Impact of U.S.-Thailand FTA on Access to Medicines in Thailand

U.S.-Thailand FTA

The United States of America trade agenda involves working to open markets globally (WTO negotiation), regionally (Enterprise for ASEAN Initiative, EAI), and bilaterally (Free Trade Agreement, FTA). The fact sheet released from the White House in October, 2002 stated the roadmap to FTAs between the U.S. and individual ASEAN countries. They will be based on the high standards set in the U.S.–Singapore FTA. The USTR notified Congress of intent to initiate FTA negotiations with Thailand on February 12, 2004 . The U.S.-Thailand FTA will start the negotiation in Hawaii on June, 28, 2004. The negotiation text was kept secret despite the request from Thai civil society. The Thai NGOs coalition working on this area was formed as “FTA watch”. This coalition published the study of the impact of U.S.-Thailand FTA in several areas: such as agriculture, investment, and intellectual property rights under the name of “Sovereignty not for Sale” .

The high level of Intellectual Property Rights (IPR) Protection is aimed in the U.S.-Singapore FTA. A comprehensive text in this agreement on Patents & Trade Secrets is presented in the followings:

•Patent term can be extended to compensate for up-front administrative or regulatory delays in granting the original patent, consistent with U.S. practice.
•Grounds for revoking a patent are limited to the same grounds required to originally refuse a patent, thus protecting against arbitrary revocation,
•Provides protection for patents covering biotech plants and animals.
•Protects against imports of pharmaceutical products without patent-holder’s consent by allowing lawsuits when contracts are breached.
•Test data and trade secrets submitted to a government for the purposes of product approval will be protected against disclosure for a period of 5 years for pharmaceuticals and 10 years for agricultural chemicals. Closes potential loopholes to these provisions.
•Ensures that government marketing-approval agencies will not grant approval to patent violating products.
•Criminal penalties for companies that make pirated copies from legitimate products.

Based on the interpretation of the US-Singapore FTA, in order to protect the negative consequence on the public health of the Thai populace, these following requests should be taken into ccount.

1.The extension of patent term must not be accepted

The patent term in Thai Patent Act is 20 years from filing date, therefore the delay in the process of patent granting do not affect the right of patentee. There is no obligation in the drug registration to wait for the granting of patent and the patentee has the full right for the invention even though the application is still in the granting process. In contrary, there is no regulation in the Thai drug registration process to enforce the patentee to elaborate the patent status of registered drug. In consequence, it delays the introduction of generic product into the market about 5 years after the patent expiry date of those drugs. In fact, Thailand must request the U.S. to shorten the patent term for the essential drugs, since it is the burden for Thailand to solve her health problems.

2.The patent rights should not threaten the protection of public health

According to Thai Patent Act, it protects against imports of pharmaceutical products without patent-holder’s consent, and there are also the measures like CL, government use and parallel importing to protect the public health. These provisions comply to TRIPs. In addition the TRIPs and Public Health declaration paragraph 4, 5, and 6 allow the country to protect public health and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all.

3.Test data and trade secrets must not be used for market monopoly

The request of data exclusivity on the test data came from the statement of the U.S. Pharmaceutical Research Manufacture Association (PhRMA) in the report to USTR:

“While Thailand is required to implement all provisions of the World Trade Organization’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), it has not yet enacted legislation to implement the obligations contained in TRIPS Article 39.3 relating to data exclusivity.”
PhRMA “Special 301” Submission Priority Watch List Countries (2004)

PhRMA claimed that Article 39.3 requires the introduction of "data exclusivity", even though Article 39.3 obliges WTO member countries to protect undisclosed test data of a new chemical entity made for registration purposes against disclosure and unfair commercial use. Clearly, no parts of Article 39.3, create a "market exclusivity" in information. Consequently, Article 39.3 cannot prevent a regulatory authority from using/relying on the data of a registered product in order to assess and register other "similar" products so long as this information is not disclosed. The PhRMA proposed interpretation is therefore beyond TRIPs and would, if applied, have a major negative impact on access to medicines and the development of local generic pharmaceutical companies.

“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”
TRIPs Article 39.3
“Once data on a new drug have been submitted, their use by a national health authority to study and approve a subsequent application on the basis of similarity, does not entail a violation of the confidentiality”
Professor Carlos Correa

4.Legal obligation to submit the patent status is warrant
If the request from the U.S. on ensuring that the FDA will not grant approval to patent violating products is applied, a big problem in implementation will occur. The FDA do not get the information on patent status of those products from the patentee, so it is important to introduce the legal obligation to submit the patent status with all other documents for market approval. The criminal penalties for one who abuse this system by submission of wrong patent status have to be initiated.

5. Recommendations:
•HIV-AIDS is not only the health problem in Thailand but it spreads rapidly all over the world. The control of this disease should be considered world wide, any obstacle for the accessibility to the medication must be eliminated. One big obstacle is the pharmaceutical product patent, so the essential drugs, especially ARVs and OI treated drugs must be exempted from the patent protection system.
•The US-Thailand FTA should limited to the trade issues and Royal Thai Government should let all stake holders have the opportunity to share their concerns and decisions when the negotiations could affect people health.
•In the issue of Intellectual Property, since Thailand’s legislations are complied to the international standard of TRIPs, so there should be not any TRIPs Plus in FTA.
•The extension of patent life to compensate for up-front administrative or regulatory delays in granting the original patent must not be accepted at all. Since the patent life of 20 years in Thai patent law started from the application filing date, so the delays in granting the original patent do not shorten this patent life and do not affect the rights of patentee.
•TRIPs Article 39.3 is not the provision of the market exclusivity to the protection of the undisclosed information. Thai Trade Secrets Act’s provisions are for data protection from disclosure and unfair commercial use. WTO’s dispute settlement board decided to conclude this issue raised by the U.S. to the Argentina government that the differences in interpretations shall be solved under the DSU rules. So U.S.-Thailand FTA should not bring data exclusivity into the negotiation unless the clear interpretation of this article is solved in WTO.
•Legal obligation to submit the patent status on the drug registration process is warrant
•Royal Thai Government has to start to implement the CL for needy ARVs in order to solve the health crisis in the scarce health care resources.

Associate Professor Dr. Jiraporn Limpananont
Drug Study Group,
c/o Social Pharmcy Research Unit,
Faculty of Pharmaceutical Sciences,
Chulalongkorn University,
Bangkok 10330, Thailand.