21 - 27 June 2001
Issue No.539
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Al-Ahram Weekly Online 21 - 27 June 2001 Issue No.539 |
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Anticipating TRIPS
"PLEASE, can you spare LE60? My daughter suffers kidney problems and she desperately needs medicine every week that I cannot afford," said a man whom I was passing on the street. I look at him with suspicion and tears well up in his eyes. "I am not lying," he chokes, "here, look at the prescription."Sad as it may be, this man's plight is commonplace, writes Niveen Wahish. With the implementation of TRIPS, however, the already unaffordable cost of medicine may be pushed even further out of reach of those who need it the most. According to one physician, "After all, it is the poor who get sick."
Hence, one of the most controversial aspects of the draft for the intellectual property law -- specifically the chapter on patents -- has been the likely impact of its application on the pharmaceuticals sector.
One of the important provisions in the draft law is the protection of the end product and not just the chemical formula, as was the case under the current law, which allows for the sale of drugs under generic names. Consequently, if the draft law is passed, people will have no choice but to purchase the brand- name drug, which is usually more expensive. Because of the dire ramifications of this clause, the provisions concerning the end product as well as other new items such as chemicals in food products and micro-organisms will not be applicable until 2005 when the grace period provided by TRIPS ends.
Egypt chose to take the full grace period permitted under TRIPS, buying time in an attempt to prepare itself for the effect of full implementation, including what opponents of the draft law claim will be price increases that will put medicines beyond the affordability of average-income individuals. But proponents of the law cite studies which indicate that 90 per cent of the drugs on the market in Egypt today will not be affected.
The draft law currently being debated provides for two requirements of the TRIPS agreements. One is applying for a patent "in the mailbox," namely, requiring the Egyptian patent office to accept applications for pharmaceutical products but delay their processing until the grace period ends.
The other requirement is the "Exclusive Marketing Rights" clause, which enables a company to market a product exclusively if it is patented, and has received marketing authorisation elsewhere and has a patent "in the mailbox" in Egypt.
In an attempt to address social concerns, the draft law includes mechanisms aimed at curbing any adverse affects TRIPS may have on the accessibility of drugs for those with average-incomes. For example, since the government must approve drug prices, it can reject any price requests. In the meantime, experts believe that companies would not generally set a price that is not affordable otherwise they would jeopardise their investments.
Compulsory licensing is another tool. If a licence is applied for, but the terms requested by the company are too harsh and it refuses to make any concessions, the government may issue a compulsory licence on condition that the drug is for non- commercial use, that is the medicine in question may only be dispensed through government hospitals. This theory applies to all patents and not just pharmaceutical products. It is also applicable not only if the conditions demanded by the patent holder are too severe, but also -- according to article 25 of the draft law -- for reasons of national security, as well as environmental and food safety considerations. In these cases, the government need not apply for a voluntary licence at all. In all cases of compulsory licensing, the patent holder must be informed as well as remunerated.
In addition the draft law provides for the establishment of a Drug Support Fund to be financed by one per cent of the sales of local and imported medicines as well as two per cent of the sales of "medical food products" and cosmetics registered with the ministry of health. The fund will also be financed by the government as well as donations.
And while efforts to protect end users are being debated, the protection of national industry is also an issue of prime concern. While the fund is being established to assist the average citizen, pharmaceuticals companies are making an effort to protect Egypt's pharmaceuticals industry. According to Galal Ghorab, chairman of the Holding Company for Pharmaceutical Industries, the private sector together with the public sector is working to establish "Cluster support companies," which are independent companies providing consultancy services for the industry. These include three companies: the Egyptian Company for Exporting Pharmaceuticals and Medical Supplies (EXPOFARMA), the Egyptian Research and Development Company (ERDC) and the third company, yet to be established, is for the production of equipment and machinery used by the industry. ERDC is the first research company in Egypt. Four US companies have a stake of 40 per cent and the holding company has a stake of 40 per cent. The National Bank of Egypt is also a partner along with other investors.
"The idea behind ERDC is that we do not set up our own labs, but we find out where the research is and we buy or 'rent it' and resell it or re-rent it to Egyptian companies. If we need something specific we can have it developed somewhere and we spend on it.
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