INTRODUCTION
The massive proliferation of exclusivity regimes risks altering the global landscape of intellectual property (IP) protection and public health dynamics, particularly for developing countries.Footnote 1 There has been an aggressive push for higher exclusivity regimes for IP protection,Footnote 2 ranging from bilateral to regional agreements.Footnote 3 Although the World Trade Organization (WTO) Agreement on Trade-Related Aspects of IP Rights (TRIPS) and the Doha Declaration on the TRIPS Agreement and Public Health (Doha Declaration) provide for flexibilities,Footnote 4 the emerging exclusivity regimes undermine reliance on them,Footnote 5 impede the imperative of health technology transfer,Footnote 6 and weaken the capacity of countries to foster affordable healthcare coverage.Footnote 7 On the other hand, exclusivity is justified in recognition of the considerable efforts involved in generating data and of the value of the data,Footnote 8 while patent protection is necessitated to spur innovation and recompense invention.Footnote 9 Hence, the US Chamber of Commerce has explicitly stated that the emerging exclusivity regimes established in the current trade agreements will constitute the basis for future IP rule-making, in the sense that they will be transposed into the global realm.Footnote 10 The US and EU in particular have been promoting TRIPS-plus standards in trade and investment agreements. Market and data exclusivities create impediments to access to medicines.Footnote 11 This obstructs the full realization of not only the third Sustainable Development Goal on “good health and well-being” but also the human right to health.Footnote 12 Against this backdrop, developing countries, such as South Africa, that face challenges to the realization of the right to healthcare coverage must strike a trade-off with pharmaceutical companies.Footnote 13
In particular, South Africa's patent law and health policy are deeply intertwined with global IP dynamics.Footnote 14 Given the future course of IP rule-making,Footnote 15 South Africa needs to resist the global dynamics of IP rule-making while reforming its patent law and health policy.Footnote 16 Consequently, the Republic of South Africa's 2018 IP Policy Phase I (IP Policy Phase I) represents an important step in solving the complex tension between IP law and access to medicines.Footnote 17 The IP Policy Phase I constitutes the first part of a phased approach to recalibrate the provisions on IP to take account of domestic socio-economic conditions and public health imperatives, to advocate coherently in international fora, and to implement commitments undertaken in international agreements.Footnote 18
Most compellingly, the Constitution of South Africa 1996 (the Constitution) guarantees the right of access to healthcare services, and imposes a positive obligation on the state to take measures to ensure progressive realization of that right.Footnote 19 The state's duty to realize the right to health progressively is enshrined not only in the Constitution but also in international instruments that South Africa has ratified.Footnote 20 Nevertheless, deserving members of the population often do not have access to healthcare services because prohibitive pricing places lifesaving drugs out of reach, “while cheaper generics are prevented from entering the market due to patent barriers”.Footnote 21 The slow pace of patent law reform has consolidated the market exclusivity of pharmaceutical companies and constrained the right to healthcare services. Consequently, the publication of IP Policy Phase I should be matched with effective action to remove barriers created by the outmoded patent law. Arguably, optimal results in the current patent law reform will be determined not only by domestic dynamics overriding global norm-setting but also the scale of investment in non-IP infrastructure that obstructs access to healthcare coverage. In other words, there should be an expeditious reform of patent law matched by complementary efforts to strengthen South Africa's healthcare and insurance systems to improve health service delivery. This would require action beyond patent law reform, involving different government sectors, including health and finance. Arguably, the suggestions in this article will be useful in framing comprehensive solutions to the access to medicines conundrum.
This article is divided into six main sections. After this introduction follows an in-depth evaluation of the exclusivity regimes within the framework of the outmoded patent law and its relationship with the right to health. The article then examines the exceptions to patenting and the modalities for placing reliance on them to foster the affordability of medicines. The next section appraises the complementarities and conflict between the rights to health and to IP. The article then assesses the strategies for future action, before offering concluding remarks.
EXCLUSIVITY REGIMES AND PUBLIC HEALTH CHALLENGES
Patents grant exclusive rights to inventors to exclude competition for a period of 20 years. Other forms of exclusivity are data exclusivity and the related exclusive marketing rights granted by the regulatory authority upon the approval of a drug that may or may not run concurrently with a patent.Footnote 22 Data-related market exclusivity constitutes the exclusive marketing right granted by the regulatory authority upon approval of a drug, thereby preventing competitors from entering a specific market until the end of the exclusive period.Footnote 23 Data-related market exclusivity is distinguished from data exclusivity, which is the period of time during which the regulatory authority may not approve a competitor's generic product that relies on the originator's safety and efficacy data.Footnote 24 Market exclusivity of the pharmaceutical companies in South Africa depends on a combination of both national and international dynamics.Footnote 25 Globally, IP norm-setting affects South Africa through transposition.Footnote 26 Developing countries could be coerced or encouraged to accede to such norm-generation, either through subtle pressure or the conditioning of market access to developed countries on acceptance by developing countries of the higher standard of IP norms. Thus, if South Africa or any other developing country should desire to conclude trade and investment agreements with any of the major IP generating jurisdictions, the former faces the danger of being confronted with these restrictive regimes.Footnote 27 Similarly, pressure and the threat of proceedings are useful tools for both the home countries of pharmaceutical companies and their subsidiaries to protect exclusivity. Similarly, pharmaceutical companies in South Africa have been taking advantage of the outmoded patent law to advance the exclusivity strategy. Hence, the IP Policy Phase I reform initiative is commendable. However, its success would require deft management of patent law reform and non-patent factors that can foster or frustrate the right to healthcare services, as highlighted below.
