COMPLUSORY LICENSINGCOMPLUSORY LICENSINGFocus on public Health SectorFocus on public Health Sector

SpeakerSpeaker

Mohammed Zaka-ur-RehmanMohammed Zaka-ur-Rehman

• CEO CEO Schazoo Zaka (Pvt.) Ltd.Schazoo Zaka (Pvt.) Ltd.

The Schazoo Laboratories (Pvt) Ltd.The Schazoo Laboratories (Pvt) Ltd.

Zaka Healthcare Ltd.Zaka Healthcare Ltd.

• ChairmanChairman WTO committee of PPMA.WTO committee of PPMA.

Standing Committee IPR LCCI.Standing Committee IPR LCCI.

• Former ChairmanFormer Chairman PPMA.PPMA.

““WTO Patent Rules & Access to Medicines: The WTO Patent Rules & Access to Medicines: The Pressure Mounts”Pressure Mounts”

“Public outage over the exorbitant prices of HIV/AIDS drugs in Africa is focusing public attention on the harmful role of global patent rules in

blocking poor people’s access to vital medicines.”

Source: Oxfam, June 2001

Developed CountriesDeveloped Countries

Products & Process are patentable

Patent life – 17 Years

Software & Entertainment Industry is already protected by Patent Laws

Strangle hold of Multinational Companies on Pharma Industry

Prices of generic substitutes much lower than branded products

Govt. measures to promote generic industry

Generic Pharma growth Double than Branded

Generic Pharma becomes an Industry

Conditions prior to WTOConditions prior to WTO

Examples of price differentials betweenExamples of price differentials betweengeneric and brand productsgeneric and brand products

Belgium Belgium Italy Italy Spain Spain GermanyGermanyFrance France Canada Canada UK UK US US

20% 20% 20% + 20% + 25% 25% 25% - 30%25% - 30%25% - 35%25% - 35%40% - 50%40% - 50%80% +80% +50% - 90% 50% - 90%

Source: IMS, Pharma Strategy GroupSource: IMS, Pharma Strategy Group

Conditions prior to WTOConditions prior to WTO

Average Price per Prescription for Brand Name is approximatelyAverage Price per Prescription for Brand Name is approximatelyThree Times Generic Drugs (data from US)Three Times Generic Drugs (data from US)

3537

4043

48

54

13 13 14 1417 17

0

10

20

30

40

50

60

1993 1994 1995 1996 1997 1998

DO

LL

AR

S

BRANDSGENERICS

Source: IGPA Conference 2001, 25-27 June 2001, Cannes, FranceSource: IGPA Conference 2001, 25-27 June 2001, Cannes, France

Conditions prior to WTOConditions prior to WTO

Conditions prior to WTOConditions prior to WTO

USA Brand Price Increases are above CPI,USA Brand Price Increases are above CPI,Generic Prices Shrink LessGeneric Prices Shrink Less

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

BRAND PRICE CHANGE GENERIC PRICE CHANGE

1996 1997 1998 1999 20001996 1997 1998 1999 2000

Source: IMS, Pharma Strategy GroupSource: IMS, Pharma Strategy Group

Developing CountriesDeveloping Countries

Process are patentable for 7-10 years

No Product Patents

In countries with Strong National Pharma Industry, the share of

national Pharma industry flourished

Agriculture sector, mostly dominated by multinational companies

No large scale industry in software & entertainment sector

Prices of generic substitutes much lower than branded products

Conditions prior to WTOConditions prior to WTO

Govt. measures to promote Generics-USAGovt. measures to promote Generics-USA

Hatch-Waxman Reforms to Facilitate Generic Industry ….Hatch-Waxman Reforms to Facilitate Generic Industry ….

is Necessary to...is Necessary to...

• Maximise Consumer benefits at a Time When Drug Prices Are Rising.

• Expand Access to Generic Pharmaceuticals

• Increase opportunities to Lower Drug Costs

• Continue to stimulate R&D that will positively impact Patient

Care/Disease Management

Encouraging the Use of Generics- U.S. PerspectiveEncouraging the Use of Generics- U.S. Perspective

Govt. measures to promote Generics-USAGovt. measures to promote Generics-USA Opportunities to Enhance Hatch-Waxman expand BolarOpportunities to Enhance Hatch-Waxman expand Bolar Maintain Incentives for Challenging or Circumventing Patents and Encourage

Product Launch Maintain ability to Litigate Prior to launch, thereby limiting risks to generic

companies Limit damages to generic companies’ Profits Create significant penalty for inappropriate listing of patents Provide forum to challenge listing of patents Limit brand exclusivities Provide for Ability of Generics to Use Labelling of Brands Regardless of Patent

Status when Safety is an Issue Create regulatory mechanism for Generic Biologics

Encouraging the Use of Generics- U.S. PerspectiveEncouraging the Use of Generics- U.S. Perspective

