Developing countries fought for and won safeguards to promote access to medicines in international trade law. These safeguards are now being heralded by legislators around the world as critical legal mechanisms that nations can and must use in the fight against the Covid-19 coronavirus, writes Catherine Tomlinson.
Around the turn of the century, developing countries, led by African countries, dramatically fought for and won safeguards to promote access to medicines in international trade law.
These safeguards are now being heralded by lawmakers around the world as critical legal mechanisms that nations can and must use in the fight against Covid-19.
Maybe the most important of these safeguards is the right to grant compulsory licenses when the public interest requires it.
In short, compulsory licenses allow generic companies to manufacture and sell medicines even if the medicine in question is still under patent.
It is called compulsory since the license is granted whether or not the patent holder agrees to it. The patent holder is paid royalties as compensation.
International trade law determines the standards of patent protection which World Trade Organisation (WTO) member countries are required to provide.
The WTO was established in 1995 to govern international trade and settle disputes between countries.
In the same year, the Agreement on Trade-Related Aspects of Intellectual Property Rights (Trips) came into force.
South Africa has been a member of the WTO since 1995.
The TRIPS agreement obliges WTO member countries to provide 20 years of monopoly protection on patent claims meeting countries’ patentability criteria, which can differ widely between countries.
As multiple patent claims are typically filed on single medicines, patent holders’ monopoly periods on medicines often extend long beyond 20 years owing to secondary patents.
In the absence of competition, patent holders can set high prices, unrelated to the costs of developing and manufacturing medicines, to maximise profits. Consequently, medicines under patent are often unaffordable for many individuals and health systems.
During the late 1990s and early 2000s, patents upheld in South Africa had deadly consequences, blocking access to life-saving HIV treatment for hundreds of thousands of people and contributing to many avoidable deaths.
South Africa amended its national patent laws to provide 20-year patent monopoly periods as required by Trips in 1997.
However, in the same year, the country also amended its legal framework governing the regulation of medicines to include some limited health safeguards contained in Trips, which enable generic medicine access.
The international pharmaceutical industry quickly fought back against the proposed legislative changes.
In 2001, 39 international pharmaceutical companies brought a legal challenge against former president Nelson Mandela’s government, seeking revocation of legal provisions to promote generic medicine access in South Africa.
The US threw its weight behind the pharmaceutical companies and threatened to impose trade sanctions against the fledgeling democratic state.
The case was eventually dropped following widespread mobilisation by the Treatment Action Campaign and international outrage against the actions of the pharmaceutical companies.
However, as a consequence of this case, as well as aggressive actions taken by the US to block access to generic HIV medicines in Brazil, developing countries realised that they would confront significant challenges when seeking to adopt and use Trips health safeguards.
In response, a group of African countries called on the WTO to convene a special discussion on intellectual property and medicine access. During these discussions, developing countries lobbied for the adoption of a declaration confirming countries’ rights to adopt and use Trips health safeguards. The result was the landmark 2001 Doha Declaration on the Trips Agreement and Public Health.
The Doha Declaration and Covid-19
Critically, the Doha Declaration affirmed the right of countries to determine the grounds for granting compulsory licenses to address health needs.
Developing countries also successfully opposed efforts by the US to limit the use of compulsory licensing to HIV, tuberculosis and malaria.
As a result of the efforts of developing nations, compulsory licensing now provides an important legal avenue available to countries in addressing all health conditions, including Covid-19.
While the Doha Declaration unambiguously confirmed the right of countries to use compulsory licensing and other Trips provisions to address health needs, countries must enact provisions into their national laws to use the safeguards.
Maybe still smarting from the legal battle and trade pressure around the 1997 legislation, almost 20 years later South Africa’s laws have not been amended to enable the use of all available health safeguards set out in Trips and the Doha Declaration.
Despite the Doha Declaration representing agreed international law, countries continue to face various forms of retaliation and trade pressure when amending their national laws to adopt Trips health safeguards or using the safeguards to improve medicine access.
In 2007, the pharmaceutical company Abbott withdrew its regulatory applications for new medicines from Thailand in retaliation for the country’s compulsory licensing of the HIV medicine lopinavir/ritonavir.
In 2012, Bayer brought a legal challenge against India for granting a compulsory license on the cancer medicine sorafenib, which enabled a 97% price decrease. Bayer chief executive Marijn Dekkers famously stated: “We did not develop this product for the Indian market… We developed this product for Western patients who can afford it.”
The US and the EU consistently seek provisions in bilateral trade agreements that restrict the freedom of trading partners to use Trips health safeguards.
