Since the COVID-19 pandemic, affordable drug access push vs pull has been at the centre of intellectual property (IP) discussion. There has always been a conflict between drug distribution and drug patents. However, it is most acute in the least developed and middle-income nations, where infectious diseases like Ebola, HIV, tuberculosis, and malaria carry a high toll. South Africa is one of these belaboured nations with a high level of economic inequality and numerous health concerns, despite ranking 36th in the world in terms of Gross Domestic Product (GDP).
The main problem is that patented medications are expensive and frequently out of reach for the world’s poorest countries. This obstacle ultimately results from the prohibitively costly testing, approval, and research and development (R&D) procedures needed to bring a drug to market; on average, these procedures cost more than USD 1 billion per product. With the knowledge that it will cover their expenditures and that they will make enough money, patent holders are encouraged to do the R&D required to create new treatments.
How should the consumer’s or patient’s demand for affordable medications be weighed against the producer’s need to return their enormous financial investments? This article uses South African law as a case study to analyse different remedies to this problem suggested by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Flexible by nature
TRIPS’ Articles 1 and 8 allow for a lot of flexibility. Article 1 will enable nations to give more extensive patent protections than the minimum standard defined by the Agreement, provided that doing so does not conflict with the Agreement’s provisions, which govern how member states are to implement the framework in the context of their national laws. Members may also adopt measures to further safeguard the public interest under Article 8. These clauses offer flexibility for public health considerations and proper medication access.
The availability of modern technologies and pharmaceuticals in the least developed nations is covered by TRIPS Article 66. That is crucial since many countries lack the manufacturing capabilities to create the necessary medications domestically. Therefore, they should refrain from using compulsory licencing to acquire patented goods.
Greater detail is provided in this regard by articles 30, 31, and 31bis, which permit the unlawful use of patented subject matter under strict restrictions and with compulsory authorisation.
South Africa’s Patents Act No. 57 of 1978 (the Act) defines how the state may use a patent, whereas Section 78 explains how it can purchase a patent. These safeguards would make medication access more convenient in a pandemic or national emergency. The form must be able to produce the drug or import it from a nation where patent protection still needs to be put in place for these alternatives to be effective. As a result, this technique might be more advantageous for low- and middle-income nations.
Reasonable conditions and limited costs for mandatory licencing
In cases of rights abuse, Section 56 of the Act enables forced licencing; paragraphs 56(c) and 56(e) state that inappropriate licence terms and exorbitant pricing are abuses. These requirements allow a licensee who locally manufactures the medicine to receive compelled licencing. That is a form on the same presumption as the walk-in rights regarding the availability of local manufacturing capacity, which is very occasionally the case in South Africa.
The Bolar Provision, generic drugs, and open-source pharmaceuticals
Open Source Pharma (OSP) project is similar to the open-source software movement and even refers to itself as “Linux for Drugs.” This paradigm focuses on international drug trials and collaborative R&D to generate medicines more swiftly and affordably. We saw how quickly the multiple COVID-19 vaccines came about, primarily made possible by coordinated data-sharing initiatives and collaborative research between the corporate sector and academic institutions. University collaborations are widespread, but combined trials are intriguing because here is where most of the expenditures associated with drug development are. Pharmaceutical companies often bear these expenses and work to secure enough reimbursement through patents and additional protection certificates (SPCs).
In addition, after a drug’s patent protection has gone, quicker access to less expensive substitutes would be made possible through open-source test data for generics.
While open test data does not have an explicit definition in South African law, it is still possible. Redundancy results from the requirement that each manufacturing business submits its docket to the regulating body for medicines. Allowing the filing of regulatory approvals from other countries for the same formulation would be a compromise between the OSP and the Bolar Provision that would also speed up the availability of generic drugs.
Instead of a thorough examination process, South Africa uses a formal examination system. which means that only administrative requirements matter when examining a patent application rather than the novelty and inventive step requirements outlined in the Act. Except in the case of extensive litigation before the Court of the Commissioner of Patents, there is no post-grant opposition period. Litigation is an expensive approach for a party to request revocation or a compulsory licence in South Africa, as opposed to a substantive examination jurisdiction where the patentee pays the costs of assessing the patent’s subject matter. That is undoubtedly a better condition for a patent holder in the pharmaceutical sector because the expenses associated with patenting are low, the validity of the invention is not immediately in doubt, and expensive litigation deters innovation.
In South Africa, restricted evergreening is also a feature. Applications and claims for second medical uses predicated on particular and limited dose regimens are allowed by the Companies and Intellectual Property Commission (CIPC). Due to this procedure and the fact that only a formal inspection is light on, a patent register may contain possibly void patents that need to be a slur in court. Although specific dosage regimens and second medicinal uses are not inherently controversial, they can become so in a setting without thorough evaluations. Evergreening is made more difficult by the disallowance of dual medical use and dosage regime patents. This alternative should partially offset the R & D and trial costs of creating new medications.
Tax incentives and public-private partnerships
South Africa offers financial incentives for research and development. Its rules govern public-private partnerships for specific businesses and public financing for research and development (Intellectual Property Rights from Publicly Financed Research and Development Act No. 51 of 2008). Given that private partners hold the patents resulting from such R&D, this legislation may make the innovation landscape challenging to negotiate and less appealing for them.
It may be fascinating to see tax incentives for licencing systems and R&D, allowing for lower production costs for medicines and matching capacity growth without necessarily increasing patent holder revenues.
Not so much in national patent legislation or the TRIPS Agreement, but rather in a more thorough examination of the economics of medication discovery, manufacture, and distribution, it is the most practical solution to the problem of affordable pharmaceutical access. A patentee may not necessarily have to give up any profit due to lower consumer-end costs if manufacturing volumes are added to by tax and licencing incentives.