Doctors Without Borders/Médecins Sans Frontières (MSF) would like to submit the following written comments to the 2014 United States Trade Representative (USTR) Special 301 Out-of-Cycle Review of India’s intellectual property legal regime and policies.
MSF is an independent, international medical humanitarian organization that delivers medical care to patients in nearly 70 countries. Our work focuses on the medical needs of marginalized and difficult to reach populations living in developing countries, whose needs are often neglected. We provide medical aid to victims of armed conflict, epidemics, natural and man‐made disasters, and to others who lack health care due to social or geographic marginalization. Our teams provide medical care for people with HIV/AIDS, malaria, severe acute malnutrition, tuberculosis, Chagas disease, leishmaniasis, and other diseases, as well as primary care, maternal and child health care, and other preventive and treatment interventions.
In consideration of the needs of MSF operations, MSF also advocates for access to and innovation for medical tools to meet the needs of patients in our projects and in contexts in which we work. One element of this work includes identifying and challenging the political, legal and commercial barriers that stand in the way of access to affordable and appropriate medicines, vaccines and diagnostics and that inhibit medical innovation for patients in developing countries.
As a medical treatment provider with more than 40 years of experience caring for vulnerable people, including nearly 15 years in India, MSF is able to speak about the relationship between intellectual property (IP) rules and access to medicines, and about the role India has played in enabling access to essential and lifesaving medicines for millions around the world.
MSF has commented on the Special 301 Review process each year since 2010 and each year has highlighted the critical role India plays in increasing access to affordable medicines by facilitating generic competition.
MSF is now submitting comments to the Special 301 Out-of-Cycle Review for India because we are concerned about ongoing pressure by USTR upon India to undermine the effectiveness of public health safeguards in patent law and policies, and the effects this will have on access to affordable generic medicines for millions in India and in other developing countries, including for MSF medical humanitarian operations.
India, as part of its obligations under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO TRIPS Agreement), was required to introduce a 20 year product patent regime for pharmaceutical products in 2005. While the freedom of Indian domestic manufacturers to manufacture and sell affordable versions of any new essential medicine has been limited since 2005 because of its TRIPS obligations, the country’s legislators also sought to balance the imperatives of the right to health and public health, by enshrining safeguards into the patent law and limiting the potential of pharmaceutical companies to abuse the patent system. This balance is now under threat due to the USTR’s pressure on India’s domestic policies, laws and judicial practices.
We urge the USTR to respect the legal public health safeguards included in India’s laws and policies. This submission highlights three major concerns with the USTR’s Out-of-Cycle Review for India, to the extent that this process will be reviewing India’s patent laws, polices and judicial practices that balance private patent rights with protecting public health:
- India’s role in ensuring global access to medicines is vital. India is often referred to as the “pharmacy of the developing world” because of its critical role in providing more affordable generic medications for use in India and worldwide. MSF, like other international medical treatment providers and funders such as the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) and U.S.-funded Global Fund to fight AIDS, Tuberculosis and Malaria, rely heavily on affordable generics from India to provide medical treatment in many developing countries.
- India’s IP regime is legal. India’s patent and intellectual property (IP) regime is based on current international legal regimes, and balances the obligation to protect private commercial interests in patent-based monopolies and the need to ensure access to medicines in the interest of public health. The right to this balance is enshrined in the TRIPS Agreement, and affirmed in the Declaration on the TRIPS Agreement and Public Health (the Doha Declaration). TRIPS and Doha are agreements to which both India and the U.S. governments are bound as members of the World Trade Organization.
- Promoting stricter IP policies perpetuates a broken biomedical innovation system. The process of the Special 301 Report, whereby countries are evaluated on their adherence to U.S.-style IP protections exports a broken system for biomedical innovation that does not appropriately reward patient-driven innovation nor does it ensure affordable access to lifesaving medicines and other medical tools for all patients in need.
This Out-of-Cycle Review is only one of a number of tools that the USTR is employing to try to change India’s legal IP laws and undermine public health safeguards. MSF has documented the escalating pressure by U.S. Government and U.S. pharmaceutical companies. A timeline of this is available on our website. This includes, but is not limited to the following events in which MSF has engaged directly: MSF submission to the 2014 USTR Special 301 Report, MSF testimony at the 2013 United States House Committee on Energy and Commerce hearing, “A Tangle of Trade Barriers: How India’s Industrial Policy is Hurting U.S. Companies,” MSF testimony at the ongoing investigations by the U.S. International Trade Commission, “Trade, Investment and Industrial Policies in India: Effects on the U.S. Economy.”
