Implementation of the WTO Decision on TRIPS and Public Health

1
Implementation of the WTO Decision on TRIPS and
Public Health

• Government of Canada
• August 2004

2
Background

• Many developing and least-developed countries
  lack access to affordable pharmaceutical products
  necessary to respond to public health problems.
• Until August 30, 2003 WTO-TRIPS Agreement
  required that compulsory licenses only be issued
  predominantly for the supply of the domestic
  market, thereby limiting the ability to export
  licensed versions of patented pharmaceutical
  products.
• The WTO Decision allows its 147 member countries
  this is a waiver, not an obligation to
  establish compulsory licensing regimes for export
  of pharmaceutical products to countries that are
  unable to manufacture them domestically.

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WTO Decision August 30, 2003

• WTO Decision applies to
• Public health problems especially those resulting
  from HIV/AIDS, malaria, tuberculosis and other
  epidemics
• Importing countries with insufficient
  manufacturing capacity.
• Moreover, the WTO states that
• The Decision should not be used to pursue
  industrial or commercial policy objectives
• The WTO and the patentee must be notified of any
  license
• Only the necessary amount of the pharmaceutical
  product can be produced, the entirety of which
  must be exported and be specially marked and
  labelled
• Licensees must publicly disclose the quantities
  and features of the pharmaceutical product
• Patentees must be compensated.

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Implementation by Canada

• As a major producer of generic drugs, Canada is
  establishing an international precedent by
  providing the foundation for a TRIPS compliant
  compulsory licensing for export regime.
• The regime required amendments to the Patent Act
  and the Food and Drugs Act.
• The regime wont be operational until
  accompanying regulatory changes are in place.

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Challenges in Implementing WTO Decision

• Facilitate access to essential pharmaceutical
  products as quickly as possible while managing
  expectations.
• Ensure that the scheme contains sufficient
  incentives to encourage generic participation
  while leveraging brand name participation.
• Prevent erosion of patent protection preserve
  investment climate and ensure continued
  introduction of new therapies onto the Canadian
  market.
• Respect Canadas other international obligations
  (i.e. NAFTA), while reflecting as fully as
  possible the WTO Decision.
• Ensure that exported pharmaceutical products are
  as safe, efficacious and high quality as drugs
  for domestic consumption.

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Bill C-9 Drafting Process

• Officials consulted stakeholders, including brand
  name and generic pharmaceutical industries and
  NGOs on the draft Bill.
• All stakeholders wanted specific provisions but
  supported the overall intent of the Bill
• Brands wanted measures to prevent diversion and
  abuse by importing countries.
• Generics wanted protection from liability a
  streamlined application process Health Canada to
  review pharmaceutical products intended for
  export.
• NGOs wanted a government commitment to help
  developing and least-developed countries no
  restrictions on non-WTO countries, diseases or
  pharmaceutical products.

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Bill C-9 Key Features

• All least-developed countries are eligible
  importers and developing non-WTO member countries
  are eligible upon request.
• Every pharmaceutical product on the WHO list of
  essential medicines that was patented in Canada
  was pre-approved as eligible.
• Health Canada will review all pharmaceutical
  products for safety, efficacy, quality and
  distinguishing marks before export.
• An Advisory Committee will be created to
  recommend additional eligible products to
  Ministers.

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Bill C-9 Key Features

• Patentees were given the right to ask the Federal
  Court to terminate a licence if the licensee has
  not met the terms and conditions or if diversion
  has occurred.
• Compensation for the patentee will be paid by the
  licensee and will be linked to the importing
  countrys level of development and the value of
  the contract.
• The regime contains provisions to ensure that
  companies participating in the regime do so in
  good faith and not for commercial purposes.
• Regime will be reviewed in two years.

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Required Importing Country Information
Schedule 2 all LDCs Schedule 3 WTO members Schedule 4 WTO non-WTO members
Declaration of pharmaceutical product needed required quantity Y Y Y
Declaration that product is not patented in importing country or that a compulsory license will be granted Y Y Y
Declaration of inadequate manufacturing capacity in importing country N Y Y
Declaration of emergency in importing country N N Y
Declaration that anti-diversion measures from WTO Decision will be adopted Y (for non-WTO members) N Y (for non-WTO members)
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Next Steps

• Bill C-9 received Royal Assent on May 14.
• The accompanying regulations are expected to be
  finalized later this year.
• Consultations with stakeholders have taken place
  regarding the proposed Regulations.
• There will be an additional opportunity to
  comment once the proposed Regulations are
  published in Canada Gazette, Part I.