Resolution On Compulsory Licences For Patented Medicines Passes In Chile

A resolution has been passed by Chile’s Chamber of Deputies, a branch of its National Congress, to encourage the use of compulsory licences to import generic versions of a patented drug when necessary to protect and promote the health of the population.

The resolution is available here [in Spanish]. A partial unofficial translation has been posted by Knowledge Ecology International, which first issued notification of the resolution. IP-Watch also carried out an informal translation of the 5-page text.

According to translations, the resolution directs the health minister to facilitate the acquisition of necessary drugs at prices affordable for the population, and to build the administrative procedures necessary to prioritise certain medicines which could be considered for compulsory licensing. The resolution additionally directs the Minister of Economy, Development and Tourism to review and update Chile’s existing law on compulsory licences, and to develop administrative guidelines on the granting of licences that are consistent with the right to health and life, in an effort to make the future issuance of any compulsory licence more legally certain.

It states (via the KEI translation):

1.-To the Ministry of Health:
A) To incorporate and use the compulsory licensing mechanism provided for in article 51 numeral 2) of the industrial property law, especially for reasons of Public Health and non-commercial government use, to facilitate its acquisition at competitive prices both by the public services as well as by the private health services and the population that requires it; And ultimately guarantee their access.

1. B) To elaborate administrative directives, circulars and protocols or procedures within the health sector for the selection and prioritization of products or procedures related to medicines subject to patents that must be considered for purposes of compulsory licensing requirements based on public health reasons and non-commercial government use.

2.- The Ministry of Economy, Development and Tourism
A) To review and update the regulation of said article 51 of the industrial property law 19039 for the purpose of developing and complementing what is established in said legal provision, granting a greater degree of fluidity and legal certainty for its application by the competent bodies and Individuals.

1. B) To develop and publish administrative guidelines for the granting of such licenses consistent with the objective of protection of the right to health and life, including parameters and other criteria for the purposes of determining remuneration and other conditions for the granting of the said licenses.

Background

According to the unofficial IP-Watch translation of the resolution, an estimated 1.5 percent of Chile’s population is afflicted with hepatitis C. The resolution specifically cites the difference in price between Chile, where the patented medication is acquired under the public health system for approximately US$8,000 per patient, and India, where generic competition lowers the price to under US$300 per patient.

The resolution specifically references that generic versions of sofosbuvir, the hepatitis C medication, are available from India, and points out the price difference that has resulted from other countries use of compulsory licences for medications to treat HIV and AIDS, cancer, and cardiovascular disease.

The resolution discusses current health care law in Chile, which calls for public financing of certain treatments in order to guarantee access to the population, as well as a national fund which was created in 2015 to finance high-priced medicines. The resolution states that these measures have not been enough, and that the high prices of medicines under patent make them unattainable for the general population.

As a developing country member of the World Trade Organization, Chile adopted the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 2000. TRIPS requires that all parties adhere to uniform protections on patents from other member states. TRIPS has been criticised for enabling patent holders to retain a monopoly on pharmaceuticals which are essential for public health, which may result in high prices unattainable to individuals or health plans in both developing and developed countries.

As a response to the negative implications which patents may have on public health, an overwhelming majority of WTO member states endorsed an agreement known as the Doha Declaration on TRIPS and Public Health. Under the terms of this agreement, member states declared their right to use some flexibilities in applying patents when doing so would threaten public health. These flexibilities include compulsory licensing.

If a state were to determine that the price of a necessary medication made it inaccessible to the general public, they could issue a compulsory licence to an entity other than the patent holder. That firm or state would then be legally enabled to create a generic version of the patented drug. That firm or state would then be legally enabled to create or make available a generic version of the patented drug, for use to treat the illness impacting public health. The compulsory licence is limited to non-commercial use and acquired and subsequently distributed by the requesting government agency.

The Chilean resolution cites this ability to use compulsory licensing under the Doha Declaration, as well as the recent United Nations Secretary-General’s High-Level Panel on Access to Medicines, which addressed the contradicting interests of parties holding pharmaceutical patents and public health objectives and recommended the use of compulsory licences when necessary to protect public health.

Many countries have used compulsory licences in the past, to address crises of HIV and AIDS, cardiovascular disease and cancers. Even the United States threatened to issue a compulsory licence for Anthrax treatment in 2001, and the resolution makes a point that countries at all levels of development have made use of this tool.

A compulsory licence has never been issued in Chile, though the existing law does allow for the government to make use of it. In order for a compulsory licence to be issued, the relevant authority would have to declare that “Where for reasons of public health, national security, non-commercial public use, or national emergency or others of extreme urgency, declared by the competent authority, the grant of said licenses shall be justified.”

The Chamber of Deputies, as one branch of Chile’s Congress, not only participates in the elaboration of laws under Chile’s civil law system, but has responsibilities to oversee the actions of the executive branch, including the Ministers of State.

To this end, the resolution ended with the directive towards the Health Ministry and Ministry of Economy, Development and Tourism to make use of its ability to issue the compulsory licence.

Kim Treanor is an intern at Intellectual Property Watch.

 

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