Author: Jonathan Berger and Achal Prabhala
Source: Business Day
Intellectual property law would encourage competition and innovation by exploiting global flexibility provisions. The announcement that the Cabinet has approved the Draft Intellectual Property Policy of the Republic of SA: Phase I — to give the formal title — was made in a few terse lines embedded within the official account of its meeting on August 1. On the heels of this announcement, the detailed draft policy was released by the Department of Trade and Industry a week later.
At 38 pages and full of arcane technicalities of intellectual property law, it isn’t exactly light reading. And given that the report was released on the evening of the no-confidence motion against President Jacob Zuma, it’s understandable that you may have missed it.
But none of this should confuse you about the significance of what has just happened. As the first step in the culmination of a 20-year struggle, this policy offers the potential drastically to transform the landscape of life itself, in SA and across the continent.
At the heart of the matter is government recognition of patent protection — a state-sponsored guarantee of market exclusivity for a defined period of time — which is a non-negotiable requirement for all members of the World Trade Organisation (WTO) as well as a key battleground in international trade deals. The purported logic is simple: as patents are necessary for innovation (and by extension development), member states should recognise them in their laws.
Yet the protection of patents often comes at an unacceptably high cost: limited access to new inventions. This is because in the absence of direct competition, there are few restraints on what may be charged for essential products.
In the case of medicines, the mere existence of patent protection may lead to the high price of lives being lost, as in our recent history, when millions of South Africans could not afford antiretroviral treatment for HIV, and as in the present day, when few can afford the impossible burden of new, life-saving treatments for cancer.
Perversely, even as the patent system strengthens its grip on the planet, its logic has grown progressively weaker: the system has been gamed so heavily over the past few decades and the standards so weakened that a substantial percentage of patents cannot be deemed genuine innovations by any stretch of the imagination.
Indeed, the existence of patents may actually stifle innovation in key sectors, for example in software, electronics and medical devices. And still, despite many obvious contradictions and flaws, the system remains firmly entrenched in the global imagination.
Hearteningly, protests by developing countries such as SA, India and Brazil have led to significant changes to patent rules at the international level. Unfortunately, in SA this has seldom had a direct domestic effect. Thus, while recognising that the state is constitutionally required “to increase access to medicines as a component of its obligation to take reasonable measures towards the realisation of the right to healthcare services”, the draft policy notes that “the South African government has to date not made full use of the flexibility within international law through the pursuit of appropriate policy and legislation”.
The flexibility to which reference is made is that provided by the WTO’s Agreement on Trade-related Aspects of Intellectual Property Rights (Trips), as subsequently clarified by the Declaration on the Trips Agreement and Public Health (the Doha Declaration).
Adopted by WTO members in 2001, the Doha Declaration states that “the Trips agreement does not and should not prevent members from taking measures to protect public health”. Yet most WTO members including SA, have failed to do precisely that.
Twenty years ago, when countries such as SA first rang alarm bells on the high cost of medicines and sought to amend their patent laws, there was no consensus on what WTO members could do to expand access to medicines. We now have that consensus.
In fact, we have had that consensus for 16 years. The Doha Declaration unambiguously states “that the [Trips] agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all”.
In September 2013, after years of inexplicable inaction, the Department of Trade and Industry’s consumer and corporate regulation division published a draft National Policy on Intellectual Property. Not only did it make particular reference to the Doha Declaration, it also recognised that there is a direct link between patent protection in SA and the high cost of medicines, and that an appropriate policy was needed — one that would take the country’s health and developmental needs into consideration.
After accepting comments on the 2013 draft, the department lapsed into another long, inexplicable silence. Then, on July 6 2016, the Cabinet approved the publication of the Intellectual Property Consultative Framework for public comment. Building on the department’s earlier draft, the framework – this time prepared by its international trade and economic development division — included a short-term agenda that focused on public health concerns. The division has now published the Cabinet-approved draft policy for comment, thus taking the first decisive step in delivering on a promise made two decades ago.
Describing itself as “the first phase in what will be a comprehensive IP [intellectual property] policy to be developed and updated over the medium-to long-term”, the draft policy not only sets out the entire strategy and identifies issues to be tackled in subsequent phases, but also describes two sets of issues that are to be dealt with in the short term: intellectual property and public health and, international co-operation.
The approach the draft policy appears to have adopted is one that seeks to strike a careful balance between the appropriate protection of intellectual property (including, but not limited to, patents) on the one hand and the use of Trips-compliant flexibilities to ensure access to medicines on the other. If the proposals in this policy eventually translate into legislative amendments, they would probably result in significant benefits to public health in the country and across the continent.
The big change would be that patent applications filed in the country would be evaluated in a phased manner (as capacity and cost constraints allow) instead of being accepted without question, as is the current practice. Other benefits would accrue from provisions for allowing only genuine innovation to be rewarded with patent protection, a range of Trips-compliant measures facilitating the early market entry of generic medicines, and a host of related provisions, such as ensuring that user rights in the patent system were adjudicated fairly and quickly.
To be sure, the draft policy sets its sights beyond public health to rationalising the manner in which SA takes advantage of what the international system offers. For example, it urges the state to sign the Marrakesh treaty, which — if implemented in domestic copyright law — would radically expand access to knowledge for visually impaired people in SA.
The draft policy would help to increase access to medicines. Moreover, the policy recognises that direct competition between multiple manufacturers is the most efficient way to increase the availability and affordability of medicines, and this is likely to provide a significant boost to the local production of medicines.
Given SA’s tiny share of the global market for patented medicines, such changes are unlikely to have any significant effect on manufacturers whose business model is predicated on patent protection. In contrast, the domestic generic medicine industry will probably experience tremendous expansion opportunities, with all the attendant benefits for economic growth, employment and general socioeconomic development.
Could the draft policy have gone further and tested the limits of the flexibilities and public health safeguards available under the Trips agreement? Yes. However, we recognise that the state’s constitutional obligation is not to adopt a policy that best promotes the right to health; instead, the state is required only to act reasonably in the circumstances.
Given the competing interests and rights at stake, the intricate dance of maintaining stable trade relations with interdependent partner countries, as well as the human and financial resources at the state’s disposal, it is arguable that the draft policy — if adopted in its current form — would constitute the type of reasonable measure contemplated by the Constitution.
Interested parties were given 60 days to submit comments on the draft policy. Once finalised, the department will hopefully follow up soon with the publication of a Patents Amendment Bill for discussion, so the parliamentary process can begin. With so much at stake, not least of which is the state’s willingness and ability to discharge a key constitutional obligation, one can expect the debates to be robust. Regardless of what follows, we should pause for a moment to consider what this draft policy represents: nothing less than the state’s first serious attempt in 20 years to put an end to the unjustifiable support of multinational commercial interests that compromise the health and wellbeing of all its people.
Berger is a member of the Johannesburg Bar and serves on the Expert Advisory Group of the Medicines Patent Pool. Prabhala is a fellow of the Shuttleworth Foundation and works on innovation and access to medicines in India, Brazil and SA with the AccessIBSA project.