RCEP and Health: This Kind of ‘Progress’ is Not What India and the World Need

Concerns remain over the impact of RCEP negotiations on public health and access to medicines

Negotiators from 16 countries are meeting in Kobe, Japan on Monday to begin the 17th round of negotiations of the Regional Comprehensive Economic Partnership (RCEP) agreement. Launched in 2012, the RCEP negotiations are taking place between the Association of South East Asian Nations (ASEAN) which comprises 10 countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and six countries with which the ASEAN bloc has pre-existing trade agreements – India, Australia, China, Japan, New Zealand and South Korea.

Since the recent demise of the Trans Pacific Partnership (TPP) agreement, all eyes have turned to the RCEP negotiations that now carry, in the opinion of some, the heavy burden of rescuing the international free trade regime from the growing tendency to protectionism. Unfortunately, the RCEP negotiations suffer the same flaws as the TPP, particularly in the context of public health. As with the TPP and most other free trade negotiations, RCEP too is being negotiated behind closed doors, with limited access for public interest and health groups, and the only negotiating texts available in the public domain coming from regular online leaks. An analysis of these leaked texts shows that Japan and South Korea are proposing intellectual property (IP) provisions referred to as TRIPS-plus, in that they go far beyond the obligations under the World Trade Organisation’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Such provisions are a cause for great concern among public health groups over their potential adverse impact on access to affordable medicines.

High priced patented medicines in Asia-Pacific countries

All developing countries in the RCEP negotiations are now implementing the TRIPS Agreement and granting 20 year patents on pharmaceutical products; the impact of the resulting high priced patented medicines is being felt directly by patients and government programmes. Around 2.1 million people living with HIV in the Asia–Pacific region had access to antiretroviral therapy in 2015, which accounts for approximately one in three people living with HIV. Scaling up of HIV treatment across the region remains slow. For developing countries in the region, categorised as middle income countries by the World Bank, their access to international aid, particularly from the Global Fund, is decreasing while at the same time multinational pharmaceutical companies are withdrawing lower prices for their medicines and excluding several of these countries from voluntary licenses with generic companies. A 2014 WHO report found widely varying prices for HIV medicines in middle income countries impacted by their patent status and licensing deals. According to information provided by the Positive Malaysian Treatment Access and Advocacy Group (MTAAG) the second line combination of tenofovir+emtricitabine+lopinavir/ritonavir costs US$ 3204 per year in Malaysia; generic prices for these drugs could total as low as US$ 307 per year.

For people living with hepatitis C, access to directly acting antivirals (DAAs) like sofosbuvir, ledipasvir and daclatasvir, has also been severely hampered by high prices and restrictive voluntary licensing by patent holders. In the case of sofosbuvir and ledipasvir, Gilead has issued voluntary licenses to generic companies to produce low cost versions that exclude China, Malaysia, and Thailand among the developing countries in the RCEP negotiations. In the case of daclatasvir, BMS and the Medicines Patent Pool have issued voluntary licenses to generic companies that exclude China, Malaysia, and Thailand. For the countries excluded, Gilead and BMS are negotiating extremely high prices; according to MTAAG, patients in Malaysia are paying US$40,667 for a 12 week course of Gilead’s version of the sofosbuvir/ledipavir combination. Meanwhile community groups in India are procuring 12 week courses of sofosbuvir for US$324; of daclatasvir for US$153; and of sofosbuvir and ledipasvir fixed dose combination for US$507.

Like much of the developing world, the Asia-Pacific region is also witnessing a rise in the incidence of non-communicable diseases (NCDs).. The cost of oncology drugs, particularly for biologics, remains unaffordable in developing countries. As pointed out by Dr. Margaret Chan, executive director, WHO, “Developing countries now account for around 70% of all cancer deaths. Many of these people die without treatment, not even pain relief. Estimates for 2010 indicate that cancer cost the world economy nearly $1.2 trillion.”

Global leaders in use of TRIPS flexibilities

To deal with the high prices of patented medicines, several developing countries in the Asia-Pacific region are using TRIPS flexibilities to ensure access to affordable generic medicines. The right of all WTO members to use these flexibilities was reiterated in 2001 in the Doha Declaration on TRIPS and Public Health which stated that “the (TRIPS) agreement can and 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”.

Among the RCEP negotiating countries, Malaysia (2003), Indonesia (2004, 2007 and 2012), Thailand (2006 and 2008) and India (2012) have issued compulsory licenses to ensure generic competition for medicines for HIV, heart disease and cancer. India and the Philippines have included statutory provisions in their laws that incorporate strict patentability criteria including a prohibition on evergreening – the practice of patent holders extending monopolies on medicines by filing successive and overlapping patents on new forms and new uses of old medicines. As a result of the use of this and other provisions in India, first and second line AIDS drugs remain off-patent in India. The patent laws of most RCEP developing countries include several other TRIPS-flexibilities as well, such as parallel imports, early working, research and experimental exceptions among others.

TRIPS-plus provisions: What’s on the RCEP table?

