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COMPLUSORY LICENSING
Focus on public Health Sector
Speaker
Mohammed Zaka-ur-Rehman
• CEO
Schazoo Zaka (Pvt.) Ltd.
The Schazoo Laboratories (Pvt) Ltd.
Zaka Healthcare Ltd.
• Chairman
WTO committee of PPMA.
Standing Committee IPR LCCI.
• Former Chairman
PPMA.
“WTO Patent Rules & Access to Medicines: The
Pressure Mounts”
“Public outage over the exorbitant prices of HIV/AIDS drugs in Africa is
focusing public attention on the harmful role of global patent rules in
blocking poor people’s access to vital medicines.”
Source: Oxfam, June 2001
Conditions prior to WTO
Developed Countries
 Products & Process are patentable
 Patent life – 17 Years
 Software & Entertainment Industry is already protected by Patent Laws
 Strangle hold of Multinational Companies on Pharma Industry
 Prices of generic substitutes much lower than branded products
 Govt. measures to promote generic industry
 Generic Pharma growth Double than Branded
 Generic Pharma becomes an Industry
Conditions prior to WTO
Examples of price differentials between
generic and brand products
Belgium
Italy
Spain
Germany
France
Canada
UK
US
20%
20% +
25%
25% - 30%
25% - 35%
40% - 50%
80% +
50% - 90%
Source: IMS, Pharma Strategy Group
Conditions prior to WTO
Average Price per Prescription for Brand Name is approximately
Three Times Generic Drugs (data from US)
60
BRANDS
GENERICS
50
54
48
43
DOLLARS
40
40
37
35
30
20
10
13
13
14
1993
1994
1995
14
1996
17
17
1997
1998
0
Source: IGPA Conference 2001, 25-27 June 2001, Cannes, France
Conditions prior to WTO
USA Brand Price Increases are above CPI,
Generic Prices Shrink Less
6
4
2
0
-2
1996 1997 1998 1999 2000
1996 1997 1998 1999 2000
-4
-6
-8
-10
-12
-14
BRAND PRICE CHANGE
GENERIC PRICE CHANGE
Source: IMS, Pharma Strategy Group
Conditions prior to WTO
Developing Countries
 Process are patentable for 7-10 years
 No Product Patents
 In countries with Strong National Pharma Industry, the share of
national Pharma industry flourished
 Agriculture sector, mostly dominated by multinational companies
 No large scale industry in software & entertainment sector
 Prices of generic substitutes much lower than branded products
Govt. measures to promote Generics-USA
Hatch-Waxman Reforms to Facilitate Generic Industry ….
is Necessary to...
• Maximise Consumer benefits at a Time When Drug Prices Are Rising.
• Expand Access to Generic Pharmaceuticals
• Increase opportunities to Lower Drug Costs
• Continue to stimulate R&D that will positively impact Patient
Care/Disease Management
Encouraging the Use of Generics- U.S. Perspective
Govt. measures to promote Generics-USA


Opportunities to Enhance Hatch-Waxman expand Bolar
Maintain Incentives for Challenging or Circumventing Patents and
Encourage Product Launch

Maintain ability to Litigate Prior to launch, thereby limiting risks to generic
companies

Limit damages to generic companies’ Profits

Create significant penalty for inappropriate listing of patents

Provide forum to challenge listing of patents

Limit brand exclusivities

Provide for Ability of Generics to Use Labelling of Brands Regardless of
Patent Status when Safety is an Issue

Create regulatory mechanism for Generic Biologics
Encouraging the Use of Generics- U.S. Perspective
CHANGES DUE TO WTO
Developed Countries
 Patent life extension from 17 to 20 Years to encourage R&D
 New Indication & Pediatric patent extension
 No price impact since rules are already being followed
 Health sector already developed: Insurance + Health Services
 Importance of new molecules: New molecules dominates the market
CHANGES DUE TO WTO
Developing Countries
 Product Patent vs. Process Patient
 Huge price impact since prices were lower due to the presence of generics
 Health sector not developed: No Insurance + Health Services, In
Philippines & S. Africa 80% population being covered by health services
whereas in developing countries only 10% are covered
CHANGES DUE TO WTO
Developing Countries

