ALSA Indonesia Seminar Materials Set by ALSA Indonesia

ALSA INDONESIA SEMINAR MATERIALS SET

alsa-indonesia.org

ALSA FORUM MATERIALS Table of Contents

Modul 1

: Improving Accessibility of Patented Medicine in Times of Emergency………….2

Modul 2

: Protection of Traditional Medicine through International Patent Law…………..8

Modul 3

: Alternative to Patent Law to Support Pharmaceutical Research and Development Efforts …………………………………………………………...13

Modul 4

: A Look Forward: A Review of Current Patent Law in Pharmaceutical Development …………………………………………………………………...16

Content Writers: Nikolaus Baptista Ruma (Vice President of Academic Activities and Training) Ratu Tasya Adawiyah (Chief Officer of Academic Research and Publication)

MODUL 1 IMPROVING ACCESSIBILITY OF PATENTED MEDICINE IN TIMES OF EMERGENCY

The COVID-19 crisis highlights the urgency of having a vaccine and medicine to cure it as soon as possible. However, ensuring medicine accessibility risks not giving adequate reward for the pharmaceutical industry for their efforts. How should Asian countries answer this dilemma, and is there a way for Asian countries to work together on the issue? Ensuring universal access to free or affordable essential medicines is one of the “core obligations” for fulfilling the right to health.1 WHO has encouraged countries to amend their national legislation or constitutions to provide for this specific right.2 All countries should develop a national medicines policy that includes a national list of essential medicines that takes into account of national needs. In some countries, the national constitution commits governments to provide equitable access to essential medicines and health care services. For example, the Universally Accessible Cheaper and Quality Medicines Act of 2008, enacted by the Philippines, contains the following declaration of policy, it is the policy of the State to protect public health and, when the public interest or circumstances of extreme urgency so require, it shall adopt appropriate measures to promote and ensure access to affordable quality drugs and medicines for all.3 The Act also states that any doubts about the interpretation of provisions of the Act shall be resolved by adopting a construction in favour of the protection of public health.4

United Nations Economic and Social Council, General Comment No 14: The right to the highest attainable standard of health. United Nations document E/C.12/2000/4 (11 August 2000): para. 43(d); Hogerzeil H, Mirza Z. The world medicines situation 2011: access to essential medicines as part of the right to health. Geneva: World Health Organization; 2011. 2 Medium-term strategic plan 2008–2013. Geneva: World Health Organization:96 (http://apps.who.int/gb/ ebwha/pdf_files/MTSP-08-13-PPB-10-11/mtsp-3en.pdf). 3 Universally Accessible Cheaper and Quality Medicines Act of 2008, Republic Act no. 9502 (Philippines) § 2. 4 Universally Accessible Cheaper and Quality Medicines Act of 2008, Republic Act no. 9502 (Philippines) § 3.

Pricing and Procurement In order to ensure access to essential medicines, countries need to establish a national drugs policy. WHO has released comprehensive guidance on creating these policies, which should address access to, and the quality and rational use of, medicines.5 The WHO Model List of Essential Medicines can help to guide drug selection, although the development of a national list should take account of national priorities and disease challenges.6 A national drug policy, including a list of essential medicines and standard treatment guidelines, can increase the use of generics, improve prescribing practices and protect against drug resistance. A national procurement policy is an important tool for assisting governments to purchase quality drugs at the lowest price possible. An effective procurement strategy must accurately estimate the drug needs of the country and select the most appropriate purchasing strategy based on resources and time. There are four general methods for procuring pharmaceuticals: open tenders, restricted tenders, competitive negotiations and direct procurement.7 The procurement method chosen by a government should seek to achieve the following objectives: 8 (1) to procure the most cost-effective drugs in the right quantities; (2) to select reliable suppliers of high-quality products; (3) to ensure timely delivery of essential medicines; and (4) to achieve the lowest total cost possible. In addition, laws that ban or limit the advertising of pharmaceuticals direct to consumers can reduce patient demand for unnecessarily expensive drugs.9 Direct-to-consumer advertising stimulates the prescribing of advertised medicines, and is rare outside the United States, where commercial free speech by pharmaceutical manufacturers is protected by the Constitution.10

