[Ip-health] Re: [HEALTHGAP] Ecuador's compulsory licensing policy: Corrections to media reports
peter maybarduk
peter.maybarduk@essentialinformation.org
Tue Nov 3 11:03:11 2009
--
[ Picked text/plain from multipart/alternative ]
Hi Richard,
While national manufacturing has received quite a bit of attention,
access to medicines is at the heart of Ecuador's policy. Ecuador has
not stated it would rely exclusively on national manufacturing, and
indeed IEPI also plans to rely on imports and generic firms based
abroad (and has said so publicly). It seems likely the first
licenses would rely on imports. We can't say, of course, what the
ultimate outcome of internal government deliberations will be. But
the government is aware of Indian ARVs, as well as some of the
products available from Latin American producers. One option open to
Ecuador, depending on the product, manufacturing capacity and other
factors, is to issue compulsory licenses, and begin by importing
products from India or elsewhere, while the licenses simultaneously
incentivize production at home. With time, if local or public
producers prove ready to compete with the imported products, drug
purchasers would have the opportunity to switch. I understand this
is what Brazil did with efavirenz. This way, the licenses serve
public health interests right away, and can also help develop a local
pharmaceutical sector over the long run. (It is worth recalling that
Canada used routine compulsory licensing to develop its
pharmaceutical sector in the 1960s and 1970s.)
On Nov 2, 2009, at 3:33 PM, ALAN STERN RICHARD wrote:
> Much has been made of the Ecuatorian government's plan to utilize
> national manufacturers. The reasons given for as I understand it
> is 1) that prices will be much lower and that the money will go to
> local businesses instead of multi-national pharmaceutical
> companies. So far so good.
>
> But I haven't seen anything about the government's intent or
> willingness to purchase drugs from other already established
> generic companies such as the Indian companies. In that case the
> savings would be there, but profits would not go to locally owned
> companies. I would be very concerned about AIDS drugs. Are
> their local companies in Ecuador prepared and qualified to rapidly
> scale up production of AIDS drugs that meet the necessary standards
> of quality. This also applies of course to other drugs for other
> diseases. If the President is truly interested in saving lives,
> it would be important for him to look at the world wide market,
> before deciding where to purchase generic drugs from. (There are
> also companies in Argentina and Costa Rica producing good quality
> generic AIDS drugs, although most of the generic AIDS drugs come
> from India.)
>
> I hope that this apparently excellent initiative will not place
> "nationalistic interests" above saving lives.
> Historically Ecuador has had some of the worst (highest) prices in
> Latin America for AIDS drugs because of corrupt negotiations with
> Big Pharma. I am not sure if they have recently begun to use
> generic AIDS drugs provided by the PAHO strategic fund. But in any
> case, the production capacity of the National Industry must be
> taken into account, and weighed against what is already available
> on the World generic market.
>
> Richard Stern
>
> ----- Mensaje original -----
> De: peter maybarduk <peter.maybarduk@essentialinformation.org>
> Fecha: Lunes, 2 de Noviembre de 2009, 1:31 pm
> Asunto: [HEALTHGAP] Ecuador's compulsory licensing policy:
> Corrections to media reports
> A: ip-health@lists.essential.org, Public list for Health GAP
> notices and discussions <healthgap@critpath.org>, e-drug@healthnet.org
>
>
> > Dear friends,
> > You will recall last Monday, Ecuadorean President Rafael Correa
> announced a bold new national access to medicines policy through
> decree no. 118, declaring access to priority medicines a matter of
> public interest, and establishing procedures for issuing compulsory
> licenses. Such licenses would authorize price-lowering competition
> with expensive patented drugs.
> >
> >
>
> > Many news articles, in Spanish, English and French, reported on
> the decree, as well as on subsequent comments and analyses by the
> patent office, national and international pharmaceutical companies,
> and observers. Unfortunately, several inaccuracies circled the
> globe through some of these reports. We would like to take the
> opportunity to correct a few of the most common inaccuracies now.
> >
> >
>
> > First, compulsory licenses do not eliminate or break patents.
