[Ip-health] TAC & MSF call on DTI to reform patent laws to improve access to medicines

Lotti Rutter lotti.rutter at mail.tac.org.za
Tue Aug 6 21:33:01 PDT 2013



This is a memorandum dated 7th August delivered to representatives from the
Department for Trade and Industry, including Minister Rob Davies, ahead of a
workshop in coordination with the WTO, WHO, WIPO calling on the DTI to
urgently "Fix the Patent Laws" to improve South Africans' access to
medicines. You can access the original memorandum
um-to-DTI.pdf> here.


The Treatment Action Campaign (TAC) and Doctors Without Borders (MSF)
urgently call upon the Department of Trade and Industry (DTI) to reform the
system for examining pharmaceutical patent applications in South Africa, in
order to ensure patients have greater access to affordable medicines.
Despite widespread calls for reform to the country's patent laws, the draft
Intellectual Property policy that could outline such change has experienced
considerable delays. Today, as the DTI convenes the "Intellectual Property
and Public Health National Workshop" in coordination with the World Trade
Organization (WTO), World Health Organization (WHO) and World Intellectual
Property Organization (WIPO), we request that the DTI recognize the validity
of the needed reforms outlined below, and commit to a more timely
prioritisation of the IP policy.


The agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS) sets the standards of intellectual property protection that World
Trade Organisation (WTO) member states are required to uphold at 20 years
dum%20FINAL%20-%20signed%20off.docx#_ftn1> [1] - during which period the
patent holder has exclusive rights to market the medicine. This lack of a
competitive market allows pharmaceutical companies to often charge
unaffordable prices in order to maximise profits - meaning life-saving
medicines remain inaccessible to those in need.


Certain legal flexibilities within TRIPS were affirmed in 2001 in order to
protect countries' abilities to achieve the right to health
dum%20FINAL%20-%20signed%20off.docx#_ftn2> [2]. Although other BRICS
countries like India and Brazil have utilised these pro-public health
safeguards, South Africa is lagging behind and has not amended its patent
law to incorporate or implement TRIPS flexibilities. This is highly
problematic given South Africa's high burden for both communicable and
non-communicable diseases, and the continuing rise in healthcare costs.
There is a pressing need to take urgent steps to address access to many
important medicines which would save the lives of millions of South


South Africa hands out an excessive number of pharmaceutical patents-more
than most developed or developing countries-without examining patent
applications to determine their validity. Whilst the introduction of an
examination system is the cornerstone of patent law reform, South Africa
must also ensure that at the examination stage the patents office only
grants patents on new drugs and prevents abusive patenting. If fewer
secondary patents are granted, then more generic versions of medicines will
be able to enter the market upon the expiry of compound patents, which will
in turn drive down prices. Furthermore, when patents result in medicines
being priced out of reach, actions that mitigate high prices, such as
compulsory licensing, must be practically feasible to implement.


We call on the DTI to limit the number of pharmaceutical patents granted in
South Africa by (1) ensuring that all pharmaceutical patent applications are
substantively examined; (2) by strengthening patentability criteria to
prevent patent evergreening; (3) by enhancing public transparency of the
Patents Office concerning pending patent applications and the status of
granted patents; (4) by allowing a broad range of third parties to file
pre-grant and post-grant patent oppositions; (5) and by broadening the
grounds and facilitating the procedures for issuing a compulsory license.


Substantive patent examination:

South Africa does not examine patent applications to determine whether they
meet the country's standards of patentability - because of this South Africa
grants an excessive number of patents when compared to countries that do
examine applications. In 2008 alone South Africa granted 2,442
pharmaceutical patents, while by contrast, Brazil only granted 278
pharmaceutical patents between 2003 and 2008
dum%20FINAL%20-%20signed%20off.docx#_ftn3> [3].


Prices are kept artificially high because pharmaceutical companies are able
to obtain multiple patents on the same medicine, - a process known as
'evergreening'. For example, in South Africa to treat a cancer patient for a
year with Novartis' drug imatinib costs over R387,000-one of the highest
prices in the world. Even though Novartis' 20-year patent on the compound
imatinib expired in South Africa in April 2013, an additional patent for a
'new use' of imatinib does not expire until 2022. This additional patent
delayed generic manufacturer Cipla from introducing a product onto the
market. On the expiry of the first patent, Cipla was forced to initiate
litigation procedures against Novartis to clarify whether its generic
product infringed the new use patent. However, eventually the two companies
settled the matter out of court under confidential terms. The Cipla product
is now available in South Africa at a 46% price reduction compared to
Novartis' imatinib. Yet Novartis' patent remains enforceable in South
Africa, which means that other generic manufacturers of the same cancer drug
could face similar constraints in introducing more affordable versions of


Section 34 of the South African Patents Act
dum%20FINAL%20-%20signed%20off.docx#_ftn4> [4] requires that all patent
applications are examined to ensure that they meet the legal requirements of
patentability, but to date, the DTI has failed to take the necessary steps
to ensure patent applications are substantively examined in South Africa.
This critical shortcoming must be addressed.


