E-drug: USA-SA deal on drug patents at hand?
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[copied from PHARM-POLICY with thanks]
This is Simon Barber's column in the South
African Business Day. I have heard about this
"deal" from other sources, but have not seen
the "non paper" itself. Apparnetly, Gore is
searching for a way out of the current trade
dispute.
Mr. Barber is a colorful writer, but occasionally
allows himself to deliberately overstate issues
for the sake of a good yarn. I never suggested
that I was the "orchestrator" on the demonstrations
against Gore, and indeed, told Mr. Barber that this
is the independent work of the AIDS activists.
There is a difference, it seems to me, between
communicating and being supportive of actions,
and being an "orchestrator" of actions, but Mr.
Barber is searching for a conspiracy.
Also, in order to get a dig in about Section 15c of
the South African Medicines Act, Mr. Barber confuses
the issue of broad statutory authority to do compulsory
licensing, and the requirements in Article 31 of the
TRIPS to provide for judicial review of compulsory
licensing decisions. In the USA, the pharmaceutical
companies as a matter of course litigate the most
tenuous patent and other IPR claims, simply to delay
introduction of competition. Clear legal authority
to proceed would see like a prudent step in a world
where big PhRMA companies are constantly making
absurd legal claims. Finally, as noted by Mr. Barber,
if and when SA ever issues a compulsory license, the
USA can challenge any decisions before the WTO, in the
event that the patent owners can demonstrate that
their legitimate rights are actually violated.
Jamie Love
http://www.bday.co.za/99/0714/news/n6.htm
14 July 1999
STARS AND STRIPES
by Simon Barber
US-SA deal on drug patents appears to be at hand
A "NONPAPER" circulating in Washington and Pretoria
sets out the basis for defusing the long-running row
between the two governments over the sanctity of drug
patents. Officials on both sides sound confident that an
agreement is at hand.
Essentially, Washington will declare itself satisfied, take SA
off its trade representative's "watch list", and release trade
benefits it has withheld as a bargaining lever, in return for
the SA government reaffirming its full commitment to the
World Trade Organisation agreement on trade-related
intellectual property (Trips).
The pharmaceutical industry fears that US Vice-President
Al Gore has caved in to AIDS activists who have hounded
him as he campaigns for president, alleging he is in cahoots
with the industry to deny poor, HIV-positive South Africans
cheap medicine to control their infections.
Gore has exercised his grey matter, certainly; with a new
team in Pretoria, the time is ripe for a sensible compromise.
At the core of the deal is Gore's pregnant declaration, in a
June 25 letter to congressman James Clyburn, chairman of
the Congressional Black Caucus, that: "I support SA's
efforts to enhance health care for its people - including
efforts to engage in compulsory licensing and parallel
importing of pharmaceuticals - so long as they are done in a
way consistent with international agreements."
The dispute has centred on section 15c of the SA Medicines
and Related Substances Amendments Act as incorporated
in the SA Medicines and Medical Device Regulatory Act
signed into law last December.
Not yet implemented, the clause explicitly excuses the
health minister from deference to existing SA patent law -
as amended to conform with international agreements -
when setting drug policy.
The avowed purpose is to allow government to purchase
patented medicines outside the marketing channels of
patent-holders and to licence third-party companies to
exploit formulae whose patents they do not own. The
objective of these expedients, technically known as parallel
imports and compulsory licensing, is cost control. .
Parallel importing without the patent-holder's consent
seems to be prohibited by article 28 of Trips but actually is
not. The prohibition is subject to article 6 which, broadly,
states that the treaty suspends judgment on the
"exhaustion" of patent rights - that is, in this context, the
point in the sales chain at which patent-holders lose control
over onward distribution of their products.
Trips members like SA are permitted to decide for
themselves when "exhaustion" occurs, provided their
decision is carried through in a consistent manner, not giving
locally owned patents greater protection than
foreign-owned ones or discriminating between different
types of patented product - for example, by singling out
drugs for special treatment.
Article 31, meanwhile, acknowledges the right of member
governments to engage in compulsory licensing for the
public good if they play by a dozen or so rules.
Here are several. Patent holders must receive
"remuneration... taking into account the economic value" of
the rights assigned to third parties. The rights should not be
used to make goods for export. A government's action, even
though nominally permitted under its own laws, must still be
justiciable in its courts.
The problem with section 15c is that it grants the the health
minister sweeping authority to ignore SA's Trips obligations,
"notwithstanding" the patent act which is, to all intents,
repealed where medicines are concerned. That is one
reason both local and multinational drug companies are
seeking to block the measure in the courts.
James Love of the Washington-based Consumer Project
on Technology says the breadth of section 15c is intended
precisely to stop companies "litigating to death" any
patent-threatening action the minister might take in the
name of lower medical costs. That intention is specifically at
odds with Article 31.
Love, who has worked closely with the health ministry's
departing Dr Ian Roberts - although not, he stresses, as a
paid consultant - happily acknowledges his role as
intellectual orchestrator of the anti-Gore demonstrations.
Among their charges is that Gore has been "bullying" SA to
swear off parallel imports and compulsory licensing.
By announcing he supports those practices as long as they
are conducted within Trips rules, Gore may hope to catch
the activists flat-footed and force Love to concede that
what he seeks is a dilution of Trips.
Love, however, refuses to do that, emphasising that his goal
is only to stop the US trade representative dictating other
countries' laws to them. Instead, he says, the US should
wait until they really do violate the treaty, then seek redress
in the World Trade Organisation. This would seem to be the
current US position on SA. In lieu of getting section 15c
repealed or amended, the administration appears content to
let the SA courts decide, and, if the law is upheld, act only if
SA uses it in a Trips-illegal way.
The accusation that Gore is in the pocket of the drug
industry, which was starting to gain currency, now holds
less water than it ever did. The industry wants a big fat
stake driven through section 15c and the vice-president has
not delivered. But he may have helped foster something
more important if the companies can keep their toys in the
cot: a sane atmosphere for reasoning through why the
protection of intellectual property is not necessarily
incompatible with better, more affordable health care for
SA's poor, HIV-infected or otherwise.
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