Published on 23 July 2012 @ 7:00 pm
Inside Views: Access To Medicines And Intellectual Property In Jordan
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Intellectual Property Watch
Summary: A new study sponsored by the Medicines Transparency Alliance (MeTA) sheds light on the impact of strong intellectual property protection on access to medicines. Since joining World Trade Organization (WTO) in 2000, and signing a free trade agreement with the United States in 2001, Jordan has dramatically strengthened the intellectual property protection it provides for pharmaceutical products. The MeTA study quantifies the impact of these developments by evaluating the effects on the private retail market of delayed market entry of generics. MeTA assembled an international, multidisciplinary research team composed of representatives from the Jordanian government, originator and generics industries, academics and health care providers to analyze data from IMS Health, the Jordan Food and Drug Administration (JFDA), the Jordan Patent Office (JPO) and the Jordan Association of Pharmaceutical Manufacturers (JAPM). The study estimates that delayed market entry of generics due to enhanced IP protection cost Jordanian private consumers approximately 18 million US dollars annually. Based on its findings, the study concludes that Jordan should consider amending its current regulatory scheme on data protection as well as the Unfair Competition and Trade Secrets Law of 2000. Jordan should also consider increasing spending on public health to offset the impact of strengthening its intellectual property protection. The study was published in the Journal of Generic Medicines, and it is being made available online without charge for a limited time at: http://jgm.sagepub.com/content/9/2/75.full.pdf+html.
While intellectual property rights create incentives for development and commercialisation of useful innovations, they also create obstacles to accessing new technologies. In the case of pharmaceuticals, patent protection promotes investment in research and development for the creation of new drugs. However, these same protections limit access to medicines, particularly in developing countries. Deciding on the appropriate level of protection for intellectual property involves striking a balance between innovation and access.
Before Jordan joined the WTO, the Office of the United States Trade Representative (USTR) had listed Jordan on its Special 301 watch list for failure to adequately protect US intellectual property rights. This is one of the lists maintained by the USTR that identifies foreign countries with barriers to trade or without adequate protection for IP. A report by the USTR noted that Jordan’s then current patent law did not permit patenting of pharmaceutical products.
Jordan joined the WTO in 2000. Membership in the WTO confers a variety of benefits, including lower tariffs and reduced trade barriers to exports, more access to foreign products and potentially improved international relations. However, applying to the WTO for membership is a lengthy and complex process, and Jordan was required to commit to substantial new obligations in areas such as tariff reductions, services, agriculture and transparency. Jordan was also required to enhance protection for intellectual property and to become compliant with the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS), an obligation for all WTO Members.
In 2001, Jordan became the fourth country to enter into a bilateral free trade agreement (FTA) with the United States. The agreement phased out tariffs and completely eliminated duties on nearly all products by 2010. The FTA commits Jordan to TRIPS-plus provisions for IP protection, particularly in the pharmaceutical sector. FTA requirements include expanded data protection, extension of patent term, notification requirements, elimination of exclusions from patentability for biotechnology inventions, limitations on parallel imports and limitations on compulsory licensing.
Domestically patented pharmaceutical drugs in Jordan now receive 20 years of market exclusivity without generic competition from the date of patent application. However, multinational pharmaceutical companies have tended to forgo patent protection in favor of five years of market exclusivity automatically associated with registration of a new medicine. There are many reasons a company may choose not to file for a pharmaceutical patent. For example, a foreign manufacturer may decide the limited size of the Jordanian market does not justify the cost and time necessary for patent application.
Prior studies of the effects of increased intellectual property protection in Jordan produced conflicting results. A report by the International Intellectual Property Institute (IIPI) in August 2004 noted Jordan’s economy expanded significantly between 1998 and 2001, which it attributed to improved protection for intellectual property. The report noted health-service contributions to the Jordanian gross domestic product grew from 2.8 percent in 1997 to 3.5 percent in 2001, and health-services employment grew 52 percent since 1997. The IIPI report further stated that pharmaceutical exports from Jordan expanded 30 percent from 1999 to 2002.