The US also routinely threatens trade sanctions against developing countries considering or using compulsory licensing provisions for health, despite its avid use of compulsory licensing to secure state access to knowledge and technologies.
Despite its integral role in securing provisions in international trade law enabling compulsory licensing for health, South Africa has never issued a compulsory license on medicine, not even in the worst days of the Aids epidemic.
This is partly because of a lack of political will and partly because of shortcomings with the existing compulsory licensing provisions in South Africa’s Patents Act.
The country has, however, taken important steps towards improving its legal framework for granting compulsory licenses.
In 2018, South Africa adopted a national policy committing to pro-public health reform of domestic patent laws, including simplifying its procedures for compulsory licensing for medicines.
This policy was broadly welcomed by patient groups, which have long advocated pro-public health reform of South Africa’s patent laws through the Fix the Patent Laws campaign.
The policy has, however, as yet not resulted in any change to South Africa’s Patents Act.
In committing to reform its patent laws, to promote medicine access and health rights, South Africa stood up to undue pressure from foreign pharmaceutical companies, the US government and others.
In 2014, leaked emails revealed a plot by foreign pharmaceutical companies to fund efforts to subvert pro-public health reform of South Africa’s patent laws.
That episode was labelled Pharmagate and described as genocide by former health minister Aaron Motsoaledi.
In 2015, the US sought to pressure South Africa into abandoning patents law reform to remain eligible for inclusion in the US African Growth and Opportunity Act trade programme.
Is the tide turning?
Opponents of compulsory licensing for health have long sought to stigmatise compulsory licensing through the use of rhetoric that frames the legal mechanism as a form of theft and piracy.
They argue that compulsory licensing robs industry of the financing needed for future innovation. This is despite industry’s ongoing refusal to disclose its financial contributions towards heavily state-subsidised biomedical research and development efforts as well as evidence that industry’s marketing expenditures typically dwarf their research and development contributions.
Critics of compulsory licensing often also neglect to mention that the patent holder receives royalties from generic manufacturers, although these royalties are likely lower than the profits the patent holder would have made otherwise.
Learning from the Aids crisis and the more recent excessive pricing of cancer medicines, there are legitimate fears that companies will price Covid-19 treatments excessively high should effective treatments be found.
Should pharmaceutical companies engage in such unethical pricing, compulsory licenses are one legal mechanism governments can use to ensure their people get the medicines they need.
Legislators in several countries have already demonstrated an interest in or willingness to use compulsory licensing to access medicines, diagnostics, vaccines and personal protective equipment for Covid-19.
It is hard to understate how unprecedented these developments are, especially given that they are occurring in wealthy countries such as Canada, Germany and Israel.
This month, Canada and Germany passed emergency legislation simplifying procedures for granting compulsory licenses in response to Covid-19.
Legislators in Chile and Ecuador issued resolutions calling on their ministries of health to use compulsory licensing for Covid-19 and take steps to enable its use.
Israel went even further, issuing a compulsory license this month to enable generic access to the drug combination lopinavir/ritonavir for Covid-19, despite important outstanding questions about its effectiveness against the virus.
In stark contrast to the company’s response in Thailand, AbbVie, which originated as a spin-off of Abbott, responded to Israel’s compulsory license with an announcement that it would no longer enforce patents on lopinavir/ritonavir anywhere in the world, likely fearing a global wave of compulsory licensing of the drug.
Two decades later
Almost 20 years after the Doha Declaration, few countries have used compulsory licensing for health, fearing trade and other repercussions.
Developments in various countries over the past two months suggest that Covid-19 may change this.
The current momentum around and the use of compulsory licensing in both wealthy and poor countries may normalise the long-stigmatised legal mechanism and bring it into focus for what it is – a mechanism to serve the public interest when a private company is putting excessive profits ahead of people’s lives.
In the short term, compulsory licensing will have immediate impact on whether or not people have access to Covid-19 treatments. In the longer term, the normalisation of this mechanism may significantly strengthen governments’ ability to curb abusive monopolist behaviours and excessive pricing of medicines.
As was the case around the turn of the century, much will depend on the ability and political will in developing country governments to drive change that is in the public interest.
South Africa, together with other developing countries, played a critical role in securing an international legal framework that enables compulsory licensing for health. We must continue to play this progressive leadership role on the international stage.
But it can’t stop there. Domestically, our legislators must take action to ensure that our people can benefit from these hard-fought international gains.
This means reforming the country’s patent laws in line with the 2018 Intellectual Property Policy of SA.
At the same time, Health Minister Zweli Mkhize and President Cyril Ramaphosa must commit to using what compulsory licensing provisions we have in our law should we need to use them in future to ensure access to effective Covid-19 treatments and/or vaccines.