Patent Protection and Affordable Drugs

The most important factor to intensify protection of public health is the availability of affordable drugs. Meanwhile, nowadays public facing the high price of drugs. Data from Third World Network, a non-profit organization, reported that HIV/AIDS patient’s medicines cost could reach U.S. $ 10.000-US $ 15.000 per year, while the generic drugs for HIV/AIDS treatment can be produced for as cheap as U.S. $ 100 – U.S. $ 150 per year.

The main cause of that high price drugs is the patent protection received by international pharmaceutical companies (IPC’S). Patent protection gives them the exclusive right to determine production and prices. Those rights give IPC’S discretion to impose drugs price because they monopolize market. Consequently, people do not have a choice to buy drugs except which produce by IPC’S. There are no alternative drugs on the market. In case of HIV/AIDS patient’s, they only can buy drugs which production by IPC’S and in fact its so expensive.

In other words, paten protection gives IPC’S monopolize rights in terms of production (quota) and price determination of drugs. That is reality facing by many people in developing countries.



TRIPS flexibilities

Patent protection, including patent on drugs, in international trade is protected under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which became an integral part of the World Trade Organization (WTO). Apparently, TRIPS has considered by developing states as an obstacle for people to access affordable drugs. However, some developing states did not realize that TRIPS also provides flexibilities on patent protection. Flexibilities in TRIPS is stipulated in Article 31 which consists of parallel import, patent use by the government (government use) and the compulsory license

A parallel import is a direct purchase from a third party in another country even though the patent holder registered the product in the importing country. This method can be use because it could be the drugs price offered by the third party in another country cheaper than if bought directly from the manufacturer within state.

For reasons of national emergency and non-commercial, each country is allowed to waive patent holder on drugs so that the government can produce drugs with affordable price. This flexibility is called patent use by the government.  Meanwhile, compulsory license is using patent object without permission from patent holder on the grounds that extraordinary emergency.

Although TRIPS has provided flexibilities, in fact a lot of developing countries are not using these mechanisms to support their affordable drugs policy. Therefore, to emphasize flexibilities in TRIPS, WTO members adopt the Doha Declaration on the TRIPS Agreement and Public Health (2001) that reaffirmed and proclaimed the flexibilities under TRIPS agreement.

On Why Choose Compulsory License?

An important point to note from the 2001 Doha Declaration is it affirmation of compulsory license provisions. There are several requirements that must be met by the state who want to issue a compulsory license. First, the provision should be stipulated in a product of legislation. Second, there is an urgently needed/emergency. Third, only for non-commercial purposes.  Fourth, no discrimination and still provide compensation to the patent holder. As a reason access to justice, the patent holder receives rights to file a lawsuit against compulsory license policy.

Compulsory license is having advantages over other flexibilities because this method gives full of discretion to the government to determine the reason for issue it. As long as the government can put forward reasons for public health interest, compulsory license can be issued. In addition, a compulsory license can be used by all parties to produce drugs without patent holder permission. Of course, these provisions should be set out in legislation. The goal is to eliminate monopoly by IPC’S so that drugs price becomes more affordable for people.

India, Brazil and several states has issued compulsory license on drugs. Probably, sooner it will be followed by China. Then, what about Indonesia?

Indonesia and Compulsory License

Indonesia has not used compulsory license for drugs despite the provisions on compulsory license of patents have been stipulated in Article 74-87, Law No. 14 of 2001 on Patent. Unfortunately, the provisions specified conditions to issue compulsory license whereas in the Doha Declaration, the government is given the freedom to determine the grounds to issued compulsory license.

Nevertheless, the Government has used the flexibility in patent by choosing government use mechanism with the issuance of Government Regulation (PP) No. 27/2004 on Patent Exploitation Mechanism by the Government, Presidential Decree (Decree) No.83/2004 on the Patent Implementation by the Government on Antiretroviral Medications and Presidential Decree (Decree) No. 76 Year 2012 on Exploitation of Patent by the Government on Antivirals and Antiretrovirals Medicines.

Those regulations have intention to make price of drugs for people with HIV/AIDS and Hepatitis B become more affordable. For comparison, a drug made by Kimia Farma worth about U.S. $ 38/months compared to that produced by GlaxoSmithKline worth U.S. $ 290/month (Lutfiyah Hanim & Hira Jamthani/2007).

To improve public access for affordable drugs, in few next years government should make implementing regulations on the compulsory license of drugs to implement and interpret what already stipulated in Patent Law. This regulation will make drug prices become more affordable because it will erase IPC’S monopoly rights. Thus, to protect IPC’S right, the regulation also has to regulate about adequate compensation. If these interest meet, then public will get more benefits from the policy.


Eka An Aqimuddin

Peneliti partikelir hukum internasional. Pengelola Jurnal Online Hukum Internasional di Tulisan yang pernah dipublikasikan diantaranya Mekanisme Penyelesaian Sengketa di ASEAN; Lembaga dan Proses (2011) dan beberapa artikel di media massa

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