How to develop and implement a national drug policy. 2nd ed. Geneva: World Health Organization; 2001 (http://apps.who.int/medicinedocs/en/d/Js2283e/). 6 Model List of Essential Medicines. 18th List (April 2013). Geneva: World Health Organization; 2013 (http://www.who.int/medicines/publications/essentialmedicines/en/). 7 Practical guidelines on pharmaceutical procurement for countries with small procurement agencies. Geneva: World Health Organization; 2002:7â&#x20AC;&#x201C;8 (http://apps.who.int/medicinedocs/en/d/Jh2999e). 8 Operational principles for good pharmaceutical procurement. Geneva: World Health Organization; 1999:7â&#x20AC;&#x201C;8 (http://apps.who.int/medicinedocs/en/d/Jwhozip49e/). 9 The Broadcasting Law 2012 (The Former Yugoslav Republic of Macedonia). 10 Wang B, Kesselheim A. The role of direct-to-consumer pharmaceutical advertising in patient consumerism. Virtual Mentor.2013;15(11):960â&#x20AC;&#x201C;5.

Finally, where a branded medicine has previously received regulatory approval, governments may encourage the supply of generic or bioequivalent versions of the same drug by offering a faster, preferential process for regulatory approval, together with discounted registration fees. 11 A national procurement strategy may assist governments to formalize a range of measures to purchase quality medicines at cheaper prices. Addressing corruption, eliminating tariffs on imported drugs, controlling mark-ups on drugs at wholesale and retail levels, requiring or creating incentives for the supply of generic versions of drugs by pharmacists and medical practitioners, and banning or limiting direct-to-consumer advertising of medicines, are some of the strategies that may reduce prices.

Access to Medicine, Patents, and TRIPs The national drugs policy adopted by each country needs to be consistent with international law governing intellectual property rights. Medicines, as well as the processes required to produce them, are patentable under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).12 TRIPs is one of the agreements that Members of the World Trade Organization (WTO) are required to implement. In order to implement TRIPs, all Members of the WTO are required to enforce national legislation that recognizes and enforces pharmaceutical patents. 13 Affordable access to essential medicines that are under patent depends partly on the terms of national patent laws, and on the actions of the patent holder. TRIPs includes a number of flexibilities that can be used to reduce the prices of essential medicines and to better meet the goal of universal access. TRIPs does not prevent national governments from issuing compulsory licences in order to meet national health objectives, from choosing an exhaustion regime that best

Homedes N, Lopez Linares R, Ugalde A. Generic drug policies in Latin America. Washington (DC): World Bank; 2005:4–5 (http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/2816271095698140167/HomedesGenericDrugFinal.pdf). 12 Agreement on Trade-Related Aspects of Intellectual Property Rights, opened for signature 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations, 1869 UNTS 299 (entered into force 1 January 1995) (“TRIPS Agreement”). 13 TRIPS Agreement, Articles 7, 27–8

suits national circumstances (allowing parallel importing for example), or from defining patentability criteria in national patent legislation.14 Âˇ

Voluntary Licence Agreements for Essential Medicines Pharmaceutical companies that hold patents or other intellectual property rights over essential medicines can decide when and how to exercise their exclusive rights and as a result may choose to enter into voluntary licences with third parties, such as generic producers, to produce, market and distribute a particular drug within a specified territory. Where the licence is nonexclusive and foresees moderate royalties or is royalty-free, the licence may encourage competition between generic producers to supply the market within the authorized territory, thereby reducing the market price.15 Voluntary licences have been widely used by companies producing HIV medicines,16 and could have a significant impact on the global epidemic of hepatitis C.17 To avoid legal disputes, it is important for the voluntary licence to clearly set out the actions that licensees are permitted to take, and the territories to which the licence extends. Voluntary licences are part of a broader set of strategies that pharmaceutical companies can use, as part of their corporate social responsibility or humanitarian programmes, to increase access to essential medicines at affordable prices. Other strategies include tiered pricing, donation of drugs, non-filing of patents in least developed countries, and non-enforcement of patents.18 The originator company or rights owner may formalize their decision not to enforce patent rights by making a nonassertive declaration, or by entering into a non-assertion covenant or immunity-fromsuit agreement that sets out the conditions under which the rights owner will not enforce their patent rights.