As outlined above and described in more detail below, any censure by this Out-of-Cycle Review of India’s IP laws, practices and rules for pharmaceuticals, or other strategies used to pressure India to retreat from lifesaving public health safeguards in its IP law by USTR, the U.S. Government and the pharmaceutical industry, is not only unwarranted. It will furthermore cause enormous harm and suffering to millions of people around the world that will see their right to access to medicines severely restricted.
India’s crucial role as the “pharmacy to the developing world”
MSF would like to emphasize the role that India’s laws and legal regimes have played in enabling access to life-saving medicines for millions and urge the USTR not to penalize the Indian Government and the Indian judiciary system for actions that promote access to medicines.
In 2001, MSF faced what seemed like insurmountable barriers in meeting critical treatment needs and saving the lives of our patients. In particular, we faced an astronomical price tag of more than 10,000 U.S. dollars per-person annually for life-saving HIV medicines, which barred millions from treatment and prevented us from being able to reach more than a very limited number of people.
However a solution was found in India. The legal safeguards introduced in the country’s 1970 patent law excluded patents on life-saving medicines and resulted in boosting the manufacture of low-cost, quality generic medicines for a fraction of the existing price. In 2001 the cost to treat someone with HIV fell by over 96 percent – literally overnight – to 360 dollars per person per year. Since then the patent regime has changed but public health safeguards built into the patent law have ensured continued generic competition, which has caused prices to fall even further.
As a result, today nearly 12 million people in developing countries receive treatment for HIV in 2014, many of those from U.S. government-funded global health programs. India’s role in this treatment scale up has been – and continues to be – a critical one. As the biggest source of quality generic medicines, medical humanitarian organizations, governments and donors rely heavily on Indian generic medicines. Ninety-seven percent of the medicines used in the American taxpayer-funded PEPFAR program are generic, as of 2010. In only three years from 2005 to 2008, the use of generics saved PEPFAR an estimated $323 million dollars. In 2010, the savings from generics were estimated to be almost $50 million more than those three years combined. This represents important cost savings that stretches the U.S. Government’s significant investment in global health further and saves millions of lives.
According to the last U.S. Government budget request, in fiscal year (FY) 2015 this U.S. Government investment could amount to 6.2 billion dollars just in funding for the global HIV/AIDS response. The generous contributions of the U.S. Government in the global fight against HIV and AIDS have been pivotal in bringing us to the point where we can, for the first time, talk about reversing the AIDS epidemic as a feasible objective. We welcome new ambitions and efforts on the part of the U.S. Government to translate the new science – that HIV treatment is prevention – into policies that will scale up access to treatment. However the ability to implement these policies is directly linked to the ability of patients, treatment providers and donors, including the U.S. Government, to access medicines at affordable prices.
HIV/AIDS is just one example. We need access to affordable generic drugs for a variety of medical problems that affect patients, including both communicable and non-communicable diseases. The hepatitis C epidemic is a clear example where generic competition could play a crucial role in substantially driving down prices in many countries that are struggling to scale-up urgently needed diagnostic and treatment response with unaffordable prices. The U.S. FY 2015 budget requests 9.4 billion dollars for global health funding that extends far beyond HIV/AIDS programs, but U.S. policies and investments on global health are at odds with the USTR’s work to change Indian laws and policies and to pursue international trade policies that increase IP protections, making it harder for patients, governments, treatment providers like MSF and U.S.-donor supported programs to have access to lower-priced generic drugs. The USTR’s attempts are in direct contradiction with medical ambitions and the needs of millions of patients around the world.
India’s intellectual property regime is legal
The Preamble to the WTO TRIPS Agreement recognizes the inherent legal flexibility of WTO Members when it states that the TRIPS Agreement recognizes “the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives.” The TRIPS Agreement put in place global minimum standards for IP legal regimes but left room for flexibility in how governments decide to enact their laws so long as they meet the TRIPS minimum standards.
