UNITAID comments on the Trans-Pacific Partnership Agreement and its implications for public health

Last week, UNITAID released its full report on 'The Trans-Pacific Partnership Agreement: Implications for Access to Medicines and Public Health' (the IPKat, here, carries a number of posts that examined in detail the Trans-Pacific Partnership Agreement, including my analysis of patent-related provisions). The organization, established in 2006 by the governments of Brazil, Chile, France, Norway and the United Kingdom, aims to increase access to treatment for HIV/AIDS, TB and malaria for people in developing countries, promoting policy measures and international efforts to significantly reduce the price of quality drugs and diagnostics, while ensuring their widespread availability. From this perspective, UNITAID noted that several provisions included in the draft (leaked) version of the Trans-Pacific Partnership (TPP) Agreement 'have the potential seriously to hamper access to medicines', disrupting generic competition in the pharmaceutical market and negatively affecting the flexibilities embedded in the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and public health.

The report first looked at the provisions dedicated to patents. UNITAID observed that the TPP would generally require its parties to adopt low thresholds of patentability, resulting in an increase in the number of patents granted, inter alia, for medicines and medical technologies. Similarly, the agreement would prevent developing countries from adopting higher standards of patentability for secondary pharmaceutical innovation, such as the well-known Section 3(d) of the Indian Patent Act. This measure, according to the report, would incentive 'evergreening' practices, allowing patent holders 'to enjoy longer periods of exclusivity on a medicine than the 20-year minimum period prescribed by TRIPS'. Further, by affirming the patentability of plants, animals, surgical and diagnostic methods, the TPP would effectively repeal the flexibility afforded by Article 27(3) of the TRIPS Agreement.

UNITAID noted that the agreement proposes the weakening of disclosure standards (in particular, watering down the requirement to disclose the best mode of working, and allowing Markush-style claims), altering the balance between patent reward and public interest. The organization also expressed serious concern about the provision prohibiting pre-grant opposition proceedings (withdrawn in the latest version of the TPP), and questioned the opportunity of providing a five-year extension of the patent term to compensate patent holders for delays related to the regulatory approval of patented drugs. Restrictions to the Bolar exemption were also described as measures which 'would create significant barriers to the rapid entry of generic medicines into export markets', due to the proposed limitations concerning manufacture and export of generic drugs.

Intense criticism was prompted by the provisions concerning data exclusivity and patent linkage. The former, proposed by the US and adversed by most of the other parties, would protect the safety or efficacy information submitted by a patent holder in order to obtain marketing approval for a new pharmaceutical product, if their origination involved a considerable effort, through a five year period of data exclusivity. A similar protection, albeit for a reduced period of at least three years, would also apply to new clinical information (except those related to bioequivalency) essential to the approval of a pharmaceutical product that contains a chemical entity previously approved for marketing in another pharmaceutical product. According to UNITAID, these provisions would result in duplicate clinical trials, force generic manufacturers to face high pre-marketing expenses, considerably increase the cost of generics, and interfere with the implementation of compulsory licenses, producing an overall negative impact on access to medicines. On patent linkage, the organization argued that it represents a particular concern in developing countries, as it provides patent holders with an additional tool to prevent generic entry, creating, at the same time, an additional burden on regulatory authorities.

After providing an overview of issues that arise from the TPP provisions concerning trademarks and copyright, the report examined the chapter related to the enforcement of intellectual property rights. First, UNITAID suggested that the adoption of a presumption of validity of patents and trademarks 'is likely to make it considerably more difficult to challenge intellectual property rights on medicines, while also increasing the risk to generic competitors of infringement proceedings'. Second, it observed that requiring civil judicial procedures to be made available for any intellectual property rights would reduce the flexibility allowed by TRIPS. Third, a number of measures for strengthening enforcement (e.g. disclosure of information concerning the supply and distribution chain of an alleged infringer, high damages, criminal penalties, etc.) would significantly discourage generic entry, with obvious negative effects on the timely availability of generic medicines. The report went on to examine other provisions related to border measures and public investments.

UNITAID concluded its report noting that the TPP would 'restrict the adoption of policy options for developing countries to ensure that trade or commercial interests do not hinder the protection of health and human development'. The organization explained that it supports the adoption of a 'positive agenda', which would ideally take into account all the interests at stake, balancing 'the goals of free trade and growth [with] the objectives of ensuring access to needed medicines and the protection of public health'. Further, it prompted a reflection on the reciprocal role of intellectual property and competition law, noting that stronger protection for intellectual property rights should be accompanied by a stricter and more effective enforcement of competition rules.

