Image from here.
In an article published on 16th November, 2015 in the Wire, I have analysed the Patent section of the Intellectual Property chapter of the Trans-Pacific Partnership Treaty, a regional free trade agreement involving the US and 11 other countries and 40% of the world GDP that was released earlier this month. Negotiated in secret, the Treaty has been controversial for adopting TRIP plus standards in IP, threatening internet freedom, endangering the rights of labour, health and the environment, and, largely furthering private interests over public good. This stands out clearly in the Chapter 18 of the Treaty – the IP Chapter. The Treaty introduces many new mandatory standards that effectively lengthen monopoly rights. For pharmaceuticals, this means delayed generic entry and a severe threat to access to medicines for all.
Here is a quick summary of my article. You can read the entire piece here.
See our earlier posts on the TPP here and here.
Closed door negotiations
The TPP, while zealously advocating transparency for national governments (See Article 18.9), was negotiated completely behind closed doors. This prevented any vigorous scrutiny of negotiating positions or the draft text by academics, civil society and other professionals. Given the egregious history of knowledge asymmetries and coercive politics in international IP law making, scholars and activists were immediately suspicious. Leaked drafts of the text confirmed these fears. For IP, the US was strongly advocating for the adoption of higher minimum standards, despite the inability of the developing countries in the group to implement the same without seriously impeding access to medicines for the poor majority in their countries [ eg. Vietnam ranks 121 on the Health index even below Iraq]. Corporations, however, were consulted on some positions, and portions of the text seem to be the outcome of corporate lobbying. These attempts were fiercely resisted by public health advocates and global health professionals. This has resulted in some roll backs – however the treaty still scores major wins for Big Pharma.
Patent Term Extensions
The treaty provides that member countries ‘shall’ provide extensions to patent terms, over and above that provided in law to account for ‘unreasonable’ delays in processing patent applications. This is in contrast to the TRIPS mandated minimum period of 20 years “counted from the filing date”. This norm of compensating for delays in patent processing may not be suited to regimes with complex patentability criteria, such as Section 3(d) in India law. Also, ‘processing’ is defined as only ‘initial administrative proceeding’ and ‘administrative processing at the time of grant’, and thus does not envisage pre-grant opposition proceedings. In developing country patent offices which do not have an adequate number of specialised examiners and access to key databases, this could lead to routine (and significant) extensions, and militates against the incorporation of pre-grant opposition procedures.
The treaty also provides an additional patent term extension to patented pharmaceutical products to compensate for “unreasonable curtailment of the effective patent term as a result of the marketing approval process.” As marketing approval and patent examination are two completely distinct enquiries – with different purposes and different expertise – the merging of patent rights with marketing approval is highly problematic. In fact, this is the chief strategy that has been followed in the treaty. Drug safety testing and resultant marketing approval has been linked to exclusionary rights thereby effectively granting monopolies of patent while circumventing the checks in patent law.
Data exclusivity
The TPP provides for a minimum five year protection of data required to be submitted to a drug regulatory agency for marketing approval of a drug. Biologics are granted an even higher 8 year protection term. In this post, I have argued why data exclusivity is inefficient, contrary to TRIPS and dangerously upsets generic-brand pharmaceutical competition. The TPP mandates data exclusivity to all ‘new pharmaceutical products’ – which is defined as any product that has not received prior approval. New indications (the use of the same drug to treat a new ailment), new formulations (new mixtures or slight modifications in the structure or composition of the chemical) or new methods of administrations (new dosage) are explicitly given ‘at least three years’ of data exclusivity despite the fact that these often do not meet the patentability threshold (even under the lower bar in US law) and can be expressly declared non-patentable in some jurisdictions – as in Section 3(d) of the Indian law.
Patent linkage
The TPP introduces two systems of patent linkage. The soft version requires a mechanism for notifying patent holders when generic market approval applications are made for the same drug and a system for such patent holders to then seek immediate remedies for potential patent infringement before the approval application is processed. While this seems like a balanced approach, a footnote states that ‘patent-holder’ will include a market approval holder which again raises the problem of linking rights from a patent with passing drug safety testing. The alternative harder patent linkage norm states no generic approval is granted without the consent of the originator company when a drug is under patent. Any system of patent linkage effectively shifts the onus and burden of patent litigation on generic entrants to prove lack of infringement or invalidity of a patent which involves prohibitively high costs that further inhibit generic manufacturers and drive costs of medicines up.
Conclusion
I conclude by pointing out that barriers to generic entry not only extend monopolies for brand drug companies, but also make generic -brand competition unviable. A new era of voluntary licensing between generics and brand drug companies has meant that generics have no incentive to challenge erroneous patents or apply for compulsory licenses. It also means that generic entry no longer drives down prices and generic prices themselves are saddled with royalty amounts.
The TPP indicates what India can expect in terms of the talks at Joint High level Working Group on IP and the upcoming India-EU FTA talks. The creeping adoption of TRIPS plus standards makes it harder for India to hold out against the attack on its use of TRIPS flexibilities to promote pubic health. With the developing world relying on generics, particularly Indian generics to ensure access to affordable medicines, India needs to renew energies into defending an IP regime that puts social and economic welfare of people first.