Fact sheet: TRIPS and pharmaceutical patents: obligations and exceptions. Geneva: World Trade Organization; September 2006 (http://www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm) 15 Beyer P. Developing socially responsible intellectual property licensing policies: non-exclusive licensing initiatives in the pharmaceutical sector. In: de Werra J, editor. Research handbook on intellectual property licensing. Cheltenham: Edward Elgar; 2013:227â&#x20AC;&#x201C;56. 16 Ibid. 17 Edwards D, Coppens D, Prasad T, Rook L, Iyer J. Access to hepatitis C medicines. Bulletin of the World Health Organization. 2015, 93: 799â&#x20AC;&#x201C;805. 18 Beyer P., Loc.Cit.

The Medicines Patent Pool (MPP),19 established by the International Drug Purchase Facility (UNITAID) in 2006,20 negotiates licence agreements with patent owners and enters into sublicensing agreements with generic companies to produce licensed drugs and drug combinations for low- and middle-income countries. For example, in 2015, AbbVie entered into an agreement with MPP to grant non-exclusive, royalty-free sub-licences for the manufacture and sale of lopinavir and/or ritonavir (LPV/r), two second-line HIV drugs, for prevention and treatment of HIV within (all) African countries.21 This licence agreement requires sub-licensees to demonstrate their capacity to manufacture these compounds in a manner consistent with WHO prequalification standards,22 to agree not to divert them outside African countries where this would infringe an existing AbbVie patent, and to cooperate in pharmacovigilance reporting responsibilities. In 2015 the MPP was expanded to include drugs for tuberculosis and hepatitis. The first licence issued for declatasvir, a hepatitis C drug, covers 112 countries.23 There are a number of variables within licensing agreements that may help to increase competition and to reduce the market price for essential medicines. For example, royalty-free, nonexclusive licences â&#x20AC;&#x201C; which include a large number of countries within the licensed territory, permit sale to both the public and private sector, and permit licensees to source active pharmaceutical ingredients from anywhere in the world â&#x20AC;&#x201C; are more likely to encourage robust competition and the economies of scale that are needed to substantially reduce prices. Other variables that support access include the publication of licence agreements, permitting licensees to supply countries that issue compulsory licenses in accordance with TRIPS flexibilities, and not restricting the rights of licensees to challenge the licensorâ&#x20AC;&#x2122;s patent or to market the drug in countries where it is not under patent.24 Where the originator company permits the licensee to rely on its pharmaceutical data, this 19

Medicines Patent Pool [website]. Geneva: Medicines Patent Pool; 2016 (http://www.medicinespatentpool.org/). UNITAID [website]. Geneva: World Health Organization; 2016 (http://www.unitaid.eu/en/). 21 Licenses in the MPP [website]. Geneva: Medicines Patent Pool; 2016 (http://www.medicinespatentpool.org /current-licences/). 22 Prequalification of medicines by WHO. Fact sheet no. 278. Geneva: World Health Organization; 2013 (http://www.who.int/mediacentre/factsheets/fs278/en/). 23 The Medicines Patent Pool signs licence with Bristol-Myers Squibb to increase access to hepatitis C medicine declatasvir. Geneva: Medicines Patent Pool; 23 November 2015 (http://www.medicinespatentpool.org/themedicines-patent-pool-signs-licence-with-bristol-myers-squibb-toincrease-access-to-hepatitis-c-medicinedaclatasvir). 24 Access to medicines index. Haarlem: Access to Medicine Foundation; 2014:109 (http://www.accesstomedicineindex.org/what-index). 20

may speed up the process of obtaining marketing approval for the drug in countries where data exclusivity provisions apply. Originator companies may also contribute to local capacity in the manufacture and distribution of essential medicines by including technology transfer components within the licence.25 For example, the originator company may offer support to the licensee in meeting quality standards for manufacturing, packaging and storage, as well as registration requirements applicable within the authorized countries. Conversely, generic companies may also contribute expertise to the partnership with the originator company through their knowledge of registration processes and supply chain management within the authorized countries.26 A patent holder may enter into a voluntary licence with third parties, such as generic producers, to produce, market and distribute a particular drug within a specified territory. Royaltyfree, non-exclusive licences that include a large number of countries within the licensed territory, permit sale to both the public and private sector, and permit licensees to source active pharmaceutical ingredients from anywhere in the world are more likely to encourage robust competition and the economies of scale that are needed to substantially reduce prices. Other strategies that support access to essential medicines include tiered pricing, donation of drugs, nonfiling of patents in least developed countries, and non-enforcement of patents.

