South Africa Awaits Patent Reforms With Hope, Concern

CAPE TOWN – South Africa’s new policy on patents could go to the Cabinet for approval soon, says Doctors without Borders (Médecins Sans Frontières, MSF), one of the organisations spearheading the Fix the Patent Laws campaign in the country.

The draft intellectual property policy has been circulated for comments since its release in September 2013.

Reaching the Cabinet paves way to debate before the draft comes into law.

According to Julia Hill, MSF access advocacy officer, government promises made in recent months indicate that the new policy could come soon.

Hill said the Department of Trade and Industry (DTI) said in October the final policy would go to Cabinet for approval by the end of 2014 – a deadline which was missed – and at the end of last year, noted on Twitter that the policy would be finished in February 2015.

She said the DTI patents office announced at the national IP summit in October 2014 that a patent examination system would be set up and will start training 20 examiners from April 2015. The examiners will prioritise pharmaceutical and mining patents.

Efforts to confirm the latest date were unsuccessful at the time of going to press.

In Hill’s opinion, South Africa is moving in the right direction with policy reform.

The draft policy clearly states the need for laws that will protect people’s health needs ahead of pharmaceutical companies’ exorbitant profit margins, she said.

Hill said there could be consequences for further delays in carrying out the reforms.

“The longer we delay, the more medicines are patented, and the more battles we will be fighting for important drugs at affordable prices in the future,” she told Intellectual Property Watch.

A year ago – in January 2014 – McDonald Netshitenzhe, chief director for IP policy at DTI, was quoted in the Business Day as saying the draft was expected to be submitted to the Cabinet in March 2014.

Fixing the Flaws

The Fix the Patent Laws (FTPL) campaign, pegged on accessing affordable medicines for all people living in South Africa, has been working on the issue since November 2011.

FTPL was started by the Treatment Action Campaign, Doctors without Borders and SECTION27.

Health activists accused South Africa of registering any patent whose paperwork was filed and fees paid for, rather than examining applications to assess whether they meet innovation criteria.

They alleged that pharmaceutical companies have exploited South Africa’s system by ever-greening – making minor changes to medicines that were already on the market to gain additional 20-year patents that block competition by affordable generic versions – which has meant that excessive number of drug patents were granted.

Close to 50,000 people worldwide in 2014 signed petitions condemning an underground attempt by multinational pharmaceutical companies to delay reform, and supported the South African government to finish the national IP policy.

According to MSF, patented medicines in South Africa can cost up to 35 times more than in countries like India, where robust generic competition exists. DTI statistics indicate that the current IP system not only hurts patients, but also the South African economy, advocates said. Imported medicines are the fifth largest contributor to South Africa’s trade deficit, which is driven mostly by high costs of patented drugs.

Hill said a change in the law could bring relief to the public sector as the Department of Health grapples with sustaining the 2.4 million South Africans on antiretroviral treatment and the affordability of much-needed second-line and third-line ARVs as more people develop resistance to first-line drugs.

Getting the second-line HIV drug lifeline is more than double the cost of affordable first-line drugs, while third-line treatments are 15 times more expensive, she said.

Kate Ribet, MSF spokesperson, said indications are that South Africa will introduce a number of pro-public health reforms, or make some existing laws easier to implement.

Closer examining of patent applications, and stricter selection criteria to determine a patent will help to reduce a practice called ever-greening, where companies can maintain monopoly periods, and the ability to charge high prices for longer, Ribet said.

Linda Greeff of People Living With Cancer (PLWC) agreed.

“We want to see ever-greening being stopped and a more ethical practice that will ensure that new developments in oncology will be accessible for state and private oncology patients at affordable prices,” Greeff told Intellectual Property Watch.

Concern for Investment, Innovation

Differences on what the reforms should be and should not, however remain numerous.

Anthea Jeffery, head of policy research, Institute of Race Relations, warned in @Liberty, IRR’s occasional paper in October 2014, that if translated into law, the proposals will reduce the impetus for local innovation.

He said such reforms will give potential investors an impression that South Africa is a ‘rogue’ state with scant regard for property rights or the rule of law.

Jeffery said the DTI’s policy proposals attracted some 115 comments [Note: the comments are not publicly available online], critical of plans to reduce the prices of medicines by allowing more competition from generics and promoting local industrialisation by encouraging the growth of a domestic generic manufacturing sector.

The Innovative Pharmaceutical Association South Africa (IPASA), representing companies that make “innovator” medicines, which are protected by patents and have no competition from generic copies, supports the broader objectives of the draft IP policy, but it has a bone of contention.

IPASA said it hails empowering all sections of South African society, contributing to development, improving IP enforcement, promoting research and development and improving national compliance with international treaties.

“These are pillars of growth and development, and attracting foreign direct investment,” said Konji Sebati, IPASA, chief executive officer, and a recent officer at the World Intellectual Property Organization.

Sebati said they would like to see an IP regime and a patent system that promotes innovation, respects the rights of inventors, granting them their patent rights to make and sell their new products, without competitors being allowed to copy them.

“In essence, the inventor, the patent holder, should be rewarded for his/her creativity, insight, and costly research and development, and should be given a ‘window of opportunity’ for the exclusive exploitation of his innovation,” Sebati told Intellectual Property Watch.

She said this system brings about much-talked about balance, and benefits all, including the patent holder, and then everyone else can copy, sell, or otherwise use this innovation after 20 years – which she noted includes the many years of R&D and the many years waiting for the medicine to be approved by the Regulatory Authority.

“I cannot stress enough that without a robust research-based pharmaceutical industry, there will be no generics, there will be nothing to copy from, and that will be a very sad day for patients, and communities at large,” Sebati said.

IPASA hopes that the government will not intentionally want to “hurt the very golden goose that lays the medicine eggs,” but will find ways to engage with the industry in a spirit of partnership in the welfare and healthcare of the millions of South Africans, she said.

Purpose in Numbers

The fight for cheaper medicines in South Africa has, however, not slowed down. People Living With Cancer (PLWC) joined the campaign on 5 February, World Cancer Day.

“The sign on by People Living With Cancer was a very important step in the campaign’s work,” said Ribet.

The patient cancer groups have been traditionally suspicious of any attempts to put pressure on pharmaceutical companies to lower prices, as they fear that this will cause these companies to disinvest in R&D and withdraw their life saving treatments, she said.

The fear was unfounded as there were documented cases where pharmaceutical companies have reduced prices when put under consumer or government pressure, Ribet added.

Greeff of PLWC said they joined the campaign because the initiative is fighting cancer advocacy issues on many levels, cancer stigma, poor services delivery, broken machines and lack of transport for patients.

She says cancer drugs in South Africa are unacceptably high and more effective medicines could be so expensive that sometimes they are beyond the reach of patients in the public sector adding that some patients were forced to fork out of pocket payments or battle with medical aid schemes to get access to the right drugs.

Greeff said trastuzumab, an effective treatment for early stage breast cancer patients in use for many years, currently costs about R24,000 (US$2000) for a patient every three weeks.

“There is no similar drug currently – a generic will not be possible for some time, that can compete, as far as our medical team knows,” she said.

Greeff said reforms must open doors for more transparency in determining cancer drug prices.

She said when new drugs are registered the drug company should base their price on the cost of R&D plus a mark-up of 100 per cent, but not more than that.

As South Africa awaits new IP reforms, it’s apparent that both parties, for and against, have genuine grievances, and one hopes an amicable solution will be found to balance the competing interests.