CHANGES DUE TO WTOCHANGES DUE TO WTO

Developed CountriesDeveloped Countries

Patent life extension from 17 to 20 Years to encourage R&D

New Indication & Pediatric patent extension

No price impact since rules are already being followed

Health sector already developed: Insurance + Health Services

Importance of new molecules: New molecules dominates the market

CHANGES DUE TO WTOCHANGES DUE TO WTO

Developing CountriesDeveloping Countries

Product Patent vs. Process Patient

Huge price impact since prices were lower due to the presence of generics

Health sector not developed: No Insurance + Health Services, In

Philippines & S. Africa 80% population being covered by health services

whereas in developing countries only 10% are covered

CHANGES DUE TO WTOCHANGES DUE TO WTO

Developing CountriesDeveloping Countries

Importance of generic industry to increase access and lower the prices

in developing countries

National Companies have less R&D budget because of lack of Govt.

Support

No National Company could launch new molecule, Multinationals will

enjoy the monopoly with increased prices

In poor countries drugs are largest household and second In poor countries drugs are largest household and second largest public expenditure for healthlargest public expenditure for health

0 10 20 30 40 50 60 70

South AfricaSouth AfricaArgentinaArgentina

JordanJordanTunisiaTunisia

ThailandThailandIndonesiaIndonesia

ChinaChinaEgyptEgypt

MaliMali

LithuaniaLithuaniaSloveniaSloveniaEstoniaEstoniaPolandPolandCroatiaCroatia

HungaryHungaryCzech Rep.Czech Rep.

BulgariaBulgaria

NorwayNorwayNetherlandsNetherlands

United StatesUnited StatesUK UK

DenmarkDenmarkSpainSpain

FranceFranceItaly Italy

GermanyGermany

Pharmaceutical spending, as % of total health spendingPharmaceutical spending, as % of total health spending

Source: IGPA Conference 2001, 25-27 June 2001, Cannes, FranceSource: IGPA Conference 2001, 25-27 June 2001, Cannes, France

Developed countries(7 - 20%)

Transitional countries (15 - 30%)

Developing countries (24 - 66 %)

05

101520253035404550

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

*

Percent of new prescriptions, U.S.Percent of new prescriptions, U.S.

National strategies for generics:1. Supportive legislation & regulation2. Reliable quality assurance3. Professional, public acceptance4. Economic incentives

AccessAccessSource: IGPA Conference 2001, 25-27 June 2001, Cannes, France Source: IGPA Conference 2001, 25-27 June 2001, Cannes, France

Building a large generic market takes timeBuilding a large generic market takes time- and requires a combination of strategies- and requires a combination of strategies

Argentina Aug 14, 2007 18 October 2005Argentina announces intention to grant Compulsory License for Tamiflu(Oseltamivir). It later transpires that the patent was never granted inArgentina.

Brazil Aug 14, 2007 6 July 2007Brazil grants Compulsory License in relation to Abbott's Kaletra.

Brazil Aug 14, 2007 4 May 2007 Brazil grants a compulsory license for Merck's HIV/AIDS drug Efavirenz.

Ecuador Aug 14, 2007 2003Petitions by local manufacturer (Acromax) for Compulsory License forCombivir (Lamivudine and AZT) refused, appealed and refused again.GSK agrees to supply HIV/AIDS drugs at a discount.

Eritrea Aug 14, 2007 5 June 2005Eritrea issues compulsory licenses for importation into Eritrea of genericHIV-AIDS medicines

Zimbabwe Aug 14, 2007 May 2002Zimbabwe declares Period of Emergency which enables it to ignoreantiretroviral drug patents for 6 months via a compulsory license. In 2003, the period of emergency was extended by five years (until 31December 2008).

Compulsory licensing International Compulsory licensing International examplesexamples

Canada Oct 4, 2007 The WTO received from Canada, on 4 October 2007, the First notificationfrom any government that it has authorized a company to make a genericversion of a patented medicine for export under special WTO provisionsagreed in 2003. The triple combination AIDS therapy drug, TriAvir, can nowbe made and exported to Rwanda, which is unable to manufacture themedicine itself. Earlier, on 17 July, Rwanda informed the WTO that itintends to import 260,000 packs of TriAvir —a fixed-dose combinationProduct of Zidovudine, Lamivudine and Nevirapine — over two years. Thedrug is to be made in Canada byApotex, Inc and is called ApoTriavir by the manufacturer. Links: WTO release; IPKat

Canada Aug 14, 2007 14 May 2004Canada amends its Patent law to allow Canadian manufacturers to export to countries which lack the ability to manufacture pharmaceuticals - but only in respect of drugs listed in Schedule 1 to the Act.Drugs that have been aded to Schedule 1 include: lamivudine nevirarpine zidovudine tablets Tamiflu (oseltamivir)

Canada Aug 14, 2007 October 18, 2001Health Canada granted a Comulsory License in relation to the Bayer'sciprofloxacin and authorized generic manufacture to build a stockpile asprotection against an attack of anthrax.