Importance of generic industry to increase access and lower the prices
in developing countries

National Companies have less R&D budget because of lack of Govt.
Support

No National Company could launch new molecule, Multinationals will
enjoy the monopoly with increased prices
In poor countries drugs are largest household and second
largest public expenditure for health
Pharmaceutical spending, as % of total health spending
Germany
Italy
France
Spain
Denmark
UK
United States
Netherlands
Norway
Developed countries
(7 - 20%)
Bulgaria
Czech Rep.
Hungary
Croatia
Poland
Estonia
Slovenia
Lithuania
Transitional countries
(15 - 30%)
Mali
Egypt
China
Indonesia
Thailand
Tunisia
Jordan
Argentina
South Africa
Developing countries
(24 - 66 %)
0
10
20
30
40
50
Source: IGPA Conference 2001, 25-27 June 2001, Cannes, France
60
70
Building a large generic market takes time
- and requires a combination of strategies
1.
2.
3.
4.
Access
Source: IGPA Conference 2001, 25-27 June 2001, Cannes, France
19
93
19
94
*
19
92
19
91
19
90
19
89
19
88
19
87
Percent of new prescriptions, U.S.
19
86
19
85
50
45
40
35
30
25
20
15
10
5
0
National strategies for generics:
Supportive legislation & regulation
Reliable quality assurance
Professional, public acceptance
Economic incentives
Compulsory licensing International
examples
Argentina
Aug 14, 2007
18 October 2005
Argentina announces intention to grant Compulsory License for Tamiflu
(Oseltamivir). It later transpires that the patent was never granted in
Argentina.
Brazil
Aug 14, 2007
6 July 2007
Brazil grants Compulsory License in relation to Abbott's Kaletra.
Brazil
Aug 14, 2007
4 May 2007
Brazil grants a compulsory license for Merck's HIV/AIDS drug Efavirenz.
Ecuador
Aug 14, 2007
2003
Petitions by local manufacturer (Acromax) for Compulsory License for
Combivir (Lamivudine and AZT) refused, appealed and refused again.
GSK agrees to supply HIV/AIDS drugs at a discount.
Eritrea
Aug 14, 2007
5 June 2005
Eritrea issues compulsory licenses for importation into Eritrea of generic
HIV-AIDS medicines
Zimbabwe
Aug 14, 2007
May 2002
Zimbabwe declares Period of Emergency which enables it to ignore
antiretroviral drug patents for 6 months via a compulsory license.
In 2003, the period of emergency was extended by five years (until 31
December 2008).
Compulsory licensing International
examples
Canada
Oct 4, 2007
The WTO received from Canada, on 4 October 2007, the First notification
from any government that it has authorized a company to make a generic
version of a patented medicine for export under special WTO provisions
agreed in 2003. The triple combination AIDS therapy drug, TriAvir, can now
be made and exported to Rwanda, which is unable to manufacture the
medicine itself. Earlier, on 17 July, Rwanda informed the WTO that it
intends to import 260,000 packs of TriAvir —a fixed-dose combination
Product of Zidovudine, Lamivudine and Nevirapine — over two years. The
drug is to be made in Canada by
Apotex, Inc and is called ApoTriavir by the manufacturer.
Links: WTO release; IPKat
Canada
Aug 14, 2007
14 May 2004
Canada amends its Patent law to allow Canadian manufacturers to export
to countries which lack the ability to manufacture pharmaceuticals - but only
in respect of drugs listed in Schedule 1 to the Act.
Drugs that have been aded to Schedule 1 include:
lamivudine nevirarpine zidovudine tablets
Tamiflu (oseltamivir)
Canada
Aug 14, 2007
October 18, 2001
Health Canada granted a Comulsory License in relation to the Bayer's
ciprofloxacin and authorized generic manufacture to build a stockpile as
protection against an attack of anthrax.
Compulsory licensing International
examples
Europe
Aug 14, 2007
July 2007
European Union Trade Commissioner sends a letter to the Thai
government, warning that it should not take further action to force
drugmakers to drop drug prices.
Ghana
Aug 14, 2007
October 2005
Ghana issues compulsory licenses for importation into Ghana of Indian
generic HIV/AIDS medicines.
Guinea
Aug 14, 2007
18 April 2005
Guinea issues compulsory licenses for importation on patents on drugs to
treat HIV-AIDS
Indonesia
Aug 14, 2007
5 October 2004
Indonesia issues a Compulsory License to manufacture generic versions of
lamivudine and nevirapine (both HIV/AIDS drugs).
Israel
Aug 14, 2007
January 1992
Israel grants Compulsory License to manufacture Bio-Hep-B under Biogen
patent. Biogen's appeal was unsuccessful.
The patent expired in 1999 before the Supreme Court ruled on the dispute.
Compulsory licensing International
examples
Italy
Aug 14, 2007
21 March 2007
Italy grants Compulsory License in relation to Finasteride and related
generic drugs for two years prior to the 2009 expiration of patent monopoly
(Complementary Protection Certificate).
Korea,
republic of
Aug 14, 2007
January 2002
Korea rejects application for Compulsory License of Novartis' Glivec.
Malaysia
Aug 14, 2007
29 September 2004
Malaysisa issues a compulsory license to import from India didanosine
(ddI), zidovudine (AZT) and lamivudine zidovidine (Combivir).
Rwanda
Jul 19, 2007
19 July 2007
Rwanda becomes the first country to notify the WTO that it intends to use
the Paragraph 6 system (of the DOHA Declaration).
Paragraph 6 is designed for those countries that do not have the facilities to
manufacture pharmaceuticals and so allows importation.
Mozambique
Aug 14, 2007
5 April 5 2004
Mozambique's issues compulsory license for lamivudine, stavudine and
nevirapine.
Compulsory licensing International
examples
Thailand
Aug 14, 2007
April 2007
After weeks of negotiations and public debate (and statements about
withdrawing drugs from Thailand), Abbott agrees to provide discounted
AIDS drugs (Kaletra/Aluvia) to Thailand.
Thailand
Feb 1, 2007
Thailand announces two more Compulsory Licenses, this time:
Plavix, a heart disease drug made by Bristol-Myers Squibb and SanofiAventis.
Kaletra, an HIV/AIDS drug made by Abbott Laboratories
Thailand
Dec 6, 2006
Thailand government issues a compulsory license on Merck's AIDS drug,
Efavirenz. Thailand was criticised for failing to first contact Merck.
United
states
Aug 14, 2007
30 April 2007
The US Trade Representative elevatesThailand the Priority Watch list in its
annual 'Special 301' Report. The USTR cites a concern that the past year
has been characterized by an overall deterioration in the protection and
enforcement of IP in Thailand.
The Report then specifically cites the recent grant of Compulsory Licenses
as further evidence of weakening respect for patents.
Zambia
Aug 14, 2007
21 September 2004
Zambia issues a compulsory license for lamivudine, stavudine and
nevirapine.
Compulsory Licenses in Pakistan patent Ordinance
2000 Amended 2002