Patent term extension
A vast number of emergent free trade agreements (FTAs) mandate the grant of patent protection beyond the 20 years stipulated by TRIPS.Footnote 28 There are diverse drafting approaches to achieve this requirement. In most cases, an FTA is drafted to oblige each party to make available an extension of the patent term to compensate the patent owner for unreasonable delays by the granting authority and unreasonable curtailment of the patent term as a result of the marketing approval process.Footnote 29 Emerging FTAs reflect this trend.Footnote 30 Patent extension beyond 20 years advances the market exclusivity strategy of pharmaceutical companies since it delays the market entry of generics and biosimilars, thereby increasing the prices of medicines because of the restriction on competition.
South Africa's patent law grants the traditional patent protection of 20 years. Although South Africa is yet to ratify any FTA with restrictive provisions, it is imperative that it exercises circumspection and avoids granting patent terms beyond the 20 year benchmark set by TRIPS. South Africa should resist pressure to accede to such patent extensions.
Patent evergreening
South Africa applies weak patent standards that can lead to “frivolous and abusive patenting practices”,Footnote 31 or evergreening. Pharmaceutical companies achieve extra market exclusivity through the evergreening of patents. The IP Policy Phase I recommends the adoption of patentability criteria that address the country's public health and industrial policy concerns, and implement patentability requirements in a manner consistent with constitutional obligations, developmental goals and public policy priorities.Footnote 32 However, the policy does not provide specific details on how to achieve this. Hence, the adoption of patentability criteria should aim to curb evergreening of patents by the pharmaceutical companies that rely on secondary patents where inventions or innovations lead to new uses of a known product, new methods of using a known product, or new processes for producing a known product. Pharmaceutical companies can also obtain secondary patents in some jurisdictions for chemical variations, new formulations, new delivery mechanisms and new dosages. This extends the patent term and the right for the pharmaceutical companies to exclude competition. While the evergreening of patent terms favours pharmaceutical companies by limiting competition from the manufacturers of generic products and follow-on biosimilars,Footnote 33 it leads to prohibitive prices for medicines. Although not all countries subscribe to the evergreening of patents,Footnote 34 pharmaceutical companies continue to rely on the approach.Footnote 35 In the case of Novartis AG v Union of India and Others, the Supreme Court of India rejected the patenting of cancer medicine arising from the evergreening process.Footnote 36 This case seems to provide guidance to countries to reject the evergreening of patents if they have the courage to do so, and adopt patent laws that advance their health policy and development objectives.Footnote 37 Interestingly, there is an increasing number of cases challenging the evergreening of patents by pharmaceutical companies.Footnote 38
Pharmaceutical companies also claim multiple patents across different stages of a particular medicine. This prevents competitors from inventing around the originator medicine and effectively leads to multiple patent terms (or patent thickets) for a particular medicine upon grant. Multiple patenting hampers research and development of improved follow-on products, “such as combination therapies, or paediatric formulations of medicines”.Footnote 39 Arguably, stricter patentability criteria are required to restrict the patentability of incremental development, such as new uses of a known product, new methods of using a known product, new processes for producing a known product, and other forms of trivial changes to existing molecules, formulations and dosages. Besides, the adoption of stricter patentability criteria will also prevent the unworthy grant of first patents.
Patent examination
In addition, South Africa is deeply implicated in anomalous patent examination. As noted in the IP Policy Phase I,Footnote 40 South Africa has historically operated a depository system that does not robustly screen the validity of patents, leading to a much higher rate of pharmaceutical patenting than is obtainable elsewhere.Footnote 41 Also, there is a general lack of transparency from the Patents Office regarding existing and pending patents. Hence, the IP Policy Phase I recommends the introduction of a substantive search and examination (SSE) approach. This would take into consideration capacity constraints and the legitimate public interest, as well as the interests of IP holders and users. Equally, it would provide for a robust framework for the awarding and management of patents.Footnote 42 Moreover, South Africa's patent law does not currently require applicants to furnish information concerning the applicant's corresponding foreign applications and grants. For greater efficiency and transparency in the execution of a SSE strategy, the IP Policy Phase I recommends that patent applicants provide information about corresponding patent applications and grants in foreign jurisdictions.Footnote 43
Although patent applications and substantive examination would bring South Africa's patent law closer to global best practices, the IP Policy Phase I acknowledges the prevailing constraints that may hamper full implementation (including human and financial resources).Footnote 44 Arguably, the country needs to invest more in capacity building to achieve the rigour and expertise required for examination. This will probably not materialize in the near future, which makes outsourcing a potential option.Footnote 45 However, the question of outsourcing is also confronted by inadequate resources. Certainly, the government must prioritize its agenda by funding the training of personnel and investing in infrastructure to meet the standards of global best practices in executing a SSE strategy.
Patent opposition
Patent opposition constitutes a significant feature of the patent law of most advanced countries and some developing countries. Until the promulgation of IP Policy Phase I, the value of patent opposition was not recognized under South Africa's patent law. The IP Policy Phase I incorporates a threefold patent opposition procedure: a third party submission system or observation; a pre-grant procedure; and a post-grant procedure.Footnote 46 However, due to capacity constraints, the policy recommends that patent law recognizes a third party submission system or observation to stand in for the pre-grant opposition process, and for existing provisions in administrative law to be used in lieu of post-grant oppositions.Footnote 47 As a matter of fact, a pre-grant opposition process is not yet a significant feature of most countries’ patent laws, although the third party submission system is more widely used to present information challenging patents for their failure to satisfy certain criteria, particularly patentability criteria. A patent opposition procedure affords third parties a formal opportunity to challenge a patent, before and/or after grant, to determine the level of newness and innovation that justify patentability.
