For Quality, Essential, Generic Medicines
Chapter 4 : Drug Marketing  
Patenting Pharmaceuticals
A WHO discussion study paper on the effects of the new intellectual property rights relating to pharmaceuticals, especially in developing countries, concludes that:
- although patent protection of pharmaceutical products will be enhanced this will not necessarily be to the benefit of all countries;
- it is likely that local production in developing countries will increasingly be replaced by imports of finished products, i.e., trade in drugs will increasingly replace direct foreign investment and the granting of licences to local companies;
- an increase in research and development of new drugs will not take place in either developed or developing countries;
- the transitional period for entry into force of the Agreement allows countries to continue to limit the introduction of pharmaceutical patents
- measures to be borne in mind by countries when incorporating the provisions of the Agreement into domestic legislation are:
including in domestic legislation a series of compulsory licences to act as an effective deterrent to monopolistic practices and to encourage access to licences by local companies under reasonable conditions (see box);
guarantee of the import of certain products on the principle of "international exhaustion" (e.g. if a patented product is sold in country At a price of USD 100 and in country B the same product is sold at USD 80, this principle allows any interested party in country a to import the product from country B without the consent of the patent's owner);
exclusion from patentability of certain substances;
restriction of the reversal of the burden of proof to process patents for new chemical entities.

(Source: C.M. Correa, Uruguay Round and Drugs, WHO Task Force on Health Economics/Action Programme on Essential Drugs, Geneva, 1996 )

Compulsory Licences

The (TRIPS) Agreement grants members the right to compulsory licences on certain grounds. These include:

Public health and nutrition or other reasons of public interest
Article 8 ("Principles") of the Agreement specifically recognises the right of members to "adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development..." Many countries, including some developed countries, provide for such compulsory licences in their legislation.
National emergency and extreme urgency
This is specifically mentioned in Article 31 (b). It could also be considered to be covered by other general formulations such as "public interest". In such cases, prior negotiations with the right holder can be avoided.
Public non-commercial use
In this case, a government is directly interested in using the patented invention for non commercial purposes.
Anti-competitive practices
Compulsory licences can be granted to prevent abuse of a dominant market position.
Refusal of a voluntary licence
The TRIPS Agreement also authorises the granting of a compulsory licence when a patent holder refuses a reasonable commercial offer, which he has been given a reasonable amount of time to consider.
Other grounds
The Agreement does not limit the grounds for granting compulsory licences: domestic law can define the grounds for granting such licences, including those that are not mentioned in the TRIPS Agreement, which is only indicative in this respect.
What is to be done?
... So when we are talking of renegotiating/reviewing TRIPs, what is the ideal we should agree to within the country and within WTO? It could run something like this:
India works out a drug policy that favours long-term technological self reliance and production of only essential drugs.
The national drug policy should get preference over any WTO-imposed regulations.
Product patents to be granted only to new essential drugs that are safer, cheaper and have greater efficacy than the older products.
Product patents on all essential drugs to be limited only for 10 years in national interest. Subsequently, no patent extensions to be given for new dosages and specific new usages.
Price control to be implemented on all essential drugs, and especially on new drugs under patent. Maximum price of new drugs under patent not to exceed the cheapest international price of the drug.
Importation not to be equated to manufacturing. Manufacturing within the country to be made compulsory within three years, if necessary by using compulsory licensing.
Parallel importing to be sought to be explicitly legitimised in WTO provisions.
No patents on life forms, and on traditional medicinal knowledge or obvious derivatives thereof.
Burden of proof on health, safety of drug or chemical or pesticide on those introducing the drug in the country.
Setting up of a pharmaceutical technology bank for the third world with the explicit purpose of demystifying technology and strengthening third world pharmaceutical technology capabilities. .....