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SOUTHNEWS

 
No. 311,  3 March 2020

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Government Agencies and Pharmaceutical Manufacturers in Bangladesh Discuss Draft South Centre Report on Impact of End of TRIPS Transition Period upon LDC Graduation


The possible implications of the end of the transition period available to Bangladesh as a least developed country (LDC) with regard to obligations relating to pharmaceutical products under the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) were discussed at a national consultation organized by the South Centre and the Economic Relations Division, Ministry of Finance of Bangladesh, in Dhaka, 9th February 2020. Upon the end of the transition period on LDC graduation (expected in 2024), Bangladesh would have to grant patent and test data protection to pharmaceutical products in accordance with the TRIPS Agreement obligations. This can impact the ability of the pharmaceutical industry in Bangladesh to continue to supply locally and to export affordable generic medicines. Discussions were based on a draft report prepared by the South Centre at the request of the Government of Bangladesh assessing the possible impact of the end of such transition period.

Les possibles répercussions liées à la fin de la période de transition relative aux produits pharmaceutiques dont dispose le Bangladesh en tant que pays moins avancé (PMA), en vertu de l'accord de l'Organisation mondiale du commerce (OMC) sur les aspects des droits de propriété intellectuelle qui touchent au commerce (accord ADPIC), ont été examinées lors d'une consultation nationale organisée à Dhaka, le 9 février 2020, par le Centre Sud et la division des relations économiques du ministère des Finances du Bangladesh. À la fin de la période de transition (prévue en 2024), le Bangladesh sera tenu, conformément aux engagements pris dans l'accord sur les ADPIC, de mettre en place une protection par brevet pour les produits pharmaceutiques et les données d'essai. Cela peut avoir un impact sur la capacité de l'industrie pharmaceutique du pays à pouvoir continuer de fournir localement et d'exporter des médicaments génériques à un prix abordable. Le projet de rapport préparé par le Centre Sud à la demande du gouvernement du Bangladesh aux fins d’évaluer les effets résultant de la fin de cette période de transition a servi de base aux discussions.

Las posibles consecuencias del final del período de transición del que dispone Bangladesh como país menos adelantado (PMA), en lo que respecta a las obligaciones relativas a los productos farmacéuticos en virtud del Acuerdo sobre los Aspectos de los Derechos de Propiedad Intelectual relacionados con el Comercio (Acuerdo sobre los ADPIC) de la Organización Mundial del Comercio (OMC), se examinaron en una consulta nacional organizada por el Centro del Sur y la División de Relaciones Económicas del Ministerio de Finanzas de Bangladesh, en Dhaka, el 9 de febrero de 2020. Al final del período de transición de la graduación de PMA (previsto para 2024), Bangladesh tendría que conceder protección de patentes y datos de pruebas a los productos farmacéuticos de conformidad con las obligaciones del Acuerdo sobre los ADPIC. Esto puede repercutir en la capacidad de la industria farmacéutica de Bangladesh para seguir abasteciendo localmente y exportar medicamentos genéricos asequibles. Las deliberaciones se basaron en un proyecto de informe elaborado por el Centro del Sur a petición del Gobierno de Bangladesh, en el que se evalúan las posibles repercusiones del final de ese período de transición.


 

The South Centre and the Economic Relations Division (ERD) of the Ministry of Finance, Government of Bangladesh, organized a national consultation on the “Probable Impacts of LDC Graduation on the Pharmaceutical Industry and the Way Forward” at the Bangabandhu International Conference Center in Dhaka on 9 February 2020. The consultation was organized to discuss a draft report by the South Centre on the possible implications of the end of the transition period available to Bangladesh as a least developed country (LDC) with regard to certain obligations relating to pharmaceutical products under the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) upon the expected graduation of Bangladesh as a developing country in 2024.

65 participants from different agencies of the Government of Bangladesh as well as representatives from the pharmaceutical industry, including senior officials and heads of leading pharmaceutical companies in Bangladesh, participated in the consultations.

