Kobe, 23 February 2017 — As 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP) agreement meet next week in Kobe, Japan, for the seventeenth round of negotiations, international medical humanitarian organisation Médecins Sans Frontières (MSF) is appealing to the Japanese and South Korean governments to withdraw harmful proposals that will restrict people’s access to affordable generic medicines. While being negotiated behind closed-doors, Japan and South Korea are aggressively pushing for measures in the RCEP agreement that would emphasise stronger pharmaceutical corporation power at the expense of public health, threatening millions of lives globally.
“Japan has been advocating for the need to address high drug prices and the need for access to affordable treatment at the UN and G7; but the tougher intellectual property provisions it has been negotiating for in RCEP go against that,” said Jeremie Bodin, General Director, MSF Japan. “One of the proposals would lengthen patent monopolies that will lead to unaffordable drug prices for a longer time, while also undermining fragile health care systems and stifling the patient-centred research and development required to address emerging public health challenges.”
The intellectual property provisions initiated by Japan and South Korea go far beyond the requirements needed under international trade rules. The proposed provisions seek to extend pharmaceutical corporations’ patent terms beyond the usual 20 years, and also would require data exclusivity that limits competition – even for improved formulations of older medicines that do not deserve a patent. Equally disturbing is the proposed investment chapter which raises the risks of the Indian and ASEAN country governments being sued by pharmaceutical corporations for millions of dollars in secret tribunals – outside of domestic courts – for regulating the IP system and controlling drug prices in the public interest. All of these provisions are similar to those included in the Trans Pacific Partnership (TPP) trade agreement, which MSF and many others branded as the worst trade deal ever for access to medicines.
“The worst intellectual property provisions of the TPP have been introduced through the backdoor by Japan in the RCEP negotiations. Measures like patent term extensions and data exclusivity are another form of ‘evergreening’ monopolies on older medicines, which allows a deadly delay to the introduction of generic competition and expand the power of pharmaceutical corporations to charge exorbitant prices,” said Leena Menghaney, Head-South Asia, MSF Access Campaign. “The RCEP negotiators must protect existing public health safeguards that enable developing countries like India to keep supplying the life-saving affordable medicines needed to treat millions of people worldwide.”
Today, mounting prices of medicines under monopoly are already straining the budgets of governments around the world, and leaving treatment providers like MSF and people without access, including in high-income countries. In 2001, pharmaceutical corporations charged more than US$10,000 per year to treat one person living with HIV - even as countries like South Africa were witnessing over 500 deaths a day from the AIDS epidemic. In this decade prices have passed $100,000 per person for new cancer therapies, and $1,000 a pill in some countries for hepatitis C drugs. The recent report of the U.N. Secretary General’s High Level Panel on Access to Medicines recommended that governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include intellectual property or investment provisions that interfere with their obligations to fulfil people’s right to health.
“In our projects in South Africa, we already witness the human consequences of price hikes of medicines used in the treatment of drug resistant TB and HIV for reasons of politics and profit”, said Dr. Amir Shroufi, MSF South Africa Medical Coordinator. “Accepting stringent intellectual property measures in trade deals like RCEP will result in a further narrowing of access to the affordable, quality generic medicines that MSF relies on to treat people across the world."
IP provisions in the leaked RCEP draft text that will keep drug prices high:
|TRIPS-plus RCEP Proposals||Impact on Access to Medicines|
|Creates data exclusivity by preventing drug safety regulators from using or relying on existing clinical data to grant market approval to generic drugs.||Data exclusivity grants a market monopoly status to medicines -especially for new formulations of older medicines - even when patents no longer apply or exist. This gives companies a new way to keep prices high to block generic competition. It creates a barrier for entry of generic producers, as they will have to repeat clinical trials to generate a new set of safety and efficacy data if they intended to register before the data exclusivity period expires, a process that is costly and can takes years. In addition, existing generics can be forced off the market when such backdoor monopolies are granted under the drug regulatory system. More importantly, repeating clinical trials—solely for registering the generic version—is unethical. The WHO recommends against data exclusivity for developing countries, and yet the draft text in RCEP would grant data exclusivity for a period of “no less than five years”.|
|Mandates patent term extensions by increasing patent terms beyond 20 years.||At present, patents on drugs in most countries last for 20 years from the date of filing. Thus, a straightforward way to prolong a company’s monopoly over a drug is simply to extend the life of the drug’s patent beyond 20 years. Extra years ensure that patent holders can maintain a monopoly position and continue to charge artificially high prices for the drug, free from generic competition.|
|Extends intellectual property (IP) enforcement measures to cover all areas of intellectual property, beyond the obligations of the TRIPS Agreement. RCEP has numerous provisions on border enforcement that could prevent the flow of generic medicines from producer to patient.||Elevated levels of enforcement increase the likelihood of legal actions against legitimate suppliers of generic medicines. RCEP provisions could also widen the scope of IP enforcement and place the generic medicines distribution and supply chain, including of treatment providers, at risk of litigation and court cases. Such provisions are not only excessive in its scope, but also stand in contrast to judicial efforts to remedy IP infringements by awarding royalties to patent holders, instead of through enforcement measures that undermine access and competition. In addition, the current RCEP text on border measures does not adequately protect legitimate transport of generic medicines.|
|Proposes the premature adoption of intellectual property obligations by Least Developed Countries (LDCs) in the region.||RCEP trade negotiators have not adequately protected the transition period available to its most impoverished member countries—Cambodia, Myanmar and Lao People's Democratic Republic—that allows them to delay the implementation of the WTO TRIPS agreement vis-a-vis pharmaceuticals. Under this transition period—which may also be extended—LDCs do not have to apply or enforce TRIPS provisions concerning patents and test data protection for pharmaceutical products until 1 January, 2033. The proposed provisions in RCEP, including the mandate to ratify WIPO treaties such as the Patent Cooperation Treaty, may force these countries to prematurely adopt patents and other IP obligations that could hinder supply and registration of low-cost generic medicines.|
|Intellectual property inclusions in the investment chapter allow companies to sue governments for public health protections.||If an investor-state dispute settlement (ISDS) mechanism is agreed to in the RCEP, pharmaceutical companies could sue governments in secret arbitration tribunals and seek huge financial compensation if any IP-related law, policy, rules, regulations, court decisions or other actions interfere with their profits, even when these domestic measures are in accordance with national law and the World Trade Organization’s TRIPS Agreement.|