[Ip-health] [URGENT - News from Brazil] Law bill that accelerates compulsory licenses during pandemics is under debate in the House of Representatives

Pedro Villardi pedro at abiaids.org.br
Thu Apr 9 11:11:28 PDT 2020

Dear all,

We would like to share this news with you. The House of Representatives can
vote at any moment on a law bill that authorizes the issuance of compulsory
licenses for all health technologies related to Covid-19.

Please find below the press release by the Working Group on Intellectual
Property (GTPI) and the translated legislative proposal (below).

Big Pharma is already fighting this back (who would guess). We would like
to request internacional help to answer their arguments. Here are the main
arguments by them (very briefly):

(a) this proposal is radical and is it beyond reasonable;

(b) it de-incentivizes innovation [each drug requires more than US$1
billion, one out 6k is successful, etc], therefore to protect innovation is
key to improve society's good health);

(c) there is already a compulsory license provision in the Brazilian
legislation (Articles 68 and 71 of law #9279/96, national emergency, public
interest, lack of national exploitation) and therefore there is no need to
change the law. Rather, it is a matter of implementing it;

(d) there can be no "automatic CL, since Brazilian Constitution establishes
the adversarial principle. The patent holder has the right to argue and
clarify whether the company is able or not to meet the country's demands;

(e) the law bill established a 1,5% royalty. Big Pharma claimed TRIPS
Article 31 to argue that each license must have a separately negotiated
royalty fee. - We acuatly found a way around this, but we would be happy to
read other opinions.

(f) CL does not promote quick technology transfer. On the contrary, it
tends to increase the risk of poor resource allocation and ineffective use
of raw materials.

(g) If such a legislative proposal is approved, there will be less
investments in the country, innovation would be de-incentivize and,
therefore, less medicines would be developed, hindering access to



*Law bill that accelerates compulsory licenses during pandemics is under
debate in the House of Representatives*

Rio de Janeiro, April 9th, 2020

*Legislative proposal backed by a wide array of political parties can
reduce prices and increase availability of health technologies to fight
Covid-19. Law bill # 1462/2020 is at the House of Representatives and can
go to voting at any time.*

The law bill 1.462/2020, which proposes the temporary suspension of patents
on any and all health technologies that can be used against the Covid-19
pandemic, is being processed in the Chamber of Deputies. This PL follows
the action of countries such as Germany, Canada, Israel, Chile, Ecuador and
Colombia that have taken legislative measures to favor speedy access to
technologies useful to contain the pandemic.

In addition to contributing to tackling the new coronavirus pandemic, the
law bill 1462/2020 prepares Brazil for possible future pandemics by
defining that the legal provision of the Compulsory License (LC) comes into
effect from the moment there is an public health emergency declaration by
the responsible Brazilian authorities or, at the international level, by
the World Health Organization (WHO).

The measure, which already has the support of the National Health Council
(CNS, as per acronym in Portuguese), aims to remove any existing monopoly
on medical devices, personal protective equipment (PPE), medicines for
treatment and prevention, vaccines, diagnostic kits, reagents, among others
that may tackle Covid-19. The objective is to favor production in
sufficient quantities and at affordable prices, so that the offer is
universal, reaching everyone who needs it, especially the most vulnerable
and excluded populations.

See the CNS support motion here

The law bill allows the government to buy products, patented or with
pending patent applications, from any supplier to act in the current
pandemic of the new coronavirus. As well as allowing the production and
commercialization by any company or laboratory - public or private -, with
technical production capacity, without any legal impediment on the part of
patent owners. The measure is valid as long as the emergency situation

Law bill 1462/2020 is multi-party initiative, as it is signed by 6
parliamentarians representatives from several ideological backgrounds.
Also, on April 2nd, the “External Commission, designed to monitor
preventive actions of health surveillance and possible consequences for
Brazil regarding the pandemic caused by the coronavirus”, chaired by
congressmen Dr. Luiz Antônio Teixeira Jr (Dr. Luizinho - PP / RJ), pointed
the law bill as a priority for consideration by the plenary of the Chamber
of Deputies. The president of the chamber has not yet put the project on
the agenda.

