Bridges Weekly Trade News Digest • Volume 8 • Number 9 • 10th March 2004
Canadian Pharmaceutical Patent Act Vigorously Discussed
On 8 March, the Canadian HIV/AIDS Legal Network made a supplementary submission to the Canadian Parliament on proposed changes to a Canadian law that make it easier for least developed and developing countries to obtain less expensive versions of patented pharmaceutical products. The Canadian government announced in late September that it would amend patent laws to allow generic pharmaceutical companies to produce and export patent-protected drugs to countries unable to manufacture their own (see BRIDGES Weekly, 15 October 2003). The Canadian government’s announcement followed a 30 August decision of the WTO General Council on a mechanism for relaxing the restrictions in the TRIPS Agreement (Article 31) on using compulsory licensing to produce generic medicines in one country for export to another (see BRIDGES Weekly, 4 September 2003). Canada is set to be the first country to operationalise the 30 August WTO Decision.
The submission by the HIV/AIDS Legal Network submission is one of a series of actions taken by various civil society organisations such as the Canadian Generic Pharmaceutical Association (CGPA) and the European Aids Treatment Group (EATG) that call on the Canadian government to amend the current draft bill. The organisations are highlighting flaws that would prevent developing countries from reaping the benefits of lower drug costs. The government initially tabled the bill B C-56 last November. It was reinstated this year (and is now called Bill C-9), and a number of non-governmental organisations (NGOs) feel it has not been improved.
Right of refusal provisions
The "right of refusal" provisions in the current bill, giving patent holders the "right" to assume contracts already negotiated between generic producers and purchasers in the importing country, has been a hotly discussed topic. Jim Keon, President of CGPA commented that "the very existence of the right of first refusal will dissuade Canadian generic companies from pursuing agreements or bidding on contracts under this initiative. Generic drug companies will not invest time and millions of dollars if it all could be taken away". In response to such criticism, research-based pharmaceutical companies have proposed an alternative to the right of refusal as it appears in Bill C-9, requiring generic producers to notify the Canadian patent holder of any negotiations it undertakes with a developing country purchaser to supply a pharmaceutical product, thus giving the patent holder the opportunity to bid on the contract. The Canadian HIV/AIDS Legal Network, in response to such an alternative, noted in its latest supplementary submission that the patent holder would have an incentive to undercut any price offered by the generic manufacturer to maintain its monopoly, not solving the drug access problem. The Legal Network has suggested alternatives to allow the generic pharmaceutical manufacturer to obtain either a voluntary (granted by the patent holder, at two percent royalty) or a compulsory (granted by the Commissioner of Patents with a fixed royalty rate) licence to enable a follow through on contracts the generic producer negotiates with a developing country purchaser.
"Schedule 1" and other concerns
Although the Canadian government has recommended attaching a list of pharmaceutical products to the Bill C-9 for which a generic manufacturer could obtain a compulsory license for export (known as "Schedule 1"), the HIV/AIDS Legal Network, among other non-governmental organisations, believes it is important to maintain an open list of pharmaceutical products to be exported. The group noted that "the preferable approach, consistent with and supported by both the Doha Declaration and the 30 August 2003 decision from the WTO, is that the decision making authority decide when to use compulsory licensing to obtain cheaper products should rest with the country that is taking this step to address its own, self-determined ‘public health’ needs".
Other issues highlighted as problematic included the fact that developing countries that are not WTO Members would be excluded from the remit of the Bill, and the fact that under the Bill as it stands, NGOs and international organisations would not be allowed to obtain generic medicines for patients in developing countries.
Sources of further information
The Canadian HIV/AIDS Legal Network has produced an information kit, available online, which will be sent to all Canadian Members of Parliament. It is available on-line at http://www.aidslaw.ca/Maincontent/issues/cts/patent-amend/BillC-9_KitMP.htm(English) andhttp://www.aidslaw.ca/francais/Contenu/themes/soinstraitements/brevet-amend/trousse%20projet%20de%20loi%20C-9.htm (French)
The European Aids Treatment Group (EATG) has launched a site for organisations to endorse changes to Bill C-9. To access the sign-on letter see http://www.eatg.org/modules.php?op=modload&name=News&file=article&sid=172&newlang=eng
The supplementary submission by the Canadian HIV/AIDS Legal Network to the Parliamentary Standing Committee on Industry, Science and Technology is available at http://www.aidslaw.ca/Maincontent/issues/cts/patent-amend/SCIST%20Submission%20No%202_CHALN_March04.pdf
ICTSD reporting.