Furthermore, South Africa's Patent Act could be amended to require disclosure of international non-proprietary names in patent applications, as well to restrict “Markush” claims.Footnote 48 With regard to international non-proprietary names, this entails that applications can be filed “based purely on a diagram of a chemical structure or on an abstract manufacturing process”, which makes it “extremely difficult to pinpoint all relevant patents covering a particular medicine”.Footnote 49 This facilitates the grant of a patent right that has the consequence of barring competitors when opacity of the subject matter defeats researching patent claims. Certainly, transparency and greater specificity should underpin such applications and grants. This will also permit the manufacturers of follow-on products early access to the market. Meanwhile, it has been found that Markush claims are correlated with the restriction on research and development, as well as the commercialization of medicines by competitors.Footnote 50 Markush claims are sometimes criticized for failing to satisfy the standards of disclosure necessitated for patentability.Footnote 51 Hence, over-patenting them could undermine public health. The continued acceptability of Markush claims under South African patent law requires reassessment.Footnote 52
Registration hodgepodge
TRIPS does not generally mandate a linkage between patent protection and the registration of products by the regulatory agency. However, under the emerging IP treaties, patent protection is linked to registration.Footnote 53 Hence, there is an obligation not to grant marketing approval to any third party before the expiry of a patent term, unless the patent owner or holder consents or acquiesces.Footnote 54 The implication of this linkage is that the manufacturers of generic products and follow-on biosimilars are prohibited from registering them during the pendency of the patent term, preparatory to sale after the expiry of the patent term. In other words, these manufacturers will have to wait until a patent term has expired before applying to register follow-on products. This applies irrespective of the safety and efficacy of the product, except of course if the patent holder consents or acquiesces. The effect of this is that the patent holder will maintain market exclusivity even after the expiry of the patent term but before approval for follow-on products has been processed. Although the South African Medicines and Related Substances Act 2015 (as amended) rejected patent linkage, this will only be cemented if the country does not conclude future agreements embodying such linkages.
Data exclusivity: Generics and follow-on biosimilars
Article 39(3) of TRIPS provides that where, as a condition for approving the marketing of pharmaceutical products that utilize new chemical entities, members require the submission of undisclosed test or other data, the origination of which involves considerable effort, such data shall be protected against “unfair commercial use”. Moreover, such data shall be protected against “disclosure” by the members, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against “unfair commercial use”. This provision has been interpreted by some to require data exclusivity.Footnote 55 However, this is disputed given that the terms “unfair commercial use” and “disclosure” were used, rather than “data exclusivity”.Footnote 56
However, “data exclusivity” is used specifically in the current TRIPS-plus regimes. This exclusivity regime ensures that generic companies are prohibited from relying on the clinical trial data originated by the brand name pharmaceutical companies to obtain marketing approval. As poignantly observed, if it is impossible for generic suppliers to obtain marketing approval without repeating expensive and lengthy tests on their products, then flexibilities are rendered virtually ineffective.Footnote 57 Fortunately, South African patent law and medical regulatory law do not yet grant data exclusivity, but there “are provisions relating to the protection of confidential information in general”.Footnote 58 South Africa should persist in avoiding the pitfalls of a data exclusivity regime that undermines public health imperatives. Also, the current reform effort should provide that the protection of “confidential information” does not remove the right to health.
Parallel import restriction
TRIPS provides for flexibility in respect of parallel imports,Footnote 59 allowing each WTO member to adopt exhaustion rules and a parallel import policy consistent with its objectives. Article 6 of TRIPS stipulates that, for the purposes of dispute settlement under TRIPS, nothing in the agreement shall be used to address the issue of the exhaustion of IP rights, subject to the TRIPS provisions on the national treatment and most favoured nation treatment standards. The general idea that underpins the exhaustion of IP rights is that, once the right holder obtains an economic return from the first sale or placing on the market, the transferee or purchaser of the goods or services is entitled to use and dispose of them without further restriction.
Exhaustion of IP rights can be international, regional or national. A country could recognize that the exhaustion of IP rights occurs when goods are first sold or marketed outside its borders. Accordingly, the right holders within the country may not oppose the (parallel) import from the country from which the exhaustion of IP rights occurred. Thus, where a country operates an international exhaustion doctrine, an IP holder's right to control the movement of goods or services is extinguished when the goods or services are first sold or marketed in any part of the world. However, if a regional exhaustion doctrine holds sway, an IP holder's right to control the movement of goods or services is extinguished when those goods or services are first sold or marketed in any country within the region. If a country operates a national exhaustion doctrine, an IP holder's right to control the movement of goods or services is extinguished when those goods or services are first sold or marketed within the territory of that country. Thus, the exhaustion doctrine ensures that goods (in this case medicines or medical technologies), which would otherwise not be available in the country, become available at a cheaper rate.
The parallel import debate evokes divergent interests between the pharmaceutical companies and developing countries. The pharmaceutical companies or the right holders would generally prefer the restriction on parallel imports to enable them to price differentially so as to maximize profits from different markets. On the other hand, this could lead to prohibitive pricing of medicines, thereby undermining access to healthcare services. Parallel imports come within the regulatory purview of the Medicines and Related Substances Act 101 of 1965 (Medicines Act, as amended in 1997), legislation administered by the National Department of Health. Parallel imports in line with the provision of the Medicines Act do not contravene the provisions of the Patents Act 1978, although a narrow construction of section 45(2) of the Patents Act in its current form could potentially undermine reliance on parallel imports.
Nevertheless, South Africa should liberalize the parallel import of medicines from across the world, following in the footsteps of other developing countries, such as Kenya and the Philippines. In other words, the parallel import of genuine products lawfully placed on the market elsewhere should be permitted. Currently, a parallel importer is required to obtain from the minister of health a permit to import, after which an application must be made to the Medicines Control Council (MCC) (now the South African Health Products Regulatory Authority (SAHPRA)) for the medicine to be registered, a Current Good Manufacturing Practices certificate must be obtained, comparative dissolution data against the MCC-approved product must be provided and other requirements met.Footnote 60
These requirements are burdensome and could undermine the commercial interests of the prospective importer. A simplified registration approach that is consonant with emerging best practices should be adopted. The information supplied by the parallel importer should be sufficient to ensure that the medicine is covered by an existing authorization in South Africa. Thus, a simplified registration approach would require that parallel imported versions should: contain the same active ingredient(s); be administered to patients through the same process; have the same therapeutic effects; and share a common origin with existing versions.Footnote 61 The IP Policy Phase I intends to implement parallel imports in a controlled manner pursuant to consultations with respective stakeholders.
