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Intellectual Property Protection and Regulatory Regimes in Emerging Markets

The author: Mark Doxey      From: Business Monitor

Introduction

Summary

  • The profiles of the emerging markets have to a large extent been shaped by the evolution of their regulatory policies, in particular in relation to intellectual property (IP) protection.
  • The most wide-reaching international IP protection standards are those laid down by the World Trade Organization (WTO), which includes among its members all of the emerging markets covered in this report, with the exception of Russia.
  • The WTO’s TRIPS agreement stipulates that the patent term for innovative drugs should last for at least 20 years, and it also includes minimum standards relating to enforcement and data protection.
  • Amidst a growing number of intellectual property rights (IPR) breaches, in June 2008 a number of OECD countries began negotiating the so-called Anti-Counterfeiting Trade Agreement (ACTA).
  • ACTA differs from the International Medical Products Anti-Counterfeiting Taskforce (IMPACT) in that it seeks to operate from an IPR – rather than public health – perspective.
  • Although all of the emerging markets (except Russia) have updated their legislation to comply with TRIPS, their interpretation of the agreement has often led to controversy.
  • One of the most contentious issues has been the extent to which TRIPS’ data protection measures preclude generics companies from relying on trial data submitted by originator companies to gain marketing authorization for their drugs.
  • In some emerging markets, regulations governing the drug approval process and pricing policies are intrinsically linked to IP policies.
  • Looking to the future, two main factors are likely to encourage a number of the emerging markets to adopt a more rigorous attitude towards IP protection: the lure of new free trade agreements (FTAs), and a long-term trend towards innovation in their domestic pharmaceutical industry.

Markets in context

Over the past decade, the six emerging markets covered by this report have enjoyed pharmaceutical sales growth that has been far in excess of developed markets. Although the emerging markets have been affected by varying degrees by the ongoing global economic difficulties, several have already regained their former momentum, while others are poised to resume a strong upward path.

For all of the emerging markets, the foundations for their pharmaceutical growth have been laid by a trend of sharply rising GDPs, which have brought increased spending power and have made medicines more accessible than has ever been the case in the past. However, the profile of each market in terms of the drugs that are being purchased is in each case unique: in some countries the pharmaceutical market is comprised mainly of originator drugs, while in other countries generics dominate; in some countries, domestic companies cater for most of the market’s needs, while in other countries the market is heavily reliant on imports.

The profiles of the individual markets have to a large extent been shaped by the evolution of the regulatory policies that have governed them over the past few decades. These include policies relating to the drug approval process, pricing & reimbursement, and prescribing practices. However, possibly the most significant policies are those relating to intellectual property (IP) protection.

International IP framework

Any analysis of the IP environment in the emerging markets must be viewed against the backdrop of IP protection standards that exist at an international level. The most wide-reaching international standards are those laid down by the World Trade Organization (WTO), which includes among its members all of the emerging markets covered in this report, with the exception of Russia.

TRIPS

The minimum IP protection standards laid down by the WTO are contained within its Trade-Related Aspects of Intellectual Property Rights1 (TRIPS) agreement, which came into force in 1994 – albeit developing countries were given until 2005 to incorporate TRIPS into their national laws. The agreement stipulated that innovative drugs should benefit from a minimum patent term of 20 years, and also included measures relating to enforcement and data protection.

The requirements of TRIPS were clarified by the Doha Declaration2 in 2001, which emphasized that it “does not and should not prevent Members from taking measures to protect public health” and affirmed that it “should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.” In accordance with these principles, the Doha Declaration also stated that “Each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.”

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