Health Advocates Eye Proposed Changes To Patent Law In South Africa

This article has been republished from Intellectual Property Watch where it was originally published on 20 August 2012.

By for Intellectual Property Watch

CAPE TOWN – South African health activists and pharmaceutical industry stakeholders are keeping close watch over the government’s attempts to amend patent laws, which activists claim compromise the ability of the country’s poor majority to access cheaper generic medicines.

Activists are hopeful that the still-to-be-released draft policy on intellectual property, which includes recommendations on current patent laws, will help South Africa catch up to some developing countries’ decision to allow cheaper life-saving generics into the market through the issuing of compulsory licences.

A draft policy document on IP has been in the works for some time and according to Macdonald Netshitenzhe, who is in charge of policy and legislation in the Department of Trade and Industry, a refined version will be submitted to cabinet soon.

Once it is presented to cabinet, the policy will be forwarded to Parliament, followed by a period of public participation to further inform the policy. Netshitenzhe said that the public participation process could happen as soon as “the next few months.”

The draft policy on IP, which is driven by the Department of Trade and Industry, is an attempt at developing a single, over-arching legal framework on IP that would inform and harness a coordinated approach on IP matters by various government departments.

The draft policy discusses all types of IP, including trademarks, copyright, patents and designs, and makes recommendations on each of these within the context of South Africa as a developing country.

It is against the backdrop of South Africa as a developing nation that health activists have placed a magnifying glass on the country’s patent laws, saying it protects big pharmaceutical companies and doesn’t make it easy for the introduction of cheaper generic medicines onto the market.

In a bid to galvanise support for a change in the patent laws, the Treatment Action Campaign (TAC), a public health-focused NGO, has initiated the “Fix the Patent Laws” campaign.

The campaign demands that patents be given only for real improvements. At present, South Africa grants patents for new uses or new formulations of existing medicines. Low patent standards lengthen the term of the patent monopoly by allowing companies to get new patents for making only small changes to existing medicines, which is termed “evergreening.”

The TAC believes that the public has a right to challenge patents and demands that the South Africa’s Patents Act be changed to allow for pre- and post-grant opposition to the issuing of patents.

Also included in the “Fix the Patent Laws” demands is the allowance of compulsory licences by government where prices are unaffordably expensive and in cases of public health and national emergencies when medicines are patent-protected.

The TAC’s senior researcher on patent law, Catherine Tomlinson, believes that South Africa provides intellectual property protection beyond what is required in international law and that patents keep prices of medicines high and out of reach of the poor.

She gave the example of the cost of a first-line regimen of medication for an HIV positive person costing US$10,000 per patient a year in the early 2000s. Today, that cost has been driven down by the generic equivalent of the drug to a cost of about US$178 (R 1,500).

Mara Kardas-Nelson, access and innovation officer for Médecins Sans Frontières (MSF, Doctors without Borders), is a supporter of the TAC’s campaign.

She said that drug companies make significant profits on patented medicines and that countries face enormous pressure not to use compulsory licences.

“The US has a watch list and threatens trade sanctions,” she said. “We saw it happen in Thailand where a company removed its products from the country after the government enforced a compulsory licence on a certain drug. We need to have the political will to stand up to this. Other countries such as India have flexibilities in their 20-year patent. South Africa has not done that, which makes medicines here significantly more expensive than other countries.”

“It’s simple economics that as more firms compete on the same product, the price of that product will lower,” Kardas-Nelson continued. “We would certainly not have been able to see a massive increase in the number of people in the developing world access first line ARVs [antiretrovirals] within generic competition and the resulting price drop.”

Activists campaigning for a change in South Africa’s patent laws refer to the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as a stumbling block to allowing for more cheap generic medicines to be sold in the country, especially to treat persons with HIV, tuberculosis and patients with cancer.

It is under this agreement that signatory countries had to grant patents for periods of 20 years. The TAC and their supporters say that the protected long patent period results in the high cost of medicines without the option of cheaper generic drug competition during that time period.

Furthering their argument that South African patent laws are out of step with international declarations on the issue, activists point to the 2001 Doha Declaration on TRIPS and Public Health agreed to by WTO member states. It made clear that countries have the right to decide when to grant compulsory licences and that they can do so, amongst other reasons, in response to emergencies like the HIV pandemic.

While intellectual property law remains a technical subject for most, Kardas-Nelson said that practically, it is not such a complicated issue.

“In a way, intellectual property is very complicated in practice, but it’s actually not so complicated at all,” she said. “You put more generics on the market and the price of medicines drops. People do understand the issue of access to medicines since almost every family has struggled with that. When you say that this medicine is less expensive in India than here, people understand that,” she said.

The TAC’s campaign has attracted some support from pharmaceutical industry stakeholders such as the National Association of Pharmaceutical Manufacturers (NAPM).

NAPM is a voluntary. non-profit organisation made up of South African generics-based pharmaceutical manufacturers and distributors.

The NAPM, like the TAC, has made a submission to the draft IP policy. The group believes amongst other things that the patent laws as they currently stand are problematic and lead to the abuse of the patenting privilege.

In response to a query from Intellectual Property Watch as to whether it supports the TAC’s campaign, the body responded in part: “Evergreening of patents, whereby patents are granted (for often small or non-inventive steps) is a greater issue in South Africa as there is presently no investigative process in the South African patent office. For this reason, patents are granted as a matter of procedure, even if they are obviously invalid. The onus is left to generic companies to apply to the courts to revoke the patents.”

The statement continued: “With the courts experiencing major backlogs, this further adds to the significant delays generic companies face in having their applications heard. This in turn delays and impacts the entry of generics onto the South African market.”

