Intellectual Property and Public Health in the Developing World B Y M ONIRUL A ZAM INTELLECTUAL PROPERTY AND PUBLIC HEALTH IN THE DEVELOPING WORLD Intellectual Property and Public Health in the Developing World Monirul Azam https://www.openbookpublishers.com © 2016 Monirul Azam This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY 4.0). This license allows you to share, copy, distribute and transmit the work; to adapt the work and to make commercial use of the work providing attribution is made to the authors (but not in any way that suggests that they endorse you or your use of the work). Attribution should include the following information: Monirul Azam, Intellectual Property and Public Health in the Developing World . Cambridge, UK: Open Book Publishers, 2016. http://dx.doi.org/10.11647/OBP.0093 In order to access detailed and updated information on the license, please visit https://www. openbookpublishers.com/9781783742288#copyright Further details about CC BY licenses are available at https://creativecommons.org/licenses/ by/4.0/ All the external links were active on 16/5/2016 unless otherwise stated and have been archived via the Internet Archive Wayback Machine at https://archive.org/web This study is based on the author’s doctoral thesis, ‘The Impact of TRIPS on the Pharmaceutical Regulation and Pricing of Drugs in Bangladesh: A Case Study on the Globalising Standard of Patent Protection in WTO Law’, which has been approved for the award of PhD Degree by the Faculty of Law, University of Bern, examined by Professor Thomas Cottier (University of Bern) and Professor Frederick Abbott (Florida State University College of Law) on 22/5/2014. Digital material and resources associated with this volume can be found at http://www. openbookpublishers.com/9781783742288#resources Every effort has been made to identify and contact copyright holders and any omission or error will be corrected if notification is made to the publisher. ISBN Paperback: 978-1-78374-228-8 ISBN Hardback: 978-1-78374-229-5 ISBN Digital (PDF): 978-1-78374-230-1 ISBN Digital ebook (epub version): 978-1-78374-231-8 ISBN Digital ebook (mobi version): 978-1-78374-232-5 DOI: 10.11647/OBP.0093 Cover image: Pranjal Mahna (2010), CC BY-NC-ND 2.0. https://www.flickr.com/photos/ charlie_brown_in/4813687658 All paper used by Open Book Publishers is SFI (Sustainable Forestry Initiative), PEFC (Programme for the Endorsement of Forest Certification Schemes) and Forest Stewardship Council(r)(FSC(r) certified. Printed in the United Kingdom, United States, and Australia by Lightning Source for Open Book Publishers (Cambridge, UK). Contents Preface xi List of Tables xv List of Figures xvii Abbreviations xix Abstract xxiii 1. Setting the Scene 1 1.1 Background 1 1.2 The Advent of TRIPS and Pharmaceutical Patents 7 1.3 The Requirements of TRIPS 14 1.4 TRIPS Flexibilities and the Doha Declaration 15 1.5 The Experiences of Brazil, China, India and South Africa 21 1.6 The Role of the WHO 26 1.7 Research Questions and Methodology 29 1.8 Chapter Summary 34 2. Case Study on Bangladesh’s Pharmaceutical Industry, Legislative and Institutional Framework and Pricing of Pharmaceuticals 37 2.1 Introduction 37 2.2 Legislative Framework: Pharmaceutical Patents and Pharmaceutical Regulation 38 2.2.1 Patent Regime: Patent Law and the Patent Office 38 2.2.2 Pharmaceutical Regulations: Relevant Laws and the Regulatory Body 44 2.2.3 Changes Required in Patent Law and Pharmaceutical Regulation in Bangladesh 56 2.3 The Pharmaceutical Industry in Bangladesh 60 2.3.1 The Nature and Size of Firms 60 2.3.2 Competitive Scenario 61 2.3.3 Local Sales, Export and Import 63 2.3.4 Production Capacity and Range 67 2.3.5 Use of Technology 69 2.3.6 Innovation Capacity and Research and Development 70 2.3.7 Government Incentives for Supply of Raw Materials and Exports 72 2.3.8 Human Resources 73 2.4 (Potential) Effects of Pharmaceutical Patents on the Pricing of Drugs in Bangladesh 74 2.5 Waiver for the Least Developed Countries and the Pharmaceutical Industry in Bangladesh: Opportunities and Challenges 82 2.6 Which Way for Bangladesh? 