Global Insight Perspective | |
Significance | The Intellectual Property Office of the Philippines (IP Philippines) has released its draft regulations for the implementation of the Cheaper Medicines Law, which was formally approved in April. Public consultation for these proposals will take place on 9 October. |
Implications | The draft regulations allow for medicines to be imported freely to the Philippines once they have been advertised or sold either in the Philippines or anywhere else in the world. They also provide for compulsory licensing in cases of health emergencies. |
Outlook | The proposed regulations, though not unexpected, represent a slap in the face for research-based manufacturers. However, some of the proposed regulations are rather vague, and they still need to be integrated with further proposals that are due to be put forward by the Department of Health (DoH). |
According to Businessworld, the draft regulations of the Cheaper Medicines Law—whose official name is the "Universally Accessible Cheaper and Quality Medicines Act of 2008"—allow for medicines to be imported freely to the Philippines once they have been advertised or sold either in the Philippines or anywhere else in the world. In keeping with this, the draft regulations state that "the intellectual property rights over drugs and medicines are deemed exhausted [...] when it has been introduced in the Philippines or anywhere else in the world". The draft regulations note that the "introduction" of a medicine refers to its donation, promotion, prescription or sale.
On a more positive note for research-based manufacturers, the draft regulations state that documents, test results and other data relating to medicines submitted to the Bureau of Food and Drugs (BFD) will be protected against unfair commercial use.
Compulsory Licensing Comes to the Fore
The draft regulations also make provisions for the government to implement compulsory licensing in cases of health emergencies. If a claim for compulsory licensing arises, both the petitioner and the patent owner will be invited to a hearing where they will be able to register their arguments. The BFD's Bureau of Legal Affairs will decide on the claim within 30 days of the hearing, and it will then be left to the director-general of IP Philippines to either uphold or deny the BFD decision. However, the draft regulations also allow for the fast-tracking of compulsory licences in times of national emergency, or "in the interest of the public".
If compulsory licensing is enforced, then patent owners will be paid "adequate remuneration", unless the compulsory licence is issued in order to rectify anti-competitive practices.
The draft regulations also propose a change in the definition of what is considered an "inventive step", so that the term refers only to a process that can improve a substance's ability to produce desired effects. In order for a product to be eligible to receive a patent in the Philippines, it must be able to demonstrate an inventive step.
Outlook and Implications
The Cheaper Medicines Law was originally passed in April, after months of deliberations (see Philippines: 30 April 2008: Cheaper Medicines Law Finally Passed in Philippines). However, the law itself only set out basic parameters, and specific regulations need to be drawn up in order for it to be implemented. Responsibility for drafting these regulations was given to four government agencies (see Philippines: 3 September 2008: Drug Companies in Philippines Required to Submit Price Lists, Inventories), although in practice IP Philippines and the Department of Health (DoH) have taken the leading role. The first draft of the DoH's proposed regulations are due to undergo a further process of consultation before being integrated with the IP Philippines draft.
According to an IP Philippines intellectual property rights specialist, Nevah D. Velasco, his organisation's proposed new regulations are consistent with the Cheaper Medicines Law and are in line with the country's international obligations. However, research-based companies will feel particularly aggrieved at the proposed new regulations governing the "exhaustion" of intellectual property rights. Previously, intellectual rights to drugs were only deemed "exhausted" once goods had already been introduced to the Philippines.
Meanwhile, other aspects of the proposed regulations, such as "adequate remuneration" for compulsory licensing, are rather vague. The deadline for publication of the final implementing rules and regulations is 4 November.