Access to medicines index. Haarlem: Access to Medicine Foundation; 2014:109 (http://www.accesstomedicineindex.org/what-index); Pharmaceutical production and related technology transfer. Geneva: World Health Organization; 2011. 26 Bayer P., Op.Cit.

MODUL 2 PROTECTION OF TRADITIONAL MEDICINE THROUGH INTERNATIONAL PATENT LAW According to the WHO, 65–80% of the world’s healthcare practice involves the use of traditional medicine, commonly referred to as complementary and alternative medicine, in some way. In 2011, representatives from more than 35 countries participated in a meeting hosted by WIPO and India’s Council of Scientific and Industrial Research (“CSIR”) that discussed including database documenting traditional medicinal treatment, concluding that such a mechanism can fuel future innovation and benefit-sharing in their own nations by protecting traditional knowledge from misappropriation. This will be an important issue to be discussed because some countries in Asia have a wealth of traditional medicines. Cooperation between the pharmaceutical industry and the traditional community for both parties' benefit is important to be discussed as well.

Traditional Medical Knowledge No authoritative treaty-based definition exists for either “traditional knowledge” or its subset “traditional medicine” for the purposes of their protection. Article 8(j) of the Convention on Biological Diversity (“CBD”) makes reference to the “innovations and practices of indigenous and local communities.”27 But a definition of “traditional knowledge” as such – let alone the conditions that must be satisfied for its protection – is not found in the CBD itself. The importance of traditional medicine as a source of primary health care was first officially recognized by the World Health Organization (WHO) in the Primary Health Care Declaration of Alma Ata (1978) and has been globally addressed since 1976 by the Traditional Medicine Programme of the WHO. The WHO, through that Programme, defined “traditional medicine” as having a long history and comprising:

Article 8(j) of the Convention on Biological Diversity states that: “Each contracting Party shall, as far as possible and as appropriate, subject to its national legislation, respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biodiversity and promote wider application with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of benefits arising from the utilization of such knowledge, innovations and practices.”

“the sum total of the knowledge, skills, and practices based on the theories, beliefs and experiences, indigenous to different cultures, whether explicable or not, used in the maintenance of health as well as in the prevention, diagnosis, improvement or treatment of physical and mental illnesses. The terms complementary/alternative/non-conventional medicine are used interchangeably with traditional medicine in some countries.”28 “Traditional” means that the knowledge is created in a manner that reflects community traditions; it is often inter-generational and created and held collectively.29 “Traditional”, therefore, does not necessarily mean “old” but is rather related to the way in which the knowledge is created, preserved and transmitted.30 Traditional knowledge is generally considered as the collective heritage of a particular indigenous people or local community.31 While individuals, such as a shaman in Bolivia or a sangoma in South Africa, may themselves innovate, what makes their innovations “traditional” is that they are based on the community’s collective heritage and the innovations are regarded as community-held.32

Protection for Traditional Medicines in Indonesia Legal protection for traditional medicines from the perspective of intellectual property law is included in patent law based on Article 26 of the Patent Law. In Article 26, paragraph (1) of the Patent Law only states that inventions relating to traditional knowledge must originate from traditional knowledge.33 Also, inventions related to traditional knowledge need not be further, specifically about traditional medicine knowledge. The patent law regime in protecting traditional medicines has several obstacles because, in the patent, there are conditions that must be met, such as, new inventions, containing inventive steps, and can be applied in industry.34 Meanwhile, even simple patents are required to meet the 28

WHO General Guidelines for Methodologies on Research and Evaluation of Traditional Medicine, Geneva (WHO/EDM/TRM/2000). 29 World Intellectual Property Organization, Intellectual Property and Traditional Medical Knowledge, <https://www.wipo.int/edocs/pubdocs/en/wipo_pub_tk_6.pdf>. 30 Ibid. 31 Ibid. 32 Ibid. 33 Vide Article 26, paragraph (1) Patent Law (Law No. 13 Year 2016) 34 Vide Article 3, paragraph (1) Patent Law (Law No. 13 Year 2016)

