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Will Venezuela Modify Patents?

Will Venezuela move to modify pharmaceutical patents? Four experts share their predictions.

Inter-American Dialogue 

Earlier this month, Venezuela's trade minister said the government was carrying out a review of patents, including those on pharmaceutical products, arguing patents elevate the prices of goods and fill the coffers of multinational corporations. Leaders of Venezuela's pharmaceuticals industry say revoking patents and allowing drug makers in Venezuela to produce patented medications could discourage foreign investment in Venezuela and also cause shortages of medicine. Do you agree? Will more medicine reach the neediest people if patents are revoked? How much do protections for intellectual property rights matter in Latin America's health systems?

David Vivas-Eugui, deputy programs director at the International Centre for Trade and Sustainable Development in Geneva: The recent announcements by Venezuela's trade ministry and Intellectual Property Office (SAPI) on patent law and access to medicines have captured the attention of international media. These announcements indicate in broad terms the direction that the Venezuelan government plans to take in relation to patent law, access to medicines and industrial policy. While many of the measures announced are coherent with internal policies and seem in principle consistent with international obligations, a pragmatic approach is needed in their implementation in order to ensure some of the practical goals being sought are actually achieved. The orientation of the intellectual property system in Venezuela seems to be following two trends. The first one has a positive stand toward innovation, technology diffusion and access to medicines. The second trend points toward the 'nationalization' of both foreign and local private undertakings, clearly being the case with recent expropriations. This latter process could also be expanded to cover 'intangible assets.' The Doha Declaration on TRIPS and Public Health of 2001 allows countries to take measures to protect public health and encourage countries to use TRIPS flexibilities. Many of the announced measures could be developed under this framework. Nevertheless, no absolute legal assessment is possible until these announcements are transformed into actual measures or legislation. Experts in the field believe that many of Venezuela's goals in the current process could be achieved through a sophisticated set of policies driven by pragmatic reasoning and at the same time respecting international obligations. Finding options to achieve some of these goals might need more than political courage. It would take technical sophistication, political consensus and most importantly an inclusive consultative process with all relevant sectors in Venezuelan society.

José Luis Di Fabio, manager in the area of Technology, Health Care and Research at the Pan American Health Organization: Venezuelan authorities through SAPI have been for the last five years compiling the documentation related to all the patents granted in the country in order to make them accessible to the general public. This exhaustive revision has included those related to pharmaceutical products and has been coupled with the recent announcement to study each one of them in order to detect eventual inconsistencies with constitutional clauses (like the enjoyment of the right to health) while stating the will to respect and honor all international agreements, including TRIPS and other trade-related conventions to which Venezuela is party. Cooperation between trade, intellectual property and health authorities is a critical factor for an effective management of intellectual property rights that takes into account public health needs, including the use of flexibilities in the TRIPS agreement reaffirmed in WTO's Doha declaration of November 2001. IPR protection and patent enforcement are deemed to be rewards for innovation. However, monopolistic practices granted to patent holders often result in high prices for medicines, making them inaccessible for citizens and unaffordable for governments in middle- and low-income countries. Moreover, being a patent holder confers not only rights, but also responsibilities, such as transfer of technology, as acknowledged in Article 66.2 of the TRIPS agreement. Countries should therefore continue to closely monitor the linkage between regulation of pharmaceutical products and its impact on pricing and, ultimately, access, always keeping in mind what's best for public health.

Adrian Cruz, member of the Advisory Board of Cross Keys Capital: In violation of its TRIPS obligations, Venezuela has not protected data from clinical trials since 2002. The country's patent office, SAPI, has not granted a single drug patent in the same period. Intellectual property is the lifeblood of the pharmaceutical industry. If a market violates international IP agreements, it risks not only the aggrieved company leaving but other multinationals as well. Pharma companies depend on IP protection in order to be able to recoup the huge R&D investment for the drugs of the future. As president of Sterling-Winthrop, SmithKlineBeecham, and GlaxoSmithKline Latin American Region, I spent 30 years in constant dialogue with Ministries of Health explaining the importance of IP protection. We were threatened in Brazil in the late 1990s with patent violation for vaccines and in the early 2000s for retrovirals (anti-AIDS), but we were able to diffuse the issue through a ground-breaking technology transfer with semipublic health institution FioCruz. In that manner, we got to keep our patents inviolate for the private sector and FioCruz could produce, under our license, for the public sector and thus lower its costs. If the Brazilians had violated our anti-AIDS patents back in 2000, we would likely have left Brazil or at least not have launched any of the future anti-AIDS products. The mutating nature of the AIDS virus would have meant that the Brazilian government could have claimed to 'save' the poor AIDS victims of the year 2000 but condemned those patients of 2005 and beyond that may have been deprived of the newer generation of retrovirals, so expensive to develop.

Peter Maybarduk, attorney for the Essential Action Access to Medicines Project: It's worth clarifying what the Venezuelan government has and has not said. The government announced plans to review patent rules. Improving public access to medicines and generic medicine manufacturing capacity are key priorities of this review. The government has not yet announced a detailed policy, and statements by some government opponents seem to have exaggerated the substance of the announcements. A clarifying source is Venezuela's intellectual property office, SAPI, which has posted notices on the subject. Over the last ten years, generic competition worldwide has produced a revolution in HIV/AIDS treatment, reducing prices from $10,000 to near $100 per person per year, and enabling more than three million people to access lifesaving antiretroviral therapy. Competition and domestic manufacturing have helped Brazil save $1 billion since 2001, and develop one of the world's most effective HIV/AIDS treatment programs. Multinational drug companies, based almost exclusively in northern countries, routinely use patent monopolies on key medicines to keep prices at high, anti-competitive levels—often too high to enable widespread treatment, including throughout Latin America. There are several tailored ways Venezuela could improve access to medicines while contributing to pharmaceutical research and development costs, and complying fully with domestic laws and WTO patent rules. For example, by issuing compulsory licenses, Venezuela could authorize generic competition with specific patented medicines, in exchange for reasonable royalties to the patent holder. It is not true the Venezuelan pharmaceutical industry uniformly opposes revisions to patent rules. The generics chamber, Canamega, publicly supports revisions, and domestic manufacturers would benefit from flexibilities allowing them to produce more medicines. Targeted reforms to Venezuela's patent system could protect international investment incentives, while also improving market efficiency, increasing investments in innovative research and development—and supporting access to medicines for all.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter.


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