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Introduction The year 2005 marked the end of the transitional period allowed developing countries to introduce the ‘common minimum standards’ of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) into their national intellectual property laws. This worldwide upward harmonization, entailing legal recognition of the patentability of pharmaceutical products by all World Trade Organization (WTO) members, will greatly limit the development of low-cost generic versions of drugs, especially the most recent and innovative ones. This is particularly true in the field of HIV/AIDS, where the need for the more recently patented second-generation drugs used in antiretroviral therapy (ART) is already growing and is expected to increase significantly in southern countries 1. Until 2005, some developing countries with pharmaceutical manufacturing capacities, especially India, used the transitional period allowing local manufacturers to produce and sell generic versions of first-generation ART drugs patented in industrialized countries and originally produced and sold at high prices by Western pharmaceutical companies 2, 3. Thanks to international competition between generic manufacturers and these companies, significant price reductions were achieved for the large majority of these drugs. This was a key factor in the implementation and strengthening of access to AIDS treatment in developing countries, and a strategic element in the World Health Organization (WHO) ‘3by5’ plan 4. However, with the end of the extended deadline for TRIPS compliance, the scenario is likely to change radically. Considering the end of the transitional period, which effectively will prohibit the free manufacture of newer and innovative antiretroviral generations, to mark a key episode in the history of the fight against AIDS in developing countries, this review will provide an overview of the meaning and consequences of this turning point and to present some of the new challenges of the post-2005 period. From the TRIPS to its 2005 amendment: restricted room for manoeuvre in generic competition Coming after the considerable strengthening of intellectual property rights in northern countries 5, the signing of the TRIPS in 1994 heralded the enforcement of this new, stricter patent regime on a worldwide scale 6. By implementing so-called ‘minimum standards’, the new treaty insured a dramatic worldwide upward harmonization and marked a radical break with some of the foundations and rules that had hitherto shaped international intellectual property protection 7. It introduced two main new ‘minimum standards’: (a) the patentability of therapeutic molecules became mandatory in all country members, and (b) the length of patent protection was extended to 20 years. It should be remembered that, before the signing of the TRIPS, international treaties recognized the right of different countries to implement different systems of intellectual property protection, according to their level of economic development and the products concerned. Among these products, drugs, considered ‘basic needs’, were ranked of the highest importance 8. This explains why, even in most developed countries, patents on therapeutic molecules were not introduced until the 1960s and sometimes much later. In Switzerland, for example, such patents were only introduced in 1977, enabling this country to build up a very powerful pharmaceutical industry largely founded on reverse engineering and the copying of existing molecules. In most developing countries, the absence or laxity of a patent protection in pharmaceuticals prevailed until the mid-1990s. Exploiting their rights ‘to learn by imitating’ and ‘copying’, some developing countries established a large local industry for the low-cost production of generic drugs as a way to ensure access to treatment for the poorer segments of the population 9, 10. Although developing countries were given the deadline of 2005 for TRIPS compliance, few of them were able to resist the pressure exerted by developed countries to anticipate the date of compliance. India represents a notable exception, extensively using its right to copy existing molecules up until the end of the deadline (2005), thus playing a crucial role in the supply of generic first-line ART at reduced and affordable prices during the transitional period. It is thanks to the supply of generic versions of such drugs that some of the first-line therapies are now available at prices between US200 and 300 per person per year, compared with the US12 000–14 000 per person per year demanded by the patent holders before generic versions came into the international market 3. It is also noteworthy that the most remarkable innovation (a turning point in the history of access to treatment in southern countries), the ‘fixed dose combination’ introduced first by the Indian company CIPLA, was possible only because this company (using the opportunity provided by Indian intellectual property law prevailing until 2005) could aggregate, in a single pill, three ART drugs patented by different companies. This resulted in dramatic price reductions. The type of combination of drugs offered in this first-line fixed-dose triple therapy is available in 2007 for as little as US132 per patient per year and constitutes the most widespread first-line treatment