RWANDA BECOMES FIRST COUNTRY TO TRY TO USE WTO PROCEDURE TO IMPORT PATENTED HIV/AIDS DRUGS

Nearly four years after WTO Members agreed on a procedure for poor countries to import generic versions of patented medicines that they are unable to produce themselves, Rwanda has become the first country to notify the global trade body that it intends to use it.

The notification (IP/N/9/RWA/1), filed on 19 July, is the first in several steps that will have to be taken before the affordable drugs reach patients in the African country.

Rwanda informed the WTO that it expected over the next two years to import 260,000 packs of the HIV/AIDS drug TriAvir, manufactured in Canada by Apotex, a major generics producer headquartered in Toronto. It specified, however, that it might modify this quantity, as "it is not possible to predict with certainty the extent of the country's health needs." As a least-developed country (LDC), Rwanda did not have to prove that it lacked manufacturing capacity. Under WTO rules, LDCs are not required to provide patent protection to pharmaceutical products until 2016.

The WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) allows governments to issue 'compulsory licences' - effectively suspending patents - to permit the generic production of essential medicines without the consent of patent holders. However, it stipulates that drugs thus produced should be "predominantly" for the domestic market, providing little to help countries that have little or no pharmaceutical manufacturing capacity. To address this, governments agreed in August 2003 on how to waive the domestic consumption requirement to allow poor countries to import drugs produced under compulsory licence elsewhere.

Supporters of the '30 August Decision' hailed it as proof that the trading system could take into account humanitarian and development concerns. However, critics have consistently charged that the administrative procedures set out in the deal are unnecessarily onerous, as a result of which not a single pill has been exported under the accord thus far.

Requirements set out in the WTO decision and Canada's domestic legislation implementing it mean that the way is not yet clear for Apotex to actually start exporting pills to Rwanda, explains Richard Elliott, deputy director of the Canada HIV/AIDS Legal Network.

First, Apotex will have to acquire a licence to produce the medicine Rwanda wants to import. TriAvir is a fixed-dose combination of the patented antiretroviral drugs zidovudine, lamivudine, and nevirapine. Patents on the components are held by GlaxoSmithKline and German-based Boehringer Ingelheim. Fixed-dose medications, which combine multiple drugs in a single pill, make treatment regimes simpler and thus easier to expand to more patients.

Apotex has already secured regulatory approval in Canada for its own version of the combination, as part of a thus-far unsuccessful attempt in cooperation with Médecins Sans Frontières (MSF) to export the drug under the 30 August Decision.

One of the reasons that Apotex has not managed to receive a licence to produce and export the drug, said Elliott, was that the Canadian implementing legislation required a formal request from a would-be importing country for the compulsory licence process to be set in motion.

Indeed, one of the stumbling blocks that MSF faced in Canada was that no developing country government it worked with was willing to be named as seeking to import generic versions of patented drugs. This may have been due to fear of censure: Brazil and Thailand were heavily criticised by the pharmaceutical industry as well as by some governments when they recently used other flexibilities in TRIPS rules to suspend patents on drugs for domestic public health programmes (see BRIDGES Weekly, 9 May 2007).

Following Rwanda's WTO notification, Apotex is believed to be seeking a voluntary licence - permission to manufacture generics in exchange for a negotiated royalty payment - from the two companies that hold the patents related to TriAvir.

As per Canadian law, Elliott said, if they cannot come to an agreement within 30 days, Apotex would be eligible to apply to the country's patents commissioner for a compulsory licence and the determination of a royalty to be paid to the patent holders.

If Apotex ultimately receives a compulsory licence to produce TriAvir for export to Rwanda, before shipments can start, Canada would have to provide a notification of its own to the WTO TRIPS Council, detailing information about the licence, such as the two-year duration, the products involved, and the importing country.

Apotex itself would have to create a website indicating the quantity of medicine being supplied to Rwanda, as well as details of the distinguishing characteristics - packaging, shaping, or colouring - aimed at ensuring that the generic drugs are not illegally diverted into markets where they might displace the full-price name-brand versions. During the course of its work with MSF to try to export TriAvir, Apotex already developed alternative packaging that has been approved by Canadian regulators.

After the WTO notification and the creation of the Apotex website, the path would become clear for 260,000 packs of generic TriAvir to be sent to Rwanda over a period of two years.

Elliott, of the Canada HIV/AIDS Legal Action Network, spoke to Bridges from Toronto and welcomed Rwanda's WTO notification of intent to import, but noted that the long time gap since August 2003 suggested that something was amiss with the functioning of the waiver.

"This is great, and we hope it comes to pass," he said, referring to the Apotex drug being sent to Rwanda. However, "this actually proves that the system is much more cumbersome than it needs to be." Elliot's group is pushing for "streamlining" Canada's implementing law - currently even more stringent than the 30 August Decision - to make it easier for compulsory licences to be issued more quickly, and for more drugs.

Notably, Rwanda could have avoided the use of the 30 August Decision altogether by importing the same combination treatment at comparable cost from India, where the components are not patented. Indian pharmaceutical companies have already been approved by the World Health Organisation and the US government to export generic versions of the fixed-dose combination. In fact, after it proved unable to secure the export of TriAvir from Canada, MSF sourced the drug from India for its treatment projects. Rwandan government officials could not be reached for comment.

MSF said that it was pleased that Rwanda appeared poised to benefit from the Apotex combination drug. However, it cautioned that even if Rwanda does import the HIV/AIDS drug from Canada via the WTO flexibility, this alone would not be enough to instantly resolve broader concerns about the relationship between intellectual property protections and access to medicine. This compulsory licence would be "just for one country, for one product, and for a limited period," pointed out Alexandra Heumber, a Brussels-based spokesperson. "Unless several other countries do the same, for several key drugs, for a sufficient amount within a short time period," the first import notification would not signal a decisive shift.

Wide-scale generic competition helped lower prices for many of the older HIV/AIDS drugs, as they did not receive patent protection in pharmaceutical-producing developing countries like India. However, MSF has found signs that the cost of newer medicines with fewer side effects may be substantially higher, in part because developing countries had to start enforcing pharmaceutical product patents in January 2005, thus limiting the extent of generic production.

WTO Members agreed in December 2005 to make the 30 August Decision a permanent amendment to the TRIPS Agreement. However, this would require ratification by about 100 governments before 1 December. Only seven have approved the agreement thus far. The amendment is being hotly debated in Europe, where the European Parliament has refused to ratify it until EU member states commit to do more to help developing nations manufacture and import medicines at affordable rates (see BRIDGES Weekly, 18 July 2007).

In any event, the 30 August Decision is not the only avenue available under WTO rules for exporting drugs produced under compulsory licence, noted James Love, the director of Knowledge Ecology International.

Love observed that since 2005, Italy has issued compulsory licences for three drugs, and authorised the export of the generics thus produced to other EU member states. Italy did this by invoking TRIPS Article 31(k) provisions allowing compulsory licensing to combat anti-competitive practices, after patent holders Glaxo and Merck refused to licence their products to Italian generics manufacturers. The standard export restrictions did not apply, since that article waives the domestic market requirement in cases where licences are issued to remedy anti-competitive measures.

The generic medicines Italy exported within the EU's customs union are used primarily to treat prostate disease, migraine headaches, and male pattern baldness.

ICTSD reporting; "New Report Raises Concerns Over Price of New AIDS Drugs," VOICE OF AMERICA, 23 July 2007.