Patents and right to health - Brazil and South Africa follow in India's footsteps

Just a few months ago, the judgment of the Supreme Court of India in the Novartis' Gleevec case fueled an international debate on the protection of innovation in the pharmaceutical sector and its compatibility with the right to health. The discussion frequently focused on Section 3(d) of India's Patents Act, which sets out a test of 'enhanced efficacy' (therapeutic efficacy, for pharmaceutical substances, according to the Supreme Court) for the patentability of new forms of known substances:

3. The following are not inventions within the meaning of this Act,—

(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation.—For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.

The Supreme Court explained that the test constitutes 'a second tier of qualifying standards for chemical substances/pharmaceutical products', designed as a filter to prevent repetitive patenting and 'evergreening' practices. The ample historical re-construction, and the comments of the judges on the development of patent law in India, clarified that Section 3(d) sets the balance between the protection of IP and the safeguard of public health from a wide perspective, which includes access to medicines and development of a national generic industry. From this point of view, the provision represents India's attempt to comply with its international obligations arising from the TRIPS Agreement, in light of the Doha Declaration on TRIPS and public health and of its own national interests as a developing country.

Recent reform proposals, currently under discussion in Brazil and South Africa, show that other countries are likely to follow in the footsteps of India. The Projeto de Lei n° 5.402/2013 (a brief overview here) seeks to apply significant changes to Brazil's Industrial Property Law (Lei 9.279/1996), which comprise (i) the exclusion of term extensions to compensate for regulatory delays either in the granting of a patent or in the approval of a medicine (revoking Article 40), and the adoption of (ii) a provision (Article 10.XI) identical to India's Section 3(d), (iii) higher standards for inventive step (amending Article 13), (iv) a pre-grant opposition procedure (amending Article 31), (v) a provision (Article 195.3) rejecting data exclusivity. Further changes include the necessity of prior consent from the National Sanitary Agency (ANVISA) for granting patents on pharmaceutical substances or processes, and the establishment of governmental use licenses.

Main changes introduced by the Projeto de Lei n° 5.402/2013
Patent term	Revocation of Article 40 (‘The term shall not be less than 10 years for an invention patent and 7 years for a utility model patent, beginning on the date of granting […]) No extension of the patent term for regulatory approval of new drugs
Test of enhanced efficacy for new forms of known substances	Article 10.XI (new) 'The following are not considered to be inventions or utility models: XI – new forms of known substances that do not result in the enhancement of the known efficacy of the substance. For the purposes of this Article, salts, esters, ethers, polymorphs, metabolites, pure form, size of particles, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance shall be considered the same substance, unless they significantly differ in terms of properties regarding efficacy.'
Inventive-step	Article 13 (amended) 'An invention is endowed with inventive step provided that, to a technician versed in the subject, it is not derived in an evident or obvious way from the state of the art, and that it represents a significant technical advancement in relation to the state of the art.'
Pre-grant opposition	Amendments to Article 31 The opposition may be filed after the publication of the application and before the end of the examination Technical opinions may be asked to public administration, organisation, scholars and experts
Data exclusivity	New Article 195.3 authorises 'the use, by governmental entities, of test results or other undisclosed data, for market approval of products equivalent to the product for which they had been initially presented.'
Consent of the National Sanitary Agency for approval of pharmaceutical patent	New Article 229-C requires ANVISA’s consent in light of public health considerations ANVISA may refuse its consent if the grant of a patent application is contrary to public health
Public, non-commercial governmental use	New Article 43-A allows the government to use the subject matter of a patent or patent application without the owner’s consent, for reasons of public interest

The explanation attached to the reform proposal takes the view that such changes are essential to allow Brazil to pursue policy objectives (increasing access to medicines, lowering health care expenses, promoting domestic innovation, stimulating the development of generic competition in the internal market, etc.) which differ from those of more economically developed countries. The idea, according to the policymakers that promoted the reform, is to follow the paths of India and Argentina, rather than that of the United States.

Brazil's proposal, which is supported by numerous international scholars, addresses some of the issues examined by the Center for Strategic Studies and Debates in a recent report ('Brazil's Patent Reform - Innovation Towards National Competitiveness'). The study highlighted that the current regime appears to favour foreign innovators, and that the grant of pharmaceutical patents determined a drop in foreign investments and technology transfer agreements, undermining the development of a domestic pharmaceutical industry. Further, the report underlined the benefits deriving from generic competition, as well as the interplay between a restriction of the patentability of pharmaceutical substances and the increased availability of essential medicines at lower costs.

