[Ip-health] IP-Watch: Ecuador To Define Its Compulsory Licence Legislation

[Sarah Rimmington]

http://www.ip-watch.org/weblog/2009/11/23/ecuador-to-define-its-compulsory-=
licence-legislation/
23 November 2009
Ecuador To Define Its Compulsory Licence Legislation
By Catherine Saez

Since Ecuadorean President Rafael Correa signed a decree on 23 October
allowing compulsory licences, the national intellectual property office
has been working on a mechanism for issuing those licences, which should
be studied case by case, according to the national decree.

Referring to Article 31 of the World Trade Organization (WTO)
Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement,
the Ecuadorean constitution, and the WTO Doha Declaration on TRIPS and
Public Health, Correa declared access to essential medicines of public
interest to the Ecuadorean population.

Ecuador=92s intellectual property office is currently working on
legislation for issuing compulsory licences that will be
TRIPS-consistent and will respect all of Ecuador=92s obligations as a
member of the WTO, an Ecuadorean official in Geneva told Intellectual
Property Watch.

Article 31 of the TRIPS agreement allows member countries to use patents
without the authorisation of the right holders in certain cases such as
a national emergency, extreme urgency or for public non-commercial use,
although the right holders should be informed in the case of public
non-commercial use.

The Doha TRIPS and Public Health Declaration states that TRIPS =93does not
and should not prevent members from taking measures to protect public
health.=94 The declaration reinforce the right of countries to use the
TRIPS flexibilities, including compulsory licensing, and it was agreed
that least-developed countries=92 exemption on pharmaceutical patent
protection would be extended until 2016.

In the past some developing countries using the TRIPS flexibilities have
faced strong opposition from the developed country pharmaceutical
industry challenging on several occasions the legitimacy of compulsory
licences.

The Ecuadorean Institute of Intellectual Property (IEPI) (Instituto
Ecuatoriano de la Propiedad Intelectual) will have competency to issue
compulsory licences to applicants, based on the legislation, according
to the decree, numbered 118. The IEPI will work in coordination with the
Ministry of Public Health. The scope, purpose and timeframe of
compulsory licences, as well as the amount and conditions of royalty
payments will be established by the IEPI, the decree said.

In Ecuador, the average price of a medicine if competition exists is
about US$ 3.85, according to the IEPI, but if there is no competition,
the average price is $46, not including cancer and AIDS medicine, which
are more expensive.

According to an IEPI administrative guide presenting a scenario for the
issuance of compulsory licences, in 2002, an Ecuadorean national
laboratory asked for a compulsory licence for an anti-retroviral drug
(Convivir from GSK), which was usually priced $350 for a month of
treatment. Just by asking for a compulsory licence, GSK dropped its
prices to $60 a month and the compulsory licence was not issued, it said.

Other countries have sought to issue compulsory licences, according to
the guide. For example, Brazil in 2007 issued a compulsory licence for
an AIDS treatment. Malaysia also issued a compulsory licence for
=93government use=94 for three medicines to treat HIV/AIDS, and started to
import generic medicines from India. In Brazil, the costs dropped by 81
percent for patients with HIV/AIDS.

According to this guide, which was drafted as a basis for discussion,
between 0.5 and 10 percent of the sale of the generic medicines could be
paid as economic compensation to patent holders.

As has been the case in other countries, the decision to issue
compulsory licences could prompt pharmaceutical companies to reconsider
their prices, the Ecuadorean official told Intellectual Property Watch.
But for the moment, nothing has happened, he said, and no companies have
come forward.

Compulsory licences also could be issued under the WTO decision of 30
August 2003 on the implementation of paragraph 6 of the Doha Declaration
on TRIPS and Public Health, according to the guide.

This WTO decision, which was approved as a permanent amendment to the
TRIPS agreement in December 2005 and is awaiting full ratification,
allows members who produce pharmaceutical products under compulsory
licences to ship a majority of it to developing countries lacking
production capacity. Before this, TRIPS said that drugs produced under
compulsory licences had to be for =93predominately=94 domestic use.

Some of the medicines under compulsory licences will be manufactured by
the Ecuador national manufacturing industry, while others will be
imported from other countries, according to the Ecuadorean official.

Catherine Saez may be reached at csaez@ip-watch.ch.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: +1 (202) 387-8030
Cell: +1 (202) 422-2687
www.essentialaction.org/access/

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