Under the TRIPS agreement obligations WTO Member States– including the U.S. and India – agreed to rules that set global standards for what deserves a patent, what rights patent holders have, and for how long a patent should last. However, they also agreed that there should be exceptions and limits to these rights. Furthermore, in 2001, WTO Member States, including the U.S. and India, also signed the Doha Declaration on TRIPS and Public Health, which affirms the right of governments to implement safeguards and flexibilities to protect public health. In recent years, the U.S. has made additional commitments to recognize the importance of public health. For example, through the 2007 New Trade Policy, the U.S. recognized the importance of public health safeguards in trade policies for developing countries. The U.S. again committed to the importance of public health in the 2008 WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property.
India’s patent law and its judiciary are under pressure for policies that are entirely in line with its obligations as a WTO member. In compliance with its international obligations, India has started to provide significant patent protection for medicines. Between 2005 and 2008, India granted over 2,300 patents for medicines, and continues to grant patents today – including for example on new antibiotics for tuberculosis (TB) treatments, which we urgently need in our medical operations.
Treatment providers are already seeing the impact of these patents, which delay generic competition, keeping newer medicines out of affordable reach. Looking to HIV treatments once again for example – although first line treatment has benefited from important price reductions, many patients need to be switched to newer medicines. MSF has started to switch HIV patients who develop drug resistance onto newer medicines, which are expensive because they are under patent and there is no competition. At our clinic in Mumbai, India, the salvage regimen drug raltegravir is prohibitively priced at 1,775 dollars per person per year.
New medicines to treat hepatitis C, which affects as many as 150 million people worldwide, provide another critical illustration. New medicines entering the market, including the recently approved sofosbuvir from Gilead, are priced by pharmaceutical companies as high as 1,000 dollars per pill in the U.S. Generic competition and combining two new direct acting antivirals into one formulation has the potential to provide effective treatment at less than 500 U.S. dollars for millions of people living in developing countries. In order to ensure widespread access to low-cost fixed-dose combinations, patent barriers, including in India, will have to be overcome. The pressure that the USTR is exerting will make such barriers difficult if not impossible to overcome in the coming years, putting at stake millions of lives.
While India does grant patent monopolies to a number of new pharmaceutical products, it is trying to strike a balance between providing IP protection and having the flexibility to protect the right to health. It does so in at least three ways: first, India applies strict patentability criteria; second, when deemed necessary in the interest of public health, India grants compulsory licenses; and third, India maintains a balanced approach to IP enforcement. All three approaches are enshrined as legal under the TRIPS Agreement as public health safeguards.
(1) Strict patentability criteria
The first way India strikes a balance in IP protection is by defining strict patentability criteria. Under TRIPS, governments have the right to define their “scope of patentability” – what does and does not deserve a patent – in a way that addresses the public health needs of their own citizens, as long as they abide by international agreements. The U.S. recently contributed to its own definition when the Supreme Court reaffirmed strict patentability criteria for gene patents. India has adopted a standard of patenting that is stricter than that in the U.S. or Europe, but which is in line with international trade rules.
There are numerous examples of how India’s application of strict standards of patentability can result in improved access to medicines.India limits the granting of secondary patents and the pharmaceutical companies practice of patent evergreening.
India has granted the primary patent on bedaquiline, a new drug-resistant TB (DR-TB) drug currently being used as salvage therapy in MSF’s medical projects. Granting the secondary patent applications to pharmaceutical companies will not only not lead to any new innovation but will be used to extend the period of market exclusivity and block entry of generic competitors even after a full term of patent protection was provided.
|BEDAQUILINE - PATENTS GRANTED & APPLICATIONS IN INDIA|
|Primary: QUINOLINE DERIVATIVES AND THEIR USE AS MYCOBACTERIAL INHIBITORS [EXPIRES JULY 2023]|
|Secondary: USE OF SUBSTITUTED QUINOLINE DERIVATIVES FOR THE TREATMENT OF DRUG RESISTANT MYCOBACTERIAL DISEASES [IF GRANTED WILL EXPIRE MAY 2025]|
|Secondary: QUINOLINE DERIVATIVES FOR THE TREATMENT OF LATENT TUBERCULOSIS [IF GRANTED WILL EXPIRE DECEMBER 2025]|
In another well known example, a secondary patent application on a life-saving cancer drug imatinib by Novartis was rejected because it was for a modified salt form of an already known substance. Novartis challenged this decision, but it was ultimately upheld by the Indian Supreme Court. The Supreme Court did not only reject the secondary patent application, but also confirmed that the patent application had failed to satisfy the requirement of inventive step as provided in the patent law.
