Brazilian Competition Law and Access to Health in Brazil: Exploitative Pricing in the Pharmaceutical Sector
By Bruno Braz de Castro
This paper aims to analyze the interfaces between Brazilian Competition Law and the issue of access to medicines, with a special focus on abuse of industrial property rights and related exclusionary and exploitative effects. The paper analyzes the case law of Brazilian Administrative Council for Economic Defense (CADE) in the pharmaceutical sector and discusses abusive practices such as illegitimately imposing non-existent or invalid intellectual property rights with anticompetitive purposes. It then addresses abusive strategies in the exercise of industrial property rights which are, in essence, valid: i.e., exclusionary practices, aimed at artificially raising barriers to entry; and exploitative practices, directly translated as the exercise of market power to the detriment of the consumer. The latter ultimately result in exploitative excessive prices; contractual, quality or privacy degradation; and restrictions on supply, such as by hoarding/preventing the exploitation of industrial property rights. The paper concludes that the prohibition of exploitative pricing under the current competition law is legally valid and effective, with certain methodological concerns towards reducing the risk of wrongful convictions (for instance, by applying screening tests to determine the markets that are candidates for intervention). In view of such guidelines, the pharmaceutical industry appears to be an important candidate for antitrust attention, given the magnitude of the harm potentially derived from non-intervention against the practice. Remedies in this area, importantly, should focus on identifying and solving the sector’s structural competitive problems. In the case of medicines subject to price regulation by the Drug Market Regulation Chamber (CMED), the technical expertise of the competition authority may be of great value in terms of competition advocacy, a fact that is demonstrated in light of recent discussions on extraordinary price adjustments because of competitive problems in certain markets.
Competition Law and Intellectual Property: A Study Drawing from The Eli Lilly Case on ‘Sham Litigation’ in Brazil
By Pablo Leurquin
Competition authorities may be the best equipped institutions to penalize certain illicit practices that involve intellectual property rights. This article analyzes the decision by the Brazilian Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE) in the Eli Lilly case, in which the company was convicted for abusive use of the right to petition (sham litigation) with anti-competitive effects. It examines general aspects of technological dependence in the Brazilian pharmaceutical industry, presents the legal premises necessary for the understanding of the decision made by the competition authority, and analyzes the legal grounds for the sanction imposed on Eli Lilly.
Manufacturing for Export: A TRIPS-Consistent Pro-Competitive Exception
by Carlos M. Correa and Juan I. Correa
The paper discusses the flexibilization of the sui generis system of supplementary protection certificates (SPCs) under European law recently introduced to allow for the manufacturing, stockpiling and export of covered products. Against this background, it examines the viability under the Agreement on Trade-related Aspects of Intellectual Property Rights (the TRIPS Agreement) of an exception allowing for the manufacture and export of patent-protected products. It concludes that such an exception would promote competition and enhance access to medicines (including biologicals) for the general public while being consistent with Article 30 of the TRIPS Agreement if read in accordance with the principles of interpretation of customary international law.
Direito Brasileiro da Concorrência e Acesso à Saúde no Brasil: Preços Exploratórios no Setor de Medicamentos
Por Bruno Braz de Castro
O presente trabalho tem por objeto analisar interfaces entre o Direito da Concorrência brasileiro e o tema do acesso a medicamentos, com especial atenção aos abusos de direitos de propriedade industrial em seus efeitos exclusionários e exploratórios. O trabalho analisa a jurisprudência do Conselho Administrativo de Defesa Econômica (CADE) no setor de medicamentos e discute os abusos visando à imposição ilegítima de direitos de propriedade intelectual inexistentes ou inválidos com finalidade anticompetitiva. Em seguida, aborda os abusos no exercício de direitos de propriedade industrial que sejam, por si, válidos: práticas exclusionárias, voltadas à elevação artificial de barreiras à entrada, e práticas exploratórias, traduzidas diretamente no exercício de poder de mercado em detrimento ao consumidor. Estas últimas são manifestadas na forma de preços excessivos exploratórios, degradações contratuais, de qualidade ou de privacidade, bem como restrições na oferta como o açambarcamento/impedimento de exploração de direitos de propriedade industrial. O artigo conclui pela validade e eficácia jurídica da proibição a preços exploratórios pela Lei de Defesa da Concorrência vigente, com certas preocupações metodológicas a fim de minorar o risco de condenações errôneas (como a construção de testes “screening” de mercados-candidatos a intervenção). Em atenção a tais diretrizes, o setor de medicamentos comparece como candidato importante à atenção antitruste, haja vista a magnitude dos prejuízos potencialmente derivados da não-intervenção sobre a prática. Remédios nessa seara, de modo importante, devem focar na identificação e solução dos problemas competitivos estruturais do setor. Em caso de medicamentos sujeitos à regulação de preços pela Câmara de Regulação do Mercado de Medicamentos (CMED), a expertise técnica da autoridade concorrencial poderá ser de grande valia em sede de advocacia da concorrência, o que é demonstrado à luz das discussões recentes acerca do reajuste extraordinário de preços em virtude de problemas concorrenciais de determinado mercado.