On the other hand, a 2007 article in the Journal of World Intellectual Property analyzed the TRIPS-plus provisions of the FTA and found that the claimed benefits from the FTA have been exaggerated and the costs underestimated. The article notes that Jordan had a vibrant domestic pharmaceutical industry prior to the FTA which was geared toward export. It concludes there is no evidence to support claims that the FTA has enhanced availability and accessibility of medicines in Jordan, attracted foreign investment, improved R&D capacity of local manufacturers or led to more collaboration between national and multinational pharmaceutical companies.
Another study of the FTA, published in 2007 by Oxfam, found that medicine prices have increased significantly in Jordan since the FTA, partly as a result of TRIPS-plus rules. It concludes stronger IP protections have produced minimal benefits to foreign direct investment, domestic R&D, and the introduction of new medicines. The report predicts that medicine prices will continue to rise in Jordan but that the country will be unable to use TRIPS safeguards to reduce their price.
The current report was commissioned to investigate the effects of increased intellectual property protection – as a result of WTO accession and the US-Jordan Free Trade Agreement – on access to medicines in Jordan. It was conducted by an international, multidisciplinary research team composed of representatives from the Jordanian government, originator and generics industries, academics and health care providers. Data is presented and analyzed from IMS Health, the Jordan Food and Drug Administration (JFDA), the Jordan Patent Office (JPO) and the Jordan Association of Pharmaceutical Manufacturers (JAPM).
The study found that, adjusting for increased sales volume and inflation, during a five-year period spanning the time before and after Jordan’s WTO accession and the FTA, there has been a 17 percent increase in the total expenditure per year for medicines in Jordan. Considering originator medicines with generic equivalents marketed before and after increased intellectual property protection in Jordan, the weighted average price of originator medicines has increased while the weighted average price of generic medicines has decreased. Delayed market entry of generics due to enhanced IP protection is estimated to have cost Jordanian private consumers approximately 18 million US dollars annually.
Of all the current forms of intellectual property protection in Jordan, the provision for data protection has the most significant effect on the price of medicines. However, neither the TRIPS Agreement nor the FTA obligate Jordan to maintain its current regulatory scheme. Under these agreements, if applications for generic drug approval do not make actual use of test data submitted by originators, but only rely on the fact that an originator medicine has been approved in Jordan, the government has no obligation to delay generic applications.
However, the JFDA is currently required by Jordan’s Unfair Competition and Trade Secrets Law to prevent approval of generic applications that rely on originator approval. Jordan should consider eliminating this requirement from its Unfair Competition and Trade Secrets Law.
Jordan is already committed to the strong intellectual property protection mandated by WTO membership and the US-Jordan Free Trade Agreement. However, Jordan has recently taken promising initiatives to promote generic competition within the framework of its international obligations. This has included restricting market exclusivity to a narrow definition of “new” uses and limiting applications for data exclusivity to a short period following market approval in the originator country.
Nations considering agreements that would strengthen their intellectual property protection for pharmaceuticals should be aware this is likely to have a negative impact on access to medicines. This risk should be carefully balanced against possible benefits such as tariff reductions and increased foreign direct investment. On the available evidence, developing nations should generally resist TRIPS-plus rules in such agreements. Otherwise, they should plan to increase spending on public health to offset the impact of TRIPS-plus rules on consumers.
Ryan Abbott, MD, JD, MTOM is Associate Professor of Law at Southwestern Law School. He has served as a consultant on health care financing and regulation, intellectual property, and public health for international organizations, academic institutions and private enterprises including the World Health Organization, World Intellectual Property Organization and University of California, Los Angeles. Professor Abbott has published widely on issues associated with health care law and intellectual property protection in legal, medical, and scientific peer-reviewed journals.
Professor Abbott is a physician, attorney, and acupuncturist. He is a graduate of the University of California, San Diego School of Medicine and the Yale Law School, as well as a Summa Cum Laude graduate from Emperor’s College (MTOM) and a Summa Cum Laude graduate from University of California, Los Angeles (BS). Professor Abbott has been the recipient of numerous research fellowships, scholarships and awards, and has served as Principal Investigator of biomedical research studies at University of California. He is a registered patent attorney with the US Patent and Trademark Office and a member of the California and New York State Bars. He can be contacted at firstname.lastname@example.org.