The Monopoly Enforcement Agenda:

A Global OverviewPeter MaybardukEssential Action

29 May 2009

Patents and public health

Patents and public health

Patents facilitate monopoly power in medicinesBrand-name companies lock out competition from generics firms

Cost of patented medicines vastly higher than generics

High prices create a terrible access to medicines problem

Patents facilitate monopoly power in medicinesBrand-name companies lock out competition from generics firms

Cost of patented medicines vastly higher than generics

High prices create a terrible access to medicines problem

Access to medicinesAccess to medicines

Generic competition has fueled a revolution in HIV/AIDS treatment98+% cost reduction over ten years: From $10k to near $100

3 million globally on ARTTreatment programs

Generic competition has fueled a revolution in HIV/AIDS treatment98+% cost reduction over ten years: From $10k to near $100

3 million globally on ARTTreatment programs

Competition Competition Price drops average 40-80% with first generic entry, continue to fall with time

Competition between branded and generic, and between generics firms

Competition key to implementing vision of access to medicines for all

Price drops average 40-80% with first generic entry, continue to fall with time

Competition between branded and generic, and between generics firms

Competition key to implementing vision of access to medicines for all

A global monopoly enforcement agendaA global monopoly enforcement agenda

Many new measures worldwide protect patent and copyright monopolies under guise of fighting counterfeits and “piracy.”

See Susan Sell, “The Global IP Upward Ratchet.”

See Kevin Outterson, “Import Safety Rules.”

See Essential Action, “Survey.”

Many new measures worldwide protect patent and copyright monopolies under guise of fighting counterfeits and “piracy.”

See Susan Sell, “The Global IP Upward Ratchet.”

See Kevin Outterson, “Import Safety Rules.”

See Essential Action, “Survey.”

Table: How PHrMA confuses monopoly

enforcement and public health needs

Table: How PHrMA confuses monopoly

enforcement and public health needs

Venn diagram: The actual

relationship between drug

quality, fake medicines and

the enforcement agenda

MSF: “the majority of poor drugs [are] genuine, but substandard drugs, and not the result of

counterfeiting” (2008)

Enforcement agendaEnforcement agendaSerious anti-competitive effects and public health costsSeeks to confuse public, reduce confidence in generics

Can chill investment, international tradeMay snare non-infringing competitors in its net

Places enforcement burden on publicMore aggressive patent enforcement generally

Seize-and-destroy rather than damages

Yet, some anti-counterfeiting measures may protect public health.

Question for today: How do we respond?

Serious anti-competitive effects and public health costsSeeks to confuse public, reduce confidence in generics

Can chill investment, international tradeMay snare non-infringing competitors in its net

Places enforcement burden on publicMore aggressive patent enforcement generally

Seize-and-destroy rather than damages

Yet, some anti-counterfeiting measures may protect public health.

Question for today: How do we respond?

Global IP enforcement initiatives

Global IP enforcement initiatives

Major international organizations: WHO, INTERPOL, WCO, APEC, Postal Union, more

Accords and Associations: ACTA, G8, Global Congress, Rome Declaration, more

National legislation: Kenya, Uganda, US, EU

National enforcement:US exec branch initiatives, DG Trade, Trainings worldwide

Major international organizations: WHO, INTERPOL, WCO, APEC, Postal Union, more

Accords and Associations: ACTA, G8, Global Congress, Rome Declaration, more

National legislation: Kenya, Uganda, US, EU

National enforcement:US exec branch initiatives, DG Trade, Trainings worldwide

International organizationsInternational organizations

IMPACT (WHO’s International Medical Products Anti-Counterfeiting Taskforce)2006 - Seeks coordinated global response to counterfeits.

Data not well-developed. Joint venture with IFPMA.

IMPACT (WHO’s International Medical Products Anti-Counterfeiting Taskforce)2006 - Seeks coordinated global response to counterfeits.

Data not well-developed. Joint venture with IFPMA.

International organizationsInternational organizations

World Customs Organization: “Secure”Proposed standards to coordinate “a global effort to suppress all kind of intellectual property rights infringements”

“TRIPS-plus-plus”Universal Postal Union (UN Postal Agency)Proposal to control “counterfeit and pirated items sent through the post”

Are customs/postal agents qualified to judge quality or rights infringement?