> They simply authorize use of a patented technology. Under
> compulsory licenses, patent holders retain their patents and a
> variety of related rights, including the right to be adequately
> compensated through royalty payments and any rights reserved
> through restrictions set out in the license. For example,
> sometimes compulsory licenses are limited to public, non-commercial
> use. In this case the patent holder would retain exclusive rights
> in the private market (i.e., the right to be the exclusive seller
> to private pharmacies and insurers). Ecuador will issue compulsory
> licenses, which is qualitatively different from annulling patents.
> >
> >
>
> > Second, Ecuador has not predetermined the number of licenses it
> intends to issue, nor will it license all medicines en masse.
> Ecuador's patent office (IEPI) will consider compulsory license
> requests on a case-by-case basis. IEPI will consult with the
> Ministry of Public Health and take into account the public interest
> that licensing a particular medicine would serve. Some news
> articles reported Ecuador would "license 2,214 medicines" or
> "eliminate over 2,000 medical patents." 2,214 is actually the
> total number of granted and/or requested patents for
> pharmaceuticals in Ecuador. Often, multiple patents apply to a
> single medicine. Therefore, it is not even theoretically possible
> for Ecuador to issue compulsory licenses for 2,214 medicines, as
> there are not that many patented drugs. IEPI will proceed more
> methodically and deliberately than reported, considering license
> requests for priority medicines case-by-case.
> >
> >
>
> > Third, much speculation has surrounded the issue of royalties.
> IEPI has not predetermined the royalty rates it will require
> licensees to pay to patent holders. IEPI will instead determine
> royalties according to the unique circumstances of each case. IEPI
> is currently studying international best practices in setting
> royalty rates, including models and equations used in other
> countries. Royalty rates established by IEPI are therefore likely
> to correspond to international precedent.
> >
> >
>
> > Finally, some reports have suggested the WTO's TRIPS Agreement
> requires Ecuador to negotiate with pharmaceutical companies before
> issuing compulsory licenses, because Ecuador has not declared a
> public health emergency. But under WTO rules, licenses issued for
> public, non-commercial use are also exempt from the prior
> negotiation requirement. Ecuador has not announced whether
> licenses would be issued for public use, but if so, Ecuador would
> not be required to negotiate first. In cases where negotiation is
> required, the government need only offer reasonable terms and
> conditions. If the patent holder fails to reply, or refuses
> reasonable conditions, the government can then proceed and issue a
> compulsory license. In other words, pharmaceutical companies
> cannot hold up the government for whatever royalty rates they
> want. In that case the license would no longer be compulsory at
> all, but voluntary, and the WTO rules would cease to make sense.
> >
> >
>
> > Please see below for Essential Action's Backgrounder on
> "Ecuador's Presidential Declaration on Access to Medicines and
> Compulsory Licensing." You can also download a PDF at: http://
> www.essentialaction.org/access/
> > >
> >
>
> >
> > President Correa's decree is available online, in Spanish, at:
> http://www.sigob.gov.ec/decretos/. We hope to make an English
> translation of President Correa's declaration available in short
> order.
>
> > Thank you, and please feel free to contact me with any
> questions. - Peter Maybarduk, Attorney, Essential Action,
> peter.maybarduk@essentialinformation.org
>
> >
>
> > Ecuador=92s Presidential Declaration on
> > Access to Medicines and Compulsory Licensing
>
> > =96 Backgrounder =96
>
> > Quito, Ecuador, October 26, 2009 =96 Today, Ecuador=92s President
> Rafael Correa declared access to priority medicines affecting the
> health of the Ecuadorean population to be a matter of public
> interest. Under Andean Community law, the declaration opens the
> door to competition of generic medicines with patented brand-name
> drugs, through use of an internationally recognized legal mechanism
> called compulsory licensing. The declaration should lead to
> government policies that expand access to medicines.
>
> > Globally, competition has consistently proven the most effective
> method to reduce medicine prices, and ensure prices continue to
> fall over time. Over the last ten years, generic competition has
> produced a revolution in HIV/AIDS treatment, reducing prices for
> first-line antiretrovirals from around $10,000 to around $100 per
> year, and enabling over four million people worldwide to access
> treatment.