85 3. The Experiences of TRIPS-compliant Patent Law Reform in Brazil, China, India and South Africa—Lessons for Bangladesh 89 3.1 Background 89 3.2 The Journey Towards TRIPS and Obligations for Patent Law Reforms 92 3.2.1 Patentable Subject Matter 95 3.2.2 Rights and Obligations of Patentees 97 3.2.3 The Term of Patent Protection 98 3.2.4 Enforcement Obligations 100 3.2.5 Exceptions and Limitations of Exclusive Rights 102 3.2.6 Provisions on August 30 Decision (Implementation of Para. 6 of the Doha Declaration) 102 3.3 The Experience of Brazil 106 3.4 The Experience of China 114 3.5 The Experience of India 120 3.6 The Experience of South Africa 129 3.7 Comparative Review and Lessons for the LDCs, including Bangladesh 143 3.8 Concluding Remarks 148 4. The Globalising Standard of Patent Protection in WTO Law and Policy Options for the LDCs: The Context of Bangladesh 149 4.1 Introduction 149 4.2 Legislative Options for Bangladesh 153 4.2.1 A High Threshold and Exclusion Clause 153 4.2.2 Best Mode Disclosure and Disclosure of the Source of Genetic Resources and Traditional Knowledge 158 4.2.3 Narrowing the Scope of Patent Claims 163 4.2.4 Exceptions to Product Patent Rights 164 4.2.5 Early Working (or Bolar Exceptions), Research and Experimental Use 165 4.2.6 Parallel Imports 169 4.2.7 Strong Compulsory Licensing Mechanisms 175 4.2.8 Prior Use Exceptions 186 4.2.9 Pre-grant and Post-grant Opposition 187 4.2.10 Duration of Patent Protection 190 4.2.11 Do Not Adopt Overprotective Enforcement Provisions 192 4.3 Government Intervention Options 195 4.3.1 Drug Price Control 197 4.3.2 National Competition Law 205 4.3.3 Patent Prize System 211 4.3.4 Limit Data Protection 217 4.3.5 Patent Pool on Country-specific Diseases 220 4.3.6 Avoiding Bilateral Investment Treaties or Free Trade Agreements that Erode TRIPS Flexibilities 224 4.3.7 Utilisation of the Transitional Period for Pharmaceutical Patents 228 4.3.8 Provision for Process Patent during the Transitional Period and Adoption of a Utility Model Law 231 4.3.9 Special Investment Protection Regime, Open Drug Innovation Model and Promotion of Social Business Model in the Pharmaceutical Sector 233 4.4 Conclusion 236 5. Has the TRIPS Waiver Helped the Least Developed Countries Progress Towards Innovation and Compliance? 239 5.1 Background: TRIPS Waivers for the LDCs and Designing a Plan of Action for Graduation and Progression Towards Innovation and Compliance 239 5.2 Extending the LDC Transition Period: Is it a Measure for Making a Viable Technological Base or Simply a Waste of Time? 241 5.3 The Case of Bangladesh: Has the Country Gained from its LDC Status and the Transition Period? 245 5.4 Progress Towards Graduation and Compliance 248 5.4.1 When and How Might LDCs Graduate from this Category? 248 5.4.2 Competitiveness of the Local (Pharmaceutical) Industry and a Plan for Graduation from the LDC Category and Progress towards TRIPS Compliance: The Context of Bangladesh 250 5.5 Progress towards Graduation and Compliance: Institutional and Infrastructural Issues in Bangladesh 258 5.5.1 Capacity Building in the Department of Patents, Designs and Trademarks, and Intellectual Property-related Institutional and Infrastructural Issues 260 5.5.2 Capacity Building in the Directorate of Drug Administration and Public Health-related Institutional and Infrastructural Issues 264 5.6 Adopting a National Development-centred Intellectual Property Policy and a National Health Strategy Integrating Long-term Innovation and Access Objectives 270 5.7 Collaboration between Univeristies, Industry and Government and Public-private Partnerships 273 5.8 Limitations and Further Research 276 5.9 Concluding Remarks 277 Bibliography 281 Appendices 311 Appendix 1: Status of Patents in Bangladesh (1972–2012) 311 Appendix 2: Relevant Provisions of the TRIPS Agreement 313 Index 319 This study is dedicated to my parents, Ishaque and Sanowara, whose inspiration and sacrifice made me what I am today. Preface This study could not have been completed without the