following requirements: new inventions, development of existing products or processes, and can be applied in industry. 35 Therefore, patent arrangements in Indonesia currently related to the protection of knowledge of traditional medicines can be said to be still weak because they are only given to new inventions, contain steps of the invention, and are applied in industry. In contrast, traditional medicine knowledge is an intellectual work that is inherited so that it is not possible to fulfill the requirements of patents, especially regarding new inventions (novelty). Seeing this issue, the government has made various alternative efforts, such as by making adjustments to the IPR regime as a legal product or establishing new laws and regulations relating to traditional knowledge in medicine and documentation as an act of devastating protection of traditional knowledge. The purpose of the formation of these laws and regulations is so that local people get recognition as a party who has ownership rights to the knowledge of traditional medicines. Alternative sources are used, such as customary law, by including the rights of local communities into Sui Generis Laws. In customary law, some principles can be used as alternative sources in the Sui Generis Act, such as:36 1. modest. 2. elements based on religious norms are not neglected; 3. based on a social system where togetherness is valued; 4. guarantee or provide the possibility that the community's traditional knowledge, especially in the field of medicines and practices related to this matter, can provide welfare for the community. Until now, the legal protection of traditional knowledge, especially in the field of medicine in Indonesia, has reached the Draft Law on Traditional Knowledge and Traditional Cultural Expressions.

Ni Ketut Supasti Dharmawan, 2017, Protecting Traditional Balinese Weaving Trough Copyright Law : Is It Appropriate? , Jurnal Law Review, Fakultas Hukum Universitas Diponegoro, Vol. 2, No. 1, p. 4. Also see. Article 3, paragraph (2) Patent Law (Law No. 13 Year 2016) 36 Agus Sardjono, 2010, Hak Kekayaan Intelektual dan Pengetahuan Tradisional, PT Alumni, Bandung, p. 251.

Sui generis Systems Some countries have adopted special sui generis laws and measures, specifically to protect traditional medical knowledge. For example, Thailand’s Act on Protection and Promotion of Traditional Thai Medicinal Intelligence protects “formulas” of traditional Thai drugs and “texts on traditional Thai medicine”.37 Only those who have registered their IP rights can research, develop and produce drugs using traditional medical knowledge.38 At the international level, the international legal instrument on the protection of traditional knowledge negotiated by the WIPO IGC would embody a sui generis approach.

Protection of Traditional Medicinal Knowledge from Bio-Piracy Several countries in the world have made several strategic efforts to protect life-saving centuries-old traditional medicines from bio-piracy. India has found a solution to how to halt their misappropriation through international patents granted on non-original innovations, by creating India's Traditional Knowledge Digital Library (TKDL), a database of traditional medicinal treatment documenting, concluding that such a mechanism can fuel future innovation and benefitssharing in their nations by protecting traditional knowledge from misappropriation.39 TKDL was launched to assert certain rights to bio-piracy by providing information about traditional Indian knowledge in languages and formats that can be understood by patent examiners at International Patent Offices (IPOs) so that it can act as a bridge between traditional knowledge information in local languages and patent examiner at an IPO to prevent giving a wrong patent.40 Also, TKDL gives legitimacy to existing traditional knowledge and allows the protection of such information from being patented by bio-piracy actors who obtain patents on the traditional Indian knowledge system.41 It should be emphasized that TKDL will prevent the misuse that splits

World Intellectual Property Organization, Intellectual Property and Traditional Medical Knowledge, <https://www.wipo.int/edocs/pubdocs/en/wipo_pub_tk_6.pdf>. 38 Ibid. 39 United Nations, UN News, 24th March 2011, Saving traditional medicines from ‘bio-piracy’ patents the goal of UN forum < https://news.un.org/en/story/2011/03/370182-saving-traditional-medicines-bio-piracy-patents-goal-unforum> 40 Ibid. 41 Ibid.

the format and solution to language barriers, thus allowing patent examiners at IPOs to conduct searches and examinations. The WIPO Directorate General said TKDL is an excellent example of a technology platform that can work side by side with a legislative framework and has become a good model for other countries.42 Therefore, WIPO is ready to facilitate international collaboration for countries interested in building their systems. In a conference organized by the UN World Intellectual Property Organization (WIPO) and India's Council of Scientific and Industrial Research (CSIR) in 2011, some countries were rich in traditional knowledge, such as Ecuador, Indonesia, Kenya, Peru, Republic of Korea and Thailand agreed to emulate India's TKDL on the need to protect their traditional knowledge.43

42 43

Ibid. Ibid.

