UNDP Report Promotes Competition Law To Boost Access To Medicines 19/05/2014 by Catherine Saez, Intellectual Property Watch 2 Comments Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The United Nations Development Programme has launched a new publication on the use of competition law to promote access to health technologies. The guidebook describes competition law as an underused tool to be harnessed by developing countries and is designed to help them proficiently using it. The guidebook entitled, “Using Competition Law to Promote Access to Health Technologies,” is intended “for use by government authorities in LMICs [low-and-middle-income countries] … including competition authorities, procurement and health authorities, judges and members of legislatures.” It was authored by professors Frederick Abbott, Sean Flynn, Carlos Correa, Jonathan Berger, and Natasha Nyak. “While competition law does not provide the financial resources necessary to procure and supply health technologies,” say the authors, “it may well be used to bring down prices and to help ensure that budget resources are used most efficiently.” Beyond IP Flexibilities According to the guidebook, competition law is complementary to some of the flexibilities built into international IP and trade rules and, therefore, warrants further attention. Competition law can be used to address ‘market failures’ and wrongful conduct in the health technologies sector, the authors say, “whether or not they are associated with the abuse of patents or other IP rights. For instance, anticompetitive activities undertaken in the context of government procurement processes, such as bid-rigging and price-fixing, are not necessarily associated with IP,” they remark. The guidebook also provides model interpretations of key aspects of competition law (Restrictive practices in licensing agreements; defining the relevant product market in access to medicines cases, refusal to license; excessive pricing; approach to extraterritorial application of competition law; remedies to address generic pathway-related abuse; model provisions of competition-related TRIPS flexibilities), and examples of price reductions achieved through use of competition law and use of compulsory licensing. According to author Abbott, professor of international law at Florida State University, “There are many ways in which anticompetitive conduct may affect the pharmaceutical sector. For example, in many developing countries, governments are active in the procurement market where there is a substantial risk of anticompetitive bid-rigging,” he told Intellectual Property Watch. “The government may issue a tender for bids to supply pharmaceutical products, with the contract to be awarded to the low bidder,” Abbott continued. “Rather than bid against each other, potential suppliers may agree that one of them will bid at an artificially fixed ‘lowest’ price that is higher than what they might otherwise have bid,” he explained. Then the suppliers may allocate the awarded contract quantities among themselves at the higher price. “There are different ways for bid-rigging to be organised,” said Abbott. “It is a common practice in relation to government tenders and competition authorities must be vigilant to prevent and react against such practices.” “If a pharmaceutical company has a dominant position in the market and can effectively foreclose competition, it should not be able to charge any price that it wishes,” he said. “How from a competition law standpoint do you go about assessing whether a company is abusing its position to charge an excessive price?” A number of developed countries have means to regulate prices under competition law principles. Developing countries need to develop tools to control excessive prices of medicines. Excessive pricing can have dramatic public health impact. The US and other countries use competition law both as an instrument of industrial policy and as a tool for consumer protection, he said. “Unlike some other areas of law, there are no extensive overarching international agreements on competition law,” say the authors. “As a consequence, there are few external constraints on the approaches that governments may legitimately adopt to address anticompetitive conduct, and governments, particularly those in the developed world, have adopted and employed substantially different approaches to competition law over time.” Rising Interest for UNDP “UNDP is increasingly interested in the use of competition law to promote access to treatment, because in our opinion, competition law is one of those under-discussed and under-utilised public health related-flexibilities available under the TRIPS agreement,” said Tenu Avafia, policy advisor, Human Rights & Governance, HIV, Health and Development Group for UNDP. TRIPS is the World Trade Organization Agreement on Trade-Related Intellectual Property Rights. UNDP provides policy and technical support to low-and-middle-income-countries to incorporate flexibilities in their national legislation and to use those flexibilities when required, Avafia told Intellectual Property Watch. UNDP also does research and develops technical documents on TRIPS and treatment access, “such as the current one whose results are the object of the publication, and other studies on specific technical issues around IP, trade and access to treatment, “Avafia explained. “There are several entities providing advice on many public health related flexibilities,” Avafia said. “Most people are discussing compulsory licences, parallel imports, and patentability criteria. We believe that a focus should also be placed on competition law and policy as a number of LMICs have recently established competition authorities and may be reforming their laws.” “It is important to highlight, the importance of including TRIPS flexibilities in these regulations,” he said. “Competition law is addressed in one of the recommendations of the independent Commission convened by UNDP on behalf of the UNAIDS family, Global Commission on the HIV and the Law in its report HIV and the Law: Risks, Rights & Health,” he said. The Commission’s report urges the closer examination of competition law, and the current publication is UNDP’s contribution on this recommendation, he added. According to Avafia, the TRIPS agreement [pdf] holds a number of articles which are relevant for the regulation of anti-competitive behaviour (Article 6 (Exhaustion), 8 (Principles), 31 (Other Use Without Authorization of the Right Holder) (k), and 40, under section 8 (Control of Anti-Competitive Practices in Contractual Licences). Developing Countries New to the Game According to Abbott, major emerging market countries like China and India have recently been devoting substantially more resources and attention to implementation of competition law, “but it takes time to build up the relevant institutions and gain experience in applying doctrine in a way suited to the local environment.” “South Africa has used competition law successfully to enhance access to HIV/AIDS treatments,” he explained. “Brazil has a fairly substantial history and experience in competition law development and enforcement, and has been updating its legislation. These are countries with substantial resources that can be devoted to developing and implementing competition law.” “Some other developing countries may be more likely to suffer from resource constraints, and may confront more challenges in building up institutional structures and staff,” said Abbott. “Competition law enforcement can be complex from a legal standpoint. Companies often resist volunteering data, and the investigation process can be resource-consuming.” “Many developing countries are at an early stage in the field of competition law enforcement and some countries may not have appreciated how important competition law can be used in regulating the pharmaceutical sector, promoting access and reducing prices,” Abbott said. Resources for Developing Countries According to the guidebook, a number of the developed-country competition law authorities, along with international organizations and civil society organizations, can provide technical training and support. Abbott said the International Competition Network (ICN) is an important resource “for developing country competition authorities seeking to pursue cooperation with other authorities, and to learn about current developments.” The US Department of Justice and US Federal Trade Commission engage in bilateral and multilateral outreach programmes that involve cooperation among authorities, as well as training, he said. The European Competition Directorate also maintains a “substantial number” of initiatives for cooperation and training with developing country competition authorities, he added. The Organisation for Economic Co-operation and Development (OECD) has a substantial number of reports and documents regarding competition law that may be useful, Abbott said. “Depending on the reception of the document, UNDP would like to work more closely with both intellectual property and competition authorities on this important matter,” said Avafia. Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Catherine Saez may be reached at email@example.com."UNDP Report Promotes Competition Law To Boost Access To Medicines" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.