Similar issues are also under consideration in South Africa, where the Department of Trade and Industry presented, in September, a 'Draft National Policy on Intellectual Property', which suggests modifications in many areas of IP law. Inter alia, the draft focuses on the reform of patent law, in light of public health policy considerations, contemplating the introduction of a new Search and Examination Office, pre and post grant opposition procedures, stricter patentability requirements, and other provisions aimed at fostering generic competition and facilitating access to medicines. 

Draft national policy on IP of South Africa – Recommendations
Technology – Public policy	Establish a new Search and Examination Office Develop human-resource capacity for the handling of technology, including technology transfer Adopt rules to regulate technology transfer agreements related to restricted/prohibited technologies Do not support international patent reforms which undermine South Africa’s public policy Address parallel importation and compulsory licensing in line with Doha Declaration Promote schemes and regulations to encourage use of patents and help achieve developmental goals (poverty alleviation and health) Do not enter into bilateral agreements that may impair the flexibility granted by TRIPS
Pre and post opposition of patents	Introduce a dual opposition procedure (pre/post grant)
Patents and public health	Incorporate the flexibilities contained in the TRIPS and Doha Declaration Do not grant patents on medicines that may be expiring Adopt a cost and benefit analysis (monetary/non-monetary) through processes and benchmarks in line with those used in India and Brazil Amend the Patent Act to take into account public health
Data protection	Maintain commitment to protection of data under Art. 39 TRIPS but refrain from conceding clinical data exclusivity
Generic medicines	Use of the Bolar provision before expiry of the originator’s patent Raise awareness that generics are not counterfeited medicines

In particular, the second chapter of the Draft Policy analyses the relationship between IP and public health, admittedly from the point of view of 'a developing country like South Africa'. The drafters identify three main mechanisms to ensure access to medicines at lower prices and to facilitate generic competition: compulsory licensing, parallel importation, and limitations to the patentability of pharmaceutical substances. Accordingly, they essentially propose (i) to introduce compulsory licensing provisions, (ii) to facilitate parallel importation from other jurisdictions, (iii) to adopt provisions aimed at increasing generic competition (e.g. Bolar provision and a fast procedure for generic approval), (iv) to implement strict requirements for patent protection, which should exclude diagnostic, therapeutic and surgical methods, including new uses of known products, from patentability, and (v) to ensure that the protection of intellectual property does not conflict with public health policies.

In an open letter addressed to the Department of Trade and Industry, several organisations and academics welcomed the proposals contained in the Draft Policy, suggesting an even more radical approach. The signatories supported the introduction of a search and examination system, especially in relation to the pharmaceutical sector, the implementation of pre and post grant oppositions, and the use of compulsory licensing and parallel importation. They also highlighted the importance of improving transparency during the application procedure (including disclosure of the INN - International Nonproprietary Name - of the pharmaceutical subject matter) and of avoiding the conferral of data exclusivity.  On patentable subject matter and patentability criteria, the letter endorsed the adoption of stricter rules aimed at preventing 'patent evergreening' and the patentability of DNA and cDNA sequences:

[We] recommend that additional criteria also be put in place in South Africa, to exclude from patentability or to clarify lack of inventive step with respect to new forms of known medicines or their components (salts, polymorphs, esters and other derivatives), new dosages and formulations, and new combinations of known medicines or components. These exclusions from patentability or clarifications of inventive step are all compliant with Article 27.1 of TRIPS, and countries such as India, Argentina and the Philippines have already put such criteria in place. Strict subject matter exclusions and patentability criteria prevents originator pharmaceutical companies from obtaining multiple patents on the same drug—a practice known as “patent evergreening,” which keeps medicine prices high by preventing the entrance of generic competitors. [...] Both DNA and cDNA sequences should also be explicitly excluded from patentability, as they are products of nature—cDNA sequences in particular are relevant to developing therapeutic products. Adopting this exclusion is essential if South Africa is to develop a rich biotechnology/biosimilars sector. In addition the DNPIP must reject the introduction of utility model patents in South Africa in regard to pharmaceutical products [...].

The reform proposals examined above showcase a fundamental issue which prevents a global harmonisation of patent law. Disparities in the economic and social development of many countries inevitably prompt reactions inspired by the protection and promotion of national interests and priorities. The debate on Brazil's and South Africa's reforms offers a significant occasion to reflect on these elements and their interplay, a necessary step towards an internationally harmonised system of patent protection.