MODUL 3 ALTERNATIVE TO PATENT LAW TO SUPPORT PHARMACEUTICAL RESEARCH AND DEVELOPMENT EFFORTS

Alternatives to patents that have been implemented in Indonesia Patents are important instrument in protecting innovation activities in modern economy. Referring to the current patent law, patent is an exclusive right granted by the state to an inventor for the results of his/her investment in the field of technology which for a certain period of time carried out the invasion itself or give approval to other parties to carry it out.44 The exclusive rights that are granted is monopolistic in nature,45 that the holder of the rights is given by the state authority to exploit all of these or giving it to other parties which usually go through licensing agreements to exploit these findings. Such conditions frequently fabricate difficulty in accessing essential medicines due to the increasing drug prices which could not be afforded by low-income public in developing countries.46 This is unfortunate because developing countries are the most vulnerable countries in terms of dangerous diseases, such as HIV / AIDS, Malaria, TBC, etc. To overcome the difficulty of access to these drugs some protection measures has already been enacted, in the form of flexibility, that can be used. These protection measures have been given by TRIPs with the aim to protect public health.47 Compulsory License48 Another issue in Indonesian patent law related to public convenience in accessing medicines is a provision regarding compulsory licensing. In General, the definition of a compulsory license is the

World Health Organization (“WHO”), ‘Globalization and Access to Drugs, Perspectives on the WTO/TRIPs Agreement, Health Economics and Drugs’, (DAP Series No.7) 45 United Nations Confrence on Trade and Development, ‘Development Dimensions of Intellectual Property in Indonesia: Access to Mediicines, Transfer of Technology and Competition’ (2011), https://unctad.org/en/Docs/diaepcb2011d6_en.pdf Accessed on 25 July 2020. 46 Muhammad Djumhana, Perkembangan Doktrin dan Teori Perlindungan Hak Kekayaan Intelektual, (Bandung: PT. Citra Aditya Bakti, 2006), Page. 108. 47 Soekidjo Notoatmodjo, Ilmu Kesehatan Masyarakat: PrinsipPrinsip Dasar, (Jakarta: PT. Rineka Cipta, 1997), hal. 10. 48 Law No. 14 of 2001 Concerning Patents, Art. 74 44

right of the government to give a license to third party, (be they private, government institutions, or other parties.) to use the patent in question without the need for approval from the patent holder.49 This compulsory license must be established by certain authorities, for example the government through court’s judgement. Compulsory licenses are basically unknown in TRIPs, however the basic principle is contained in Article 31 50 regarding “other use without authorization of the right holder”. Parallel Imports51 Parallel import is an import action "without the consent of patent holder, from a product marketed in another country, either by patent holder or with permission from the patent holder. 52 The implementation of parallel imports must be in accordance with the import procedure in a general manner and other relevant regulations that apply in a country. If we look at the provisions regarding parallel imports in Indonesian patent law, there is a development of thought from time to time. Law No. 5 of 1989 concerning patents limits the exclusive rights of patent holders, namely by not granting the right to ban importing patent products or in other words parallel import is permitted. Article 20 of the law asserts that imports of production products that are patented or made by processes that are granted patents are not the implementation of patents, meaning that the patent holder has no right to prohibit the existence of parallel imports. thus in 1997 the Government of Indonesia made adjustments to its patent law with the provisions of TRIPs namely through the enactment of Law No.13 of 1,997 which is a revision of Law No. 6 of 1989. As a result, the provisions regarding patent holder rights were amended to include the right to prohibit the import of patent goods without the permission of the rights holder. As the predecessor law, Article 16 of

Totok Mardiyanto, ‘Hukum Paten Indonesia Dalam Perspektif Kepentingan Konsumen Untuk Akses Obat’, (http://perpustakaan.bappenas.go.id/lontar/file?file=digital/78133-%5B_Konten_%5D-Artikel%20A.86-27-02.pdf Accessed on 22 July 2020) 50 Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 31. 51 Law No. 14 of 2001 Concerning Patents, Art.135(a) 52 Carlos Correa, ‘Integrating Public Health Concern Into Patent Legislation in Developing Countries, (Geneva: South Centre, 2000), Page 4 49

Law No. 14 of 2001 gives exclusive rights to patent holders to prohibit other parties without their consent,53 importing products related to their patents. In TRIPs, this importation is explained more broadly in Article 6. Intellectual Property Rights (“IPR”) owners will lose their control rights over goods that has been sold.54 Theoretically, by putting things in the market, the owner releases the IPR attached to the item that has been sold.55 From the provisions of the TRIPS, it can be concluded that TRIPS does not prohibits parallel import practices. Policy to ban or allow parallel imports are left to the national laws of each country.

