BRICS, Industry Spar over Intellectual Property

The divide between developed and emerging markets over pharmaceutical patents looks set to widen as the BRICS countries—Brazil, India, China and South Africa—are increasingly allying to combat EU and US pressure for more stringent global intellectual property rules. Accentuating this divide has been continued efforts by the BRICS countries to grow their research and development in the pharma sector to offer lower-cost generics.

In the wake of last September’s report from the UN’s High-Level Panel on Promoting Access to Medicines advocating less stringent IP enforcement in the interests of public health, the BRICS countries have called for intensive discussions at the World Trade Organization (WTO). BRICS countries are in favor of flexibility in this area in accordance with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. BRICS leaders doubled down on their stance at the 6th BRICS Health Ministers’ Meeting the following December. At this gathering, ministers reiterated their commitment to making optimum use of the flexibilities of TRIPS to promote access to medicines and also pledged to insist on the inclusion of TRIPS flexibilities in bilateral and regional trade agreements in the interest of public health.

Major pharma firms, mostly based in the United States or EU, have countered that governments should use provisions during trade negotiations with developing nations to strengthen intellectual property rights and drug patents. There remains a clear divide between developed and developing countries in their reaction to the aforementioned UN report, with Egypt, Indonesia, Bangladesh and Bolivia supporting the Panel’s recommendations and the EU, Switzerland, Japan and South Korea criticizing it for being overly narrow in its focus.

India is under particular pressure from the US and the EU to drop a provision in section 3(d) of the Indian Patent Act that does not allow the grant of patent if a new form of a known substance does not result in the increased efficacy of that substance. This protects generics from the so-called practice of ‘evergreening,’ whereby patents may be extended based on smaller modifications to older drugs. India is one of the world’s principal producers and suppliers of generic medicines for the developing world and views its role as crucial in providing access to lower-cost generics in these countries, where out-of-pocket drug spending is high. That said, foreign manufacturers have continued to point to serious questions surrounding quality and regulatory compliance among emerging market generics.

Although Indian IPR laws are in compliance with the WTO's TRIPS agreement, countries such as the US and Switzerland are attempting to make a case for non-violation complaints to be allowed under TRIPS. India has consistently been on the US 'priority watch' list of countries with lax IPR rules in its annual assessment of its trading partners; India in 2017 was again included on the USTR 301 Special List, according to DRG’s Global Market Access Solution. The US also alleges that there is a lack of clarity in India's rules for granting compulsory licenses for manufacturing copies of patented drugs in cases deemed to be of national concern such as national emergencies.

BRICS countries agreeing to modify their IPR regimes in accordance with US and EU suggestions could stand to delay generic entry in the market and thereby give innovators a sigh of relief. Strong IP protections serve to reward innovations, which is necessary to discover cures to life-threatening diseases. Additionally, as these innovation are costly, it is vital that pharma companies are well compensated to ensure that they are motivated to work to discover new drugs. However, there is a fear that this could deprive developing countries from affordable, life-saving drugs. The solution likely lies in a middle ground, where both access and quality are taken into consideration.

For more on global market access, follow Priya Wahal on Twitter @Wahalpriyadrg

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