World Trade Organization (WTO) accession and implications for public health

1
World Trade Organization (WTO) accession and
implications for public health

• Sanya Reid Smith
• Third World Network
• Kiev
• 22 September 2009

2
The effects of generic competition on ARV prices
Doctors without Borders, Untangling the Web of
Price Reductions
3
How TRIPS provisions can occur

• Bilateral pressure, eg
• USAs Special 301
• Bilateral/regional trade agreements (FTAs) with
  developed countries, eg
• European Union eg PCAs with Armenia, Azerbaijan,
  Georgia, Kazakhstan, Russia
• EFTA (Iceland, Liechtenstein, Norway,
  Switzerland) eg Ukraines negotiations and
  possible negotiations with Russia
• USA
• Japan
• Regional patent offices, eg Eurasian Patent
  Organisation (which includes Armenia, Azerbaijan,
  Kazakhstan, Russia)
• WTO accession
• Bilateral investment treaties (BITs)

4
Analysis possible with World Health Organization
(WHO) model

• The model can analyse the individual and combined
  effects of TRIPS provisions such as
• Allowing patents for new uses of existing
  medicines
• Removal of the regulatory review (Bolar)
  exception
• Patent term extensions
• Data exclusivity
• Linkage of medicine marketing approval to patent
  status
• The model examines the effects of these TRIPS
  provisions on
• Medicine prices
• Spending on medicines
• Consumption of medicines
• The market share of domestic generic medicine
  manufacturers
• The model can quantify these effects over the
  short, medium and long term

5
Application of WHO model to Colombia

• Analysing the impact of the Colombia-USFTAs
  TRIPS provisions found
• Allowing patents on new uses
• would cause an 8 increase in medicine prices in
  Colombia by 2020 resulting in an additional cost
  of US181million per year by 2020 and
  US265million per year by 2030
• would also cause the Colombian medicine
  manufacturers to lose up to 13 of their market
  share by 2020.
• The overall impact of the patents provision
• would cost Colombia an extra US401million per
  year by 2020 and an extra US657million per year
  by 2030.
• if this additional amount is not spent, the
  consumption of medicine by Colombians would have
  to fall by 18 by 2020 and 20 by 2030.
• would cause the Colombian medicine manufacturers
  to lose up to 31 of their market share by 2030

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Application of WHO model to Colombia (continued)

• Data exclusivity
• would require Colombia to spend an additional
  US675million per year by 2020 and US989million
  per year by 2030
• if this is not spent, Colombians will have to
  reduce their medicine consumption by 30 by 2020
• would cause the Colombian medicine manufacturers
  to lose 47 of their market share by 2020.
• Linkage of medicine registration to patent
  status
• would require increased spending of US53million
  per year by 2030
• would cause Colombian medicine manufacturers to
  lose 3 of their market share by 2020.
• The total effect of Colombias USFTA provisions
• would require an extra US1.5billion to be spent
  on medicines every year by 2030,
• if this is not spent, Colombians will have to
  reduce their medicine consumption by 44 by 2030
• would cause Colombian medicine manufacturers to
  lose 64 of their market share by 2030
• (Intellectual property in the FTA impacts on
  pharmaceutical spending and access to medicines
  in Colombia, Mision Salud and Fundacion IFARMA,
  Miguel Ernesto Cortes Gamba, Bogota, 2006
  available from http//www.ftamalaysia.org/article
  .php?aid153).

