Using Law to Accelerate Treatment Access in South Africa. An Analysis of Patent, Competition and ...

120 Pages·2013·2.36 MB·English

Empowered lives.
Resilient nations.
USING LAW TO ACCELERATE
TREATMENT ACCESS IN SOUTH AFRICA
An Analysis of Patent, Competition
and Medicines Law
United Nations Development Programme

Using Law to Accelerate
Treatment Access
in South Africa:
AN ANALYSIS OF
PATENT, COMPETITION
AND MEDICINES LAW
Chan Park, Achal Prabhala and Jonathan Berger
October 2013
Copyright © United Nations Development Programme, October 2013
One United Nations Plaza
New York, NY 10017
U.S.A.
Website: http://www.undp.org/
DISCLAIMER:
The views expressed in this publication are those of the authors and do not necessarily
represent those of the United Nations, including UNDP, or their Member States.
ABOUT THE STUDY
This study was conceived and commissioned by UNDP’s Regional Service Centre for
Eastern and Southern Africa in 2007 as one of a number of country studies initiated to exam-
ine the extent to which the domestic legal and regulatory environment enabled countries in
Africa to increase access to essential medicines. A fi rst version of the paper served a back-
ground document for a consultation organised by UNDP in November 2007, for government
offi cials from Ghana, South Africa and Zambia which took place in Pretoria. The paper was
updated in 2013 by the authors and edited by Kajal Bhardwaj. The authors thank representa-
tives from government, industry and civil society for sharing their time and insights, and are
particularly grateful to SECTION27 (formerly known as the AIDS Law Project) for research
and logistical support. The authors are grateful to Kajal Bhardwaj for her helpful sugges-
tions and editorial review and to Tenu Avafi a and Katie Kirk from UNDP’s HIV, Health and
Development Practice in New York who oversaw the publication process.
Using Law to Accelerate Treatment Access in South Africa l 3