*Legislative proposal puts Brazil at the forefront*

The law bill amends Article 71 of Law No. 9279/1996, the Industrial
Property Law, by including an item that speeds up the issuance of
compulsory licenses in specific emergency contexts. The mechanism
establishes a simplified compulsory licensing process which, in times of
serious health threat, provides agility that can save hundreds or thousands
of lives saved. Currently, compulsory licensing can only be issued in the
following situations: national emergency, public interest or incapacity to
supply the Brazilian market. All of these cases depend on the opening of
negotiations with the patent holder and a series of acts by the executive
branch. With the legislative proposal these conditions are no longer in

“The Covid-19 epidemic showed how important are the efforts that society
and governments make, running to serve people and save as many lives as
possible, are not interrupted by patent holders, such as happened in
various parts of the world, when they threatened or tried to prevent
actions by groups and small companies in the middle of contagion and with
an increasing number of deaths per day”, commented the coordinator of the
Working Group on Intellectual Property (GTPI, as per acronym in
Portuguese), Pedro Villardi. “A wide base of producers is essential for us
to overcome the situation of exclusion from access to health goods,
observed in so many past epidemics and that is taking shape in this
pandemic. Preventing monopolies is a strategic measure, which gives breath
to the overworked s health systems, and through the compulsory license it
is possible that this is done legally, with due compensation to patent
holders ”, he concludes.


Engineers who made life-saving respirator parts in Italy for free were
threatened by the patent holder


Investor group that acquired patents from a collapsed testing company,
whose machines did not work, sue a company whose machines work and are on
the front lines against Covid-19



Villardi further emphasized that the legislative proposal does not deprive
the patent owner of the right to continue marketing their products and will
receive royalties for each sale by other companies of the licensed product.
“The point is to increase the government purchase options, with the agility
for distribution that a health emergency requires. Whoever holds the patent
will continue to sell, but it will not be able to do so in the form of a
monopoly ”, he explains.

*What is the compulsory license?*

The Compulsory License is a legal measure foreseen in the TRIPS Agreement,
of the World Trade Organization (WTO), of which Brazil is a member. The
TRIPS Agreement is a multilateral treaty that regulates the governance of
intellectual property rights in the world.

Pandemics fit among the very specific cases where it is possible to issue a
CL, when the public interest prevails so that the country can use the
patented product, even if the holder does not authorize it, in the name of
guaranteeing access to essential medicines. CL also provides a type of
remuneration to the patent holder, safeguarding its earnings.

In 2007, Brazil used the mechanism for the first time. The compulsory
license was issued for the drug efavirenz, sold by the American
pharmaceutical company Merck Sharpe & Dohme. Initially importing a generic
version from India, the cost of efavirenz treatment per patient per year
fell from US$ 560 to around US$ 160, which generated an immediate impact of
US$ 31.5 million in savings. In the first five the savings to the Ministry
of Health budget were around R$ 237 million (Brazilian reais).

*Drugs tested to treat Covid-19*

Surveys, such as the one prepared by the National Institute of Industrial
Property, present a list of products with the potential to treat Covid-19.
A preliminary survey by GTPI shows that many of these products have patent
applications in Brazil, which reinforces the importance of approving this
law bill.

“Brazil is going through a moment of apprehension while looking at the
drama of places where the pandemic has arrived before, such as Italy,
Spain, Iran and the United States. The president of the Chamber of
Deputies, Rodrigo Maia, needs to act quickly and put PL 1462/2020 to vote.
The approval of this law bill is urgent. We need to ensure maximum
responsiveness to save lives. Any delay or high prices during times like
these is inconceivable”, concluded Villardi.