in many developing countries 3. Unfortunately, such price reductions cannot be envisaged for the new generation of ART drugs. With the end of the transitional period and the passing of the Indian Patent Amendments Act (voted in March 2005), the Indian generic drug manufacturers will now be forbidden to manufacture the new ART drugs 11. In practice, dramatic effects will result from these changes. Generic equivalents of most second-generation ART drugs, especially those recommended in the second-line regimens, will not be available. In the context of increasing need for second-generation ART in developing countries, national budgets will not be able to sustain the cost of drugs in the short term without generic competition. Figure 1 illustrates this issue by comparing the median price paid in developing countries for the first-line combination (lamivudine, stavudine and nevirapine) with the price paid for one of the WHO-recommended second-line regimens (abacavir, didanosine and ritonavir-boosted lopinavir), according to the WHO Global Price Reporting Mechanism database 12. Fig. 1: Median price paid in 2005 by developing countries for second-line antiretroviral therapy (abacavir/didanosine/ritonavir-boosted lopinavir), compared with first-line regimen (lamivudine, stavudine and nevirapine) peported to the World Health Organization Global Price Reporting Mechanism 3, 12. Here, it is important to note the difference in prices paid in low- and middle-income countries for the second-line regimen. This results from the differential price policy practiced by originator companies in the context of their ‘access programmes’. Most of these laboratories offer different prices for patented ART drugs depending on the countries to which they are sold, the lowest prices being granted only to the least-developed countries and sub-Saharan Africa. However, surveys conducted by Médecins Sans Frontières have shown that the variability in conditions of application from one laboratory to another, the absence of registration and marketing of certain ART in the eligible countries and the complexity of the distribution circuit chosen by the laboratories for their reduced-price products often make effective access to differential prices very difficult for the least-developed countries 3. In other developing countries (not eligible for access programmes according to the conditions laid down by the originator companies), prices are negotiated on a case-by-case basis, generating very large price differences. According to WHO data, middle-income countries can pay as much as nine times more than the least-developed countries for recent ART drugs such as ritonavir-boosted lopinavir 12. The price offered to least-developed countries by the company Abbott in its ‘access program’ for ritonavir-boosted lopinavir (Kaletra) is US500 per person per year. In Chile, the price was US4119 for a transaction carried out in September 2005, while in Brazil, after tough negotiations, the price was fixed at US1379 (see below). From a legal point of view, generic versions of newly patented ART can still be manufactured, but only through the issuing of compulsory licences. Compulsory licensing is one of the exceptions to exclusive patent rights allowed by the TRIPS. This legal tool allows WTO members to authorize themselves or third parties to use the subject matter of a patent, without the permission of the patent holder, but with negotiated royalties. However, there are strict limitations to the issuing of such compulsory licences. In particular, article 31f of the TRIPS stipulates that such licences should be granted ‘predominantly’ to supply the ‘domestic market’. A key consequence of these provisions is that it is almost impossible for countries lacking technological capabilities to use compulsory licences effectively. The contradiction here is at its highest, since article 31f entails that the poorest and most fragile countries (the ones lacking technological capabilities) are also the ones most unlikely to gain access to copies of patented drugs (through imports). This situation and the more general criticisms leveled at the many unbalances of the TRIPS provisions 13 has provoked a vast debate on the relationship between TRIPS and access to drugs, leading to the adoption, at the Fourth WTO Ministerial Conference in Doha in 2001, of the famous Doha Declaration on the TRIPS and Public Health14. In this, ministers of WTO member countries recognized the serious public health problems raised by article 31f of the TRIPS for countries with little or no drug-manufacturing capacity and mandated the TRIPS Council to find an ‘expeditious’ solution to this problem. It was only on August 2003, after bitter negotiations, that the WTO General Council adopted a so-called ‘Decision’ to implement paragraph 6 of the Doha Declaration 15. Later, in December 2005, this temporary Decision became permanent with the adoption of an amendment to the TRIPS 16. The terms and conditions of the Decision are so rigid, however, that we are very unlikely to see the new drugs being effectively incorporated into treatments in southern countries. Where we stand: the post-2005 legal framework Recognizing explicitly that for pharmaceutical products, exceptional circumstances justified the implementation of special means, the Decision defined a system to be followed by both the exporting