> >
> By issuing a compulsory license, a government can authorize
> competition with patented products, including the importation,
> domestic production, distribution and/or sale of generic
> medicines. In exchange, licensees pay reasonable royalties to the
> patent holder, set by the government according to the circumstances
> of each case. Compulsory licenses do not =93eliminate=94 or =93override=
=94
> patents. Instead, they authorize the use of patented technology
> under enumerated conditions.
>
> > Countries=92 right to issue compulsory licenses =93on grounds of
> their choosing=94 is enshrined in the World Trade Organization=92s
> TRIPS Agreement (1995) and unanimous Doha Declaration (2001) on
> intellectual property and public health. The WTO=92s Doha Declaration
> also states, =93the [TRIPS] Agreement can and should be interpreted
> and implemented in a manner supportive of WTO Members' right to
> protect public health and, in particular, to promote access to
> medicines for all.=94
>
> > Ecuador=92s Presidential declaration does not on its own issue a
> compulsory license. Rather, it authorizes procedures by which the
> government can subsequently decide, case-by-case, to issue
> compulsory licenses for priority medicines (as determined by the
> Ministry of Public Health), based in public interests such as
> reducing treatment costs and enabling greater access to treatment.
> The declaration follows public pronouncements by President Correa
> articulating a vision of intellectual property as =93a mechanism for
> development for the people,=94 and is an important step toward access
> to medicines for all.
>
> > Many countries have used compulsory licenses to promote public
> interests and remedy anti-competitive practices in a variety of
> sectors. Today, the United States is perhaps the most frequent
> user of compulsory licensing; including the government use of
> defense technologies, and judicially-issued licenses to remedy anti-
> competitive practices in information technology and biotechnology,
> among others. Canada routinely issued compulsory licenses during
> the 1960s and 70s to develop its national pharmaceutical
> industry. In recent years, a number of countries have issued
> compulsory licenses to improve access to medicines, including
> Thailand, Malaysia, Eritrea, Mozambique and Indonesia, among others.
>
> > In 2007, Brazil issued a compulsory license for the HIV/AIDS
> medicine efavirenz. Brazil has provided treatment to hundreds of
> thousands of people living with HIV/AIDS and saved well over US$1
> billion through its combined medicines strategy of domestic
> production, importation, negotiation and compulsory licensing.
>
> > President Correa signed the declaration Friday, but his office
> released it today. The declaration enables Ecuador=92s government
> officials to consider introducing generic competition with some of
> the country=92s expensive patented drugs, including second-line HIV/
> AIDS treatments that cost more than double the current competitive
> price, and lifesaving cancer treatments that exceed $35,000 per
> person, per year, and which some hospitals cannot afford. The
> UNAIDS 2008 report estimated 42% of Ecuadoreans needing
> antiretroviral therapy received it. Resource constraints in
> Ecuador limit availability of treatment.
>
> > Ecuador=92s declaration cites Constitutional principles as well as
> provisions of the National Development Plan and international
> agreements, including the WTO TRIPS Agreement and the World Health
> Assembly Global Strategy and Plan of Action on Public Health,
> Innovation and Intellectual Property. The declaration charges the
> Intellectual Property Institute of Ecuador (IEPI) with establishing
> royalties and the terms of licenses, in compliance with all
> applicable national legislation and international rules. The
> Presidential declaration incorporates requirements of the WTO=92s
> TRIPS Agreement and Andean Community legislation, including
> excerpting some passages word-for-word. IEPI has published an
> administrative guide to compulsory licensing for the use of
> Ecuador=92s government agencies.
>
> > For more information, contact:
>
> > Peter Maybarduk
> > Attorney
> > Essential Action
> > Access to Medicines Project
> > peter.maybarduk@essentialinformation.org
> >
>
> >
> >
>
>
>
>
> > _______________________________________
> > http://critpath.org/mailman/listinfo/healthgap_critpath.org
> > HealthGAP is a public list. To post, send to
> > healthgap@critpath.org. To subscribe, unsubscribe, or for help
> > with your account, send an email to info@healthgap.org
> >
> > www.healthgap.org
> >
> _______________________________________
> http://critpath.org/mailman/listinfo/healthgap_critpath.org
> HealthGAP is a public list. To post, send to
> healthgap@critpath.org. To subscribe, unsubscribe, or for help with
> your account, send an email to info@healthgap.org
>
> www.healthgap.org
>