TABLE OF CONTENTS
Foreword ............................................................................................................................... 9
Executive Summary ............................................................................................................ 11
1. Introduction ................................................................................................................. 15
1.1 Why TRIPS fl exibilities? ................................................................................. 15
1.2 South Africa and treatment for HIV infection ................................................. 19
1.3 TRIPS fl exibilities and the South African legal system ................................... 22
2. Analysis of the South African Patent System ......................................................... 23
2.1 Patent Criteria ................................................................................................ 25
2.1.1 Novelty ................................................................................................ 26
2.1.1.1 New uses of known substances .............................................. 28
2.1.1.2 Selection patents ..................................................................... 29
2.1.2 Inventive step........................................................................................ 31
2.1.3 Industrial application/utility ................................................................. 34
2.1.4. Summary of policy options relating to patentability criteria ................ 36
2.2 Defi ning limited exceptions to patent rights, including for compulsory
licensing ........................................................................................................... 37
2.2.1 Exclusions expressly allowed under TRIPS ......................................... 37
2.2.2. Other exclusions from patentability ..................................................... 38
2.2.2.1 Naturally occurring substances .............................................. 40
2.2.2.2 New forms of known substances ............................................ 41
2.2.2.3 Mere admixtures ..................................................................... 44
2.2.3. How effective are these exclusions from patentability? ....................... 45
2.2.4 Summary of policy options relating to exclusions from patentability .... 45
2.3. Disclosure of information in patent applications ............................................. 46
2.3.1. Flexibilities in TRIPS with with respect to disclosure of information
in parent applications ............................................................................ 47
2.3.1.1 Disclosure of best mode ......................................................... 48
2.3.1.2 Disclosure of the status of foreign applications ..................... 48
2.3.1.3 Other disclosure requirements ................................................ 50
2.3.1.4 Duty to disclose all relevant material prior art ....................... 50
2.3.1.5 Duty to disclose international non-proprietary names for
pharmaceutical applications ................................................... 51
2.3.1.6 Duty to disclose whether an application relates to a disease
of public health priority .......................................................... 52
Using Law to Accelerate Treatment Access in South Africa l 5
TABLE OF CONTENTS
2.3.2 Summary of policy options with with respect to disclosure of
information in parent applications ....................................................... 52
2.4 Patent examination and oppositions ................................................................ 53
2.5. Limited exceptions to patent rights .................................................................. 55
2.5.1 Early working and parallel imports ...................................................... 55
2.5.2 Other exceptions ................................................................................... 56
2.5.3 Summary of policy options related to limited exceptions to
patent rights .......................................................................................... 56
2.6 Compulsory licensing and government use ..................................................... 57
2.6.1 TRIPS requirements for compulsory licences and government use ..... 59
2.6.2 Compulsory licensing under South African law ................................... 61
2.6.2.1 Proceedings before the Commissioner of Patents ................. 61
2.6.2.2 Determining adequate remuneration ...................................... 62
2.6.2.3 Government use ...................................................................... 63
2.6.2.4 Situations of national emergency or extreme urgency ........... 65
2.6.2.5 Compulsory licences granted to remedy anti-competitive
practices .................................................................................. 66
2.6.2.6 Compulsory licences solely or largely for export .................. 68
2.6.2.7 Other grounds for issuing compulsory licences ..................... 71
2.6.3 Patent revocation and acquisition by the State ..................................... 72
2.7 Enforcement mechanisms, including remedies for infringement .................... 73
2.7.1 Remedies available for infringement .................................................... 73
2.7.2 Limiting the grant of interim interdicts ................................................ 74
2.7.3 Limiting the grant of fi nal interdicts ..................................................... 76
2.7.4 Summary of policy options related to remedies available
for infringement .................................................................................... 78
2.7.5 Counterfeit goods ................................................................................. 79
3. Analysis of South African Competition Policy ....................................................... 81
3.1 Overview .......................................................................................................... 81
3.2 Relevant standards for anticompetitive behaviour ........................................... 83
3.3 TRIPS and anti-competitive practices ............................................................. 85
3.3.1 Intellectual property and anti-competitive practices ............................ 85
3.3.2 Compulsory licences and anti-competitive practices ........................... 86
3.3.3 Anti-competitive behaviour and licensing practices with
intellectual property goods ................................................................... 86
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TABLE OF CONTENTS
3.3.4 Case studies of competition law and intellectual property ................... 87
3.3.4.1 Restrictive licensing agreements ............................................ 88
3.3.4.2 Evergreening and frivolous litigation ..................................... 88
3.3.4.3 Patent settlements and ‘pay-for-delay’ arrangements ............. 90
3.3.5 Anti-competitive acts tied to patents in South Africa: case studies ...... 91
3.3.5.1 Excessive pricing .................................................................... 91
3.3.5.2 Refusal to license ................................................................... 93
3.3.5.3 Market concentration as a result of acquisitions and mergers ... 95
3.4 Policy options related to ensuring competition ................................................ 98
3.4.1 Amendments to the Competition Act ................................................... 98
3.4.2 Amendments to the Patents Act ............................................................ 99
3.4.3 Growing the number cases involving IP and health ............................. 99
3.4.4 Making patent-related licences transparent .......................................... 99
4. Analysis of Medicines Regulation ............................................................................ 101
4.1 Overview of medicines regulation ................................................................... 101
4.2 What aspects of TRIPS are relevant to medicines regulation? ........................ 102
4.3 The process of drug registration in South Africa ............................................ 104
4.4 Limitations to the current drug registration process in South Africa ............... 109
4.5 Potential opportunities in drug registration ..................................................... 110
4.6 Policy options in relation to medicines regulation ........................................... 112
Conclusion and Way Forward ............................................................................................ 113
Using Law to Accelerate Treatment Access in South Africa l 7
TABLE OF CONTENTS
List of Boxes
Box 1.: Intervention 3.1.4: Ensuring access to aff ordable, high-quality drugs
to treat HIV, sexually transmitted infections and TB ..................................... 20
List of Figures
Figure 1.: Innovation and intellectual property .............................................................. 17
Figure 2.: New drug approvals by the US Food and Drug Administration
from 1990–2012 ............................................................................................. 17
Figure 3.: Annual costs of the National Strategic Plan on HIV, STIs and TB
in South Africa .............................................................................................. 20
Figure 4.: The process of drug approval in India ........................................................... 111
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