and the importing country. The most serious constraints imposed by the Decision are (a) the application of a double compulsory licence, which must be performed rigorously in the same terms in both the importing and the exporting country; and (b) the limitations imposed on the generic manufacturer, who must produce the exact amount requested by the importing country as specified in the compulsory licence 16, 17. Since the Decision stated that generic manufacturers are not allowed to produce any more than the quantities predefined in each compulsory licence, a powerful inbuilt mechanism is introduced to impede the large-scale production required to deliver the goods at low cost. So it is hardly surprising that, to date, not one application of the Decision has been implemented. There is some evidence that the Amendment is not seen as an efficient solution or as the end of the debate on intellectual property and public health. Moreover, a series of bilateral ‘TRIPS Plus’ agreements have been signed over the last few years, usually between southern countries and the United States. These bilateral agreements include several new provisions that reach far beyond the ‘minimum standards’ implemented by the TRIPS, calling into question the multilateral arrangements to address public health issues 18, 19. The proliferation of these bilateral agreements, as well as the rigidity of TRIPS amendments, clearly shows how the impact of intellectual property might threaten public health. This situation is unlikely to be solved in the short term. The case of the Brazilian anti-AIDS programme deserves particular attention. It provides a unique case study of the contradictions raised by the enforcement of the TRIPS. It enables us to appreciate what has been possible within the constraints of TRIPS, and the threats that this agreement and its recent developments now pose for the sustainability of national responses to the pandemic, even when the public health authorities are strongly committed to healthcare programmes, as are the Brazilian authorities. Challenges to sustainability within southern countries: the case of the Brazilian response Since the mid-1990s, the Brazilian government has established a consistent legal framework to provide free and universal access to diagnosis, prevention and treatment for patients with HIV/AIDS 20. At the end of 1990s, the Brazilian government, driven by resource constraints and facing the challenge posed by the very high prices of ART marketed by patent holders, launched a concerted action involving the Ministry of Health, the public pharmaceutical laboratories and the national pharmachemical companies, aiming at the local manufacturing of generic versions of ART. This collaboration resulted in the national production of 10 low-cost generic versions of the nonpatented ART drugs listed in the national therapeutic guidelines 10, 20. In 2001, 56% of all ART consumed was nationally produced, resulting in a reduction of 82% in the purchase price of these drugs over the period from 1996 to 2001 21. At the same time, the Brazilian government conducted intense price negotiations with the pharmaceutical companies for patented ART drugs. At that time, the threat to use compulsory licensing proved a strong argument, notably owing to the know-how and technological capabilities acquired by the country through the local manufacturing of generic ART. Yet, the early compliance of Brazil to the TRIPS (achieved as early as 1996) greatly hampered the public health policy to scale up patented ART. By not taking advantage of the 10-year transitional period for TRIPS compliance, the Brazilian government was obliged to amend its intellectual property legislation immediately to recognize pharmaceutical products and processes as patentable subject matters. Notwithstanding the implementation of some flexibilities allowed by TRIPS, the application of such provisions proved cumbersome and dependent upon more detailed legal definition. In 2006, of the 17 ART drugs currently used by the AIDS programme, 10 are patented or under patent application (Table 1) Table 1: Initial therapy recommended in Brazil and patent status of antiretroviral drugs n 2006a. A more and more ineffective local industry faced with the evolution in treatments Presently, there are 158 000 patients taking ART in Brazil, with an expected 15 000 new AIDS cases every year. Nevertheless, the sustainability of the Brazilian response to the epidemic is now facing new challenges to maintain the level of success achieved since the launch of the programme. First, the patent protection conferred by the TRIPS only permits local manufacturing of the oldest ART drugs. Moreover, because of insufficient national capability in the synthesis of molecules, most of the ‘active pharmaceutical ingredients’ used in the local production of nonpatented ART have been imported from China and India 10. This represents a serious threat to the future of the AIDS programme. By reducing sources of cheap chemical inputs, the TRIPS compliance of these major suppliers of active pharmaceutical ingredients may jeopardize the procurement policy and the whole architecture on which the Brazilian programme is based. Second, most of the latest generations of ART (entirely protected by patents) has to be imported. These imports are likely to grow fast in the future, as the trends on therapeutic guidelines point to the inclusion of newer generation ART drugs as substitutes for older ones. Such is the case for tenofovir, indicated as a preferential drug in the early stages of treatment. Similarly, new regimens for a growing number of patients include ritonavir-boosted lopinavir and atazanavir as alternatives to older drugs of the same therapeutic class (Table 1). This situation has lead to an acute imbalance in national budget expenditure for ART procurement in Brazil. Approximately 80% of the Ministry of Health's budget is currently spent in the procurement of imported patented drugs. Almost 65% of this budget is devoted to the acquisition of ritonavir-boosted lopinavir (34. 