Chapter II
Economic Commission for Latin America and the Caribbean (ECLAC)
Diagnostic assessment or rationale Signed when WTO was created in 1995, the TRIPS Agreement aimed to create a global intellectual property rights (IPR) regime, based on the harmonization of legal standards in developed countries. Under the TRIPS IPR regime, WTO member States must grant product patents and exclusive marketing rights to producers for defined periods of time (usually 20 years). In a highly concentrated and R&D-intensive market, such as that of pharmaceuticals, patent protection has allowed companies to set high prices in order to recover R&D costs. However, this system has put many drugs beyond the reach of developing countries. Moreover, debates over the interpretation of certain articles of the agreement, for example in relation to the exclusivity of clinical trial data, have sometimes erected additional barriers to accessing medicines. To ensure access for developing countries, the TRIPS Agreement offers governments some degree of flexibility in the management of patents on critical goods such as pharmaceuticals (see table II.1). Table II.1 Flexibilities in the Agreement on trade-related aspects of intellectual property rights (TRIPS Agreement) Measure
Article
Definition
Compulsory licensing and non-commercial public use
Art. 31
Governments are allowed to authorize a party other than the holder of a patent on an invention to use that invention without the consent of the patent holder, on the condition that efforts have been made to obtain the authorization from the right holder, or in cases of national emergency.
Parallel imports
Art. 6
The import and resale of a product from another country (where the same product is legitimately for sale at a lower price) without the consent of the patent holder.
Exceptions to rights conferred
Art. 30
WTO Members may provide limited exceptions to exclusive rights conferred by a patent (for example, the regulatory (Bolar) exemptiona and research exemptions).
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Burlamaqui and Cimoli, 2014. “Industrial Policy and IPR: A Knowledge Governance Approach”, Intellectual Property Rights, Oxford University Press, 2014. a These exemptions are often referred to as “Bolar” exemptions in reference to a law that was enacted in the United States after a court ruling in the case of Roche Products, Inc. vs. Bolar Pharmaceutical Co., Inc. (1984). This mechanism allows the conduct of trials to establish the bioequivalence of generic medicines before the expiry of the patent
The Declaration on the TRIPS Agreement and Public Health, approved at Doha in 2001, and the amendment to the TRIPS Agreement that entered into force in 2017, confirmed the right of countries to use compulsory licensing and other flexibilities to safeguard health, and their freedom to determine the grounds for compulsory licensing. Compulsory licenses are the most widely used TRIPS flexibility, with 100 compulsory licenses or public licences for non-commercial use having been issued between 2001 and 2016 (Hoen and others, 2018). Compulsory licenses allow a patent to be used without the patent holder’s authorization. Specifically, the issuance of a compulsory licence for a pharmaceutical treatment allows a government to manufacture locally, or import, generic versions of the treatment without the patent holder’s consent. The licences may be granted for a number of reasons, including to remedy anti-competitive practices or because the patent is not being used; when the patented drug is inaccessible due to high cost or unavailability; when the patent holder refuses to license the patent to other qualified producers, including domestic producers; when there is a risk of shortages; and when public health is at stake. The laws of Latin American and Caribbean countries provide different rationales for compulsory licensing (see annex 5.1). Some countries have benefited from the use of these provisions and have obtained significant cost reductions and increased access to medicines. In the context of the COVID-19 pandemic, Brazil, Chile, Colombia and Ecuador have amended their laws to facilitate compulsory or government licensing to combat the pandemic.
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