High Level Opening Session

 


The consultation was inaugurated by a high level opening panel comprised of Mr. Salman F. Rahman, Hon’ble Adviser to the Prime Minister for Private Industry and Investment; Dr. Carlos M. Correa, Executive Director, South Centre; Mr. Monowar Ahmed, Secretary, ERD; and Mr. Abdul Baki, Project Director (Joint Secretary), Sustainable Graduation Project, ERD.

In his opening address, Dr. Carlos M. Correa commended the government and the people of Bangladesh on the impending LDC graduation. He observed that Bangladesh had achieved impressive development of its local pharmaceutical industry through the adoption of right policies, which has ensured access to affordable medicines in Bangladesh and the generation of a significant export capacity. However, LDC graduation will impact the existing policy framework relating to intellectual property rights (IPRs) protection of pharmaceutical products in Bangladesh, in accordance with obligations under the TRIPS Agreement that will apply to Bangladesh upon graduation. Thus, LDC graduation presents a challenge for Bangladesh to develop an IPRs policy framework for pharmaceutical products in a manner that supports the pharmaceutical industry and access to affordable medicines.

Mr. Salman F. Rahman delivered a special address as the Chief Guest. He observed that Bangladesh has made major strides towards LDC graduation and has the ambition to grow further. The pharmaceutical industry in Bangladesh has grown substantially and currently exports medicines to 150 countries. In this context, he stressed the critical importance of addressing changes necessary in the patent law of Bangladesh in a manner that supports the further growth of the pharmaceutical industry.

Graduation Journey of Bangladesh

Mr. Md. Anwar Hossain, ERD, delivered an overview of the LDC graduation journey of Bangladesh. He observed that the LDC graduation process itself has a long duration (6 years following the meeting of all the criteria for graduation by a country). LDC graduation is determined on the basis of a country’s per capita gross national income (GNI), human assets value (HAI) and economic vulnerability index (EVI). Bangladesh is the first WTO member country to meet all the three criteria for graduation and will officially graduate from the LDC category in 2024. He pointed to the growing global recognition of Bangladesh for its economic potential in the foreseeable future. In this context, the use of TRIPS flexibilities and exploring policy options for support to potential technology sectors is among the critical policy measures that Bangladesh needs to explore, including through negotiations within the WTO and other stakeholders.

Presentation of Draft Report by the South Centre

Mr. Nirmalya Syam, Senior Programme Officer of the Health, Intellectual Property and Biodiversity Programme of the South Centre, presented the draft report by the South Centre on the implications of the end of the TRIPS transition period upon LDC graduation of Bangladesh. The draft report was prepared by a research team of the South Centre and an external consultant, based on a review of primary and secondary literature and key informant interviews undertaken on a mission to Bangladesh in March 2019.

Mr. Syam presented the draft report in two parts – 1) an overview of policy measures pursued in Bangladesh to support access to medicines and the development of the pharmaceutical industry to that end; and 2) policy options that Bangladesh could explore to mitigate the impact of the end of the TRIPS transition period upon LDC graduation.

Policy Measures to Support Access to Medicines

Bangladesh has witnessed substantial demographic and epidemiological transition that has accompanied her economic growth. While Bangladesh has made huge improvements in increasing life expectancy and in reducing infant and maternal mortality, it now faces the double-burden of disease, including high incidence of infectious diseases like tuberculosis (TB) and many non-communicable diseases such as diabetes, cancer, cardiovascular diseases, chronic respiratory diseases, etc. While the price of medicines in Bangladesh are very low, most of the expenditure on medicines is out-of-pocket i.e. the burden of drug prices falls directly on the patient. Some critical medicines that are under patent protection outside Bangladesh are available in the country at a significantly low price as they are supplied by a number of generic companies. However, other technologically complex drugs are not manufactured in Bangladesh. These drugs (e.g., dolutegravir) have to be either imported or supplied through charitable access programmes.

