Recurring debate

Proposed trade pact clause on intellectual property could endanger India's TB programme

A draft of the Regional Comprehensive Economic Partnership agreement reveals three clauses that could potentially hurt production of important generic drugs.

The latest round of the Regional Comprehensive Economic Partnership or RCEP that concluded in Japan in early March did not yield any major decisions. The stalemate is largely due to the continued insistence of developed countries to include provisions that will adversely impact generic production of cheaper medicines. If such provisions are passed, India’s tuberculosis control programme might be among the worst affected.

The RCEP is a mega trade deal being negotiated between 10 ASEAN countries and their six partners, namely India, China, Australia, South Korea, New Zealand and Japan. The negotiations have been difficult because of developed countries pushing for intellectual property protections that will hamper the production of cheaper generic medicines in developing countries.

“Developed countries are pushing the most for the clause related to data exclusivity,” said one delegate at the negotiations, who did not wish to be identified. “Australia, New Zealand, Malaysia and South Korea already have data exclusivity in their countries. The pressure is on other countries including India.”

Data exclusivity disallows clinical trial data generated by one company to be used by another company to get approvals to market generic versions of the drug for which the trial was conducted. This will make producing cheap generic medicines almost impossible because companies making generics will have to repeat these clinical trials at high costs.

ASEAN countries and India have so far resisted the demand for data exclusivity but there are indications that the ASEAN countries might buckle under pressure. “If ASEAN nations relent to the data exclusivity clause, then India will be left alone in the fight,” said the delegate. India’s stand is important because as the major source of affordable generic medicines for middle and low income countries, policy changes that affect India have a global impact.

“Medicines by big pharma companies will be costly and generic companies won’t be able to produce inexpensive ones,” said Swarnim Shrivastava, lawyer who works on free trade agreements. “Recently TRIPS was amended to promote production of generic medicines to export to least developing countries. RCEP provisions are in contradiction to it and go against international consensus on public health.”

The Trade-Related Aspects of Intellectual Property Rights or TRIPS is an international agreement on intellectual property between member countries of the World Trade Organisation. The agreement earlier allowed which produced under compulsory licences to be sold only in the country of their production. A compulsory licence allows the authorities to grant a license to a generic manufacturer even if the company that first made the drug holds a patent.

In January 2017, member countries approved the first-ever amendment to TRIPS since it came into force in 1994, according to which medicines made under compulsory licences can be exported to least-developing countries that lack manufacturing capacity themselves. This amendment emerged only after consistent pressure from middle- and low-income countries to safeguard their public health concerns.

Damaging proposals

The draft intellectual property chapter from the current draft of the RCEP had many damaging clauses apart from data exclusivity. RCEP represents 45% of the world population and 40% of global trade. Negotiations started in 2012 and have been held behind closed doors. The leaked text of the RCEP revealed that provisions backed by Japan and South Korea can block access to low cost medicines from India.

“These provisions are pushed mainly by Japan and South Korea,” said Shailly Gupta from international humanitarian organisation Medecins Sans Frontiers. “The intellectual property chapter of RCEP looks exactly like the one from Trans-Pacific Partnership, which is now dead. MSF had called the Trans-Pacific Partnership’s intellectual property chapter the worst deal for affordable medicines.”

The Trans-Pacific Partnership was the mega-trade deal negotiated between the United States and 11 Pacific nations, which is now in cold storage after US President Donald Trump withdrew from it.

Health activists find two more provisions of the RCEP’s intellectual property chapter particularly worrying. According to TRIPS, a new medicine can be patented for 20 years but the RCEP could extend this to 25 years. Another clause allows pharmaceutical companies to sue governments under a investor-state dispute settlement or ISDS mechanism by which companies can seek huge financial compensation and destroy any competition in the market.

Ukrainian law allows for data exclusivity and the government was recently sued by Gilead, pharmaceutical company in the United States, for allowing the sale of sofosbuvir that is used to treat hepatitis C. Gilead sued Ukraine for $4 million and forced the generic version of the drug manufactured by Egyptian company Pharco Pharmaceuticals out of the market. According to World Health Organisation statistics, more than 13,00,000 people are infected with hepatitis C in Ukraine. The state hepatitis treatment programme covers only about 2,000 people while more than 44,000 Ukrainian citizens urgently need treatment.

“Competition is crucially important for affordable prices on medicines while creation of monopoly regarding sofosbuvir may lead to increase or freeze its price for many years,” said Sergiy Kondratyuk, a legal specialist on intellectual property with the All-Ukrainian Network of People Living with HIV/AIDS.

Can these provisions on data exclusivity interfere with the process of issuing complusory licences?

“The patent climate has to be conducive for compulsory licences,” said Shrivastava. “India should not accept the current RCEP provisions because they are in contradiction to our stated positions like compulsory licencing.”

Impact on TB treatment

All these provisions, if passed in the RCEP deal, will mean that new medicines will remain expensive for longer periods of time. India’s Revised National Tuberculosis Control Programme could be hit badly.

After forty years, two new TB drugs – Bedaquiline and Delamanid – have been discovered. They are effective in treatment of drug-resistant TB, which is emerging as a major public health issue in India and other developing nations. The Global TB Report 2016 by World Health Organisation showed that India has 2.8 million TB cases of which 79,000 are of drug-resistant TB. According to WHO guidelines, all extremely drug resistant or XDR TB patients and pre-XDR patients should be given the new drugs.

A tuberculosis patient is categorised as XDR when he is found to be resistant to isoniazid, rifampicin, fluoroquinolone and second-line injectables. A patient is called pre-XDR if he is resistant to the first two drugs and any one of the latter two. If a pre-XDR patient is not treated with correct medication, he have a high chance of turning XDR. About 10% of all DR-TB patients have XDR TB. Thus, in India nearly 8,000 XDR TB patients will need these medicines to survive and many more pre-XDR TB patients will need the drugs as well. Pre-XDR-TB is defined as TB with resistance to isoniazid and rifampicin and either a FQ or a second-line injectable agent but not both

Both Bedaquiline and Delamanid are patented drugs. If the national TB programme wants to scale up treatment for drug-resistant TB, the government will have to buy the new drugs. Without the new drugs, the current cost of DR-TB treatment is between Rs 60,000 and Rs 2,70,000, depending on the patient’s regimen. Bedaquiline costs about Rs 60,000 per course and Delamanid around Rs 1,02,000. Thus, the total cost for an effective treatment will be approximately between Rs 2,22,000 and 4,32,000.

The United Nations Programme on HIV/AIDS has donated 600 courses of Bedaquiline to India. Once the donation is over, the Indian government will have to start buying its own medicines. Delamanid, produced by Japanese company Otsuka, is expected to be registered in India within four to five months. For the past eight years Otsuka has held the patent for the medicine without registering it in India, ensuring that there is no competition through generic production. No Indian company can apply for a manufacturing licence for an unregistered drug. If a clause such as data exclusivity comes into force, then it will be the death knell for production of any cheaper version of the medicine. In effect, the tuberculosis programme will have to buy both Bedaquiline and Delamanid at high prices from the big pharmaceutical companies.

“The RNTCP is facing a major fund crunch,” said Ketho Angami, member of international coalition of TB experts and activists, TB-community advisory board. “Unless the new medicines are available at cheaper price, there is no way that DR-TB patients will be able to receive them. The RCEP agreement needs to be in line with the provision of making drugs easily accessible for all.”

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