Compulsory licensing International Compulsory licensing International examplesexamples

Europe Aug 14, 2007 July 2007European Union Trade Commissioner sends a letter to the Thaigovernment, warning that it should not take further action to forcedrugmakers to drop drug prices.

Ghana Aug 14, 2007 October 2005Ghana issues compulsory licenses for importation into Ghana of Indiangeneric HIV/AIDS medicines.

Guinea Aug 14, 2007 18 April 2005Guinea issues compulsory licenses for importation on patents on drugs totreat HIV-AIDS

Indonesia Aug 14, 2007 5 October 2004Indonesia issues a Compulsory License to manufacture generic versions oflamivudine and nevirapine (both HIV/AIDS drugs).

Israel Aug 14, 2007 January 1992Israel grants Compulsory License to manufacture Bio-Hep-B under Biogenpatent. Biogen's appeal was unsuccessful.The patent expired in 1999 before the Supreme Court ruled on the dispute.

Compulsory licensing International Compulsory licensing International examplesexamples

Italy Aug 14, 2007 21 March 2007Italy grants Compulsory License in relation to Finasteride and related generic drugs for two years prior to the 2009 expiration of patent monopoly (Complementary Protection Certificate).

Korea, republic of

Aug 14, 2007 January 2002Korea rejects application for Compulsory License of Novartis' Glivec.

Malaysia Aug 14, 2007 29 September 2004Malaysisa issues a compulsory license to import from India didanosine(ddI), zidovudine (AZT) and lamivudine zidovidine (Combivir).

Rwanda Jul 19, 2007 19 July 2007Rwanda becomes the first country to notify the WTO that it intends to usethe Paragraph 6 system (of the DOHA Declaration).Paragraph 6 is designed for those countries that do not have the facilities tomanufacture pharmaceuticals and so allows importation.

Mozambique Aug 14, 2007 5 April 5 2004Mozambique's issues compulsory license for lamivudine, stavudine andnevirapine.

Compulsory licensing International Compulsory licensing International examplesexamples

Thailand Aug 14, 2007 April 2007After weeks of negotiations and public debate (and statements aboutwithdrawing drugs from Thailand), Abbott agrees to provide discountedAIDS drugs (Kaletra/Aluvia) to Thailand.

Thailand Feb 1, 2007 Thailand announces two more Compulsory Licenses, this time:Plavix, a heart disease drug made by Bristol-Myers Squibb and Sanofi-Aventis. Kaletra, an HIV/AIDS drug made by Abbott Laboratories

Thailand Dec 6, 2006 Thailand government issues a compulsory license on Merck's AIDS drug,Efavirenz. Thailand was criticised for failing to first contact Merck.

United states

Aug 14, 2007 30 April 2007The US Trade Representative elevatesThailand the Priority Watch list in itsannual 'Special 301' Report. The USTR cites a concern that the past yearhas been characterized by an overall deterioration in the protection andenforcement of IP in Thailand.The Report then specifically cites the recent grant of Compulsory Licensesas further evidence of weakening respect for patents.

Zambia Aug 14, 2007 21 September 2004Zambia issues a compulsory license for lamivudine, stavudine andnevirapine.

Compulsory licensing International Compulsory licensing International examplesexamples

The patent holder refuses to grant a license to a third party on reasonable

commercial terms and conditions: or

Where patent has not been exploited in manner, which contributes to the

promotion of technological innovation and to the transfer and

dissemination of technology.

Powers Of Controller In Granting Compulsory Licenses

On request, made to the Controller after the expiration of a period of four

years from the date of filing of the patent application, or three years from

the date of the grant of the patent, whichever might result from the

exercise of the rights conferred by the patent, for example, failure to work.

Section 58(1) c

Section 58(1) d

Section 59(1)

Compulsory Licenses in Pakistan patent Ordinance Compulsory Licenses in Pakistan patent Ordinance 2000 Amended 20022000 Amended 2002

Pakistani Patent Rules 2003Pakistani Patent Rules 2003

According Rule 44

For the purpose of this ordinance the patentee shall be entitled to a payment up to three percent remuneration by the licensee, on the basis of total sales of that chemical product taking into consideration its trade price, under clause (iii) of sub-section (3) of section 59.

Subject to the sub-section (1) of section 59, none or insufficient exploitation of a patent in case of a chemical product intended for use in agriculture or medicines shall be determined on the basis of healthcare requirements of Pakistan and monopolization of the market against the public interest.

Provided, that the patent holder does not make available the subject patented product, in sufficient quantities , so as to meet the requirement of the licensee (s). The licensee (s) shall be at liberty to import or procure the said chemical product from anywhere.

Implementation of compulsoryImplementation of compulsorylicensing in Pakistanlicensing in Pakistan

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