Bangladesh has one of the most advanced pharmaceutical industries among developing countries. Local firms dominate the market, with a high concentration of a few local pharmaceutical companies. The industry is predominantly focused on development of formulation drugs, though some firms have also manufactured a few technologically complex drugs, including biologicals. The pharmaceutical industry is very dependent on the importation of active pharmaceutical ingredients (API) for producing formulation drugs.

The Drugs Control Ordinance of 1982, the National Drug Policy of 2005 and 2016, the suspension of pharmaceutical patent protection in 2008 and the API Policy of 2018 are major policy initiatives that have been adopted to support the local pharmaceutical industry. While the Drugs Control Ordinance of 1982 played a key role in supporting the development of the formulation drug market for local manufacturers in Bangladesh, the suspension of patent protection since 2008 created opportunities for the local generic manufacturing of drugs patented outside Bangladesh at a fraction of their cost in countries with patent protection. Bangladesh has also taken some measures to support the development of a local API industry after the suspension of the grant of patents on pharmaceutical products. This initiative will take time to mature due to the technological complexities and skill requirements involved. Bangladesh will need a sustained period of freedom for local manufacturers to develop APIs without infringing any patent on the drug.

The immediate impact of the end of the TRIPS transition period for Bangladesh upon LDC graduation will be that Bangladesh will have to resume granting patents on pharmaceutical products. Currently, drugs patented outside Bangladesh constitute less than 10 per cent of the local market. Nevertheless, some patent applications have been filed in the country on pharmaceuticals, which may eventually be granted upon examination of the application at the end of the TRIPS transition period. This can have a chilling effect on the ability of local pharmaceutical companies to produce and supply affordable generic medicines and also on the ability of Bangladesh to develop from a formulations based industry to a manufacturer of active pharmaceutical ingredients.

Hence, while graduating from the LDC status, it would be important for Bangladesh to ensure that she retains the policy space to implement appropriate measures, particularly with regard to patent protection, to support the further development of the Bangladeshi pharmaceutical industry.

Policy Options upon End of Transition Period

Interventions to mitigate the impact of the end of the TRIPS transition period can be pursued at two levels: 1) making full use of the TRIPS flexibilities in the design and implementation of the patent law in Bangladesh; and 2) negotiating an extension of the transition period beyond LDC graduation till its full term currently set at 1 January 2033. Of these, the possibility of successfully negotiating an extension of the transition period in the WTO, though justifiable, is a very difficult option and the outcome of such an initiative will be uncertain. The draft report, however, presents some justifications on the basis of which such an extension could be sought, if it is considered feasible. However, making full utilisation of the TRIPS flexibilities that will be available to Bangladesh even after graduation will be most critical for Bangladesh.

In this regard, the South Centre’s research included an analysis of the existing Patents Act of 1911. It pointed, inter alia, to the need for Bangladesh to define rigorous and robust criteria for patentability of pharmaceutical products and processes, so as to limit the possibility of patents being granted on frivolous developments which cannot be considered to be inventions that satisfy the requirements of novelty, inventive step and industrial applicability. Bangladesh should also make full use of the exceptions and limitations to patent rights available under TRIPS Agreement including parallel importation based on an international doctrine of exhaustion of patent rights, research exception and regulatory review exception, and compulsory licenses. The draft report noted the need for Bangladesh to increase its capacity for examination of pharmaceutical patent applications by increasing the number of qualified and trained patent examiners, and also the importance of not ratifying the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty (PCT) which could significantly increase the number of patent applications that would have to examined by Bangladesh with its limited patent examination capacity and influence the standards under which such applications are to be assessed.

 

Author: Nirmalya Syam is Senior Programme Officer of the Health, Intellectual Property and Biodiversity (HIPB) programme of the South Centre. 
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For more information, please contact Anna Bernardo of the South Centre: Email bernardo@southcentre.int, or telephone +41 22 791 80 50.
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