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Other analyses of possible effects of TRIPS
provisions

• A study of the impact thus far of the TRIPS-plus
  provisions of the Jordan-USFTA found that
• one hospital alone has increased its medicine
  spending six-fold,
• medicine prices in Jordan have already increased
  20 since 2001 when the FTA began,
• over 25 of the Ministry of Healths budget is
  now spent on buying medicines,
• data exclusivity has delayed the introduction of
  cheaper generic versions of 79 of medicines
  launched by 21 multinational companies between
  2002 and mid-2006 and
• ultimately the higher medicine prices are
  threatening the financial sustainability of
  government public health programs.
• (http//www.oxfam.org/en/files/bp102_jordan_us_fta
  .pdf/download).
• It was recently estimated that eight years of
  data exclusivity alone in Canada would have added
  600 million to prescription medicine costs alone
  in the last five years.
• ( http//www.canadiangenerics.ca/en/news/nov_14_06
  .shtml)

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Other analyses of possible effects of TRIPS
provisions continued

• World Bank estimated that if Thailand uses
  compulsory licensing to reduce the cost of
  second-line antiretroviral therapy to treat
  people living with HIV/AIDS by 90 (eg by issuing
  compulsory licences), the government would reduce
  its future budgetary obligations by US3.2
  billion discounted to 2025.
• http//www-wds.worldbank.org/external/default/WDSC
  ontentServer/WDSP/IB/2006/09/26/000310607_20060926
  124315/Rendered/PDF/374490TH0Economics0aids01PUBLI
  C1.pdf
• The extension of patent terms alone has been
  calculated by the Korean National Health
  Insurance Corporation to cost US529 million for
  having to extend medicine patents for 3 years and
  US757 million if it has to agree to a four year
  extension in its USFTA negotiations.
• (http//english.hani.co.kr/arti/english_edition/e_
  business/165065.html)

9
WTO accession

• Extent of TRIPS commitments undertaken by
  countries in their WTO accession varies
• None lt information lt binding but loosely worded lt
  binding and tightly worded
• If the commitment is less binding and/or quite
  loosely worded, the impacts on public health of a
  TRIPS commitment in WTO accession may be able to
  be mitigated during its implementation.

10
WTO accession continued

• Example of quite tightly worded and binding,
  Chinas data exclusivity obligation
• The representative of China further confirmed
  that China would. . . introduce and enact laws
  and regulations to make sure that no person,
  other than the person who submitted such data,
  could, without the permission of the person who
  submitted the data, rely on such data in support
  of an application for product approval for a
  period of at least six years from the date on
  which China granted marketing approval to the
  person submitting the data. During this period,
  any second applicant for market authorization
  would only be granted market authorization if he
  submits his own data. This protection of data
  would be available to all pharmaceutical and
  agricultural products which utilize new chemical
  entities, irrespective of whether they were
  patent-protected or not. The Working Party took
  note of these commitments.
• Paragraph 284, WT/ACC/CHN/49 and locked in in
  paragraph 342 which mentions paragraph 284 and is
  referred to as a commitment in the Protocol of
  Accession

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WTO accession continued

• Eg contrast Chinas DE with the DE in Peru-USFTA.
  Peru-USFTA has more loopholes
• no person other than the person that submitted
  them may, without the latters permission, rely
  on such data in support of an application for
  product approval during a reasonable period of
  time after their submission. For this purpose, a
  reasonable period shall normally mean five years
  from the date on which the Party granted approval
  to the person that produced the data for approval
  to market its product, taking account of the
  nature of the data and persons efforts and
  expenditures in producing them.

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Investment provisions in FTAs and BITs

• Bilateral investment treaties (BITs)/the
  investment chapter of FTAs may lead to infinite
  data exclusivity and/or an effective prohibition
  on compulsory licensing if they have
• A broad definition of investment that includes
• intellectual property such as patents or the data
  used to give marketing approval to a medicine
  explicitly and/or
• A catch-all any tangible/intangible,
  moveable/immoveable property and related property
  right
• And an expropriation provision without exceptions
• (or with only a GATT Art XX exception)
• And investor-state dispute settlement
• Government-government dispute settlement
• Eg BITs between Armenia-UK, Azerbaijan-Belgium,
  Georgia-Greece, Kazakh-Swiss, Russia-Japan,
  Ukraine-Netherlands

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Thank you

• For more information and questions
• sanya_at_thirdworldnetwork.net