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Ecuador overrides 2.000 pharmaceutical patents considered “indispensable”

Monday, October 26th 2009 - 10:14 UTC
Full article 4 comments
President Rafael Correa had anticipated his intention to apply the “compulsory licenses” right. President Rafael Correa had anticipated his intention to apply the “compulsory licenses” right.

Ecuador made public on Sunday a presidential decree overriding over 2.000 pharmaceutical patents in order to provide more affordable medicines to the people of Ecuador.

President Rafael Correa who had anticipated the measure said that access to medicine is a “human right” and that he intended to seek “compulsory licenses” to acquire medications considered indispensable.

Under current World Trade Organization rules, countries have the right to seek such “compulsory licenses” that override traditional patent rights. Current WTO rules require that such countries negotiate with the patent owners to determine fair compensation.

“All those pharmaceutical products we can produce and copy, we will elaborate in Ecuador”, said Correa.

With this decision the Ecuadorian government wishes to promote local production of medicines thus avoiding “the huge profits of trans-nationals”, based on an industrial and intellectual property system which Correa defines as “neo-liberal”.

The action by President Correa is in line with recent statements that it would not honour the illegitimate debt that had been placed on the country by foreign banks (under previous administrations).

This bold move allowed Ecuador to renegotiate its debt for roughly 30 cents on the dollar. Much of that debt was considered “predatory debt” by academics who understand the way the World Bank and other first-world banking interests attempt to place debt burdens on many smaller nations as a tactic for exerting long-term influence over their economies.

Pharmaceutical pricing is also considered “predatory” by many observers. By definition, prices on brand-name pharmaceuticals are “monopoly prices.” That's because patent protection grants drug companies a monopoly market for a period of roughly 20 years. During that time, drug companies extract as much money as possible for their products, even from poorer nations whose population can barely afford to pay such prices.

Categories: Politics, Latin America.

Top Comments

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  • rob

    Is this a serious article by a purported “news agency”? Or is it a paraphrasing of Correa's speech?

    Oct 27th, 2009 - 06:24 am 0
  • Bubba

    And just who are the “many observers” that consider the work of the IMF, World Bank, and Drug companies predatory??

    Oct 27th, 2009 - 11:04 am 0
  • Peter

    Perhaps this will clarify questions. -Peter Maybarduk, Attorney, Essential Action

    Note: President Correa's decree is available online, in Spanish, at: http://www.sigob.gov.ec/decretos/

    Ecuador’s Presidential Declaration on Access to Medicines and Compulsory Licensing

    – Backgrounder –

    Quito, Ecuador, October 26, 2009 – Today, Ecuador’s President Rafael Correa declared access to priority medicines affecting the health of the Ecuadorean population to be a matter of public interest. Under Andean Community law, the declaration opens the door to competition of generic medicines with patented brand-name drugs, through use of an internationally recognized legal mechanism called compulsory licensing. The declaration could lead to government policies that expand access to medicines.

    Globally, competition has consistently proven the most effective method to reduce medicine prices, and ensure prices continue to fall over time. Over the last ten years, generic competition has produced a revolution in HIV/AIDS treatment, reducing prices for first-line antiretrovirals from around $10,000 to around $100 per year, and enabling over four million people worldwide to access treatment.

    By issuing a compulsory license, a government can authorize competition with patented products, including the importation, domestic production, distribution and/or sale of generic medicines. In exchange, licensees pay reasonable royalties to the patent holder, set by the government according to the circumstances of each case. Compulsory licenses do not “eliminate” or “override” patents. Instead, they authorize the use of patented technology under enumerated conditions.

    Countries’ right to issue compulsory licenses “on grounds of their choosing” is enshrined in the World Trade Organization’s TRIPS Agreement (1995) and unanimous Doha Declaration (2001) on intellectual property and public health. The WTO’s Doha Declaration also states, “the [TRIPS] Agreement can 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.”

    Ecuador’s Presidential declaration does not on its own issue a compulsory license. Rather, it authorizes procedures by which the government can subsequently decide, case-by-case, to issue compulsory licenses for priority medicines (as determined by the Ministry of Public Health), based in public interests such as reducing treatment costs and enabling greater access to treatment. The declaration follows public pronouncements by President Correa articulating a vision of intellectual property as “a mechanism for development for the people,” and is an important step toward access to medicines for all.

    Many countries have used compulsory licenses to promote public interests and remedy anti-competitive practices in a variety of sectors. Today, the United States is perhaps the most frequent user of compulsory licensing; including the government use of defense technologies, and judicially-issued licenses to remedy anti-competitive practices in information technology and biotechnology, among others. Canada routinely issued compulsory licenses during the 1960s and 70s to develop its national pharmaceutical industry. In recent years, a number of countries have issued compulsory licenses to improve access to medicines, including Thailand, Malaysia, Eritrea, Mozambique and Indonesia, among others.

    In 2007, Brazil issued a compulsory license for the HIV/AIDS medicine efavirenz. Brazil has provided treatment to hundreds of thousands of people living with HIV/AIDS and saved well over US$1 billion through its combined medicines strategy of domestic production, importation, negotiation and compulsory licensing.

    President Correa signed the declaration Friday, but his office released it today. The declaration enables Ecuador’s government officials to consider introducing generic competition with some of the country’s expensive patented drugs, including second-line HIV/AIDS treatments that cost more than double the current competitive price, and lifesaving cancer treatments that exceed $35,000 per person, per year, and which some hospitals cannot afford. The UNAIDS 2008 report estimated 42% of Ecuadoreans needing antiretroviral therapy received it. Resource constraints in Ecuador limit availability of treatment.

    Ecuador’s declaration cites Constitutional principles as well as provisions of the National Development Plan and international agreements, including the WTO TRIPS Agreement and the World Health Assembly Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. The declaration charges the Intellectual Property Institute of Ecuador (IEPI) with establishing royalties and the terms of licenses, in compliance with all applicable national legislation and international rules. The Presidential declaration incorporates requirements of the WTO’s TRIPS Agreement and Andean Community legislation, including excerpting some passages word-for-word. IEPI has published an administrative guide to compulsory licensing for the use of Ecuador’s government agencies.

    For more information, contact:

    Peter Maybarduk
    Attorney
    Essential Action
    Access to Medicines Project
    peter.maybarduk@essentialinformation.org

    Oct 27th, 2009 - 09:36 pm 0
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