Access the INPI survey here.

*Press contact:*

Pedro Villardi, coordinator of the Working Group on Intellectual Property
(GTPI): e-mail: pedro at abiaids.org.br; mobile: (21) 99438.0399 (whatsapp and
phone calls)


Translated law bill

*Bill No.           1462, 2020.*

*(Excellencies Mr/s Mr Deputies Alexandre Padilha, Alexandre Serfiotis,
Carmen Zanotto, Dr. Zacharias Calil, Dr. Luiz Antonio Junior, Dra. Soraya
Manato, Hiran Gonçalves, Jandira Feghali, Jorge Solla, Mariana Carvalho and
Pedro Wetphalen)*

Amends art. 71 of Law No. 9,279, of May 14, 1996, in order to address
compulsory licenses in cases of national emergency arising from a national
or international declaration of public health emergency of national or
international concern.

Article 1. The *caput* of art. 71 of Law No. 9,279, of May 14, 1996,
becomes effective as follows:

Art. 71. In cases of national emergency or public interest, declared in an
act of the Federal Executive Authorities, insofar as the applicant, the
patentee or his licensee does not meet such necessity, a temporary *ex
officio* non-exclusive compulsory license for the exploitation of the
patent or patent application may be granted, without prejudice to the
rights of the respective patentee.

Article 2. Art. 71 of Law No. 9,279, of May 14, 1996, becomes effective
with the following paragraphs and items:

§2 - The declaration of public health emergency of international concern by
the World Health Organization (WHO) or the declaration of public health
emergency of national concern by the competent national authorities
automatically warrants the granting of compulsory license for national
emergency of all patent applications or patents in force relating to
technologies used to address the respective health emergency, such as
vaccines, medicines, diagnostic tests, reagents, medical devices, personal
protective equipment, supplies and any other technologies used to meet
health needs related to the emergency.

Item I - The granting of compulsory license, in the form of paragraph 2,
shall become effective as from the respective international or national
public health emergency declaration independently of the ascertainment that
the patentee or the applicant, directly or through his licensee, does not
meet the needs arising from the emergency situation.

Item II - The INPI is responsible for publishing *ex officio* the list of
patents and patent applications, or at the request of any interested party,
and inscribing the granting of the compulsory license in the respective
administrative process for each patent or patent application as they are
identified as susceptible of being relevant in cases of health emergencies.

Item III - In the case of the compulsory license granted pursuant to
paragraph 2, the following provisions shall be respected:

a.       The license will be valid for the duration of the public health

b.      The remuneration of the patentee is fixed at 1.5% (one and five
tenths percent) of the sale price to the Government, to be paid by the
supplier of the product produced under the license. In the case of a patent
application, remuneration will only be due from the date the patent is
granted, if the patent is granted.

c.       The patentee or the applicant must make available to the
Government all the information necessary and sufficient for the effective
reproduction of the protected objects, and the Government must ensure the
appropriate protection of these informations against unfair competition and
dishonest commercial practices. In the event of non-compliance by the
patentee, the provisions of art. 24 and Title I, Chapter VI, of this law,
are applied.

Article 3. During the State of Health Emergency referred to in Law No.
13,979, of February 6t , 2020, a temporary and non-exclusive compulsory
license is granted, while the national public health emergency endures due
to the pandemic of COVID-19, authorizing the exploitation of patents and
patent applications, without prejudice to the rights of the respective
holder of technologies useful for the surveillance, prevention, detection,
diagnosis and treatment of people infected with the SARS-CoV-2 virus, in
particular, vaccines; medicines and correlates; complementary diagnostic
tests and laboratory kits; health equipments and other devices; inputs for
the elaboration of products of interest to health; other useful
technologies in fighting COVID-19.

Article 4. The effects of this law applies to all other public health
emergencies of national or international concern currently in force.

Article 5. This law comes into force on the date of its publication.

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