The TRADE Act of 2008's Provisions on Intellectual Property and Access to Medicines

Mike Palmedo
October 14, 2008

Rep. Michaud has introduced legislation in the House that would require a review of existing Free Trade Agreements, and create rules on what types of provisions can be included in future ones. The Trade Reform, Accountability, Development, and Employment (TRADE) Act of 2008 includes a brief section on the intellectual property chapters of future agreements. Sec. 4(b)(7)(B) is meant to ensure that strict patent rules do not limit access to generic medicines.

INTELLECTUAL PROPERTY REQUIREMENTS. - If the agreement contains provisions related to the protection of intellectual property rights, such provisions shall-

… (B) include only terms relating to patents that do not, overtly or in application, limit the flexibilities and rights established in the Declaration on the TRIPS Agreement and Public Health, adopted by the World Trade Organization at the Fourth Ministerial Conference at Doha, Qatar on November 14, 2001, particularly the flexibilities and rights relating to the promotion of access to medicines and the issuance of compulsory licenses on grounds determined by member states;

This broad language aims to exclude from future FTAs various TRIPS-Plus intellectual property provisionsfound in earlier ones. These provisions included not only restrictions on compulsory licenses, but also patent extensions past the international 20-year norm and the obligation to grant second use patents. However, this reference to "terms relating to patents," which would exclude provisions on linkage and data protection sought by industry and included in most of the FTAs.

Most of the recent FTAs have included "linkage" requirements, which prohibit health regulators from approving generic drugs while the originator's product is still under patent. However, one of the compromises in the "New Trade Policy for America" was to remove the requirement from the Peru, Panama and Colombia FTAs. In the US companies have abused linkage (as established by the Hatch-Waxman Act) by filing additional patents of questionable merit on their products to extend their monopolies.

Every FTA from NAFTA forward has included a requirement that countries institute a period of data exclusivity for five years or longer. This is a period of time during which generic competitors cannot win regulatory approval to sell their product based on safety and efficacy data generated by the originator's clinical trials. (Generic firms show regulators that their products are bioequivalent to the approved brand name product, and therefore do not have to conduct their own clinical trials. Recreating the originator's trials would take years, would be prohibitively expensive, and would involve additional placebo-based tests on humans.)

Data exclusivity can prevent a generic drug from coming to market even in instances where a compulsory license has been issued or a patent has expired. A 2007 Oxfam briefing paper on the effect of the US-Jordan FTA on medicine prices found that data exclusivity instituted by the Jordanian government delayed generic entry for 79% of the drugs that came to market in the five years after the FTA went into effect.

Though it is does not specifically refer to public health flexibilities or the well-publicized gains from the Doha Declaration, Sec 4(b)(7)(D) goes farther in protecting access to medicines. This provision requires that future trade agreements

ensure that the access of the public to essential medicines and to technologies critical to preventing climate change is not obstructed by any provision of the agreement relating to the protection of intellectual property.

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