Portfolio Committee On Trade And Industry
Proposed Patents Amendment Bill 2002
By The NAPM (National Association Of Pharmaceutical Manufacturers)
30 October 2002

The NAPM appreciates the opportunity to comment on the proposed Patents Amendment Bill.
As the NAPM is a body representing the locally based pharmaceutical industry the views expressed here mainly focus on the pharmaceutical industry as such.
The patent protection is a necessary and an effective incentive for research and development of needed products.
Drugs are a public good and not simply just another commodity. Patents must therefore be managed in an impartial way to benefit both the patent holder and the public. Protectionism can never benefit public health.
The NAPM therefore supports the government for coming up with a national legislation which can draw advantage from open trade and better regulated international system. We also support to ensure prompt availability of generic drugs upon patent expiration.

Experience from countries with generic friendly policies clearly demonstrates that the market competition created by these policies increases affordability of medicines stimulates true innovation within the research based industry and encourages increased production efficiency by the generics industry.
The two main areas of argument for the NAPM are:
Data protection/ Exclusivity
Patent Term restoration

Section 45 A of the patents act of 1978 as it stands does not allow researchers and innovators to work on a patent which is still in force. This stands in the way of innovation, competition, research and development.
Allowing researchers access to data will create competitiveness, technology transfer and access to cheaper and affordable health care medicines.
For Generic companies to carry out the activities necessary to develop the information required to obtain MCC approval, the generic manufacturers need the data or information of the originator. Any delay in the availability of the data to the manufacturers is tantamount to artificial extension of the term of patent.
As everybody knows in other countries like USA, Australia, European Union and Canada it is legislated in their patent laws that researchers and innovators should be allowed to conduct early work on a patent which is still in force provided that nobody or company should commercially compete with the patentee whilst the patent is still in force.
In South Africa we need to put our legislation in line with that of the other countries because;
South African generics companies are disadvantaged as their competitors from other countries flood the S.A market with new generic products as soon as a patent expires before we can develop one locally.
This has a negative effect of keeping generic prices high because of lack of competition at the off patent level.
There is no uniform implementation of the Roche - Bolar system. Article 39(3) of Trade related aspects of Intellectual Property Rights (TRIPS Agreement) provides that members shall protect such data against disclosure, except were necessary to protect the public or unless if steps are taken to ensure the data are protected against unfair commercial use.
All issues should be addressed within the context of health needs, innovative research and development and competition issues.

The South African FRIDGE study done in 2000 it yielded the following:

Register a new entity – time varies for eighteen (18) months to three (3) years with respondents commenting twenty four (24) to thirty six (36) months on average. In India this period is six (6) months to just over twelve (12) months.

First generic registration – registration time indicated by respondents is similar to new entities namely twenty four (24) to thirty six (36) months. In India this is estimated at six (6) to eighteen (18) months.
Subsequent generics: time varies between eight (8) to eighteen (18) months up to twenty four (24) to thirty six (36) months, in India this period is three (3) to six (6) months.
The NAPM therefore welcomes the amendment especially Section 45 A of the proposed patents amendment as the local manufacturers will have access to data at the same time as international manufacturers and will therefore allow South African generic manufacturers to enter the market at the same time as other countries thus creating a level platform for competition.
Provision can be made to punish severely companies that seek to gain commercially on a product that is still under patent.
In the USA when the Bolar provision (The Hatch-Waxman) act was passed in 1994 the US market share of generics grew from less than 20% in 1994 to over 40% in 1996. At the moment US is at +- 50%.
In Canada C91 provision favors generic. The WTO ruled in favor of aspects such as process development and bioequivalence studies before patent expiry but against stock piling.
South Africa’s patents act was amendment by Act 37 of 1997 to make it TRIPS compliant. South Africa also brought its patent law in line with TRIPS by promulgating the intellectual property law amendment act (Act No 38 of 1997).
Article 31 makes provision for use of subject matter of the patent by the government of a member country or third parties authorized by government without the consent of a patent holder under certain conditions.

One of the conditions is that prior to such use, effort were made to obtain authourisation from the patents holder on reasonable commercial terms and conditions and these were not successful within a reasonable period of time. However this requirement may be waived by a member country in the case of national emergency or other circumstances of extreme urgency.
We believe that these extreme emergency circumstances exist in South Africa. Everyday 30 000 people in developing world die from curable diseases – mainly because they cannot afford the high prices charged by drug companies for vital medicines.
More than one (1) in ten (10) South African are HIV positive. In a 1999 survey done, it revealed that 66% of respondents cited cost as main reason for not seeking healthcare when sick.

This public need, justifies policies and laws that enable South African government to provide access to cheaper medicines. Our commitment to improve healthcare for every citizen should be a priority and capacity should be created to address the healthcare needs of ordinary South African.
The NAPM opposes article 43 E section 4.3 which empowers the registrar to extend the time before or after expiry extend the time before or after patent expiry. We are of the opinion that the period of twenty (20) years is adequate enough for the innovator companies to recoup their money invested in research and development and there should not be any extension of time.

The Roche– Bolar style system is not uniform through out the world and each country will have to take into account circumstances which are prevalent in that country.
The US senate has recently passed legislation to amend the Hatch – Waxman act in US which allows for patent extension. This new legislation passed is intended to accelerate generic drugs approval. This has been triggered by the need for generics to quickly enter the market once the patent has expired in order for medicines to be accessible and affordable.
The USA has seen a need to do away with patent extension because of high prices of medicines.
We have an even bigger pressing need to make sure that we move in that direction in order to make sure that healthcare is accessible and affordable.

The NAPM opposes patent term restoration being put into law. We are of the opinion that MCC is currently putting in place a system that will greatly shorten the registration period and there will therefore be no delays on the innovation time of registration. We cannot let the law provide for inefficiencies that can be avoided. This will otherwise be subject to abuse.
Millions of dollars a day are made by innovator companies for every day that a generics company is kept off the market and this causes the consumer/patient to loose.

The latest action by the Bush Administration in the US clearly indicates that patent protection is detrimental to a healthy nation. We cannot implement in South Africa what has fallen short elsewhere in the world.
Ours is to strive to make sure that the situation in South Africa is even- handed in the market place and that the patients are the ultimate beneficiaries.