World Customs Organization: “Secure”Proposed standards to coordinate “a global effort to suppress all kind of intellectual property rights infringements”

“TRIPS-plus-plus”Universal Postal Union (UN Postal Agency)Proposal to control “counterfeit and pirated items sent through the post”

Are customs/postal agents qualified to judge quality or rights infringement?

International organizationsInternational organizations

Anti-counterfeiting and piracy initiatives:Asia-Pacific Economic Cooperation Forum

SPP (US, Canada, Mexico)US-EU Summit (ACTA precursor)OECD report

Anti-counterfeiting and piracy initiatives:Asia-Pacific Economic Cooperation Forum

SPP (US, Canada, Mexico)US-EU Summit (ACTA precursor)OECD report

International organizationsInternational organizations

Pharmaceutical Security Institute2002, now 21 major pharmaceutical companiesTo “collate their fake drug information to cooperate in fighting the racket”

IFPMA is PresidentPSI recorded 76 cases of counterfeiting in 2004; FDA knew of only 58

PSI database thought to be world’s best, but is “not accessible to the WHO, health authorities or the public.”

Pharmaceutical Security Institute2002, now 21 major pharmaceutical companiesTo “collate their fake drug information to cooperate in fighting the racket”

IFPMA is PresidentPSI recorded 76 cases of counterfeiting in 2004; FDA knew of only 58

PSI database thought to be world’s best, but is “not accessible to the WHO, health authorities or the public.”

Accords and AssociationsAccords and

AssociationsACTAG8 declaration

technical assistance pilot programs

4th Global Congress Combating Counterfeiting and Piracy

INTERPOL, WIPO

Visiongain conference major international industry information conference, chaired by IFPMA.

Three annual anti-counterfeiting conferences so far.

Andean-EU FTA, other FTAs

ACTAG8 declaration

technical assistance pilot programs

4th Global Congress Combating Counterfeiting and Piracy

INTERPOL, WIPO

Visiongain conference major international industry information conference, chaired by IFPMA.

Three annual anti-counterfeiting conferences so far.

Andean-EU FTA, other FTAs

ACTA: Anti-Counterfeiting Trade

Agreement

ACTA: Anti-Counterfeiting Trade

AgreementObjective:

“Establish, among nations committed to strong IPR protection, a common standard for IPR enforcement to combat global infringements of IPR particularly in the context of counterfeiting and piracy.”

Really an IP enforcement treaty 3 areas: International Cooperation, Enforcement Practices, Legal Framework

Objective: “Establish, among nations committed to strong IPR protection, a common standard for IPR enforcement to combat global infringements of IPR particularly in the context of counterfeiting and piracy.”

Really an IP enforcement treaty 3 areas: International Cooperation, Enforcement Practices, Legal Framework

ACTAACTA

Especially brazen; simply treats social interests in preventing counterfeits and intellectual property rights as the same. Formula: Trade in counterfeits has increased (alleged), hence IP enforcement must increase.Fallacious (assuming enforcement can be effective, does more to block competition than protect public safety.)

Especially brazen; simply treats social interests in preventing counterfeits and intellectual property rights as the same. Formula: Trade in counterfeits has increased (alleged), hence IP enforcement must increase.Fallacious (assuming enforcement can be effective, does more to block competition than protect public safety.)

ACTA termsACTA terms

Provisional measures to allow authorities to destroy goods without hearing both parties

Border measures; suspend entry of goods

Criminal penaltiesTechnical assistance

Provisional measures to allow authorities to destroy goods without hearing both parties

Border measures; suspend entry of goods

Criminal penaltiesTechnical assistance

National legislationNational legislationUS laws:

Stop Counterfeiting in Manufactured Goods Act, AntiCounterfeiting Amendments of 2004, etc: increase counterfeiting penalties and enforcement powers

PRO-IP Act: Creates IP czar position (still waiting on Obama appointment)

US proposed legislation:IP Enforcement Act, Safeguarding America’s Pharmaceuticals Act, Counterfeit Drug Prevention Act

US laws: Stop Counterfeiting in Manufactured Goods Act, AntiCounterfeiting Amendments of 2004, etc: increase counterfeiting penalties and enforcement powers

