A guide to surviving the court case
Compulsory licensing
Giving a local firm the right to make a copy of an expensive patented drug at a lower price, while compensating the patent holder. TRIPS includes the right to issue compulsory licences. This right may be used where a patent holder (the manufacturer who first registered the invention or drug) can be shown to be abusing its monopoly position, or in cases of national emergency.
Parallel importation (Section 15C of the Medicines Act)
Buying drugs from countries where prices are already lower, and so trading in parallel with the local seller of the same drugs. Parallel importation is based on the principle of exhaustion of rights – a patent holder?s rights are said to be “exhausted” once the product is first placed on the market, allowing the purchaser to resell the product without offending the intellectual property rights of that patent holder. Specific mention is necessary in national law of where rights are considered to be exhausted, so that parallel trade can occur within that area.
The drug companies say that parallel importation conflicts with the World Trade Organisations rules on intellectual property, but Article 6 of TRIPS says that the agreement does not cover parallel importation. Also, many countries in the European Union and the USA are parallel importing.
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
By 2006 all signatories to the Agreement (which means all members of the World Trade Organisation) must give drug companies 20 years? patent protection on their inventions.
Medicines and Related Substances Control Amendment Act, No 90 of 1997(Medicines Act)
On October 31 1997, Parliament passed the Medicines Act. The National Council of Provinces passed the Act on November 20 1997 and President Mandela signed the law on November 25 1997. This law amends or changes the Medicines and Related Substances Control Act, No 101 of 1965.
The new law contains measures that will make medicines more affordable and improve the functioning of the Medicines Control Council.
The Medicines Act introduces four important elements to contain health care costs to government and the private sector.
- Generic substitution of medicines that are no longer under patent is part of the law. This means that a pharmacist must offer a patient the generic version of a brand name medicine.
- Another element of the Medicines Act is the introduction of a pricing committee that will set up “transparent pricing mechanisms”. Pharmaceutical companies will have to justify the prices that charge.
- The third part of this law is the parallel importation provision – known as Section 15C of the Medicines Act. This measure allows the government to import the same medicine sold by the same company or its licensee at a lower price in another country.
- The Medicines Act also allows international tendering for medicines used in the public sector.
Generic medicine
A generic medicine is a drug with the same quality active ingredient than a brand name drug. Generic substitution is practised in several European countries and US states. The World Health Organisation strongly advocates the use of good generics and it is estimated that the practice could save the SA economy millions.
State tender system
The State buys some 80% of all goods through a State Tender System that sees government call for and award contracts to the cheapest bidder complying with required specifications.
This system is used to purchase both patented and off-patent medicines for patients dependent on State-funded resources.
Price comparisons
Ciprofloxacin
Manufactured by Bayer (Germany), the anti-biotic is a first line treatment for sexually transmitted diseases.
The patient will receive a number of drugs when being treated, but Ciprofloxican will always be part of the regimen.
It is on the Essential Drug List, which means it should be available at Primary Health Care facilities.
It is also patented in South Africa so there are no generic versions locally available.
Price per 500mg tablet
India (generic): Less than 50c
State tender (South Africa): R5,50 (including VAT)
Pharmacy (SA private sector): R32,40 (including VAT)
Author
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A guide to surviving the court case
by Anso Thom, Health-e News
April 17, 2001