But the campaign to fix the country’s patent laws does have its detractors who have expressed some caution in the attempt to revamp the laws.

The Pharmaceutical Industry Association of South Africa (PIASA), a trade association of companies involved in the manufacture and marketing of prescription medicines in South Africa, also made a submission to the draft IP policy.

PIASA Chief Operating Officer Vicki St. Quintin said that while PIASA supports the ideal that the population should have access to efficient healthcare services and quality medicines, “it is essential that any intervention does not result in a trade-off of short-term gains for the loss of sustainability, access to innovation and loss of investment. The local registration of innovative medicines feeds the generic pipeline of the future.”

St. Quintin added that South Africa’s history of intellectual property law has encouraged widespread foreign investment and ensured access to the newest and best treatments in South Africa.

“There is no consensus that intellectual property rights prevent access to medicines,” she said. “In addition, price is not the only factor in determining access to medicines and a number of other factors should also be considered, including political will, lack of resources and infrastructure, regulatory issues such as tariff barriers and most important, funding issues.”

St. Quintin added that South Africa is a high-level user of generic medicines, with more than 60 per cent by volume in the private sector being generic medicines and at least a similar level in the state sector.

“The long-term results of weakening intellectual property laws should be carefully evaluated against the existing and long-term benefits of having access to new and more effective medicines, which eventually become the generics of the future. The industry is committed to working with other stakeholders to overcome the barriers to access where they exist and to finding creative solutions to ensure the best patient care,” she said.

The draft policy on IP indicates that it is attempting to remedy the reality that South Africa does not have an IP policy and the subsequent result that the country’s approach to IP matters is fragmented and is not informed by national policies. The draft policy recognises that the concluded IP policy must be “fused” with all relevant national policies, be it on trade, public health, indigenous knowledge, innovation and development.

It will now be up to cabinet to approve the draft policy ahead of its release to the public for further comment.

One thought on "Health Advocates Eye Proposed Changes To Patent Law In South Africa"

  1. webmaster says:

    Fix the Patent Laws campaign response to arguments put forward by PIASA in the above article:

    “it is essential that any intervention does not result in a trade-off of short-term gains for the loss of sustainability, access to innovation and loss of investment. The local registration of innovative medicines feeds the generic pipeline of the future.” – St. Quintin, PIASA

    In her comments to IP Watch, St. Quintin warns that the interventions called for by the Fix the Patent Laws campaign could harm innovation. However, the patent system has failed, in many cases to provide the innovation that countries need. See the discussion piece posted above this article on the R&D treaty. The treaty is being put forward simply because the patent system has failed to stimulate innovation of new medicines for diseases that affect poor countries. Despite this, developing countries are forced to uphold the same levels of protection as wealthy countries.

    Given the lack of innovation of medicines that affect poor countries, the WHO Commission on Intellectual Property and Innovation concluded, in 2006, that there is no evidence that the implementation of the TRIPS agreement will significantly boost R&D in diseases affection poor countries.

    Additionally, TRIPS has failed to stimulate significant increases in innovation in wealthy countries. While globally the rate of patents has increased over the past 20 years, pharmaceutical innovation has dropped with few new chemical entities and an increasing number of me-too drugs. And, reports coming out of France, the US and the EU found that more than half of new product approved offer nothing new over existing products.

    St. Quintin also puts forward the potential loss in investment that could occur from weakening patent laws in South Africa. What she does not mention is the potential growth to the economy as a result of granting fewer patents.

    South Africa’s pharmaceutical industry is not currently an innovative industry producing branded medicines. Rather our local industry produces mainly generic medicines. By granting an extremely high number of patents, we are preventing our local industry from expanding and diversifying its product lines and competing more effectively with foreign pharmaceutical companies.

    Evidence suggests that strict IP protection, may impede rather than strengthen the development of local industry – thereby also impeding development. An analysis of pharmaceutical patents granted in South Africa shows that it is largely foreign companies that are benefitting from SA’s strict IP laws. In 2008, South Africa granted 2,442 pharmaceutical patents. Of these 1,988 were granted to companies in the US and the EU. Only 16 were granted to local companies.

    “There is no consensus that intellectual property rights prevent access to medicines,” she said. “In addition, price is not the only factor in determining access to medicines and a number of other factors should also be considered, including political will, lack of resources and infrastructure, regulatory issues such as tariff barriers and most important, funding issues.” – St. Quintin, PIASA

    While St. Quintin is correct that there are a number of factors such as funding and regulatory issues that impact on access, there is ample evidence that price plays a significant role in medicine access. Numerous medicines are not provided in the public sector or included as a prescribed minimum benefit in the private sector (which are medicines that are fully covered by medical schemes) due to their high costs.

    The antiretroviral programme provides strong evidence of the impact of patents on access.
    PIASA provided similar comments to the Department of Trade and Industry on the draft IP policy (not yet published for public comment), stating that patents do not undermine health because SA has the most ARV patents and the largest ARV programme.

    This argument makes no sense and is based on a denial of the fact that the provision of many ARVs was only scaled up once patent barriers were removed through complaints to the Competition Commission.

    Tenofovir, stavudine, zidovudine, lamivudine, emtracitabine, abacavir, efavirenz , nevirapine and lopinovir/ritonavir are all purchased and provided in the public sector. The majority of these medicines were only rolled out when generic versions became available – many times due to competition commission challenges by TAC. The only patented medicine used in the public sector is lopinovir/ritonavir (kaletra), it is purchased as there is no other option and is only provided to patients in need of second line treatment. No 3rd line ARVs are provided in the public sector – all of these medicines are under patent. Additionally there are better 1st and 2nd line medicines that are not provided through the public sector as they are under patent and unaffordable.

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