A path for countries to import patented medicines over which a compulsory license has been issued
Abstract:
If global agreements around Intellectual Property (IP) are possible, what should the global south -and the world for that matter- try to accomplish in the future? This blog hints a way to achieve the long sought balance, adding perspective to the recent and historic amendment of IP’s most transcendent global agreement.
Global south: The next move in Intellectual Property (specifically patents).
Should the global south celebrate the recent amendment on access to medicines? It is a start, an indication that the rules of the World Trade Organization (WTO) can in fact be modified. This is encouraging, especially if you think the system has shortcomings. Why then there are voices of disdain in the global south about it? It is probably because the issue addressed by this amendment, although important, is just a drop on a big bucket. Nonetheless, knowing that there are coherent proposals to address the inadequacies of the system, I do find comfort in this first indication at the WTO level that its member-countries could actually fix that which needs fixing.
It is worth celebrating that the world got together to implement change. Many believed that it was impossible to change any of the WTO three essential agreements. The Trade Related Aspects of Intellectual Property Rights Agreement (TRIPS) has been the first to be modified since WTO´s creation more than two decades ago. The amendment creates a path for countries to import patented medicines over which a compulsory license has been issued. It is only logical to create the path to essential medicines for those countries that lack the infrastructure to produce them and yet need them so badly that they have issued a compulsory license over it.
Although coherent as the amendment is, some developing nations have not even adhered to it as a protest vote to the entirety of the global system set to promote innovation. Simply go to the map made available here by the WTO and see how many countries in Africa and Latin America have not yet accepted it. The problem of access to essential medicines comes from many factors, certainly going beyond compulsory licensing. There is no cure for many diseases that affect developing countries, for instance, and there are parts of the world where access is deficient even for non-patented medicines. None of this will improve by the application of the amendment (it was not its target). Moreover, compulsory licenses are not a panacea.
It has been argued that the very existence of compulsory licenses deters investment to cure tropical diseases, for instance. Other than when public or altruistic funding is behind it, local and foreign innovators stay away from research to cure these diseases because of the compulsory licenses that will in deed be granted in the global south, which tends to affect the innovator´s economic interests. This in turn affects the very availability of these medicines. The path for a system that works for us will not come from issuing as many compulsory licenses as we possible can –they should collectively be use but not abuse by the global south. Nor is it in using all available flexibilities of the TRIPS standard to the fullest, without proper thought.
The answer is at introducing the ultimate flexibility, curving by it our belligerency to the system in minor topics. It entails changing the length of patents, weighing it in accordance to the wealth of each country, i.e., GDP per capita. Not 20 fixed years for every country; those with less must contribute less. This single change could help revolutionize our attitude towards the system. (Incidentally, this could allow us to celebrate minor victories as this recent easing on access to essential medicines.) From this the developed world stands to gain as well, as it creates opportunities.
The first and obvious justification for this proposed amendment comes from its intrinsic justice, but there is more to it that only this. This hypothetical system is comparatively more efficient in economic terms than the current one. Additionally, as our attitude towards the system would change under a coherent system, the developed world could move to enhance global compliance, which we might accept in view of our new standing. We will trade-off. This could reset the system. The developed world´s wish for harmonization will probably be demanded in exchange for setting the ultimately flexibility commented above. (This will make it easier for our innovations to access the global reward as well.) Provided the system becomes just, we may not be so reluctant to offer broader access to our markets as a trade-off. We could even consider rewarding all kinds of incremental achievements with patents, which the global south is at present time capable of producing. To adhere to the WTO rules, all advantages given by a WTO member must be bestowed to local and foreign innovators alike and, therefore, this trade-offs should be done with care.
Although this is thought as a solution for all fields of innovation, the pharmaceutical industry is at the hart of this discussion. For the United States (US), additionally, this proposal could open an opportunity for a smooth transition out of a health system that does not impose caps on medicine prices, as the new administration has hinted. The US has carried the burden of rewarding pharmaceutical innovation in this fashion, with not caps nor some sort of price limitation on medicines –e.g. bulk negotiations-, for long enough. The world´s pharmaceutical industry with this is at a tough spot. Although the issue of rewards for pharmaceutical innovation is a complex one, with many elements into play that interact in various ways, a move by the US to drop a no-cap system is going to have a big impact on it. The industry could be offered in exchange an enhanced worldwide system of innovation. A system with better compliance, harmonized, efficient and, potentially, with longer periods of exclusivity if agreed by the developed world to compensate the industry.
How long will each country have to contribute under this hypothetical system? The hart of the proposal is for the global south to have shorter periods. The developed world will have to come to terms with the industry. To start the conversation, here you could find a simulation of how this could have looked like from 2004 to 2013, with the developing world carrying the burden of revenues lost in the global south. In it, the first 27 to 30 richest countries would give more than 20 years to a patent and the rest of the world (the global south) less (e.g. Europe 22 -23 years; Ecuador 8 – 11 years). China’s contribution in this simulation, for instance, would have grown from 7 years in 2004 to 13 years in 2013 (14 or 15 years now). China and others are catching up and it is about time we comply with the international standard as well. This will be convenient for us too, since we are becoming a central part of the game now, with innovations on our account.
The ability to change and improve is essential to any system. I am glad the global innovation system showed this feature in practice for the first time. When conceived it was design to have constant revisions and adjustments. Many are long overdue. The global south has to actively become a part of the system. We should aim to cure all tropical diseases (we have done it for cholera through incremental change based on local knowledge, for instance), produce many other innovations, and profit from it greatly. In any case, it will certainly be uplifting to have the system built on basic principles of fairness, like proportional contribution, and rules which make sense for all of us, like the recent amendment on easing access to essential medicines.
The papers that inform the postures in this blog are: – Application of a mechanism of global rewards towards innovation, Donoso @ NYU-JIPEL; – On Aiding Technological Development: The Max Planck Declaration on Patent Protection, Dreyfuss & Donoso @ SSRN, forthcoming @ UC Irvine Law Review; for more relevant academic work in English and Spanish go here. Please direct your social media comments here.