Can incentives to generic manufacturers save the Doha Declaration's Paragraph 6?

Author:Lee, Stacey B.
  1. INTRODUCTION II. OVERVIEW OF THE CONTENTIOUS RELATIONSHIP BETWEEN INTELLECTUAL PROPERTY RIGHTS AND THE RIGHT TO HEALTH A. The Pre-TRIPS Landscape 1. Compulsory License Protections 2. Doha Declaration's Paragraph 6 Provisions III. ASSESSING THE DOHA DECLARATION'S PARAGRAPH 6 COMPULSORY LICENSING EFFECTIVENESS: RWANDA AND CANADA IV. THE NEED FOR A NEW FRAMEWORK A. Africa's Changing Health Needs B. India's Effect on Africa's Access to Medicine C. The Challenge: Increasing the Role of Generic Manufacturers 1. Necessary Prerequisites a. Production and Transactional Costs b. Market Size c. Risks 2. Re-Defining the Generic Manufacturers' Role V. CONCLUSION I. INTRODUCTION

    The effect of the World Trade Organization's (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement on the generic pharmaceutical industry has always been contentious. TRIPS established a comprehensive set of global standards of intellectual property protection, including a minimum of twenty years of patent protection on pharmaceuticals. (1) This change in intellectual property rights significantly altered generic manufacturers' ability to provide WTO member countries affordable medicines. TRIPS also contained various flexibilities, including compulsory licenses, to counterbalance the adverse effect of patents on member countries' ability to access generic medicines. (2) Under the TRIPS compulsory license provisions, governments can disregard a patent to produce locally a low cost generic version of a patented drug. (3) In practice, however, the majority of developing countries lacked the requisite domestic generic manufacturing capacity to use these provisions. (4)

    Ultimately, member country dissatisfaction over the lack of access to generic medication under TRIPS resulted in the WTO adopting the Declaration on the TRIPS Agreement on Public Health (Doha Declaration). (5) In addition to reaffirming the validity of compulsory licenses, Paragraph 6 of the Doha Declaration tasked the TRIPS Council with finding a way for countries with insufficient or no manufacturing capabilities to gain access to generic medications through TRIPS' compulsory license provisions. (6)

    The TRIPS Council responded with the Decision of the General Council, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. (7) The decision amended the compulsory license provisions by waiving the TRIPS requirement that compulsory licenses be used "predominately for the domestic market." (8) These Paragraph 6 provisions now enable member countries to export generic medication to countries with insufficient pharmaceutical production capabilities. (9)

    Public health advocates hailed the Paragraph 6 provisions as the "solution to developing countries' most pressing medical needs" (10) and a "remarkable achievement." (11) To date, however, only one pair of countries has utilized the Paragraph 6 provisions to manufacture and purchase generic versions of patented drugs. (12) Critics refer to the infrequent use and the lackluster results as evidence that Paragraph 6 compulsory licenses offer little to the international community in terms of meeting developing countries' health needs. (13) Indeed, articles commenting on the effectiveness and continued relevance of Paragraph 6 are abundant. (14) While these publications frequently mention generic manufacturers, there is an absence in the literature of a detailed analysis demonstrating how altering the role of generic manufacturers could increase the utility of the Doha Declarations' Paragraph 6 compulsory license provisions. This Article addresses that gap in the literature.

    Specifically, this Article examines the functionality of compulsory licenses as authorized by Paragraph 6 of the Doha Declaration through the lens of generic manufacturers. This examination reveals that generic manufacturers are underutilized resources in the current discussion regarding the viability of Paragraph 6 compulsory licenses. Set against the current health challenges faced by Africa, this Article explores how legal and economic incentives aimed at generic manufacturers could increase the effectiveness and usage of Paragraph 6 provisions.

