American Journal of Law & Medicine

Delivering drugs to the poor: will the TRIPs amendment help? (Agreement on Trade-Related Aspects of Intellectual Property Rights)

I. INTRODUCTION: HEALTH CRISES, ACCESS TO MEDICINES AND THE POOR

 
   Many of the diseases and health conditions that account for a large 
   part of the disease burden in low- and middle-income countries are 
   far less common in high-income countries. These burdens are 
   primarily associated with infectious diseases, reproductive health, 
   and childhood illnesses. Just eight diseases and conditions account 
   for 29 percent of all deaths in low- and middle-income countries: 
   TB, HIV/AIDS, diarrheal diseases, vaccine-preventable diseases of 
   childhood, malaria, respiratory infections, maternal conditions, 
   and neonatal deaths. 
 
   Approximately 17.6 million people in low- and middle-income 
   countries die each year from communicable diseases and maternal and 
   neonatal conditions. Both the occurrence of and the death rates 
   from such diseases and conditions are far lower in all high-income 
   countries. (1) 

Millions of people in developing countries die of diseases for which treatments exist that can relieve suffering and save, or at least prolong, people's lives. High-profile pandemics like HIV/AIDS understandably attract considerable attention. Millions of people have died of this terrible disease 2.6 million in 2003 and 2.8 million in 2005, of which Sub-Saharan Africa contributed 1.9 million and 2.0 million respectively. (2) As the above quote makes clear, there are a whole host of diseases that have particularly devastating impacts on the poor.

The obvious reason why treatment access is such a problem is poverty. People do not have the money to buy the drugs, and governments, even those that are not corrupt or otherwise woefully dysfunctional, lack the resources and infrastructure to get them to those who need them but cannot afford them. The pharmaceutical industry certainly prefers to blame poverty and poor governance, and rejects arguments that patent rights allow them to set high prices that keep life saving drugs out of the reach of the poor. (3) Up to a point, the industry is right. But to suggest this is a sufficient explanation is to be disingenuous.

High drug prices are not of course the only factor limiting patients' access to them. Access even to very cheap drugs tends to be inadequate too. Poor people often live far away from clinics and hospitals. Also, many countries are short of medical practitioners trained to prescribe drugs to patients in the appropriate combinations and dosages. Nonetheless, high prices obviously have a profound impact on the ability of cash-strapped governments and other healthcare providing organizations to deliver drugs to the poor. National pharmaceutical markets are often highly regulated, and companies are not always free to set prices entirely as they wish. Yet companies holding patent monopolies are in a strong bargaining position for as long as they can keep out the generic competition, which potentially could drive prices downwards towards the marginal cost of making the drug in question.

II. PATENTS AND PUBLIC HEALTH: STRIKING A BALANCE

Patents for inventions have their origins in Renaissance Italy. The Republic of Venice passed a patent law in 1474 whose underlying purpose was to attract "engineers" with the incentive of a 10-year monopoly right to their "invention[s]." (4) The moral interest of inventors and the wider societal benefits were treated as complementary. Thus, in preventing others from building them and taking the inventor's honor away, it was believed that "more men would then apply their genius, would discover, and would build devices of great utility to our commonwealth." (5) It is important to note that the public interest was also upheld by a provision allowing for government use. (6)

Patents are supposed to benefit society through (i) the widest possible availability of new and useful goods, services and technical information that derive from inventive activity, and (ii) the highest possible level of economic activity based on the production, circulation and further development of such goods, services and information. (7) Once patents have been acquired, the owners seek to exploit them in the market-place. The possibility of attaining commercial benefits, it is believed, encourages innovation. After a certain period of time, however, these legal rights are extinguished, and the now unprotected inventions are freely available for others to use and improve upon.

One of the reasons that patents are so controversial is that the intellectual property incentive, as far as it actually works, functions by restricting use by others of the protected invention for a certain period. Yet follow-on innovation by others is more likely to happen if use is not restricted. Thus, society needs to strike a balance between private control over the use of technical information and its diffusion. Where the line should be drawn is very difficult to determine, but its ideal location is likely to vary widely from one country to another, and, one may argue from one business sector to another. In countries where little inventive activity takes place, free access to technical information may well do more to foster technological capacity building, than providing strong private rights over such information. In fact, technological capacity building may, at certain stages of national development, be best achieved by requiring foreign technology holders to transfer their technologies on generous terms, rather than by trying to encourage domestic innovation by making strong legal rights available to all. (8)

In reality, balancing the interests of inventors, users of other people's inventions, and society as a whole in the design of patent systems is extremely difficult. Among the safeguards commonly made available to ensure that patent rights do not over-protect at the expense of users and the public, are defenses to infringement, such as private use, experimental use, compulsory licensing and government use provisions. Outside of patent law, competition and antitrust law may also come into play, as they do in the United States.

European countries tend to provide statutory infringement defenses in the form of limitations to the rights conferred. The most important ones are: (i) private and non-commercial use, and (ii) experimental use. These tend to conform to the Community Patent Convention, which is yet to enter into force, but that nonetheless provides guidance for many national legislators in Europe. (9) For example, the United Kingdom Patents Act 1977 provides a list of defenses to infringement. (10) The general defenses to an act that would otherwise constitute infringement, as laid out in section 60(5), include if it is done privately and for purposes which are not commercial, and if it is done for experimental purposes relating to the subject-matter of the invention. It should be noted that the two defenses are separate. (11) Recent court decisions in Europe have tended to interpret the experimental use exception quite broadly. (12) In consequence, the exception is able to cover commercial as well as non-commercial acts. (13)

In the U.S., the scope of the common law experimental use exemption attracted critical attention as a result of the judgment in Madey v. Duke University. (14) The judgment gave rise to concerns that the U.S. may have gone too far in interpreting the exemption into a state of virtual non-existence; and that in doing so, it may well hinder universities from conducting the basic research upon which subsequent commercially-oriented research so often depends, and which the private sector cannot be relied upon to carry out all by itself. (15) In the opinion of the Court of Appeals for the Federal Circuit, despite a university's non-profit status, its apparently non-commercial projects "unmistakably further the institution's legitimate business objectives." (16) As long as such projects are "not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry", then they do not qualify for the experimental use defense. (17)

The TRIPS Agreement makes no reference to private or experimental use. Instead it incorporates a modified form of the Berne Convention for the Protection of Literary and Artistic Works' three-step test. Accordingly, Article 30 permits WTO members to provide limited exceptions to the rights conferred provided that such exceptions: (i) do not unreasonably conflict with a normal exploitation of the patent, (ii) do not unreasonably prejudice the legitimate interests of the patent owner, and (iii) take account of the legitimate interests of third parties. (18) A WTO panel has found that Article 30, and TRIPS more generally, permits members to provide for a regulatory review exception in their patent laws. (19) This allows activities relating to a drug patent that would normally infringe it so long as the activities are solely intended to obtain marketing approval from regulators. Such marketing will of course be possible only when the patent has expired. …

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