Competition Law and Access to Medicines: Lessons from Brazilian Regulation and Practice
by Matheus Z. Falcão, Mariana Gondo and Ana Carolina Navarrete
Competition law may play an important role in drug pricing control by containing high prices derived from economic violations. Since the use of competition tools is not limited by the TRIPS Agreement or other international binding disciplines, there is ample policy room to explore how countries, especially in the Global South, can benefit from strengthening their jurisdiction on that matter. This article briefly explains the Brazilian Competition System by describing the structure of the Brazilian competition authority (CADE – Administrative Council for Economic Defense) and the main economic violations set forth by Brazilian law. It describes the convergence of competition with the consumer protection system. It also discusses three relevant pharmaceutical market cases examined by the competition authority (sham litigation, overpricing and economic abuse, buy-and-raise and exclusionary practices). Finally, it presents some lessons from the Brazilian case on the challenges of using competition law to confront abuse or misuse of intellectual property rights in the pharmaceutical market, with lessons to other developing countries.
Strong Intellectual Property Protection, Weak Competition Rules – or the Other Way Around to Accelerate Technology Transfer to the Global South? Ten Considerations for a “Prodevelopment” IP-Related Competition Law
By Klaus D. Beiter
Competition law provisions relating to intellectual property (IP) rights should play an enhanced role in facilitating the domestic and international transfer and dissemination of technology. IP-related competition rules in the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) create an obligation for Member States to apply competition law in the IP context. TRIPS competition rules should be read in a “prodevelopment” fashion – IP rights need to be read reductively, IP-related competition law expansively. Ten considerations for a “prodevelopment” IP-related competition law are formulated.
TRIPS Flexibilities and TRIPS-plus Provisions in the RCEP Chapter on Intellectual Property: How Much Policy Space is Retained?
By Vitor Henrique Pinto Ido
The Regional Comprehensive Economic Partnership (RCEP) was signed on 15 November 2020 by 15 Asian-Pacific countries (ASEAN—Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam—, and China, Japan, South Korea, Australia and New Zealand), comprising about one third of the world’s population and economy. India was a crucial party to the negotiations but opted out of the agreement. Ratification of the agreement is still pending, subject to more Parties ratifying it at the national level. This paper provides a broad overview of the RCEP agreement and discusses the details of the intellectual property (IP) Chapter. Significantly, it does not contain substantive TRIPS-plus provisions that undermine public health in developing countries—although it does contain such provisions in other areas such as copyrights, trademarks, and IP enforcement.
Emerging Trends in FTAs and Public Health: Investment Agreements and Intellectual Property
Friday, 28 May 2021 – 16:00-17:30 (CET)
The inclusion of TRIPS-Plus provisions in developing country IP laws, as a result of negotiations of free trade agreements (FTAs) continues to be of concern. In addition, there are various emerging areas that require attention from developing countries, where accumulated knowledge and institutional learning are more limited. These include investment agreements that include ‘intellectual property’ as a category of investment – with subsequent ISDS mechanisms, as well as competition and investment chapters or agreements that may restrict the policy space, such as the China-EU Comprehensive Investment Agreement. There are several important developments to consider for the upcoming years. New negotiations in the period of Covid-19 crisis, when countries are in dire financial situations, may lead to even more unbalanced negotiations. The UK is pursuing new agreements after Brexit with developing countries, while the USA has signaled renewed attention to multilateralism and at the same time is continuing to make use of Section 301 of its trade law to advance reforms in third countries. The AfCFTA negotiations of the intellectual property chapter are set to start this year. Moreover, the RCEP Agreement is to be implemented via national law amendments and attention must be given in particular to the process for Least Developed Countries (LDCs) and the technical assistance offered.
In this context, the South Centre is holding a series of webinars on emerging trends related to free trade agreements (FTAs) and investment agreements that impact public health. In this first session, we will discuss the topic of investment agreements and intellectual property, including varied angles to the issue, such as perspectives for post Covid-19 agreements, the legal construction of IP as a category of investment, the challenges of ISDS and policy reform options, and the analysis of a concrete case.