Compulsory licensing
TRIPS allows the issue of a compulsory licence.Footnote 62 This was reaffirmed by the Doha Declaration. The paragraph 6 system under the Doha Declaration is emphatic on how countries can circumvent the incidence of insufficient pharmaceutical manufacturing capacity through the issue of a compulsory licence, which enables imports. A compulsory licence describes the involuntary use of a patented invention, by the state or a third party with the authority of the state, without the permission of the patent right holder, but backed by the payment of adequate remuneration determined by the state.Footnote 63 Although a number of TRIPS-plus agreements incorporate the flexibility necessary for continued reliance on compulsory licences,Footnote 64 stricter restrictions are being included. Article 16.7(6)(b)(ii) of the US-Singapore FTA provides that, in cases of the issue of compulsory licences, the patent owner should be provided with “reasonable and entire” compensation for that use and manufacture.Footnote 65 By contrast, TRIPS requires “adequate” remuneration.Footnote 66 The requirement for “reasonable and entire” compensation has been interpreted to mean higher protection than the “adequate” compensation provided for by TRIPS.Footnote 67
South Africa has not yet resorted to compulsory licences. Instead, it has granted voluntary licences to enhance competition and reduce the prices of antiretroviral medicines.Footnote 68 Indeed, voluntary licences have had a tremendous impact on improving access to medicines in South Africa and on the response to HIV/AIDS. The IP Policy Phase I recommends the promotion of voluntary licences, on fair terms, as a means to transfer technologies effectively and foster access to public health. However, voluntary licences are frequently limited in their territorial coverage. Most importantly, voluntary licences are not made available for the vast majority of medicines, other than select HIV and hepatitis C medicines. Consequently, compulsory licensing remains central to the healthcare services debate.
However, the issue of a compulsory licence is characterized by a burdensome procedure, including a difficult court procedure that takes time to materialize. The administrative procedure is significantly faster than the court processes.Footnote 69 Accordingly, the efforts to introduce “non-judicial, cost effective and expeditious mechanisms to obtain medicines through the issuance of compulsory licences”Footnote 70 are commendable. The recommendation to remove the requirement that a government department should first negotiate the terms of a licence in respect of government use licences, before approaching a court to seek a compulsory licence, constitutes a giant step forward in the removal of barriers to compulsory licensing.Footnote 71 This is without prejudice to exceptions to prior negotiation, such as for emergencies and in competition cases.
However, this does not totally remove the barriers regarding the issue of compulsory licences.Footnote 72 For instance, the implementation of paragraph 6 of the Doha Declaration continues to pose serious challenges to a sustainable compulsory licence strategy for countries lacking pharmaceutical manufacturing capacity. The paragraph 6 system remains bedevilled with challenges, such as strict procedural requirements, limits on exports to amounts necessary to meet the importing member's needs, and extensive notifications from both the importing and exporting countries. Consequently, reliance on the paragraph 6 system has been scanty.Footnote 73 The IP Policy Phase I intends to strengthen and clarify the scope of compulsory licences in a manner that is fair and complies with international obligations and national law.Footnote 74 Following due process, it will introduce guidelines including legal processes for government use and to enhance export capacity.
South Africa's pharmaceutical capability is fairly advanced compared to other sub-Saharan African countries. Hence, where circumstances permit, the issue of a compulsory licence to local pharmaceutical manufacturers might suffice. This would lead to operationalization of compulsory licensing in the country, with possible exports to countries that meet the requirement for the implementation of paragraph 6 of the Doha Declaration. Nevertheless, indigenous pharmaceutical manufacturers often lack the capacity to undertake the requisite production, making the multinational pharmaceutical companies with a presence within the country the preferred option. However, the latter often encounter pressure from their home countries to truncate the issue and operationalization of compulsory licences, making imports the preferred option. Thus, South Africa can import from the countries with significant generic manufacturing capabilities, such as India, although the transition periods that partly excluded India from patent protection have expired. Additional flexibility can be further explored through exceptions to patent rights.
EXCEPTIONS TO PATENT RIGHTS
Exceptions to patent rights are justified on a number of grounds, particularly public policy. Article 30 of TRIPS allows exceptions to patent rights on the basis of three conditions: the exception is limited; it does not unreasonably conflict with normal exploitation of a patent; and it does not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. This is reinforced by the WHO's Global Strategy and Plan of Action on Public Health, Innovation and IP, which clearly recognizes that a research exception is beneficial to public health needs in developing countries. While there is a general consensus on exceptions, divergences exist regarding their scope and application. Most jurisdictions have attempted to clarify this through a classification based on commercial and non-commercial research. The former is considered a patent infringement if it involves commercialization, while the latter does not constitute infringement of patent rights.Footnote 75 Further analysis of the exceptions follows.
Early working exception
The early working exception provides a valuable opportunity for generic manufacturers to research, create and test a patented product before the expiry of a patent term. This facilitates early market entry of follow-on products once the patent holder's exclusive rights lapse. The IP Policy Phase I intends to retain the provision in the 2002 amendment to the Patents Act, which grants an early working exception.Footnote 76 It also envisages enhancement of this with operationalization of the SAHPRA. In fact, some pharmaceutical companies support the Bolar research exemption, under which a third party may prepare for and obtain regulatory approval so that a follow-on product can be available soon after the expiry of a patent term.Footnote 77 However, this does not permit the company to interpret the Bolar exemption as extending to commercial manufacture, import or stockpiling during the lifetime of a patent.Footnote 78
As with the reference medicines, most jurisdictions including South Africa require the registration of generic medicines that can be expedited via the early working exception. Data on the quality of the copy are submitted to the MCC (SAHPRA). Given that information on the safety and efficacy of the active substance(s) is already available from the reference medicine, the companies producing generic medicines are merely required to submit data that provides information on the quality of the medicine, and demonstrates that the generic medicine produces the same levels of the active substance in the human body as the reference medicine does.Footnote 79 That is, no new data on safety and efficacy are generally required. Once it is established that the generic medicines satisfy the required standards of efficacy, safety and quality when compared to the reference medicine, marketing authorization will be granted, subject to monitoring for possible adverse effects by the regulatory agency and, potentially, the generic company.
