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TRIPS flexibilities and pharmaceutical industry in Bangladesh

Published : Thursday, 1 October, 2020 at 12:00 AM  Count : 1466

TRIPS flexibilities and pharmaceutical industry in Bangladesh

TRIPS flexibilities and pharmaceutical industry in Bangladesh

Creations of brain are called intellect. Since these creations have good commercial value, are called as property. Thus, Intellectual Property (IP) is a category of property in intangibles, and its exclusive rights are given to the creators of IP for a certain period of time is called Intellectual Property Rights (IPRs). Due to the having commercial value in this creation, it is called TRIPS.

The World Trade Organization (WTO) is the only international institution that oversees the global trade rules between nations. Pharmaceutical Industry requires a great deal of innovation and research work because of having the products are very technology oriented and a knowledge intensive. In this respect, among all the agreements of the WTO, TRIPS is very significant for pharmaceutical industry. TRIPS focuses on the basic structure of the trade system by including seven types of IPRs among which patent is one.

Patent: It is a legal document granted by the government giving an inventor the exclusive right to make use and sell an invention for a specific period of time. According to TRIPS agreement patent protection will be granted for Innovator Company that will last at least 20 years from the date of the patent application filed (Article 33).

Patent is applied on process and product in respect of manufacturing medicine. It was applicable till the promulgation of Drug Control Ordinance in 1982. After that as per national drug policy Bangladesh became similar to post 1970 Indian Patent Law, which was followed until the introduction of TRIPS compliance patent law in 2005. Initially India award patents not to individual drug but to the process whereby the drug manufactured. This allowed Indian pharmaceutical companies to manufacture the same drug using other process known as reverse engineering.
Since 2005 product patenting is allowed in India. The TRIPS Agreement has not only increase R & D expenditure of the Indian pharmaceutical industry but also has changed its R & D structure. The pharmaceutical industry is a highly R & D oriented sector. Under the pro-patent regime of the TRIPS Agreement, for pharmaceutical company's sustainable growth depends on their continuous R & D for developing new drugs and new technologies.

The TRIPS Agreement incorporates certain "flexibilities" such as waiver to implement patent rule, compulsory licensing, parallel importation on pharmaceutical products especially regarding right of access to affordable medicines for the developing and LDCs people. These enable them to pursue their own public policies in a manner that compatible with TRIPS agreement. However, the absence of bio-equivalence testing facilities in Bangladesh, import of Active Pharmaceutical Ingredients (API) and complexity in export registration procedures for drugs in highly regulated importing markets e.g. Europe and US leads to fell pharmaceutical companies into problem in export market.

National Drug Policy disallowed patent protection on pharmaceutical product rather allowed patent protection on process of manufacturing drug. Consequently, LDCs like Bangladesh can produce the essential drug with relatively easy way by Reverse Engineering (RE) at less cost. A manufacturer typically develops a generic drug by RE to discover the chemical composition of a patented drug invented by another firm. The manufacturer then creates its own drug based on the same chemical composition.

The WTO agreement on TRIPS, the Doha Declaration and the succeeding decisions of the Council of TRIPS allowed all LDCs to have pharmaceutical patents immune from the ambit of patentability for 21 years till 2016. This has been further extended in 6 November 2015 considering the current LDCs status further 17 years to change its patent laws under the Agreement of TRIPS i.e. up to 2033. This TRIPS flexibility has helped Bangladesh develop generic versions of pharmaceuticals through RE that are under patent elsewhere and to sell these products in local markets or to other LDCs or non-member of WTO which have not implemented patent protection.

Separate declarations on TRIPS and public health states that, the TRIPS Agreement does not and should not prevent Member states from taking steps to protect public health through emphasizing on relaxation provided in the TRIPS Agreement mentioning compulsory licensing (Article 31F) and parallel imports (Article 30).

Bangladesh mostly produces branded generics, which is already off-patent and thus will be able to continue producing these even after the TRIPS waiver are withdrawn or when Bangladesh graduates from the LDCs status. It can be assumed that in near future off-patent drugs will emerge as one of the important activities of Bangladesh's pharmaceutical Industry. 85% to 90% of the pharmaceutical product produced in Bangladesh are off-patent. Therefore, even under new patent regime (compatible with the TRIPS amendment) the availability and price of generic drugs will largely be unaffected. However, the situation is different with respect to new (on-patent) drugs. There is no doubt that these drugs will be available (either through production or license). But the effect of price is ambiguous.

Among the many challenges Bangladesh face due to the leaving LDC group by 2024 as predicted is the termination of benefits meant for the LDCs. The countries pharmaceutical industry face tough challenge in obtaining licenses from the patent holding drug manufacturers which will considerably raise production cost as well as it will lead them to stiff global competition. A country can produce patented drugs if and only if the patented right of that particular medicine is expired according to the TRIPS except LDC. But the country is not going to sit that long with the LDC baggage to avail the benefit.

Under the above circumstances, Bangladesh can use of TRIPS flexibilities other than waiver such as (a) Parallel imports, (b) Compulsory licensing (c) Bolar provision by including in the patent law to be formulated compatible with TRIPS. It may be noted here that TRIPS flexibilities are not utilizable unless legislation is drafted to incorporate them into national laws.

Parallel importation: These are products marketed by the patent owner or with the patent owner's permission in one country, but imported into another country without the approval of the patent owner (Article-6). Suppose company "A" has a drug patented in the Country X and Y, which it sells at a lower price in Country Y. If a second company "B" buys this drug in Country Y and imports it into Country X at a price that is lower than company "A"s price that would be a parallel or grey import.

Compulsory Licensing (CL): A CL is issued by a Government authority or a Court to make certain use of a patented invention without the consent of the patent owner (Article-31).

Bolar provision: Under this provision, generic manufacturers are allowed to RE the patented invention (permission given by the public authorities but not the patent holder) and use it to apply for making approval, so that they can market their generic versions as soon as the patent expire (Article-30).

Since the majority of the essential drugs consumed in Bangladesh are off patent, the introduction of patents will not have significant effect on locally produced generic version of off-patent drugs. Axiomatically, the introduction of patent will affect the Bangladesh pharmaceutical industries to a large extent. The end of access to the waiver after graduation means several things such as increasing patent terms to 20 years, extending patents to pharmaceutical products and processes.

Under the above circumstances, Bangladesh should be getting prepared in respect of availability of API and bio-equivalence testing facilities for time beyond the TRIPS waiver period.  In this connection, efforts can be made to remove complexity in export registration procedures for drugs in highly regulated importing markets. Besides, to avail benefits of the TRIPS flexibility other than waiver may be included in the patent laws by taking expert opinion. Moreover, in order to reaping benefits accruing from the existing provisions of the TRIPS Agreement required developing strong R & D base  and scope for joint venture should be explored to attract more FDI.
Abdul Quaiyum, Former Member, Bangladesh Trade and Tariff Commission









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