    Two factors are motivating the urgency of refocused attention on the Doha Declaration's Paragraph 6 provisions and generic manufacturers' role in facilitating affordable access to medicines for developing countries. First, beginning in 2016, all developing countries must be TRIPS compliant. (15) This means that Paragraph 6 compulsory license provisions will serve as the primary mechanism for these countries to access generic versions of patented drugs. Second, Africa and other developing countries owe much of their progress in fighting HIV/MDS to the availability of India's low-cost generic versions of antiretroviral medications (ARVs). (16) Medecins sans Frontieres (MSF) notes that supply is gradually running out. (17) India became TRIPS compliant in 2005. (18) The newer and more effective HIV/AIDS drugs developed after 2005 are patent protected and India cannot copy them. As HIV/AIDS patients become increasingly resistant to first-line HIV/AIDS treatments, developing countries will not be able to rely on India to supply cheaper generic alternatives to second- and third-line HIV/ AIDS medications patented after 2005. (19) It is against this backdrop that the need for an effective compulsory framework takes on new significance.

    Section I provides an overview of the compulsory licensing practices under TRIPS. Part 1 of this section describes the background of pre-TRIPS intellectual property protections. Part 2 addresses the evolution of TRIPS and discusses the Doha Declaration's Paragraph 6 provisions. Section II examines the inadequacies of the current compulsory licensing scheme by, in particular, exploring the attempts by Rwanda and Apotex, a Canadian generic manufacturer, to comply with TRIPS to deliver essential medicines under Paragraph 6. From this examination, the Article offers possible explanations for the limited use of the Paragraph 6 process by genetic manufacturers and developing countries. Section III places the need for a new framework in context through examining, in Part 1, the current and future health challenges facing sub-Saharan Africa. Part 2 of this section describes necessary revisions to the existing compulsory licensing framework. These changes center on expanding legal, business, and economic incentives for generic manufacturers to participate in the Paragraph 6 process. The Article concludes that, through proper incentives, generic manufacturers are in a unique position to change the dynamics of developing countries' use of Paragraph 6 compulsory licenses to access affordable medicines.


    1. The Pre-TRIPS Landscape

    While international agreements addressing intellectual property rights date back to the late 1800s, (20) TRIPS is the first to extend such protections to pharmaceutical products. (21) Even on a domestic level, prior to the creation of TRIPS, a majority of developing countries did not provide patent protection to pharmaceutical products. (22) According to a 1988 WTO study, of the ninety-eight state parties to the Paris Convention for the Protection of Industrial Property, forty-nine excluded pharmaceutical products from patent protection. (23)

    Accordingly, prior to TRIPS, developing countries had the flexibility to construct their own solutions to acquiring essential medicines. This included the ability to discriminate against patent inventions based on field technology and to deny patent protection to pharmaceuticals. (24) They also had the ability to issue compulsory licenses as they saw fit regarding their scope, duration, and requirements. (25) Generic companies were able to enter the market and sell medicines at considerably lower prices than brand name manufacturers, while also driving prices of the patented drugs down by the competitive force they exerted in the market. (26)

    Because of these practices, the Pharmaceutical Research and Manufacturing Association (PhRMA) (27) and other groups lobbied the U.S. government to strengthen intellectual property protections to reduce foreign competition "free riding" on their research and development. (28) Chief among PhRMA's concerns was the competitive threat brand name manufacturers were facing from generic manufacturers' lower cost products. (29) In particular, pharmaceutical companies objected to the narrow scope and short term of patent protection in many developing countries, lack of transparency in the patent granting process, and limited legal security in respect of the enforcement of patent rights. (30)

    PhRMA achieved its goal of strengthening intellectual property protections abroad in 1995 with the creation of the TRIPS Agreement. TRIPS created a broad set of uniform intellectual property rights that all WTO member countries would be required to enforce. (31) The Agreement and its subsequent clarifying instruments comprise the laws that define developing countries' access to medicine.

    TRIPS requires all member countries to provide a minimum of twenty years patent protection to all pharmaceutical products and processes. (32) The aim of this provision was to eliminate the "free riding" scenarios that flourished in countries that did not protect intellectual property rights. (33) TRIPS gave pharmaceutical patent holders the exclusive right to prevent unauthorized third parties from making, using, offering for sale, selling, or importing their drugs. (34) The Agreement also included a number of transitional provisions. Developing countries such as India had until January 2000 to implement the pharmaceutical provisions, while least developed countries like sub-Saharan Africa were not required to extend patent protections to pharmaceutical products until 2006...

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