profound encouragement, persistent support and forbearance of my loving family members. I would like to express my deep gratitude to Prof. Thomas Cottier, who has been an excellent source of support, inspiration and advice throughout this difficult writing process. I think if I had listened to him properly, this study would have been completed earlier. I am also grateful to Rosemarie, Secretary of the World Trade Institute (WTI) in Bern for her kind cooperation throughout the process of my work at the WTI. My sincere thanks to colleagues and friends at the WTI, who provided useful comments during annual workshops in February 2010 and March 2012 and also at the brown bag presentation on 27 July 2011. I am very grateful to Prof. Shah Alam, former dean in the Faculty of Law (presently chairman-in-charge, Law Commission of Bangladesh), for encouragement and advice as a student and colleague which shaped a global vision of legal education in my mind; and also to Professor Morshed Mahmud Khan who, as a supervisor of my LLM thesis at the Department of Law, University of Chittagong, initially encouraged me to conduct my research on intellectual property law. I gratefully acknowledge the inspiration and motivation I received from Prof. Mpasi Sinjella, former director of the WIPO Academy, and Prof. Marco Ricolfi, director of the WIPO-Turin IP Programme, to do further higher study and research in the field of intellectual property. I am also grateful to officials at the Department of Patents, Designs and Trademarks, and at the Directorate of Drug Administration in Bangladesh for their cooperation during my field studies. I am also thankful to the pharmaceutical industries in Bangladesh and all other participants for their cooperation during the survey and interviews in Bangladesh. However, as per requests from the participants of surveys Intellectual Property and Public Health in the Developing World xii and interviews, this study maintains the anonymity and confidentiality of the participants throughout. I would like to acknowledge the kind cooperation of Sheikh Rafiqul Islam Raju (former consultant of English for Law, Bar Council of Bangladesh) and his team in Dhaka throughout the process of field research in Bangladesh. I am also grateful to my colleagues and former teachers at the Department of Law, University of Chittagong – particularly to the late Prof. Khabir Uddin Ahmed, Prof. Zakir Hossain, Prof. Mohiuddin Khaled, Prof. Abdullah-al-Faruque and Dr. Jafar Ullah Talukder – for their kind support and encouragement. The revision of this study as a book was to some extent also influenced and complemented by my previous and ongoing research work in the field of intellectual property at the University of Chittagong; the University of Turin, Italy; the WIPO Academy, Geneva; Central Queensland University, Australia; Stockholm University, Sweden; the Tokyo Institute of Technology and the United Nations University, Japan. This study has also addressed comments of two anonymous reviewers suggested by Open Book Publishers. I also received valuable comments and inputs during my visits to and presentations at several conferences and workshops at the WIPO and WTO headquarters in Geneva, and also at the University of Oxford and Yale Law School. I hereby express deep gratitude to each of these institutions for their generous fellowship and library support. I am grateful to Prof. Marianne Levin (Department of Law, Stockholm University) for being so kind and supportive, and for her critical comments on some chapters of this book. I am also grateful to the Chicago-Kent Intellectual Property Journal and the Akron Intellectual Property Journal for kind permission to re-publish Chapter Three and Chapter Four of this book, which were published earlier as follows: M. Monirul Azam, ‘The Experiences of TRIPS-compliant Patent Law Reforms in Brazil, India, and South Africa and Lessons from Bangladesh’, Akron Intellectual Property Journal 7.2 (2014): 61–100; M. Monirul Azam, ‘Globalizing Standard of Patent Protection in WTO Law and Policy