Oxfam's fears over ACTA and generics

In a press release issued just before the fifth round of negotiations for the Anti-Counterfeiting Trade Agreement (ACTA) got under way in Morocco, Oxfam warned of its fears that the final agreement could lead to generic firms being subject to criminal prosecutions for sending generics to countries in need (see p. 4). However, the likelihood of such an outcome from ACTA is open to question. Of course, on the face of it, ACTA is not concerned with generic drug markets, or indeed the provision of legitimate drugs, whether branded or generic, to developing countries. According to the Office of the US Trade Representative, its roots lie in a desire to tackle the proliferation of counterfeit and pirated goods around the world. It sprung from preliminary talks in 2006 and 2007, with negotiations beginning in June 2008 involving Australia, Canada, the EU and its 27 member states, Japan, Mexico, Morocco, New Zealand, South Korea, Singapore, Switzerland and the US. The round of discussions in Morocco was the fifth round, with the next round to be held in Korea in November 2009. Negotiations are expected to be completed in 2010.

With regard to Oxfam’s fears, the organisation comments that the secrecy surrounding the talks raises fears that the interests of poorer nations will be ignored, and cites the EU’s recent seizures of generic medicines as evidence. Oxfam argues that the EU is taking the lead in pushing for a deal that would require all participating countries to increase seizures and prosecute companies which produce generics legally for sale in other countries. The organisation claims that this will include countries not directly involved in the negotiations, and notes that only two of the countries involved in negotiations are developing countries. Oxfam argues that this could encourage Big Pharma to file frivolous patents to maintain their monopolies.

The official line on the secrecy surrounding the talks is that this is an accepted practice during trade negotiations which allows views to be exchanged in confidence in order to arrive at a final consensus. The argument that multinational pharmaceutical companies would use the agreements to file ‘frivolous’ patents to prevent generics is questionable. Such a blatant attempt would be a public relations disaster, akin to the backlash seen with the South African patent laws debacle in 2001. It would also fly in the face of patent legislation seen in countries such as Canada, the EU and the US, which has sought to tackle such issues of evergreening. To be successful, ACTA will need to fit in with the existing TRIPS framework; the WTO has consistently been at pains to insist that TRIPS would not get in the way of sending generics to countries in need. However, it is fair to note, as Oxfam does, that EU member states have recently been seizing shipments of generics passing within its borders and headed to developing nations, often under suspicions of patent or trademark infringement, although the shipments have ultimately been allowed to continue their journeys. In addition, US free trade agreements passed in recent years have often been accused of being ‘TRIPS-plus’ in making extra demands regarding intellectual property rights that are not necessarily in line with TRIPS requirements. However, it seems unlikely that preventing shipments of generics would either be the intent or the outcome of the negotiations.

Battle lines drawn over biologic data exclusivity

The debate in the US Congress regarding the shape and form of a regulatory pathway for follow-on biologics has taken another step forward in recent months, with battle lines being drawn over the issue of how much of a data exclusivity period innovator biologics should be given. So far, the branded industry’s view is winning over the generic industry’s preference, although the latter is more in line with the White House’s thinking on the matter.

In March 2009, two competing bills were introduced to the House of Representatives concerning the establishment of a follow-on biologic pathway. Chronologically, the first was H.R. 1427, the Promoting Innovation and Access to Life-Saving Medicine Act, introduced by Representatives Henry Waxman, Frank Pallone, Nathan Deal and Jo Ann Emerson; this bill would give original biologics five years of exclusivity, whilst some modifications of existing drugs would get three years, with both periods having the potential to be extended by a year. Just a few days later, a second bill, H.R. 1548, the Pathway for Biosimilars Act, was introduced by Representatives Anna Eshoo, Jay Inslee and Joe Barton. Though the two bills were broadly similar, H.R. 1548 proposed providing up to 14 and a half years of data exclusivity for original biologics. Needless to say, the generic industry supports a shorter period of data exclusivity, whilst the branded industry as represented by BIO, the Biotechnology Industry Organisation, supports a longer period.

At first glance it would seem that H.R. 1427 would be more likely to succeed. Henry Waxman’s name carries weight in the field of generics, as one of the architects of the Hatch-Waxman Act which regulates conventional generics. In addition, Mr Waxman is now chairman of the House Energy and Commerce Committee, through which both bills must pass. Mr Waxman also wrote in June 2009 to the White House regarding a regulatory pathway, and the White House reply indicated a preference for seven years of data exclusivity following a report from the Federal Trade Commission which argued that the 12 to 14 years favoured by the branded industry would diminish innovation and unnecessarily delay generic alternatives.

However, it is becoming clear that a longer exclusivity period, such as that introduced by H.R. 1548, is more likely to become law. Crucially, the Senate HELP Committee voted on 13th July 2009 in favour of a 12-year period of exclusivity, with a vote 16-7 in favour. It also voted down an amendment which would have provided seven years, in line with the opinion of the White House. Welcoming the vote, BIO also noted that support for H.R. 1548 was growing in Congress. The organisation commented that H.R. 1548 had attracted 129 cosponsors, whilst H.R. 1427 had attracted only 13. At last count, H.R. 1548 had 142 cosponsors, whilst H.R. 1427 had 14, but the point is clear: supporters of a longer data exclusivity period outnumber by ten to one supporters of a shorter period. Interestingly, only one Representative, John Conyers, is listed as a cosponsor for both bills.

Organisations in support of a shorter period have dug in, and are already battling both to save H.R. 1427 and to scrap the 12-year period approved by the HELP Committee. Given the position of the White House, that battle is not yet lost, but the clear preference that is emerging from Congress must make the originator industry favourites in the fight.