CANADA ISSUES COMPULSORY LICENCE FOR HIV/AIDS DRUG EXPORT TO RWANDA, IN FIRST TEST OF WTO PROCEDURE

Rwanda last week came one step closer to becoming the first nation to use a WTO procedure designed to allow developing countries to import cut-price copies of patented medicines, when Canadian patent authorities issued a compulsory licence authorising the generic production of a patented HIV/AIDS drug for export to the central African country.

"This is big step forward in finally getting at least one affordable medicine from Canada to a developing country in need," said Richard Elliott, Executive Director of the Canadian HIV/AIDS Legal Network. However, noting that it had already been three years since Canada introduced a legal system for making such exports possible, he said "it's also a wake-up call" about the need to simplify the process to make it more efficient and effective.

The Canadian Intellectual Property Office (CIPO) cleared large generic pharmaceutical company Apotex to manufacture and deliver 260,000 packs of Apo-Triavir at cost to Rwandan health authorities. This would be enough to treat 21,000 AIDS patients for a year.

Rwandan WTO delegate Edouard Bizumuremyi told Bridges he was delighted with the development and said Rwanda had been "waiting for this."

The authorisation follows Rwanda's July notification to the WTO that it wanted to import that quantity of the medicine from Canada (see BRIDGES Weekly, 25 July 2007), becoming the first country to try to import generics under a WTO procedure criticised as too complex to be effective.

Trial run for WTO health amendment

The WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) allows members to issue compulsory licences in specific circumstances, including public health emergencies, effectively suspending patent rights on products to clear the way for the production of cheap generics. However, the TRIPS Agreement also stipulates that the generics thus produced should be "predominantly" for the domestic market, thus limiting the amount that can be exported to countries with an insufficient domestic pharmaceutical base.

To address this, governments agreed in August 2003 to waive the domestic consumption requirement under certain conditions to allow poor countries to import drugs produced under compulsory licence elsewhere. This provisional waiver was made into a formal amendment to the TRIPS Agreement in December 2005, despite criticism from health activists that its administrative requirements were so complex that no country had tried to use it (see BRIDGES Weekly, 7 December 2005).

Nearly four years after the '30 August Decision' waiver, Rwanda became the first country to try to use the mechanism when it notified the TRIPS Council of its intention to do so in July.

Canada was one of the first countries to respond to the 30 August Decision, clearing the way for the export of generic versions of essential medicines through initial legislation in 2004, and then through the Canadian Access to Medicine Regime (CAMR) in May 2005.

Canada licences drug under access-to-medicine regime

From the outset, Canadian health groups criticised the CAMR for exceeding the already exacting conditions set out in the WTO compromise; one provision, for instance, requires regulatory approval by Canadian authorities, and not just the World Health Organisation.

The CAMR was finally inaugurated on 19 September when the Canadian patent commissioner, Murray Lewis, granted Apotex a compulsory licence to manufacture and export Apo-Triavir, a fixed-dose combination of three drugs under patents held by Glaxo Smith Kline (GSK), Shire, and Boehringer Ingelheim. The licence is valid for two years and restricted to the supply of 260,000 packs to Rwanda exclusively.

In response to the health activists' concerns, the patent commissioner described Canada's process for granting the licence as "almost as simple as it could get," with the "self-explanatory" application forms spelt out on the website.

Generic makers, health activists unsatisfied

The Canadian HIV/AIDS Legal Network's Elliott countered that obstacles arose in the "hoops that have to be jumped through, which act as a disincentive for companies to act." For instance, under the CAMR, a would-be generic producer must first negotiate with the patent holders for a voluntary licence, and would only become eligible for a compulsory licence if negotiations have failed after 30 days. Thus, he explained, licences for each specific quantity and destination country are potentially subject to delay. Furthermore, the requirement opens the recipient country to the possibility of political pressure from the brand-name company.

Apotex Director Elie Betito was scathing about the company's experience with the CAMR, telling Bridges "it makes no sense if you are trying to save lives."

He said that Apotex's attempts to negotiate voluntary licences had lagged for over a year, until Rwanda's WTO notification triggered the Canadian regime's compulsory licence provisions. For any more than a country-specific quota, "the brand pharmaceuticals can attach whatever conditions they like" to a licence, Betito added.

Following Rwanda's petition, both GSK and Shire waived their right to the low royalty fee determined in accordance with the African country's place on the UN Human Development Index. GSK did challenge the name Apo-Triavir, however, arguing that it could be confused with their brand-name fixed-dose combination Trizivir, but the patent commissioner did not agree. Apotex said the generic would cost $0.405 per tablet, compared to $20 per tablet in the US for the brand-name equivalent. Moreover, it predicted that this price would drop once production of the active pharmaceutical ingredients is ramped up.

In any event, the path for Rwanda to import generic Apo-Triavir is now fairly straightforward. Canada must notify the TRIPS Council of its intention to export the drug to Rwanda, detailing information about the licence, the quantity, and the two-year duration. Apotex needs to create a website providing information about the quantity of medicine and the distinguishing characteristics - packaging, shaping, or colouring - aimed at ensuring that the generics are not illegally diverted into other markets.

However, if Canada is serious about wanting to facilitate the provision of medicines to developing countries, Elliott recommended reforming the CAMR to create a 'one-licence solution' that would authorise a company to produce the same drug for export to different countries that submit notifications to the WTO or Canadian government.

Elliott acknowledged that "there is not much appetite to revisit the legislation" among Canadian policymakers. He expressed concern that now the CAMR had been shown to work, in however limited a way, there would be no impetus to improve it.

ICTSD reporting.