The Indian Patent Office has rejected patent applications related to two AIDS medicines – lopinavir/ritonavir and atazanavir - on the basis that they did not merit patents under India’s patents law. The decisions mark a major victory for public health, and keep the door open for the production of more affordable generics for patients across the developing world. The patent for atazanavir bisulphate was rejected because it ‘lacked inventive ingenuity’ and the patent for lopinavir/ritonavir was rejected because it did not involve an ‘inventive step’. However the companies have filed other patent applications in relation to these two drugs which are still pending. These decisions show how India’s patent law, which prevents routine improvements from being patented, works in favour of public health by only granting patents for drugs that are truly innovative, according to Médecins Sans Frontières. The article highlights the need to safeguard India’s role as ‘pharmacy of the developing world.’ But as a part of ongoing free trade agreement negotiations, the European Union is pushing for India to accept ‘data exclusivity’ provisions that would effectively block the production of more affordable generics – even when a drug does not merit a patent under Indian law.
Health equity in economic and trade policies
The implementation of intellectual property protection for pharmaceutical products in developing countries have led to concerns on access to medicine, and some countries, such as India, have tailored their legislation to limit the effect of intellectual property (IP) rights, in particular to prevent patents on incremental innovations. However, this strategy might not be yielding the desired effect, according to this study. The author examined all patent applications during the transition period allowed under the Agreement of Trade-related Aspects of IP Rights (TRIPS) before the implementation of the agreement in 2005. India is the main provider of generic medicines to developing countries, and production is legislatively supported by the prevention of patents on incremental innovations and the use of flexibilities to TRIPS rules. The laws on the book do not map neatly with laws in practice, the author found, as it appeared that, in complex cases, the Indian Patent Office lacked resources and expertise to determine whether or not a patent may be granted. He argues that the tailoring of Indian patent standards to limit patents on incremental innovations, which dominate drug patenting in the developed world, can be seen as an institutional innovation. However, in practice, resource constraints and other pressures may lead to institutional imitation, where the Indian Patent Office would simply copy developed-country practices and standards. The author predicts that the impact of TRIPS in India will be determined by the extent to which India sticks to, or departs from, international patentability standards.
International intellectual property (IP) rights are increasingly serving the needs of the global pharmaceutical industry, the authors of this article argue. IP constitutes the most substantial class of intangible assets. They are geographically mobile sources of vast corporate income that remain difficult to financially evaluate via arms length transfer pricing. This is especially true concerning transactions between subsidiaries of the same corporation. Intangible assets are often shifted to secrecy jurisdictions that specialise in IP holding companies that provide 100% tax exemption on royalty income as one of several tax holidays. The authors report that the Anti-Counterfeiting Trade Agreement (ACTA), drawn up by an ad-hoc group of high income countries and endorsed in March 2010, seeks to further lock down any loopholes on IP that may diminish the power of big pharmaceutical companies. Vessels passing through rich countries carrying generic goods for poor countries - irrespective of whether such goods are legal at source and destination jurisdictions - may be held up for seemingly as long as the intermediary nation deems fit.
The primary objective of patent rights is to foster innovation and economic growth, but the authors of this study conclude that there is little robust evidence that patents ‘work’ as intended. The authors found that stronger patent rights were related to greater patenting or research and development but could not find a direct link to economic growth. Instead, the role of stronger patent rights in generating growth and adding value at the industry level is relatively greater in richer countries, confirming that the impact of intellectual property (IP) rights may be only positive in richer countries and, conversely, negative or insignificant in poorer countries. The authors focused their research on the efficiency of patents at country and industry levels, noting that patent-intensive industries such as pharmaceuticals and chemicals respond more to patent rights and will require further research. They found that most of the existing patent-related literature contains the statistical problem of reverse causation, where the reasoning of stronger patent rights providing more research and development, innovation and economic growth can be challenged by the reverse reasoning of richer countries being more controlled by industries, such as the pharmaceutical industry, that lobby legislators to pass stronger patent laws ‘to make sure they get wealthier’.