The US steers towards a 'differential approach' to pharmaceutical IPR issues in the Trans-Pacific Partnership

The draft IP chapter of the Trans-Pacific Partnership Agreement (TPP) was promptly analyzed in a series of posts published on the IPKat (general provisions, copyright, trademarks, and, of course, patents). Among the provisions dealing with patent rights, the most significant issues concerned the standards of protection for pharmaceutical innovation, including the following points:

• tailoring patent protection to social and economic development
  Articles QQ.A.2 and QQ.A.2 bis, in the formulation proposed by several parties, would recognize that the objectives of the TPP provisions concerning patents include the enhancement of the role of intellectual property in promoting economic and social growth, taking into account the differences between the national legal systems, and preserving the right of each party to adopt measures to promote the public interest in relation to, inter alia, public health and nutrition. The US and Japan oppose both provisions.
• relationship between TPP, TRIPS Agreement and Doha Declaration
  Although Articles QQ.A.4 and 5 reaffirm the commitment of the parties to the Doha Declaration on the TRIPS Agreement and Public Health, the negotiators disagree on the relationship between the TPP and existing international agreements. The US supports a formulation of Article QQ.A.6 that would allow the TPP to derogate to existing agreements, a solution opposed by most of the other parties, which seek to preserve the flexibility afforded by existing agreements with respect to the protection of equal access to knowledge, food and public health. 
• patentability of new uses or methods of using known substances
  The US proposes that the parties confirm the availability of patents for new uses or methods of using a known product and the commitment not to deny a patent solely due to lack of enhanced efficacy over a known product, when the applicant has set forth distinguishing features establishing that the invention satisfies patentability requirements. The other parties, with the exception of Japan, disagree.
• patentability of plants, animals, diagnostic, therapeutic and surgical methods, biological processes for the production of plants and animals
  The US seeks a commitment to the granting of patents for the above mentioned inventions, despite the disagreement of the other parties, which seek to maintain the flexibility guaranteed by Article 27(3) TRIPS. 
• the extension of the patent rights to deal with unreasonable delays or the unreasonable reduction of the effective patent term 
  Articles QQ.E.XX and QQ.E.14, both proposed by the US and opposed by the other parties, would require TPP members to adjust the term of a patent to compensate for unreasonable delays occurred in the granting of the patent, or for the unreasonable curtailment of the effective patent term as a result of the marketing approval process for patents concerning pharmaceutical products or methods of making or using pharmaceutical products.
• the protection of safety and efficacy information whose origination involved a considerable effort, as well as of clinical information needed for regulatory or marketing approval
  Essentially, the US also seeks to protect, for a period of at least five years, the safety and efficacy information submitted by the patent owner in order to obtain marketing or regulatory approval for a new pharmaceutical product, if their origination involved a considerable effort (Article QQ.E.16). At the same condition, a three-year period of exclusivity would protect new clinical information (except those related to bioequivalency) submitted for the approval of a pharmaceutical product containing a chemical entity previously approved for marketing in another pharmaceutical product. Most of the other negotiating parties oppose the provisions concerning data exclusivity.

Michael Froman

 United States Trade Representative

In a statement issued last Friday, the United States Trade Representative clarified its approach towards the protection of pharmaceutical innovation, suggesting that the US may be willing to seek a more balanced compromise on the most controversial issues, taking into account the different social and economic needs of the TPP members. The USTR explained that the US is actively engaged in identifying the right balance 'to make life-saving medicine more widely available while creating incentives for the development of new treatments and cures'. In this perspective, the statement noted that the negotiators are still discussing about the best ways to achieve that balance. However, the latest round of meetings, held in Salt Lake City in mid November, appears to have had a significant impact on the general approach of the US on the matter:

The United States is a leading voice both for strong IPR protections and for access to medicines for the world’s poor, including in developing country TPP partners. We believe the best approach to pharmaceutical IPR issues in the TPP would be one that offers countries flexibility based on their individual circumstances. That’s why we’ve begun to work with TPP partners to gauge their interest in a “differential approach,” and to identify ways to tailor potential flexibilities based on countries’ existing laws and international obligations.

This flexible approach is based on precedent: Previous U.S. trade agreements covered by the May 10, 2007 bipartisan agreement. Under May 10, developing free trade agreement partners (like Peru) were offered greater flexibility relative to more developed trade agreement partners (like Korea). In TPP, we are seeking to pursue a similar idea, using previous agreements – like those with Peru, Australia, Chile, Korea, and Singapore – as benchmarks, but keeping an open mind as to how these standards can be tailored to reflect the situations of individual partners.

The idea of a 'differential approach', tailoring patent protection to the peculiarities of each country, is remarkably similar to the approach endorsed by most of the negotiating parties in the provisions of Articles QQ.A.2, and QQ.A.2 bis and QQ.A.6, previously rejected by the US. The USTR's statement appears to signal a subtle, yet remarkably important, shift in attitude (from an 'aggressive' - as defined by the previous USTR - to a 'differential' approach), which, as I suggested on the IPKat, could be the key to the success of the TPP negotiations on the matter.

On biologic medicines, the statement clarified that they represent a critical area of innovation, whose growth is of great importance for the development of new and more effective drugs. 'Biologic drugs', according to the USTR, 'need data protection because those drugs require enormous amounts of time and money to develop'. Although the statement reaffirmed the US proposal of a 12 year period of data exclusivity, it hinted at the possibility of negotiating a shorter term of protection.

The USTR also caught the occasion to acknowledge a shift in its attitude towards pre-grant opposition procedures, which had attracted significant debate during TPP negotiations:

Reflecting input from stakeholders, the U.S. now supports a more flexible approach under which partners could retain reasonable patent pre-grant opposition procedures. These procedures, available in some countries, allow third parties to formally object to a patent at the initial application phase. Based on stakeholder input and ongoing discussions with TPP countries, we believe that other elements in TPP will meet the larger goals of ensuring that patents are of high quality and provide appropriate incentives for innovation, while ensuring access to medicines.