Despite being strong proponents and users of TRIPS flexibilities, developing countries in the region now find themselves in the midst of trade negotiations that could severely restrict their ability to use these flexibilities. According to the leaked IP chapter of the RCEP negotiations, several TRIPS-plus provisions appear to be on the table that could adversely impact public health and access to medicines including:

• Data Exclusivity that prevents governments from relying on clinical trial data to register generic versions of medicines even if they are off-patent, their patents have expired or are revoked & complicates the issuance of compulsory licences;
• Patent Term Extensions that extend patent life beyond 20 years and further delay generic entry;
• Weakened Patentability Criteria that could put restrictions in terms of the time period and content of material that the patent office can take into consideration in determining whether a medicine is actually new or inventive (see provisions on grace periods and worldwide novelty);
• Accelerated Patent Examination that may create undue pressure on already burdened patent offices in developing countries with limited human and financial resources to take hurried decisions on pharmaceutical patent applications that require close, detailed scrutiny;
• Technical Assistance measures that may result in the indirect introduction of the lower patentability standards of developed countries into developing country patent offices through patent examiner trainings and increasing reliance on patent examination reports and conclusions of developed countries;
• Weakened Patent Exceptions that may impose restrictions on how developing countries in the Asia-Pacific region employ and define research and experimental exceptions to patent rights;
• Border Measures that may deny medicines to patients in other developing countries with custom officials seizing generic medicines that are being imported or exported;
• Injunctions and Damages that could undermine the independence of the judiciary in issuing orders relating to the enforcement of patents, particularly in a manner that prioritises the right to health of patients;
• Other IP Enforcement Measures that could put third parties like treatment providers at risk of court cases and draw the whole manufacturing, distribution & supply chain for generic medicines into litigation;
• WTO-Plus Dispute Settlement On TRIPS by including TRIPS compliance in the RCEP negotiations, RCEP countries could sue each other for alleged TRIPS violations outside of the WTO Dispute Settlement Body

At the insistence of India and the ASEAN bloc, a provision reciting and re-affirming the commitment of RCEP countries to the Doha Declaration has been included. This is an important indication that the impact of these negotiations on public health is certainly obvious to at least some of the negotiating countries. Unfortunately, this alone may be insufficient to address public health concerns. Some commentators cast doubts on the impact of such an inclusion, referring to it as “usual – and usually ineffective” – as a reference to the Doha Declaration in such negotiations is largely self-contradictory. The Doha Declaration reaffirms flexibilities in the TRIPS Agreement. The TRIPS-plus demands of developed countries in the RCEP negotiations require governments to give up or greatly limit these flexibilities, making the reference to the Doha Declaration little more than lip service. Certainly an argument could be made that the reaffirmation of Doha in RCEP could strengthen the hands of developing countries in their use of TRIPS flexibilities left untouched by RCEP, notably in the issuance of compulsory licenses. If this is the thinking, the reference to Doha comes at a heavy price when critical flexibilities are being sacrificed in the rest of the IP chapter.

A specific provision for Least Developed Countries (LDCs) in the RCEP negotiations i.e. Cambodia, Laos and Myanmar, is also being discussed based on the leaked text. Under the TRIPS Agreement, LDCs presently enjoy a transition period to implement the TRIPS agreement till 2021 and to enforce patents and data protection on pharmaceuticals till 2033. The leaked text includes a very limited recognition of only one of the transition periods stating that LDCs would be exempt from some obligations under the RCEP chapter related to pharmaceuticals till 2021. Again, this indicates a clear recognition on the part of the some of the negotiating countries of the importance of shielding LDCs from the effects of a stronger IP regime at a point when their ability to absorb the impact of TRIPS itself is in doubt. Clearly the text also needs to take into account the full exemption that LDCs have till 2021 and include the 2033 transition period as well. However, addressing LDC concerns in negotiating TRIPS-plus provisions in RCEP is not as simple or straightforward as the mere inclusion of the both LDC transition periods in the text. In effect the inclusion of LDCs in the IP chapter would mean that at the end of the TRIPS transition periods, LDCs would be required to implement TRIPS-plus provisions rather than TRIPS. The RCEP negotiations may end up creating a direct path for LDCs to TRIPS-plus provisions –  bypassing completely or greatly limiting the period where they comply with TRIPS and enjoy to the fullest extent, the flexibilities available in the TRIPS Agreement. To avoid this situation, LDCs must be exempt from the IP chapter entirely not just as long as they enjoy the TRIPS transition periods.

To be fair, it is apparent from the leaked text that India, ASEAN and to some extent China are pushing back against the worst of the TRIPS-plus demands being backed by several of the developed countries in the negotiations. India announced its success in rebuffing moves to overturn the restrictions in its patent law on evergreening i.e. Section 3(d) of the Patents Act, and an official reportedly expressed optimism  that the rush to complete RCEP in light of the failure of the TPP may decrease some of the pressure on India to commit to TRIPS-plus provisions. If push comes to shove, the exceptions and exemptions in the name of public health may offer some relief and room for manoeuvre to developing and least developed countries but the reality is they will only create more legal complications and difficulties in their attempts to fulfil the right to health in the long term. With clear evidence that just TRIPS compliance alone is resulting in high prices and reduced availability of medicines, the only viable pro-health approach to the RCEP negotiations requires that these TRIPS-plus provisions be taken off the table entirely.