Competition Regulation in Healthcare in South Africa
By Hardin Ratshisusu
South Africa’s nascent competition regulatory regime is coming of age and has potential to address historical market concentration challenges previously enabled by the apartheid regime, prior to its dismantling in the 1990s. Many sectors of the economy are highly concentrated, including the private healthcare sector, with market outcomes that breed market failures, lack of competitiveness and high cost of care. Looking through competition in the healthcare sector it becomes evident that the market structure challenges do not only require domestic interventions, but also a global response to address some policy and regulatory gaps.
A New Trend in Trade Agreements: Ensuring Access to Cancer Drugs
By Maria Fabiana Jorge
A World Health Organization (WHO) report on cancer indicates that the cancer burden will increase at least by 60% over the next two decades, straining health systems and communities. Companies develop cancer drugs in part because payers are less resistant to paying high drug prices for these drugs. As Barbara Rimer, Dean of the University of North Carolina and Chair of the U.S. President’s Cancer Panel stated, “[m]ost cancer drugs launched in the United States between 2009 and 2014 were priced at more than $100,000 per patient for one year of treatment.” Many of the new cancer drugs are biologics. Such prices are clearly out of reach for most patients who will need them increasingly more to stay alive. While competition is critical to ensure lower drug prices, we have seen a number of strategies, including through trade agreements, to prevent competition and extend monopolies over these drugs and their very high drug prices. It is no accident that the exclusivity granted to biologic drugs has been one of the most conflictive provisions in recent trade agreements such as the United States-Mexico-Canada Agreement (USMCA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Nevertheless a new trend in trade agreements started in 2007 when U.S. Members of Congress pushed back against the interests of powerful economic groups seeking longer monopolies for drugs. These Members of the U.S. Congress prevailed then in restoring some balance in the trade agreements with Peru, Colombia and Panama and further consolidated this new trend in 2019 in the USMCA. Moreover, following the U.S. withdrawal from the original Trans-Pacific Partnership (TPP), the negotiators of the remaining 11 countries also pushed back to ensure a better balance between innovation and access in the CPTPP. People around the world need to be aware of these precedents and ensure that they also work for access to medicines for their own citizens.
Modulos de Introduccion a la Propiedad Intelectual y Salud Pública
Este libro contiene cuatro módulos para la capacitación en materia de propiedad intelectual y salud pública. Su objetivo es presentar una introducción a las diversas categorías de derechos de propiedad intelectual y, en particular, ilustrar sobre los derechos aplicables a la producción y comercialización de medicamentos en el marco de las llamadas ‘flexibilidades’ contenidas en el Acuerdo sobre los Aspectos de los Derechos de Propiedad Intelectual relacionados con el Comercio de la Organización Mundial del Comercio. Los módulos proporcionan elementos para comprender el alcance y las implicaciones de los derechos de propiedad intelectual, especialmente las patentes de invención, en el acceso a los medicamentos. Ellos brindan asimismo pautas para el diseño y la aplicación de esos derechos en una manera consistente con dicho Acuerdo y con políticas de protección de la salud pública. Los módulos contienen información general y enfoques prácticos para orientar a los encargados de formular y aplicar políticas públicas en el tratamiento del tema, tanto en el campo administrativo como judicial.
Intersección entre Competencia y Patentes: Hacia un Ejercicio Pro- Competitivo de los Derechos de Patente en el Sector Farmacéutico
Por María Juliana Rodríguez Gómez
La interacción entre propiedad industrial, particularmente patentes farmacéuticas, y el derecho de la competencia, tiene un impacto en asuntos de interés general como los derechos a la salud, al acceso a los beneficios de la tecnología y a la libre competencia. La cuestión es cómo hacer compatible un mercado farmacéutico competitivo y dinámico, con el sistema de patentes, que otorga monopolios legales significativamente amplios sobre productos considerados innovaciones. A partir de un análisis legislativo y casuístico, se concluye que son necesarias mejores políticas pro competitivas -en especial en países en desarrollo- para enfrentar prácticas como el reverdecimiento (‘evergreening’) de patentes, los acuerdos para demorar la entrada de competidores y la negativa a licenciar, entre otras usadas en el sector farmacéutico para bloquear la entrada de la competencia. Los competidores, los consumidores y los sistemas de salud son vulnerables al creciente número de patentes y a esas prácticas. Diversas medidas pueden adoptarse, sin embargo, para lograr un balance entre la protección de la innovación y la competencia.