Strengthening patentability criteria:

The TRIPS agreement requires countries to grant patents on all products that
are 'new', 'involve an inventive step' and are 'capable of industrial
application'. Through strict patentability criteria outlined in Section 3(d)
of the Indian Patents Act, India has avoided granting excessive monopolies
for secondary use, combinations or new formulations of medicines. The recent
Supreme Court decision in India defended the validity of Section 3(d) by
denying Novartis' appeal for a patent on a new form of imatinib. The absence
of a patent on imatinib in India has created a competitive market where the
drug rapidly became available for 94% less than the originator equivalent,
now at an affordable R170 (US $17) per month
dum%20FINAL%20-%20signed%20off.docx#_ftn5> [5].


South Africa does not explicitly exclude new forms, new uses and new
formulations of already existing medicines from patentability. South Africa
must curtail this abusive practise by interpreting TRIPS in a pro-public
health manner to prevent evergreening. This requires a change to the
patentability criteria in existing patent law.


Patent oppositions:

In addition to granting patents without examination, the Patents Act does
not contain provisions for pre- or post-grant opposition of patents by a
third party. The only way to challenge a patent in South Africa is through
lengthy and expensive court proceedings. By contrast, India provides for
pre- and post- grant opposition under its national legislation. In India a
third party (including generic manufacturers, researchers, civil society
organisations, and other interested persons and entities) can oppose a
patent while the application is pending, and for one year after it is
granted. This is done by submitting evidence to the patents office detailing
why the patent should not be granted. Such a system makes challenging
patents less burdensome and allows the patent office to benefit from the
inputs of various stake holders.


Opposition procedures must be coupled with proper disclosure requirements as
currently there is inadequate transparency around pending applications and
their examination. For instance, in India and Argentina patent applications
must be published and first examination reports be made available in the
public domain before a decision is made. In Brazil it is required that a
health authority is informed of all pending applications that may adversely
impact on health. The South African Patents Act should also be amended to
ensure disclosure of pending patent applications including the international
non-proprietary (generic) name in the abstract. Most importantly patent
claims, priority data, pending status, prosecution history, and patent
decisions must be available on the patent office website to facilitate third
party searches.


Compulsory licensing:

South Africa also has the flexibility under the TRIPS agreement to issue
compulsory licenses in cases where medicines remain inaccessible, due to
high cost or inadequate supply. A compulsory license allows for more
affordable generic production of an expensive medicine, with a royalty fee
paid to the patent-holder as compensation. Even though the Patents Act
already provides for compulsory licenses, these provisions have not been
used on a pharmaceutical product - in part due to sub-optimal terms and
procedures. According to a report from UNDP, in South Africa it may cost up
to R1,000,000 and take over three years to undergo court procedures to issue
a compulsory license
dum%20FINAL%20-%20signed%20off.docx#_ftn6> [6].


South Africa could for instance issue a compulsory license to attain an
affordable version of linezolid, a high-strength antibiotic used to treat
extensively drug resistant tuberculosis (XDR-TB). Despite growing rates of
XDR-TB in South Africa, access to the drug is limited due to prohibitively
high prices. Pfizer is the sole supplier of linezolid in South Africa and
charges R287 ($28) per 600mg tablet in the public sector, while MSF pays
R676 ($67) per tablet through the private sector. With XDR-TB patients
requiring one linezolid tablet a day, this amounts to over R123,000
($12,300) per patient for a six-month supply of linezolid, which is only
part of a regimen containing multiple drugs. In comparison a generic version
of linezolid is available from an Indian producer for R25 per tablet
dum%20FINAL%20-%20signed%20off.docx#_ftn7> [7], but Pfizer's patents
currently block access. Streamlining the process for issuing a compulsory
license in South Africa could have a dramatic impact on medicine prices for
linezolid and other critical medicines.


The Department for Trade and Industry (DTI) has promised reform of the
country's patent laws in the form of a new intellectual property (IP)
policy. The release of this draft policy has experienced multiple,
unexplained delays, yet Section 27 of the Bill of Rights in the South
African constitution places a legal obligation upon the government to ensure
the progressive realisation of the right to health care services, including
addressing the barriers to access such as the current patent system. South
Africans should no longer accept complacency from the government in dealing
with this problem. As organisations committed to public health, we urge the
DTI to fulfil its promises and release its draft IP policy for widespread,
transparent consultation, incorporating our recommendations outlined above.


For all media enquiries please contact:
Lotti Rutter
lotti.rutter at tac.org.za
+27 (0) 81 818 8493


dum%20FINAL%20-%20signed%20off.docx#_ftnref1> [1]

dum%20FINAL%20-%20signed%20off.docx#_ftnref2> [2]

dum%20FINAL%20-%20signed%20off.docx#_ftnref3> [3]

dum%20FINAL%20-%20signed%20off.docx#_ftnref4> [4] See Section 34 of SA
patents act,

dum%20FINAL%20-%20signed%20off.docx#_ftnref5> [5]

dum%20FINAL%20-%20signed%20off.docx#_ftnref6> [6] "TRIPs flexibilities,
access to medicines and the domestic pharmaceutical industry in South
Africa:  An analysis of patents, competition and medicines law." -UNDP,
November 2007

dum%20FINAL%20-%20signed%20off.docx#_ftnref7> [7]



Lotti Rutter

Senior Researcher

Policy, Communications and Research


Treatment Action Campaign

Tel: 021 422 1700

Cell: 081 818 8493

Skype: lotti.rutter

Twitter: @FixPatentLaw


 <http://www.fixthepatentlaws.org> www.fixthepatentlaws.org

 <http://www.tac.org.za> www.tac.org.za


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