Pharmaceutical IP exemption extended for Least Developed Countries: Increased efforts to secure sustainable access to treatment

On 6 November the World Trade Organization (WTO) finally agreed, after two weeks of negotiations with the United States, to extend a waiver to allow the Least Developed Countries (LDCs) to avoid implementing intellectual property rights on pharmaceutical products.

The waiver, which exempts LDCs from being required to enforce sections of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), had been due to expire on 1 January 2016 but this sought-after extension has lengthened the waiver for LDCs until 2033. This comes as recognition of the fact that LDCs are disproportionately affected by high levels of infectious and non-infectious diseases yet lack the resources to purchase expensive patent-protected treatments.

TRIPS is a multinational treaty providing that patents must be “available for any inventions whether products or processes, in all fields of technology”. Prior to the implementation of TRIPS in 1994, many countries either did not provide patent protection, or provided only limited protection for pharmaceutical products. Since 1994 the LDCs have negotiated three waivers relevant to public health and medicine, and as part of this most recent extension ending in 2033 there has been granted wider rights as well as flexibility for further lengthening in the future. Despite the benefits of TRIPS for IP protection, for the poorest countries of the world, TRIPS would have implemented an impossible barrier to healthcare and therefore a transition period for LDCs was put in place. 

An indefinite extension of the waiver was originally requested in February 2015 by members representing LDCs of the WTO. This was considered on 16 October but the TRIPS Council was unable to agree. The request was supported by many, but not all members of the WTO (notably the US). 

Some pharmaceutical companies have disagreed with the need for the waiver or exemption on the basis that there is already chronic underfunding into diseases such as HIV, TB and Hepatitis prevalent in LDCs and without patent incentives this problem will be exacerbated. Despite concerns, overall profit for pharmaceutical companies will be only be marginally affected as although LDCs account for approximately 12% of the world’s population they account for less than 2% of the world’s GDP.

A recent UNDP release stated that drugs such as Sofosbuvir for Hepatitis C costs around US$84,000 for a course in the US whereas Bangladesh, with the benefit of the TRIPS waiver, have been able to manufacture the medication for US$900 a treatment, displaying the huge benefit on healthcare the waiver can have. The continued exemption will also help reduce black market trade of patented drugs which are often illegally produced and usually much lower in quality.  

This lengthened protection will allow for LDCs to implement or amend national laws to reflect the waiver and exclude any need for pharmaceutical patent or test data protection. This in turn gives LDCs the legal certainty in order to produce or procure medicines without the high-costs associated with IP rights in the pharmaceutical industry. LDCs will be able to set up manufacturing facilities with the assurance that IP rights will not be enforced upon them leading to improved access to healthcare, wider sharing of technology and increased competitive benefit in some of the world’s poorest countries.

As part of the agreement to extend the waiver the TRIPS Council have also recommended further measures to limit marketing limits and “mailbox” patent filing systems in LDCs. Hopefully the near future will see further concessions granted to LDCs and see the resulting positive development of healthcare within these countries. This decision has come just a month after the UN General Assembly implemented the Sustainable Development Goals which, amongst other objectives, target access to affordable medicine and healthcare and with the WTO Ministerial Conference in Nairobi scheduled for December 2015 this will hopefully mark a wider global movement to help improve access to health in the most deprived parts of the world.

By Charlotte Tillett, Head of Life Sciences and Kayleigh Stevenson, Trainee, Stevens & Bolton LLP

First published in The Pharma Letter, December 2015

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Charlotte Tillett, Kayleigh Stevenson

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