Experimental use and scientific research exception
The experimental use and scientific research exception to patent rights is also generally recognized in the laws and jurisprudence of many countries.Footnote 80 The Bangui Agreement Establishing the Africa Industrial Property Organization provides that “the rights deriving from the patent shall not extend … to acts in relation to a patented invention that are carried out for experimental purposes in the course of scientific and technical research”.Footnote 81 Similarly, the Canadian IP Rights from Publicly Financed Research and Development Act 51 of 2008 grants research, development and educational purposes exceptions to patent rights. It has been pointed out that a key public policy purpose that underpins the patent laws is to “facilitate the dissemination and advancement of technical knowledge”.Footnote 82 If the patent owner is allowed to prevent experimental use during the term of the patent, it will “frustrate part of the purpose of the requirement that the nature of the invention be disclosed to the public”.Footnote 83
Indeed, the experimental use and scientific research exceptions enable third parties, without obtaining the consent of the patentees, to: examine the stated utilizability or effects of the patent invention in order to acquire knowledge, foster licensing or potentially challenge the validity of patents; and improve and develop further the patented invention.Footnote 84 That is, experimentation on existing products by generic competitors and research entities can lead to the manufacture of improved follow-on products. The IP Policy Phase I seeks to develop a broad and carefully crafted set of exceptions for research and experimental activities in consultation with stakeholders.Footnote 85
RIGHT TO IP AND RIGHT TO HEALTH
As reflected above, the access to medicines debate is deeply intertwined with the rights to health and IP. This is pertinent under both substantive international and national human rights law.
International legal position
Although the right to health does not constitute the first generation of human rights in the hierarchy of rights,Footnote 86 it continues to occupy the forefront of discourse and enforcement. The Universal Declaration of Human Rights 1948 (UDHR) affords everyone the right to a standard of living sufficient for the maintenance of the health and well-being of himself and his family, including Medicare.Footnote 87 Article 12(1) of the International Covenant on Economic Social and Cultural Rights 1966 (CESCR) also provides that states have a responsibility to accord recognition to the right of everyone to enjoy the highest attainable standard of physical and mental health. In examining the efficacy of article 12 of the CESCR, General Comment 14 notes that parties to the CESCR must undertake steps necessary to prevent, treat and control epidemic, endemic, occupational and other diseases.Footnote 88 General Comment 14 interprets the right to health as an all-encompassing right that extends to not only timely and appropriate healthcare, but also the underlying determinants of health, such as: an adequate supply of safe food, nutrition and housing; access to safe and potable water and adequate sanitation; healthy occupational and environmental conditions; and access to health-related information and education, including on sexual and reproductive health. The realization of the right to health is manifested in the availability, accessibility, cultural acceptability and appropriate quality of healthcare services. Under General Comment 14, there is also an unfettered right to affordable access to essential medicines of assured quality.Footnote 89
This right seems to conflict with the right to IP, but, in the final analysis, it does not. Article 17(1) of the UDHR acknowledges that “[e]veryone has the right to own property alone as well as in association with others”. Article 17(2) goes further to state that no-one shall be arbitrarily deprived of his property. Article 17 is linked to article 27(1) of the UDHR, which stipulates the right of everyone “to freely participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits”. Article 27(2) notes further the right of everyone “to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author”. Similarly, article 15(1) of the CESCR provides that the parties to the covenant recognize the right of everyone: (a) to take part in cultural life; “to enjoy the benefits of scientific progress and its applications; (c) to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he [or she] is the author”. Thus, artists and inventors’ rights, like the right to health, justify some form of protection under human rights laws.Footnote 90 However, protecting the moral interests of authors and inventors does not require IP protection as such or the prioritization of IP rights over the rights to essential medicines and to benefit from scientific advancement.Footnote 91
Normative conflict or conformity
The incorporation of these two rights (the right to health and the creator's / investor's right) raises the issue of conflict and conformity in international norms and the hierarchy of rights. In an extensive study on fragmentation and diversification of international law, the International Law Commission (ILC) provided incisive recommendations for dealing with cases of the multiple co-existence of international norms in conflict and interpretation.Footnote 92 The ILC recognized, at the outset, that fragmentation in international law “raises both institutional and substantive problems”.Footnote 93 However, the ILC felt that the issue of institutional problems should best be dealt with by the institutions themselves, ie the dispute settlement institutions should settle such problems through the principles of dispute settlement. Instead, the ILC focused on the substantive question, ie actual and hypothetical normative co-existence and conflict.
The ILC noted that normative deviations or diversity “do not emerge as legal-technical mistakes”.Footnote 94 Rather, they “reflect the differing pursuits and preferences of actors in a pluralistic (global) society”.Footnote 95 Hence, the ILC enumerated guidelines for resolving such normative conflicts involving two or more treaties. First and foremost, the parties’ intention should be determined. However, this may not be conclusive as each treaty could be motivated by separate objectives. Hence, normative conflicts should be resolved generally, by applying the principles of harmonization and systemic integration.Footnote 96 That is, the interpretation should be applied in such a way that it aims at the harmonization and integration of conflicting international norms. Additionally, interpretations could be guided by the established principles for the management of normative conflicts. Hence, reliance can be placed on the maxim lex specialis derogat legi generali [a specific law overrides a general law]. Accordingly, a special law generally takes precedence over a general law. Reliance on this should take into account the context, object and purpose of the treaties. Nevertheless, the maxim may not be suitable where two special treaties are in conflict, and the ILC was quite aware of this reality. Thus, normative conflicts could also be managed by the principle of lex posterior derogat legi priori [the later law supersedes earlier law], depending on the intention of the treaty parties.
