[Ip-health] Bridges Weekly: CANADA ISSUES COMPULSORY LICENCE FOR HIV/AIDS DRUG EXPORT TO RWANDA, IN FIRST TEST OF WTO PROCEDURE

[Thiru Balasubramaniam]

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[ Picked text/plain from multipart/alternative ]
  BRIDGES Weekly Trade News Digest - Vol. 11, Number 32 26 September 2007

CANADA ISSUES COMPULSORY LICENCE FOR HIV/AIDS DRUG EXPORT TO RWANDA, IN
FIRST TEST OF WTO PROCEDURE

Rwanda last week came one step closer to becoming the first nation to
use a WTO procedure designed to allow developing countries to import
cut-price copies of patented medicines, when Canadian patent
authorities issued a compulsory licence authorising the generic
production of a patented HIV/AIDS drug for export to the central
African country.

"This is big step forward in finally getting at least one affordable
medicine from Canada to a developing country in need," said Richard
Elliott, Executive Director of the Canadian HIV/AIDS Legal Network.
However, noting that it had already been three years since Canada
introduced a legal system for making such exports possible, he said
"it's also a wake-up call" about the need to simplify the process to
make it more efficient and effective.

The Canadian Intellectual Property Office (CIPO) cleared large generic
pharmaceutical company Apotex to manufacture and deliver 260,000 packs
of Apo-Triavir at cost to Rwandan health authorities. This would be
enough to treat 21,000 AIDS patients for a year.

Rwandan WTO delegate Edouard Bizumuremyi told Bridges he was delighted
with the development and said Rwanda had been "waiting for this."

The authorisation follows Rwanda's July notification to the WTO that it
wanted to import that quantity of the medicine from Canada (see BRIDGES
Weekly, 25 July 2007, http://www.ictsd.org/weekly/07-07-25/story2.htm),
becoming the first country to try to import generics under a WTO
procedure criticised as too complex to be effective.

Trial run for WTO health amendment

The WTO's Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) allows members to issue compulsory licences in specific
circumstances, including public health emergencies, effectively
suspending patent rights on products to clear the way for the
production of cheap generics. However, the TRIPS Agreement also
stipulates that the generics thus produced should be "predominantly"
for the domestic market, thus limiting the amount that can be exported
to countries with an insufficient domestic pharmaceutical base.

To address this, governments agreed in August 2003 to waive the
domestic consumption requirement under certain conditions to allow poor
countries to import drugs produced under compulsory licence elsewhere.
This provisional waiver was made into a formal amendment to the TRIPS
Agreement in December 2005, despite criticism from health activists
that its administrative requirements were so complex that no country
had tried to use it (see BRIDGES Weekly, 7 December 2005,
http://www.ictsd.org/weekly/05-12-07/story1.htm).

Nearly four years after the '30 August Decision' waiver, Rwanda became
the first country to try to use the mechanism when it notified the
TRIPS Council of its intention to do so in July.

Canada was one of the first countries to respond to the 30 August
Decision, clearing the way for the export of generic versions of
essential medicines through initial legislation in 2004, and then
through the Canadian Access to Medicine Regime (CAMR) in May 2005.

Canada licences drug under access-to-medicine regime

 From the outset, Canadian health groups criticised the CAMR for
exceeding the already exacting conditions set out in the WTO
compromise; one provision, for instance, requires regulatory approval
by Canadian authorities, and not just the World Health Organisation.

The CAMR was finally inaugurated on 19 September when the Canadian
patent commissioner, Murray Lewis, granted Apotex a compulsory licence
to manufacture and export Apo-Triavir, a fixed-dose combination of
three drugs under patents held by Glaxo Smith Kline (GSK), Shire, and
Boehringer Ingelheim. The licence is valid for two years and restricted
to the supply of 260,000 packs to Rwanda exclusively.

In response to the health activists' concerns, the patent commissioner
described Canada's process for granting the licence as "almost as
simple as it could get," with the "self-explanatory" application forms
spelt out on the website.

Generic makers, health activists unsatisfied

The Canadian HIV/AIDS Legal Network's Elliott countered that obstacles
arose in the "hoops that have to be jumped through, which act as a
disincentive for companies to act." For instance, under the CAMR, a
would-be generic producer must first negotiate with the patent holders
for a voluntary licence, and would only become eligible for a
compulsory licence if negotiations have failed after 30 days. Thus, he
explained, licences for each specific quantity and destination country
are potentially subject to delay. Furthermore, the requirement opens
the recipient country to the possibility of political pressure from the
brand-name company.

Apotex Director Elie Betito was scathing about the company's experience
with the CAMR, telling Bridges "it makes no sense if you are trying to
save lives."

He said that Apotex's attempts to negotiate voluntary licences had
lagged for over a year, until Rwanda's WTO notification triggered the
Canadian regime's compulsory licence provisions. For any more than a
country-specific quota, "the brand pharmaceuticals can attach whatever
conditions they like" to a licence, Betito added.

Following Rwanda's petition, both GSK and Shire waived their right to
the low royalty fee determined in accordance with the African country's
place on the UN Human Development Index. GSK did challenge the name
Apo-Triavir, however, arguing that it could be confused with their
brand-name fixed-dose combination Trizivir, but the patent commissioner
did not agree. Apotex said the generic would cost $0.405 per tablet,
compared to $20 per tablet in the US for the brand-name equivalent.
Moreover, it predicted that this price would drop once production of
the active pharmaceutical ingredients is ramped up.

In any event, the path for Rwanda to import generic Apo-Triavir is now
fairly straightforward. Canada must notify the TRIPS Council of its
intention to export the drug to Rwanda, detailing information about the
licence, the quantity, and the two-year duration. Apotex needs to
create a website providing information about the quantity of medicine
and the distinguishing characteristics - packaging, shaping, or
colouring - aimed at ensuring that the generics are not illegally
diverted into other markets.

However, if Canada is serious about wanting to facilitate the provision
of medicines to developing countries, Elliott recommended reforming the
CAMR to create a 'one-licence solution' that would authorise a company
to produce the same drug for export to different countries that submit
notifications to the WTO or Canadian government.

Elliott acknowledged that "there is not much appetite to revisit the
legislation" among Canadian policymakers. He expressed concern that now
the CAMR had been shown to work, in however limited a way, there would
be no impetus to improve it.

ICTSD reporting.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org
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