The patent holder refuses to grant a license to a third party on reasonable
commercial terms and conditions: or

Section 58(1) c
Where patent has not been exploited in manner, which contributes to the
promotion of technological innovation and to the transfer and
dissemination of technology.

Section 58(1) d
Powers Of Controller In Granting Compulsory Licenses
On request, made to the Controller after the expiration of a period of four
years from the date of filing of the patent application, or three years from
the date of the grant of the patent, whichever might result from the
exercise of the rights conferred by the patent, for example, failure to work.
Section 59(1)
Pakistani Patent Rules 2003
According Rule 44

For the purpose of this ordinance the patentee shall be entitled to a payment
up to three percent remuneration by the licensee, on the basis of total sales
of that chemical product taking into consideration its trade price, under
clause (iii) of sub-section (3) of section 59.

Subject to the sub-section (1) of section 59, none or insufficient exploitation
of a patent in case of a chemical product intended for use in agriculture or
medicines shall be determined on the basis of healthcare requirements of
Pakistan and monopolization of the market against the public interest.

Provided, that the patent holder does not make available the subject
patented product, in sufficient quantities , so as to meet the requirement of
the licensee (s). The licensee (s) shall be at liberty to import or procure the
said chemical product from anywhere.
Implementation of compulsory
licensing in Pakistan
?
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