However, by “relations of importance”, certain norms take precedence over all other norms when in conflict.Footnote 97 Therefore, they cannot be derogated by special norms and later norms. These non-derogable norms include: the peremptory norms or jus cogens [norms “accepted and recognized by the international community of States as a whole from which no derogation is permitted”];Footnote 98 rights erga omnes [enjoyed by everyone], which may include jus cogens but are subject to it;Footnote 99 and article 103 of the UN Charter, which makes obligations under the UN Charter superior to other international obligations. In “[r]elationships of conflict generally, that is, in cases where two norms that are both valid and applicable point to incompatible decisions so that a choice must be made between them”, resort should be made to the Vienna Convention on the Law of Treaties 1969 (VCLT), particularly the provisions of articles 31–33, to resolve the conflicts.
In the context of the right to health and the creator's / inventor's rights, the two norms are both complementary and conflicting.Footnote 100 The norms are complementary because TRIPS and the Doha Declaration afforded parties public health flexibilities.Footnote 101 Hence, TRIPS and subsequent declarations “can and should, to the maximum extent possible, be interpreted as to give rise to a single set of compatible international obligations based on a human rights approach in policies and programmes”.Footnote 102 This conclusion is reinforced by the fact that the Doha Declaration constitutes a subsequent agreement under article 31.3(a) of the VCLT, and is evidence of subsequent practice establishing the understanding of WTO members on the interpretation of TRIPS.Footnote 103 Accordingly, the norms are complementary and in conformity.
However, emerging trade agreements impose exclusivity regimes that are much stronger than the extant multilateral framework (ie TRIPS and the Doha Declaration). These agreements are equally special and later in time in comparison with multilateral frameworks. To that extent, the exclusivity norms generated from them conflict with the right to health. This creates ambiguity regarding the afforded flexibilities, which has the propensity to deter reliance on those flexibilities because of the fear of prospective or actual investor-state dispute settlement (ISDS) and / or state-to-state proceedings.
Coherence, public interest and non-IP infrastructure
In recent resolutions, which South Africa fully supported, the Human Rights Council (HRC) called for global cooperation to ensure the right of “everyone to the enjoyment of the highest attainable standard of physical and mental health”,Footnote 104 and the capacity-building necessary to achieve that right.Footnote 105 The HRC recognizes that “the protection of intellectual property is important for the development of new medicines”, but also expressed “concerns about its effects on prices” of medicines.Footnote 106 The HRC called on all stakeholders to facilitate policy coherence “in the areas of human rights, intellectual property and international trade and investment”Footnote 107 to ensure access to medicines “that are affordable, safe, efficacious and of quality”.Footnote 108
Similarly, the UN Sub-Commission on the Promotion of Human Rights recognizes IP as a human right but subject to a public interest restriction.Footnote 109 However, the recognition of IP as a human right should be distinguished from companies’ legal rights (or privilege) resulting from a patented invention, which may not be protected at the level of human rights.Footnote 110 Human rights are “fundamental, inalienable and universal entitlements belonging to individuals and, under certain circumstances, groups of individuals and communities”Footnote 111 by birth.Footnote 112 However, IP rights form one policy tool out of many “for encouraging innovation and technological research and development”.Footnote 113 IP rights are temporary and transferable privileges granted by states, and can be suspended or revoked under certain conditions involving public interest.
Unrestrained IP rights can create an inescapable conflict with the right to health and the right to life.Footnote 114 This is because a denial of the right to health treatment on account of the prohibitive pricing of medicines and medical technologies resulting in a death entails a consequential denial of the right to life. A hypothetical scenario could involve the following. Patient A desires the drug lenalidomide to treat cancer; pharmaceutical company Z enjoys market exclusivity that makes pricing beyond the reach of A; at this stage, the issues at stake are A's right to health and the IP right of pharmaceutical company Z; nevertheless, if A dies after waiting endlessly for drugs that never came, A would have been denied both the right to health and the right to life.
This shows that an IP regime that restricts access to medicine on the grounds of market exclusivity could result in the denial of the right to life. Nevertheless, the pharmaceutical companies that are actually the main target of the derogation, joined by their home countries, stoutly reject any undue emphasis on IP rights as an impediment to the rights to health and to life. The Biotechnology Innovation Organization argues that IP rights do not represent the main cause of inaccessibility to medicines. The justification is that the vast proportion of medicines in developing countries and the least developed countries are unpatented, yet they remain unaffordable. This is further buttressed by the World Health Organization (WHO)-WTO-WIPO trilateral study, which itemized factors other than IP rights that undermine access to medicines, such as poverty, tariffs and taxes on imported medicines, regulatory systems, shortage of trained healthcare providers and facilities, and corruption.Footnote 115 The implication is that IP may contribute to the inaccessibility of medicines but is not a decisive factor. Rather, strong IP rules are vital to robust medical innovation, which relies heavily upon patent protection to generate investment in the development of these products.Footnote 116 This position is further justified by the WHO Essential Medicines List, which is not patented “and yet a third of the world's population do not have reliable access to them”.Footnote 117
Moreover, the least developed countries are not obliged to introduce patents for any medicines before 2033, yet the challenges of access to medicines are more acute in these jurisdictions.Footnote 118 Thus, the current reform effort in South Africa should factor in investment in non-IP infrastructure that overlaps with the right to health. Particular effort should be given to strengthening factors such as the human resources for healthcare services, health system infrastructure and health services delivery. The normative dimension of these factors is replicated in the Constitution.