Use of Patents by The Government In the case of the government foresee a reason for state defense and security and urgent needs for the benefit of the people, then the government or a third party can implement patents without permission from the rights holder through presidential decree.56 "a very urgent need for the benefit of society" such as in the interests of procurement of medicines in the event of an outbreak (pandemic), and procurement of pepticides, in the case of crop pests that cause National harvest failure. This provision is a progress from the point of view the interests of drug consumers because of the previous patent law the only reason the government uses patents is because of national security interests.57

Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 28 Tomi Suryo Utomo, ‘Eksistensi “The TRIPs Safeguards” di dalam Perjanjian TRIPs: dalam Perspektif Kesehatan Masyarakat’, (Mimbar Hukum, Vol. 20, No. 2, June 2003), Page. 211 55 Tait R. Swanson, ‘Combating Gray Market Goods in a Global Market: Comparative Analysis of Intellectual Property Laws and Recommended Strategies’, (Houston Journal of International Law 327, 2000), Page. 3. 56 Law No. 14 of 2001 Concerning Patents, Art.99-103 57 Hukum Online, ‘Begini Aturan Pemerintah Laksanakan Hak Paten Secara Mandiri’, (5 Agustus 2016) (https://www.hukumonline.com/berita/baca/lt57a44a12a27c5/begini-aturan-pemerintah-laksanakan-paten-secaramandiri/ accessed on 26 July 2020) 54

MODUL 4 A LOOK FORWARD: A REVIEW OF CURRENT PATENT LAW IN PHARMACEUTICAL DEVELOPMENT

Patent Law in Indonesia Generally, the patent is defined as an exclusive right that is accorded by the state to an inventor to exploit their invention for a defined period commercially.. 58 The development of the provisions regarding patents in Indonesia, Law No. 6 of 1989 Concerning Patents which was perfected by Law No. 13 of 1997 Concerning Patents and recently amended by Law No. 14 of 2001, in this particular amendment there is a shift of ideas outlined in the provisions which are more directed towards adjustment of TRIPs Agreement.59 One of the regulations provided by TRIPs asserts the protection of patents in the pharmaceutical sector. Contingent upon the drugs' production, the technology that is needed for pharmaceutical products requires the expensive cost of the research and development, which are very susceptible to imitation attempts.60 Thus, in line with Article 27 of the TRIPs Agreement,61 states are required to provide patent protection for pharmaceutical processes and products. Viewed from the interest of the right-holders, this new amendment provides more reliable protection for intellectual property. However, from the standpoint of drug consumers' interest, the provisions in this law still do not provide guarantees of ease of access to medicine,62 as patent protection generally increases the product prices,63 which will affect countries with least amount of foreign direct investment, especially in circumstances where the amount of medicines available is minimal, and the price is not affordable by the wider community.

Law No. 13 of 2016 Concerning Patents Assegaf Hamzah & Partners, ‘New Patents Law Enacted by DPR’ (2 September 2016), (https://id.rajahtannasia.com/media/2554/ahpclientupdate-02september2016.pdf, Accessed on 22 July 2020) 60 Mark Ritchie, et. al., ‘Intellectual Property Rights and Biodiversity: The Industrialization of Natural Resources and Traditional Knowledge’, (St. Johns Journal of Legal Commentary Review, Vol.11, 1996.) 61 Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 27. 62 Totok Mardiyanto, ‘Hukum Paten Indonesia Dalam Perspektif Kepentingan Konsumen Untuk Akses Obat’, (http://perpustakaan.bappenas.go.id/lontar/file?file=digital/78133-%5B_Konten_%5D-Artikel%20A.86-27-02.pdf Accessed on 22 July 2020) 63 United Nations Conference on Trade and Development, ‘The TRIPs Agreement and Developing Countries’ (Geneva, 1996), ¶61 59

Although patents provision to support public access to affordable medicines following the enactment of Law No. 16 of 2016 Concerning Patents, this provision further regulates regarding the allowance of the importation of patented drugs under mandatory licenses as to ensure reasonable prices for drugs that are essential to human health and permitting the production of a patented drug five years before the expiration of its patent to apply for a marketing/distribution license upon the expiry of the relevant patent.