Five key emerging market economies, commonly termed the BRICS (Brazil, Russia, India, China and South Africa), have been lauded for their stellar economic growth and resilience through the 2008/09 financial crisis. According to this paper, they are becoming models of development for development practitioners, researchers and other emerging economies. However, not all people in these countries have benefited equally from growth. Some countries have seen enormous increases in income inequality – specifically China, India and South Africa – while Brazil has enjoyed a reduction. What can be learnt, in terms of the challenges and successes of reconciling growth and equity, from the BRICS’ recent growth? The authors examine the experiences of four of the BRICS – Brazil, China, India and South Africa – and identify four key factors shaping the countries’ pattern of growth: access to assets, above all skills, to enable people to participate in activities that generate income, and ensuring access to land; investment in productive activities that generate jobs and opportunities for the majority; social transfers to guarantee minimum incomes to those who cannot work or cannot find work; and a political-economic context that has inclusion as a priority.
Africa’s ability to leverage its increasing visibility and preference for South-South economic partnerships will significantly depend on how well it is equipped to manage the intellectual property complements and components of the contemporary economic transformations, according to this article. The continent suffers from a lack of IP manpower in the judiciary and academia, as the development of capacity and expertise has not kept pace with the expansion and sophistication of intellectual property. That state of affairs depicts a structural fault line in Africa’s ability to optimise on-going economic and social transformations. The author argues that Africa needs need expertise in IP such as patent rights, especially in biotechnology at large, including health, food, agriculture, chemistry, pharmaceuticals. He recommends stronger collaboration between members of the Africa diaspora and those back home in Africa as a way forward. Strong local institutional commitment is needed to buy into this vision. To achieve this, countries will require a culture of transparency, accountability and efficiency in the management of collaborative research funds and other forms of assistance and partnership.
Private Chinese outbound investment, not as well-known as government-led investment, offers both opportunities and challenges for Africa, according to this paper. The significance of Chinese private-sector investment is already visible in the burgeoning manufacturing sector in some parts of Africa, and the trend will continue to grow in the near future. The underlying force behind this trend is the increased pressure of industrial restructuring in coastal China, a force that drives some labour-intensive firms to relocate to other parts of the developing world, including Africa. The author argues that African host country governments can respond to this phenomenon with proactive development policies and strategies to maximise private Chinese investment for the benefit of their own economies.
In this new report, Eurodad reports that hidden ownership of companies and other legal structures facilitate tax evasion, and argues that better information about who owns and controls companies and other set-ups is key to bringing trillions of dollars of offshore wealth back into the tax net and to help prevent future capital flight. The authors call for governments to create publicly available registers of the owners and controllers of companies, trusts and other legal structures and to improve compliance with, enforcement of and sanctions for anti-money laundering rules.
Pierre Laporte, Minister of Finance for the Seychelles, revealed government’s new plans for a Corporate Social Responsibility (CSR) Fund in his budget speech in December 2012. Businesses now have four options to contribute to social development, namely sponsorship, donations, direct funding of community projects, or contribute to the new Fund. All businesses that make a turnover of SR 1 million and above will be expected to contribute to the Fund a rate of 0.5% of their turnover. The Minister clarified that Government will continue to fund infrastructure projects in districts, and CSR funds would be expected to go to areas such as environment, beach and coastal management projects, health and wellness including sports, renewable energy and others to be decided upon. Supporters of the Fund are hoping it will become a sustainable funding mechanism for civil society groups.
Senior delegates from 63 of the 79 African, Caribbean and Pacific (ACP) countries, including some 15 Heads of State, attended the ACP Summit in December 2012. This summit declaration highlights members’ determination to “stay united as a Group” and retain relevance by “enhancing the ACP-European Union (EU) relationship as a unique North-South development cooperation model, while developing South-South and other partnerships. A new working group will reflect on the response of the ACP Group to global challenges. Officials also decided to set up a high-level panel to advance trade negotiations with the EU.