The IP chapter, while the most prominent threat to public health and access to safe, effective and affordable generic medicines, is not the only one problematic part of the draft. RCEP countries have put forward several proposals for a chapter on investment protection and all include provisions for investor to state dispute settlement (ISDS) mechanisms. ISDS provisions allow corporations to take governments into private international arbitration over a plethora of national laws, policies and judicial decisions including those related to health. Given increasing concerns over the ISDS system, some countries are proposing health related exceptions, though the extent and effectiveness of these remain to be seen. In particular, countries must preserve their policy space related to compulsory licences, patent revocations or refusals, public interest exceptions in IP enforcement, health safeguards in patent laws, price controls, negotiations and reimbursement measures as well as their ability to promote local production or require technology transfer from foreign investors.

Undermining international health commitments

The adverse impact that TRIPS-plus provisions can have on public health and access to medicines is well recorded and has led to advice from UN agencies to developing countries not to sign up to such provisions in trade negotiations. These provisions being negotiated in RCEP and indeed several other trade deals are in conflict with the increasing global commitments on health that these same countries are signing up to.

In December 2012, all RCEP countries were part of the historic General Assembly resolution that, “recognises the responsibility of governments to urgently and significantly scale up efforts to accelerate the transition towards universal access to affordable and quality health-care services…” In 2015, all RCEP negotiating countries also committed to achieving the Sustainable Development Goals (SDGs). In particular Goal 3b includes a commitment to:

“Support the research and development of vaccines and medicines for the communicable and non-communicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all.”

The full use of TRIPS flexibilities is also central to the WHO’s Global Action Plan for the Prevention and Control of Non-Communicable Diseases and its Global Health Sector Strategy on Viral Hepatitis, both of which have been endorsed by WHO member governments.

The apparent conflict between trade and health commitments was highlighted in the report of the UN Secretary General’s High Level Panel on Access to Medicines which was released in September 2016 which recommended that, “governments engaged in bilateral and regional trade and investment treaties should ensure that these agreements do not include provisions that interfere with their obligations to fulfil the right to health.” Not only did the panel find that governments are duty bound to “protect the rights of their citizens by using TRIPS flexibilities,” but further in relation to TRIPS-plus provisions in FTAs that the, “failure to conduct robust impact assessments before concluding such agreements is tantamount to a neglect of state duties to safeguard the right to health.” By taking these recommendations on board, RCEP countries can chart a new and sensible approach to trade negotiations that does not place the health and well being of people at the mercy of the pharmaceutical industry.

A positive agenda

Indeed, a genuine commitment to the Doha Declaration from the RCEP negotiating countries should lead them to focus their negotiations on a positive agenda on issues related to intellectual property, research and development, increasing access to safe, effective and affordable generic medicines and prioritising the right to health. This would require a clear rejection of any TRIPS-plus provisions in the intellectual property chapter as well as any investment protection provisions that would allow companies to take governments into arbitration over domestic health policies. in terms of process, RCEP negotiating countries should immediately adopt a transparent approach to the negotiations, release the text on intellectual property and investment and hold broad based public consultations on the text to ensure that these do not undermine public health and access to medicines.

RCEP countries should commit to the inclusion of the full extent of TRIPS flexibilities in their domestic laws. The reality is that over 15 years after the Doha Declaration, most countries have yet to include the full extent of these flexibilities in their national legislation. Where they have, using these provisions also requires the support and assistance from regional partner countries – including in fending off undue pressure from developed countries. For LDCs who have till 2021 to implement TRIPS and till 2033 to grant or enforce pharmaceutical patents, RCEP countries should commit to supporting technology transfer and local production of generic medicines in LDCs.

Finally, RCEP countries should commit to negotiating and implementing a new paradigm on research and development that prioritises research in the diseases and health needs of developing and least developed countries in the Asia-Pacific region.

RCEP governments must recall their international, regional and national commitments to respect, protect and fulfill the right to health including the right to access affordable medicines. In their quest for greater economic integration, RCEP negotiating countries must not put the lives and health of millions of people in the Asia-Pacific region at risk. In the words of WHO DG Margaret Chan, “Some Member States have expressed concern that trade agreements currently under negotiation could significantly reduce access to affordable generic medicines. If these agreements open trade yet close access to affordable medicines, we have to ask: Is this really progress at all, especially with the costs of care soaring everywhere?”

 

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Shiba Phurailatpam is the Regional Coordinator of the Asia-Pacific Network of People Living with HIV/AIDS;
Kajal Bhardwaj is a Delhi-based legal researcher working on HIV, health and human rights.