Regulations in Asian Countries for Patent Law in Pharmaceutical Development Developing and underdeveloped countries do not provide adequate protection for patents in the pharmaceutical field because patents in the pharmaceutical field will only benefit developed countries. Therefore, developing countries do not agree with the existence of TRIPs with the reason that the agreement aims to preserve the monopoly of developed countries over developing countries in the economic and technological fields. TRIPs are also believed by developing countries as a factor to enlarge the gap between two groups of countries, especially relating to economic and technological development.64 The existence of TRIPs under the World Trade Organization ("WTO") administration brings a new approach to IPR protection at the international level. Some critical aspects of patents are also introduced in TRIPs. TRIPs regulate patent protection in the pharmaceutical field with high standards, covering process patents and product patents, a protection period of 20 years, and compulsory license, which is limited and based on specific requirements.65 Regarding its implementation, parallel import, bolar provision, compulsory licensing, and implementations of patents by the government66 have been widely used in developed countries and are considered quite successful in reducing the cost. Some countries that use TRIPs flexibility to get medicine supplies with lower prices are Malaysia, Thailand, and Indonesia.

Carlos Correa, ‘Integrating Public Health Concern Into Patent Legislation in Developing Countries, (Geneva: South Centre, 2000), Page 3. 65 Nadia Natasha Seeratan, ‘The Negative Impact of Intellectual Property Patent Rights on Developing Countries: An Examination of the Indian Pharmaceutical Industries’, (St. Mary’s Law Review on Minority Issues 339, (2001)), Page 13. 66 Examples of Health-Related Compulsory Licenses, (http://www.cptech.org/ip/health/cl/recent-examples.html accessed on 25 July 2020) 64

Patents in Thailand The pharmaceutical industry in Thailand primarily consists of non-research based manufacturers. In 2005, there were 162 firms involved in manufacturing modern medicines in the country.67 The lack of domestic pharmaceutical production leads to high dependency on other countries regarding technology, finished drugs, and active medicinal ingredients. One of the primary purposes of the enactment of the Thai patent law (and the consequent amendment of the Act) was to offer protection to pharmaceuticals and create a favorable climate for foreign investment.68 Regulations of Patents Regarding Artificial Intelligence (“AI”) Developed Medicines AI technologies are being rapidly implemented in drug development pathways. Considering the time and expense associated with producing a medicine, it is understandable that companies are looking for ways to streamline the research and development process. The drug development industry has started to use AI and machine learning for a range of functions, often through collaborations with small research groups and technology companies.69 With the development of AI usage, it may affect the provisions of the patents asserted to protect the invention. As the patent is granted only when a compound's application can be classified as both 'new' and 'invented.' A highly active compound thrown up by an AI algorithm could indeed be new. Whether it is 'invented,' however, is debatable. This is because the inventor might be considered either the algorithm (so not a person) or its programmer.70 Therefore, further regulations regarding AI are needed in order to assert patent protections for pharmaceutical products.

TDRI, “Intellectual Property and Impacts of Trade Agreements on Thai SMEs”, Thailand Development Research Institute, Bangkok, 2006 68 Mangalo, N. “Patent Protection and Technology Transfer in the North-South Conflict”, 9 IIC 109 (1978); Sell, A. and M. Mundkowski “Patent Protection and Economic Development - Some Results of an Empirical Analysis in the Pharmaceutical Industry in Latin America”, 10 IIC 566 (1979) 69 Bird & Bird LLP, AI in Drug Development: Who’s The Inventor?, (USA, June 2019), (https://www.lexology.com/library/detail.aspx?g=4bd8371b-e31a-4fe1-8d03-914c6bfc0e80 accessed on 25 July 2020) 70 Lutz Heuer, ‘AI could threaten pharmaceutical patents’ (June, 2018), (https://www.nature.com/articles/d41586-01805555-6 accessed on 25 July 2020) 67