Global norms and the national legal position
Section 27(1) of the Constitution explicitly stipulates the right of everyone to healthcare. The Constitution also imposes a positive obligation on the state to “take reasonable legislative and other measures, within its available resources” to realize the objective.Footnote 119 Equally, section 25 states that “no one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property”. Additionally, South Africa is a party to numerous international instruments that require protection of the right to health and IP rights. The IP Policy Phase I recognizes this relationship, and the fact that the duty to safeguard public health is not generally inconsistent with the responsibility to protect IP rights. Hence, it proposes to foster coherence through balancing the obligation to protect IP rights with the public interest in maintaining access to healthcare services. The IP Policy therefore supports both domestic and international instruments necessary to foster the right to health.
Nevertheless, the state's obligation to enforce the right to health is contingent on the availability of resources. This is based on the fact that similar rights, such as the right to education, the right to security and the right to a clean environment, compete for similar scarce resources, particularly in the emerging economies that lack the wherewithal to implement them comprehensively. Advocacy groups such as Fix the Patent Laws and Treatment Action Campaign have recorded a series of successes in this sphere.Footnote 120 However there should be effective strategies for the future to ensure that the government is more proactive in its responsibility to foster access to affordable medicines in a well-functioning healthcare system.
STRATEGIES FOR THE FUTURE
The IP Policy Phase I has an in-built agenda including short term (current) and medium term (immediate future) issues.Footnote 121 The medium term covers IP issues that transcend the right to heath, ranging from developmental and poverty alleviation to safeguarding South Africa's cultural, agricultural and biological heritage to foster promotion of the development of green technologies. This will be backed by constant monitoring and evaluation of outcomes to align IP law with constitutional imperatives, national objectives and social concerns.Footnote 122 The highlights below illustrate further areas requiring the articulation of strategies for the future.
Avoidance of restrictive agreement
South Africa has terminated its bilateral investment treaties with most pharmaceutical company home countries.Footnote 123 Furthermore, it is not a significant player in the conclusion of TRIPS-plus agreements. Nevertheless, trade agreements occasionally offer significant benefits to parties, depending on the text and trade-offs. Thus, the choice of text and texture of an agreement is critical to the preservation of interests. To safeguard public health imperatives, Oxfam encourages developing countries to say “no” to higher IP standards in agreements that undermine access to medicines.Footnote 124 Oxfam believes that the TRIPS-plus regimes undermine the credibility of TRIPS as the multilateral standard.Footnote 125 Accordingly, it warns that countries should not have to expend political capital and huge amounts of time “to gain consensus at the WTO, and then have these efforts undermined by a … strategy that depends on unequal negotiating power to pick off developing countries one by one”.Footnote 126
Similarly, the UN High Level Panel on Access to Medicines notes that the TRIPS-plus regimes in emerging trade agreements could “impede access to health technologies, including those requiring governments to ease standards of patentability, drug regulatory authorities to link marketing approval to the absence of any claimed patent and the requiring of test data exclusivity instead of test data protection”.Footnote 127 It notes further that the increasing incorporation of dispute settlement mechanisms that establish arbitration processes outside national courts threatens the legitimate resolve of government to foster access to medicines.Footnote 128 The regimes that result from power asymmetries between the IP generating jurisdictions and resource-poor countries “significantly reduce the scope of measures that national governments can use to pursue public health priorities and fulfil the right to health”.Footnote 129 Accordingly, the panel emphasizes not only the necessity of unity in ensuring that policy inconsistencies between trade and IP rules do not hamper innovation and access to needed health technologies that sustain health, wellbeing and life, but also recommends complementarities in the use of research outcomes, as well as good governance, accountability and transparency in human rights, trade and health policy.Footnote 130
Expediting reform of patent monopoly
As noted above, South Africa's flawed patent law must be promptly and comprehensively remedied. The cancer medicines report indicates that, out of the 24 cancer medicines examined, “15 are available in India for less than half of the price offered in the South African private sector”.Footnote 131 For instance, the pricing of lenalidomide shows a price differential of “R882,000 in South Africa compared to less than R32,000 in India”.Footnote 132 The difference constitutes just one line in a continuum of disparity between the prices of medicines in South Africa and elsewhere. Although the IP Policy Phase I prioritizes a constitutionally guaranteed right of access to healthcare services, pressure from the home countries of the pharmaceutical companies may shape implementation of the policy.Footnote 133 Moreover, potential or actual ISDS proceedings may create further frustration. However, South Africa's withdrawal from a significant proportion of treaties with ISDS provisions may constitute an ameliorating factor.Footnote 134
It is noteworthy that not all the pharmaceutical companies exploit the patent strategy to obstruct access to medicines.Footnote 135 In fact, a number of them strive to implement a sustainable healthcare services policy that fosters a balance between the protection of innovation and access to medicines.Footnote 136 They also structure their market strategy to take into consideration access to vaccines by the vulnerable population in emerging economies, including South Africa.Footnote 137 However, since the policy is dependent on corporate initiative, it is usually not wide-ranging enough to cover all the required healthcare services needs. The patent law reform must therefore make it clear that innovation and data generation deserve protection, but not at the expense of the right to health.
