TRIPS-plus Provisions Conséquences for Ukraine

Sergey Kondratuyk : TRIPS-plus Provisions Conséquences for Ukraine

Militant du droit à la santé et du médicament en Ukraine, Sergey sera présent lors du deuxième jour du séminaire. Il nous a fait part de l’expérience de l’Ukraine et des conséquences de l’ALECA, et d’autres accords, sur le droit à la santé.

1. Background

Number of TRIPS-plus provisions that were incorporated in the FTA agreements with Ukraine is harmful to expanding access to essential medicines. Such provisions lead to prolongation of monopolies or creation of additional monopolies in Ukraine for HIV, TB, hepatitis C, cancer and other treatments. At the same time,  the actual situation in Ukrainian pharmaceutical sector with access to modern treatments is extremely limited to either few financially-privileged citizens, who pay out of pocket for their treatment or under international donor support programs that offer free treatment. According to the qualitative research conducted in 2016 most of the respondents (94%) defined as major issue in access to medicines in Ukraine high cost of medicines. According to large nationwide study (>10 000 respondents) every fifth respondent had declined to seek medical care due to high cost of medicines, services or transportation costs.

1. Introduction of TRIPS-plus obligations to international agreements with Ukraine

Ukraine had become a member of the World Trade Organization (WHO) in 2008 and joined to the Agreement on Trade-Related Aspects of the Intellectual Property Rights (TRIPS Agreement) with obligation to introduce data exclusivity that was enshrined in the WTO-Ukraine Protocol of Accession. In addition to intellectual property standards set by the TRIPS Agreement, Ukraine had taken additional international obligations on stronger protection of the Intellectual Property Rights (IPR) than in the TRIPS Agreement by signing the free trade agreements with the European Free-Trade Association (EFTA) and DCFTA with EU. These provisions, called TRIPS-plus provisions indicate that it is above the standard of protection, set in the TRIPS Agreement.  Such additional provisions include: 5-year data exclusivity, patent term extension, measures of enforcement of the patent protection. FTAs made these to be international obligations for Ukraine, which means Ukrainian government cannot abolish such provisions in national legislation. Moreover, Ukrainian legislation contains several TRIPS-plus provisions, i.e. patent linkage and overly burdensome pre-conditions for compulsory licensing, that Ukrainian legislators had introduced by their own initiative, without international obligations backing for such harmful provisions. Several investment protection treaties exists which also may create additional leverage for monopolists in case of dispute over monopoly on medicine.

1. Consequences for access to medicines

Patent monopolists that abuse high prices on essential medicines by virtue of TRIPS-plus mechanisms has obtained additional to conventional patent protection mechanisms for enforcement of monopoly on the market. Thus, Ukrainian courts are prone to enforce data exclusivity and patent linkage provision in favor of monopolists. According to the analysis of judicial practice in Ukraine during 2012-2016 there were considered 6 resolved cases on enforcement of data exclusivity provision in 5 of which courts satisfied claim of claimant; similarly, from 13 cases on patent linkage enforcement 12 cases were in favor of claimant-patent holder, with 100% satisfaction of all injunctions in such cases.

At the same time, regular monitoring missions on EU-Ukraine Association Agreement implementation noted country’s limited progress with regards to reinforcement of the intellectual property rights, in particular, on pharmaceuticals, which is mainly a sign of pressure on Ukrainian government, without real grounds for such EU missions remarks.

Introduction of 5-year patent term extensions led to situation when patent protection expires in Ukraine later than in the EU, which puts Ukrainian generic pharmaceutical manufacturers in disadvantageous position to EU generic manufacturers, as the former cannot enter EU market right after patent monopoly expiration and loose lucrative opportunities for export.

No actual impact study in pharmaceutical market by TRIPS-plus mechanisms had been conducted to date in Ukraine.

1. Practical example: case of sofosbuvir in Ukraine

Due to ongoing multiple patent oppositions on sofosbuvir patent applications, Gilead could not obtain a patent monopoly in Ukraine, and resorted to enforcement of data exclusivity to obtain monopolistic position on the market. It was a rare case when Ukrainian court was not prone to enforce Gilead’s data exclusivity as generic manufacturer managed to file for marketing authorisation and pass through needed expertise 7 month before Gilead filed for marketing authorisation in Ukraine. As a last resort, Gilead had to revert to another TRIPS-plus regime – investments protection mechanisms, using US-Ukraine agreement on protection of investments. Investment arbitration case threat forced Ukrainian government to conclude a settlement agreement with Gilead, recognizing their monopoly until 2020 on sofosbuvir.