When the Indian Supreme Court upheld the decision of the patent office, it was legally validating a choice by the Indian Parliament to better define standards of patentability for medicines. While a patent should reward innovation, in reality the overwhelming majority of patents are applied for on obvious incremental developments on medicines that are already in the public domain.
In contrast to India’s stricter patentability criteria, today the U.S. has patent standards which allow for the granting of secondary patents for very obvious modifications of existing medicines. This practice, known as “evergreening,” delays generic competition and keeps prices high. It is a common tactic by which the pharmaceutical industry extends their monopoly on drugs beyond the original patent’s 20 years. A recent study found that evergreening extends patent protection by an average of more than six years. Allowing companies to extend patent protection and keep prices high is expensive for patients and the U.S. Government. For example, the patent on the active ingredient in imatinib, the cancer drug at the heart of the Novartis case, will expire next year in the U.S. However, secondary patents will extend Novartis’ market monopoly in the U.S. until 2019, preventing more affordable generics from entering the market. Today the U.S. price of Gleevec is approximately $287 per day, for 400 mg. The prices for generic versions of imatinib are considerably lower but secondary patents block their entry.
For another example, one study identified 108 U.S. patents and patent applications filed by pharmaceutical company Abbott for lopinavir/ritonavir, an important second-line HIV medicine that combines two existing drugs, lopinavir and ritonavir. These patents could be used to protect market exclusivity until at least 2028, even though the patents on the basic compounds expire 12 years earlier, by 2016.
The U.S. has recognized that excessive patenting can undermine innovation and U.S. economic productivity across many sectors. President Obama’s State of the Union Address this year reflected this in his calls for reform of the U.S. patent system and limits to costly patent litigation that will “[allow] our businesses to stay focused on innovation.”
The U.S. Government and courts continue to make adjustments to its patent system to achieve a better balance between rewarding innovation and providing for public health needs. It should allow other governments, like India, to do the same. The measures taken by the Indian government do not undermine rewarding innovation through the patent system, but rather curtail the worst excesses of the system, ensuring that companies focus their energies on scientific innovations and research for new drugs, rather than business strategies that extend existing patent monopolies with low or no inventive step contribution.
When it comes to incentivizing innovation, determining the right balance for governments to strike in deciding what deserves a patent and what does not is a complex matter. The Indian patent law has been leading the way on how to implement WTO TRIPS-compliant laws that prevent abusive patenting practices.
MSF supports the Indian government decision that patents should only be granted for innovations that satisfy rigorous criteria to assess inventive step and have accomplished something significant in terms of therapeutic efficacy.
(2) Compulsory licenses
Compulsory licenses are another legally recognized safeguard that allows a country to balance IP protection with the right to protect public health. The U.S. Government has used and threatened to use compulsory licenses for medicines in the past to meet public health needs, and stated that it would look to use them in the future if necessary.
The Indian Patent Office has had the ability of using compulsory licenses for many years, but unlike the United States and others – and despite the unaffordable medicine prices – had never issued one until very recently.
In 2012, the Indian Patent Controller issued its first – and so far only – compulsory license in the interest of public health, when faced with a price-tag for a cancer drug which kept it out of reach of 98 percent of those eligible for treatment. Granting the compulsory license reduced the price by 97 percent. The Indian courts also recognized the innovation behind the drug and in accordance with international law requested that the generic manufacturer pay a seven percent royalty to the patent holder, Bayer.
MSF hopes that where access barriers exist, compulsory licenses will be issued for the newest drugs to address critical health priorities, enabling access to affordable generic versions not only in India, but in the rest of the developing world. With new HIV, TB, cancer and hepatitis C medicines priced beyond the reach of patients and treatment providers, the use of public health safeguards in India will be necessary to ensure that medicines are affordable to the millions who require treatment.
(3) IP enforcement provisions
Indian patent litigation is in its nascent stage but decisions by Indian courts are increasingly receiving global attention. Pharmaceutical companies with patents on new medicines are increasingly obtaining ex-parte and interim injunctions except for a few cases where the court has ruled that if the injunction was granted in the case of a lifesaving medicine, the court would in effect be stifling Article 21 (the right to life) of the Constitution of India. More recently several international pharmaceutical companies have obtained injunctions against generic producers of lifesaving medicines.