Strengthening non-IP factors that impede accessibility
The determinants of fulfilment of the right to health are measured in accordance with certain benchmarks. These include: sexual and reproductive health; child mortality and healthcare; prevention, treatment and control of diseases; natural and occupational environment; and access to health facilities and essential medicines.Footnote 138 The right to health is significantly enhanced when these standards are viable and efficient. South Africa does not seem to satisfy the standards. Measurable progress has undoubtedly been recorded, but South Africa continues to suffer deficiencies, including: sub-optimal healthcare service delivery; longer patient waiting times in public hospitals compared to private hospitals;Footnote 139 health infrastructure deficits; inadequate supply of competent human resources for healthcare services; constraints in the supply chain management; deficits in health finances and financial management; and institutional and governance failures.Footnote 140
This is reflected in many ways. First, the vast majority of the nation's population lacks medical insurance and relies on a public health system characterized by too few doctors, dilapidated facilities and treatment delays.Footnote 141 Secondly, the proportion of the population that can access healthcare services has to contend with facilities that have been “badly managed and are hampered by broken equipment, medicine shortages and insufficient numbers of staff”.Footnote 142 Similarly, patient waiting times in public hospitals remain unenviable compared to those at private hospitals (whose services are unaffordable to many people). South Africa's doctor / patient ratio averages 0.8 per 1,000, which is lower than comparable countries such as Brazil, China, India, Russia, Egypt and Mexico.Footnote 143 Besides, deficits in health infrastructure pose a challenge that requires a comprehensive blueprint of actions ranging from the construction of new facilities, the refurbishment of existing facilities in a state of dereliction, to the development of maintenance hubs in districts to facilitate proactive planned maintenance promptly. The issue of an inadequate supply of competent human resources for healthcare services is already documented in South Africa's Human Resources for Health Strategy. Thus, in a country-wide evaluation of human resources in the health sector in line with the WHO method (Workload Indicators of Staffing Needs), which determines staffing requirements based on workload, it was found that compliance with the WHO method remains low.Footnote 144 This necessitates considerate budgeting, enhanced training of the existing workforce, more absorption of healthcare professionals, and a prompt response to the migratory nature of healthcare professionals. As regards supply-chain management, the challenge arises from the procurement processes that make many clinics operate without the requisite medication, equipment, furniture and consumables. Although efforts are ongoing to address this through adequate budgeting, increased surveillance and monitoring, and performance appraisal,Footnote 145 they need to be sustained.
With regard to health budgeting, South Africa has massively scaled up its health budget to respond to the deficit in health finances and financial management. However, it has been discovered that there are latent institutional leakages that undermine health budget allocation. A study indicates the existence of a “crisis of ineffective management, incompetence and failure of leadership and governance at all levels of the health system, exacerbated by a general lack of accountability”.Footnote 146 This trend is highlighted by prevalent irregular expenditure (spending not in compliance with applicable laws and regulations), which limits the availability of funds for healthcare services.Footnote 147 The situation is compounded by a growing crisis in the South African Revenue Service (SARS) regarding the collection of taxes owed, especially from wealthy people and businesses. This is occasioned by numerous factors, including in particular high tax burdens, misuse of earnings from taxes, low trust in SARS, the focus of SARS on soft targets and selective enforcement.Footnote 148 This requires greater institutional proactivity and transparency.
Furthermore, the institutional and governance failures highlighted in the recent policy studies indicate widespread ineffective governance on the part of both the South African Nursing Council and the National Department of Health, coupled with “significant weaknesses in the policy-making and implementation capacity of these institutions”.Footnote 149 A ministerial investigation into the effectiveness of the Health Professions Council of South Africa (HPCSA) found that “[t]he HPCSA is in a state of multi-system organisational dysfunction which is resulting in the failure of the organisation to deliver effectively and efficiently on its primary objects and functions in terms of the Health Professions Act 56 of 1974”.Footnote 150 Although efforts are being made to confront these challenges through education, training and the implementation of initiatives that foster efficient health services delivery,Footnote 151 the outcome will determine their efficacy.
Regarding universal health coverage, the National Health Insurance (NHI) debate has been ongoing for some time, culminating perhaps in the publication of the 2018 NHI Bill. The NHI debate in South Africa is deeply intertwined with issues of funding and equitable access to healthcare services. Historic inequities in access to healthcare services and the need to realize the constitutional right to health pursuant to section 27 of the Constitution necessitate NHI. The 2018 NHI Bill imposes mandatory taxation on all working South Africans and legal residents to contribute to the NHI Fund. This money would go into a pooled fund that will be publicly administered. Several taxation proposals for funding are envisaged: a payroll tax, a surcharge on taxable income and increases in VAT. The idea is to raise 5 per cent of GDP in additional taxes to achieve total public spending of 8 per cent of GDP. However, doubts exist as to whether this can be implemented, and whether this will address the weaknesses in the current health system. South Africans already pay high personal taxes, so additional taxes may be resisted. Also, there are fears that the NHI Fund might not be used as intended. Further, the NHI scheme is opposed on the grounds of being a covert ploy to undermine private medical services.
Thus, fixing non-IP factors would require holistic approaches involving targeted policies directed at crisis areas, more financing of healthcare services, absorption and training of new professionals and retraining existing ones, expanding new hospital structures where necessary, a feasible NHI scheme, as well as monitoring, surveillance and appraisal of implementation benchmarks.
CONCLUSION
The paradox that characterizes South Africa's patent law and health policy undermines access to essential medicines for the treatment of diseases and the realization of the right to health. Consequently, the wide-ranging reforms introduced by the IP Policy Phase I constitute a significant step towards reducing the challenges facing access to medicines. Consistent with the IP Policy Phase I reform, focus areas should involve both patent and non-patent factors. Hence, patent protection should be limited to 20 years, as provided by TRIPS and the South African Patent Act. Secondly, the evergreening of pharmaceutical patents should be restricted, which TRIPS does not require. Thirdly, the right of patent opposition should be fully utilized to prevent patent applications that do not fulfil the essential requirements for the grant of patents. Fourthly, agreements that restrict the granting of marketing approval to third parties before the expiry of the patent term should be avoided. Fifthly, South Africa should not grant data exclusivity. Furthermore, compensation for compulsory licensing, if any, should not exceed the TRIPS requirements. Moreover, South Africa should avoid agreements that require the significant commitment of government resources beyond the requirements of TRIPS for the enforcement of IP rights. Finally, there should be a massive investment in strengthening non-IP factors that hamper access to medicines.
CONFLICTS OF INTEREST
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