SA’s Pharma Patent Laws under Threat

Civil society groups, supposedly acting on behalf of the sickest and most vulnerable members of society, weighed in on the ongoing battle between local generics company, Cipla Medpro, which is questioning the validity of the patent on a blockbuster cancer drug produced by Aventis Pharma. Cipla Medpro began selling its own generic version of the Aventis original drug in January. According to Aventis, this is in contravention of the patent it holds on this drug. 

But what exactly is a patent? A patent is a form of intellectual property (IP), which the World Intellectual Property Organisation defines as creations of the mind. For example, inventions, literary and artistic work, and symbols, names, images and designs used in commerce are all forms of IP. It is ubiquitous and surrounds us in nearly everything we do during the course of our everyday lives. The intangible nature of IP should not detract from its importance to society. Indeed, the International Chamber of Commerce states: “The protection of IP stimulates international trade, creates a favourable environment for foreign direct investment, and encourages innovation, transfer of technology, and the development of local industry, all of which are essential for sustainable economic growth, and its concomitant benefits for public health.” 


IP has a tremendous ability to reach a vast number of people at one time. Given its intangible nature, innovators face a challenge to capitalise on the economic benefits of their ideas. In order to overcome this problem, governments grant intellectual property rights to assist innovators and provide incentives for innovation and IP dissemination. IP rights protection for pharmaceutical innovations specifically, is generally granted by government for a maximum period of 20 years. Only after this ‘window of opportunity’ to capitalise on an idea, does a product fall into the public domain, where, in the case of pharmaceutical drugs, generic companies are then permitted to copy and benefit financially from the original idea. However, without IP rights protection, private organisations, which bring to market the vast majority of new developments, would be less able to assume the costs and risks associated with the research, production and marketing of their innovations. 


The ‘window of opportunity’ strikes a balance by rewarding innovators for their ideas as well as encouraging future developments, while also maximising scientific progress and access to these new innovations. This policy ensures that innovative companies can recoup the enormous amounts of time and expense that goes into developing new drugs, whilst promoting generic competition after the expiration of the patent term. 


Advancements in healthcare technology and the medical field are important contributors to improved health and longevity globally. The development of innovative pharmaceutical products plays a significant role in this. The price mechanism and laws, such as IP laws, provide pharmaceutical companies with the economic incentives to produce the drug in the first place and then to capitalise on their idea thereafter. 


Poor enforcement or the lack of IP protection discourages investment by multinational companies. In the case of pharmaceuticals, a lack of innovator medicines in the country would lead to a stagnant generic drug market which would have dire consequences for all South Africans, regardless of their socio-economic or property owning status. 


This is not the first attack on IP in SA. Through its commitment to increase access to medicines, the government made provisions for compulsory licensing, among other things, in the Medicines Act of 1997. In simple terms, compulsory licensing gives the government the power to allow a local production company the right to produce and sell an on-patent drug at a lower price to increase access to that particular drug. 


In 2000, civil society groups argued that SA’s Intellectual Property Rights (IPR) regime was restricting access to antiretroviral (ARV) medicines used to treat HIV/AIDS and brought the matter before the courts. The group pointed to the compulsory licensing legislation, and called on government to enforce these flexibilities. The result was a compromise and innovator companies voluntarily agreed to license out production and/or distribution of their ARV drugs. This compromise, however, was an uneasy one, because, arguably, without it, the government would simply have forced innovator companies to provide their ARVs to domestic manufacturers via the flexibilities provided through the Medicines Act. 


This erosion of IPR protection is partly responsible for the decline in the number of innovative companies marketing ARVs in SA. It has also contributed to the decrease in investment and reduced the attractiveness of the country as a viable destination in which to establish manufacturing facilities. 


SA has a proud record of upholding IP rights, which has generally been lacking elsewhere on the African continent. This has been one of the factors that has attracted a high level of foreign investment to our country and contributed to the development of the local industry. It has also resulted in South Africans being able to access some of the world’s most advanced goods and services, which, ultimately, has allowed us to become wealthier and healthier. 


This article was first published in the July edition of Medical Chronicle


HPU Article / 19 September 2012

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