license in a developing country. Otherwise, the developing country's
exportation of that product to another country where no compulsory license
has been issued would constitute a violation of TRIPS, even if that
importing country is an LDC.
I must emphasize, however, that your first step should be to verify that
Bangladesh is not party to any international trade agreements that contain
TRIPS or TRIPS+ IP standards. Breaking such regulations would likely result
in a large suit or arbitration as outlined in the specific agreement
(arbitration clauses are standard practice in BITs and Multilateral Trade
agreements).

References:
1) Doha WTO Ministeral 2001: Declaration on the TRIPS Agreement and Public
Health. Adopted on 14 November 2001.
http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm(accessed
Dec 4, 2006)
2) Carlos Correa, Intellectual Property Rights and the Use of Compulsory
Licenses: Options for Developing Countries. Trade-Related Agenda,
Development and Equity (T.R.A.D.E.) Working Paper, South Center (1999)
3) TRIPS Article 31, Other Use Without Authorization of the Right Holder,
http://www.cptech.org/ip/health/cl/cl-art31.html (accessed Dec 10th, 2006)
4) James Love, Compulsory Licensing: Models for State Practice in Developing
Countries, Access to Medicine and Compliance with the WTP TRIPS Accord:
Prepared for the United Nations Development Program, January 21, 2001.
http://www.cptech.org/ip/health/cl/recommendedstatepractice.html

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From:   srkhasru@bdcom.com
Subject: [Ip-health] Export of under patent medicine by Bangladeshi
pharmaceutical industries
Date: May 31, 2007 2:53:30 AM EDT
To:   ip-health@lists.essential.org

On May 31, 2007, at 2:53 AM, Dr Md Sayedur Rahman Khasru wrote:

Export of under patent medicine by Bangladeshi pharmaceutical industries.

Would anybody of this mailing list take the trouble to reply to the
following
queries? We need this information to develop a proposal explaining the
opportunity of Bangladeshi pharmaceutical industries to export under patent
medicine to other LDCs or developing countries.

We will be highly obliged, if anyone please answer the queries with some
explanation, analysis and suggested references.

1. Can Bangladesh as an LDC, produce and export medicines (to LDCs or
Developing
countries or all countries) until 2016 that are still under patent without
any
royalties or any agreement with the patent holder?

2. Does the importing country, if an LDC; needs to issue any license
(voluntary
or compulsory) or negotiation with the patent holder?

3. Does the importing country, if NOT an LDC; needs to issue any license
(voluntary or compulsory) or negotiation with the patent holder?

4. Can Bangladeshi pharmaceutical industries utilize (import) raw materials
of
under patent medicines procured from any developing countries (like India or
China) for export purpose?

Looking forward to hear from you.
With sincere regards,

Dr. Md .Sayedur Rahman
Associate Professor
Department of Pharmacology
Bangabandhu Sheikh Mujib Medical University
Shahbag
Dhaka 1000
Bangladesh
Tel: 00880-1199840757
Email: srkhasru@bdcom.com

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