PRO-IP Act: Creates IP czar position (still waiting on Obama appointment)

US proposed legislation:IP Enforcement Act, Safeguarding America’s Pharmaceuticals Act, Counterfeit Drug Prevention Act

U.S. National enforcement /

Executive Branch initiatives

U.S. National enforcement /

Executive Branch initiativesUS Chamber of Commerce: Coalition

Against Counterfeiting and PiracyIndustry groupsWant powers to Customs agents, technical assistance to train other governments, IP attaches at American embassies, public awareness campaign

FDA and Dept. of Justice: enforcement cooperation

US Chamber of Commerce: Coalition Against Counterfeiting and PiracyIndustry groupsWant powers to Customs agents, technical assistance to train other governments, IP attaches at American embassies, public awareness campaign

FDA and Dept. of Justice: enforcement cooperation

U.S. enforcement initiatives

U.S. enforcement initiatives

USTR Special 301 Watch listSpecial section on counterfeiting this year; push to empower customs officers to seize goods without court order

National Intellectual Property Rights Coordination CenterRun jointly by Homeland Security and FBI

STOP! Initiative: White HouseNot yet clear if continues under Obama

Global Intellectual Property AcademyInternational training program for judges, enforcement officials

USTR Special 301 Watch listSpecial section on counterfeiting this year; push to empower customs officers to seize goods without court order

National Intellectual Property Rights Coordination CenterRun jointly by Homeland Security and FBI

STOP! Initiative: White HouseNot yet clear if continues under Obama

Global Intellectual Property AcademyInternational training program for judges, enforcement officials

A global industry IP enforcement strategyA global industry IP enforcement strategy

Industries uniting for IP enforcementConflating distinct rights (TM, ©, patent)

Counterfeiting historically applies to trademark alone; piracy an emotive term for copyright infringement - no real application to patents, data protection or trade secrets

Broadly apply “counterfeit,” “piracy”No longer just, “is consumer confused?”Emotionally compelling; effective cover

Misleading agreement names; IP as equal set of rights

Sell IP enforcement as solution to public threats posed by counterfeits

Industries uniting for IP enforcementConflating distinct rights (TM, ©, patent)

Counterfeiting historically applies to trademark alone; piracy an emotive term for copyright infringement - no real application to patents, data protection or trade secrets

Broadly apply “counterfeit,” “piracy”No longer just, “is consumer confused?”Emotionally compelling; effective cover

Misleading agreement names; IP as equal set of rights

Sell IP enforcement as solution to public threats posed by counterfeits

A global industry IP enforcement strategyA global industry IP enforcement strategy

Change nature of patent, copyright, TMChange private rights to public rights

Historically, violation occurs, rightsholder seeks financial compensation, sometimes injunction in court

Place burden on taxpayers to enforce industry monopolies

Prevent alleged violations, deter competition, rather than financial remedies after the factVery dangerous for medicines: stops legitimate generics, also chills financial incentives to trade in generics

Change nature of patent, copyright, TMChange private rights to public rights

Historically, violation occurs, rightsholder seeks financial compensation, sometimes injunction in court

Place burden on taxpayers to enforce industry monopolies

Prevent alleged violations, deter competition, rather than financial remedies after the factVery dangerous for medicines: stops legitimate generics, also chills financial incentives to trade in generics

Industry’s evolving global strategy

Industry’s evolving global strategy

Sell: “Forum shopping”Push each new global opportunity to raise IP enforcement to its limit, then, when challenged, find a new forum.

So far: IP treatiesWTORegional & bilateral trade agreementsCounterfeiting and piracy enforcement

What’s next?

Sell: “Forum shopping”Push each new global opportunity to raise IP enforcement to its limit, then, when challenged, find a new forum.

So far: IP treatiesWTORegional & bilateral trade agreementsCounterfeiting and piracy enforcement

What’s next?

How do we respond? How do we respond?

Industry efforts are more than a piecemeal; there’s a global designHow much deeply planned vs. evolved hard to know

Concerted industry strategy requires concerted, big-picture public interest response

Cross-sectorStrategy to match.

Industry efforts are more than a piecemeal; there’s a global designHow much deeply planned vs. evolved hard to know

Concerted industry strategy requires concerted, big-picture public interest response

Cross-sectorStrategy to match.