SIDEBAR Tangling over TRIPS Provisions [PCIJ file photo] THE 2001 World Trade Organization (WTO) Ministerial Conference in Doha reaffirmed that the TRIPS Agreement “can and should be interpreted and implemented in a manner supportive of the WTO members’ right to protect public health and, in particular, to promote access to medicines for all.” The Declaration sustained the right of developing countries like the Philippines to enforce public health safeguards so as to enable price reductions via generic competition. “Paragraph 6 Public Health Solution” of the Declaration even directed WTO member countries to facilitate access to generic medicines by poor countries with insufficient or no pharmaceutical manufacturing capacities. In a 2005 analysis, Carlos Correa, an international expert on intellectual property law and public health, said that the Philippines’ Intellectual Property Code had not contemplated several flexibilities in the TRIPS Agreement, particularly parallel importation and the “Bolar exception.” To develop a patent regime that provides for a comprehensive set of rules consistent with the Agreement and protects and promotes public health, Correa advised the country to look into other issues such as the extent of rights conferred by a patent application and grant. But as the global nonprofit organization Oxfam International observes, the public health safeguards allowed under TRIPS have been constantly undermined, either weakened or eliminated by higher levels of intellectual property protection — called TRIPS-plus rules — that countries like the United States have vigorously pushed through bilateral and regional trade agreements, to the benefit of the pharmaceutical industry. Some legislators even suspect the “unseen hand” of the United States in what they say was a recent attempt to modify some of the provisions in House Bill 2844. Apparently, an unsigned position paper was circulated among members of the House of Representatives’ trade and industry committee last month. “Predictably, the Office of the U.S. Trade Representative echoed the position of multinational pharmaceutical companies,” says Akbayan party-list Rep. Anna Theresia Hontiveros-Baraquel of the proposals in the paper. “They don’t want a stricter definition of patentability to protect the monopoly of big pharmaceutical companies. They also want to limit the government’s use of compulsory licensing.” Though unsigned, what purportedly gave the U.S. link away was the reference in the paper to the “modern free trade agreements (FTAs) that the U.S. negotiated (with countries) such as Morocco, Oman, Korea, just to name a few, (that) specifically provide patent protection for new uses (of known substances).” This was punctuated by a question asking if the Philippines “really want(s) to go in the opposite direction,” which Baraquel considers as a veiled warning now that the U.S.-RP Bilateral Trade and Investment Framework Agreement (TIFA) is currently under negotiations. According to Oxfam, expanding the scope of pharmaceutical patents to include new indications — or new therapeutic uses of existing medicines — and formulations, and limiting the grounds for issuing compulsory licenses to emergencies, government non-commercial use, and competition cases are actually among the common TRIPS-plus features in FTAs negotiated by the United States with other countries. Oxfam says that the U.S. government has close ties with pharmaceutical companies, noting that there are 20 industry representatives who sit on the advisory committees of the Office of the U.S. Trade Representative. Oxfam also considers it an attempt to enforce TRIPS-plus rules in the Philippines when Pfizer filed a patent infringement case in 2006 against the government for importing cheaper versions of its hypertension drug, Norvasc, whose patent was set to expire in mid-2007. The court has yet to issue a ruling on the case, which seeks to prohibit the government from doing parallel importation of a patented drug, even as an exercise of the “early working” doctrine that is allowed under TRIPS (and even by the country’s current IP Code, though not as an expressed provision). — Alecks P. Pabico/PCIJ

MORE OBJECTIONS
The way the Pharmaceutical and Healthcare Association of the Philippines (PHAP) sees it, though, Section 22 in House Bill 2844 and Section 26 in Senate Bill 1658 discriminate against pharmaceutical inventions and goes against the three basic requirements of patentability: novelty, inventive step, and industrial application.

PHAP says that the IP Code has sufficient safeguards against double patenting and evergreening, which, the association says, do not have a significant impact on access to medicines. After all, it argues, only one percent of the drugs in WHO’s List of Essential Drugs are patented, with the rest already outside the patent system.

But Bureau of Food and Drug (BFAD) Deputy Director Joshua Ramos counters, “What if the one percent with patents are the ‘miracle drugs’ needed by large numbers of people? Also, those that are already off-patent as new molecules — the 99 percent they claim — may again be patented for new use without the provision preventing patentability based on ‘new use.’”

PHAP’s arguments actually go to the heart of the pharmaceutical industry’s justification for strengthening the regime of intellectual property protection, which is that it provides an incentive to develop innovative drugs and allows it to recoup investments on research and development (R&D).

Yet a report by the U.S. National Institute for Health Care Management (NIHCM) makes this assumption of innovation among pharmaceutical companies suspect. From 1989 to 2000, says the NIHCM, only 35 percent of the approved 1,035 new drug applications in the U.S. Food and Drug Administration (FDA), were products with new active ingredients. The rest had active ingredients already available in an approved product. Over half (54 percent) were in fact incrementally modified drugs or new versions of available medicines. Eleven percent out of the supposedly new drugs, meanwhile, contained the same active ingredient as identical marketed products.

PHAP’s list of objections, however, includes the House bill’s provision on parallel importation. Citing the lack of an adequate infrastructure and effective monitoring systems to monitor parallel imports and prevent entry of counterfeit drugs into the country, PHAP says that substandard medicines and counterfeit drugs could proliferate through uncontrolled parallel importation.

	THE World Health Organization classifies the Philippines among countries where less than 30 percent of the population have regular access to essential drugs, which are priced beyond the reach of poor Filipinos. [PCIJ file photo]

Yet an industry insider concedes that with or without the bill, the problem with counterfeit drugs (those that are marketed without BFAD registration) and fake medicines (illegally manufactured copies of the original) exists. He says that along with substandard medicines, these constitute an enforcement matter involving BFAD and has nothing to do with the intent of the bill to provide quality, affordable medicines. “It’s a classic obfuscation tactic,” admits the insider.

BFAD’s Ramos also says there is “no real threat” as the agency, together with law enforcement agencies, can easily detect counterfeit drugs. Besides, medicines that will be subject of parallel importation will have to be registered with BFAD. The agency is also tasked to conduct the necessary post-market surveillance.

“The counterfeit medicines issue is not a real issue,” remarks Elpidio Peria. An associate of the Third World Network that is among the various nongovernmental organizations supporting the Senate bill, Peria explains that most, if not a large majority, of the pharmaceutical products that will be brought in through parallel imports are the same products produced by the same pharmaceutical firms already operating in the country.

“It is a fact,” he adds, “that these same companies imported from their mother units or manufacturing bases and made money out of the price differentials between the Philippines and the countries from where these products were sourced.”

But a healthcare professional who was once part of the Department of Health (DOH) says that while the parallel importation provision in the House bill is “relevant,” it is nevertheless “too simplistic.” He says there are no protocols to ensure checks and balance; neither are there provisions to ensure that imported drugs would come from firms complying with current good manufacturing practice and from legitimate wholesalers and consolidators. He also notes the lack of punitive clauses for those who would import or manufacture substandard generic drugs.