Options for the LDCs: The Context of Bangladesh’, Chicago-Kent Journal of Intellectual Property 13.2 (2014): 402–88. Preface xiii This book contains some repetitions across different chapters. I intentionally maintained these repetitions so that chapters could be read both as part of a book and alone, online or as study material. As a guest speaker at the Swedish Patent Office over the last five years, taking part in training programs for the Least Developed Countries (LDCs) on industrial property in the global economy, I realized that government officials, academics and industry experts in the LDCs need to have an appropriate understanding of legal flexibilities and how to address them in their national legislation. For this reason, I revised some chapters to be used as ready reference texts, free from ambiguous jargon and complex structures and case laws. Finally, I am indebted to my loving family members for putting up with me during these difficult years of writing and travelling, particularly my wife, Tanya, my son, Anas, and my daughter, Ilyana. I would like to thank my parents, brothers, sister and in-laws for their support and inspiration. Special thanks to Dr. Alessandra Tosi from Open Book Publishers for her continuous support and cooperation to publish this as a book. A research grant from the Japan Society for the Promotion of Science suppported the revision of this book. I would also like to thank Professors Hideto Nakajima and Norichika Kanie for their support during my time at the Tokyo Institute of Technology and the United Nations University, respectively. The cut-off research date for this book was 31 December 2015. Therefore, further updates after December 2015 are not reflected here. Tokyo, Japan Tokyo Institute of Technology/United Nations University 3 February 2016 List of Tables 2.1 Patent applications and granted patents in Bangladesh (1995–2012) 42 2.2 Mailbox applications (pharmaceutical and agrochemical products) 43 2.3 The DGDA controls the quality of medicines produced in Bangladesh 48 2.4 Changes required for TRIPS-compliant pharmaceutical regulation in Bangladesh 58 2.5 Allopathic pharmaceutical companies in Bangladesh 61 2.6 The top 10 pharmaceutical companies in Bangladesh (2014) 62 2.7 Multinational pharmaceutical companies operating in Bangladesh 63 2.8 Pharmaceutical exports from Bangladesh (1975–2006) 65 2.9 Survey results regarding whether Bangladesh has the capacity to produce new medicines 71 2.10 Survey results on whether TRIPS has influenced the rise in pharmaceutical prices 75 2.11 Top 10 drugs in terms of sales in Bangladesh 76 2.12 Changes in retail price of 10 important drugs 77 2.13 Causes of death in Bangladesh 78 2.14 Diseases prevalent in Bangladesh 79 3.1 Policy options used by Brazil, India and South Africa 144 List of Figures 2.1 Milestones in the gradual development of pharmaceutical regulation in Bangladesh 45 4.1 Working procedure of the medicines patent pool 223 5.1 Regulatory enforcement pyramid of sanctions under the responsive regulations theory for application in the pharmaceutical regulatory sector 266 Abbreviations ACTA Anti-counterfeiting Trade Agreement AMTC Affordable Medicines and Treatment Campaign ANVISA National Health Surveillance Agency (Brazil) API Active Pharmaceutical Ingredient ARV Anti-retroviral BAPI Bangladesh Association of Pharmaceutical Industries BIISS Bangladesh Institute of International and Strategic Studies BIT Bilateral Investment Treaties CEO Chief Executive Officer CEWG Consultative Expert Working Group CIPIH Commission on Intellectual Property Rights, Innovation and Public Health CMH Commission on Macroeconomics and Health DCC Drug Control Committee DCO Drugs (Control) Ordinance, 1982 DDA Directorate of Drug Administration DGDA Directorate General of Drug Administration DPDT Department of Patents, Designs and Trademarks DRA Drug Regulatory Authority DRR Drugs Registration Regulations EU European Union EVI Economic Vulnerability Index FDA Food and Drug Administration FDI Foreign Direct Investment FTA Free Trade Agreement