The multinational pharmaceutical industry is demanding that India implement IP enforcement measures in a manner that goes beyond the requirement of the TRIPS Agreement and that include mandatory and stricter injunction system and patent-registration linkage. These provisions could have a range of harmful effects on the registration and dissemination of generic medicines and give free rein to abuse from multinational pharmaceutical companies. These companies would merely need to claim that their IP is infringed upon in order to delay or halt generic production.
The impact of stricter IP enforcement measures being applied in India would be felt beyond its borders, as medicines destined for export could be delayed or stopped due to IP enforcement disputes. The enforcement net is also being used to implicate third parties - such as suppliers of active pharmaceutical ingredients (API) used for producing generic medicines. Indian courts, like the courts of other WTO Members, currently enjoy a degree of flexibility in determining the right balance of enforcement in patent infringement suits involving pharmaceuticals. The USTR should not interfere with such national norms and practices that allow countries to balance commercial interests with the constitutional right to life and health, and wherein the flexibility to do so is recognized under WTO TRIPS agreement and other international legal standards.
Need for new models of innovation
Strict IP protections do not only affect affordability – they also negatively affect innovation. Fixed-dose combination antiretrovirals, which combine multiple medicines into a single pill, make adhering to treatment easier for patients and make it easier for treatment providers to scale-up care to more people. These were first developed by generic manufacturers in India who were able to do so because India did not at that time (pre-2005 TRIPS implementation) grant patents on pharmaceuticals. Because the individual medicines weren’t patented in India, generic manufacturers were able to combine them into one pill.
MSF recognizes the need to reward innovation and the need to finance research and development (R&D). We are a humanitarian medical organization that needs and welcomes biomedical innovation to improve treatment options for our patients. R&D is important, and someone needs to pay. However, the reality is that relying on high prices for medicines, backed up by IP monopolies, is a flawed paradigm to pay for medical innovation. It creates both access problems due to high prices – as we have seen – and at the same time it does not stimulate innovation for many of the diseases affecting people in developing countries, where patients have limited purchasing power and the private sector sees no incentive.
Between 2000 and 2011, fewer than four percent of new drugs approved were indicated for neglected diseases accounting for more than ten percent of the global burden of disease. Fewer than two percent of new drugs approved were new chemical entities with indications for neglected diseases. The future is equally troubling with only 1.4 percent of nearly 150,000 registered clinical trials over the same period having a focus on neglected diseases. Few of these were for new chemical entities.
At MSF we believe the world needs to move towards a new framework for R&D that considers the specific needs of patients upfront, at the start of the innovation process; breaks the link between the cost of R&D and the price of products; ensures that the fruits of innovation are accessible and affordable to all in need; and moves beyond the ad hoc patchwork of limited efforts seen so far, transforming these individual successes into a sustainable R&D framework based on clear needs and agreed priorities. There are important conversations at the World Health Organizations and other forums on these new models for innovation that the U.S. Government should strongly support and engage.
Every country has the right to take steps to increase access to medicines and implement a patent system in line with its public health needs. Countries can do so without violating obligations of WTO membership, and should. We strongly object to the pressure exerted by the U.S. Government on developing countries like India for using legal flexibilities to protect public health. India’s measures are not only fully compliant with global trade rules but also with the laws of India.
Most importantly, the measures India has implemented to safeguard public health are of critical importance to protect the health of millions of people across the world. Losing the “pharmacy to the developing world” would be devastating for patients and for treatment providers around the world. MSF urges the USTR to respect the legality of the decisions made by the Indian patent office, the Government and courts that adhere to international trade rules, and to further recognize the positive impact of these decisions on public health.
India’s policies have saved lives while maintaining compliance with international trade rules. These policies should be emulated, not reprimanded. Rather than using pressure tactics like the Special 301 Out-of-Cycle Review Process as a unilateral tool to impose a heightened IP regime on developing countries like India, the U.S. government should use its laws, policies, and financial resources to ensure that developing countries exercise the full flexibilities available to them to ensure access to medicines for all. Seeking greater IP norms in countries like India that are the source of access to innovation for millions around the world not only does little for innovation but it also perpetuates a failed model. Instead of aggressively pushing governments, such as India, to ignore legal rights under international trade rules to ensure affordable medicine prices, the U.S. Government should work with India and other countries, to invest in and develop new models of innovation that promote both innovation and access.
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