5%), efavirenz (17. 8%) and tenofovir (12. 2%). According to Ministry of Health estimates, spending on these three drugs might increase two-fold by 2011 23. The impossibility of using local production, thus exerting competitive pressure through new generic ART, has yielded weaker commitments and agreements on price negotiation. One example is the supply agreement established with Abbott for Kaletra in 2005. Losing bargaining power over the strategic new molecules: the The case of Kaletra provides a of the new post-2005 situation and the it Since its into the therapeutic guidelines in Kaletra has an important in Brazilian treatment regimens, and The purchase of Kaletra represents the of the ART procurement This explains a series of involving the patent and the were aiming at issuing a compulsory the of the so-called on Public for the antiretroviral Kaletra before the issuing of a compulsory licence the Brazilian government pressure from the pharmaceutical This situation an the different national between those for the compulsory licence and those for with the pharmaceutical an agreement with Abbott was signed in 2005. Although particularly a reduction of in the price of to and the of a new, reduced the agreement also The main provisions of the agreement are as The Brazilian Ministry of Health committed not to flexibilities in intellectual property for any lopinavir and until Such a is considered ‘TRIPS since its beyond the pharmaceutical Kaletra to include all possible of its two The of the price of until the of the By the price of at until the agreement represents a considerable of as the Brazilian Ministry of Health cannot from price reduction trends over this period. The early of the in the first stages of treatment as a for the This will the Ministry of Health's budget over the to as is the price of the The case of tenofovir, currently the subject of Brazil, but also in provides of the new complexity and faced by southern countries in the most recent ART. the manufacturing of generic antiretroviral drugs be The to the tenofovir patent application Brazilian the Indian law of 2005, provides for the of using a which allows any to to the local Patent during the of a patent The of this mechanism is to that the application subject matter not with one or more of the patentability and the Patent of India and Brazil have that the patent application for tenofovir not the In Brazil, the of is also at the of the The issue at is generic manufacturers of tenofovir, such as the Indian pharmaceutical company will have to their production of this According to Médecins the generic of tenofovir is sold by at per patient per year and at by Indian 3. In Brazil, tenofovir is sold by at per patient per year It is important to note that patent law is currently subject to legal by the pharmaceutical company on the that its is and not with the TRIPS. These before the Indian the by the Indian Patent of patent application for the drug in 2006, after by a number of Indian a health we to have the end of the transitional period for TRIPS compliance a and situation for developing countries. The major threat is to the procurement of drugs at reduced especially the new generation of drugs. This is the case for tenofovir, recently recommended by the WHO for first-line treatments in and for ritonavir-boosted the key element in the of an effective second-line regimen 1. The enforcement of intellectual property rules imposed by the end of the period is thus generating a at a when should be to access to new for poorer countries, the new intellectual property rules into make this access more unlikely than several of the poorest countries cannot supply those patients who need certain drugs. The policy of differential prices adopted by the originator companies in their access programmes can no a significant role in the access to new generations of drugs in developing countries. However, the conditions of and the complexity of these programmes not to an of access to ART. the absence of competition from generic drugs for recent ART that price will be far significant than they were for the first generation of ART. the supply of patented at reduced prices has the of being terms of both products and It on the of the laboratories on their when the treatments and patients need and the first but achieved will up be by the by the end of the action is not to make the new generation of drugs affordable in southern countries, there is a strong that many countries will be restricted to and ineffective to the Brazilian programme for its This review is on an by the for on AIDS and the to the for its and efficient at all stages of the
Orsi et al. (Mon,) studied this question.