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Ecuador’s Compulsory License for Abacavir+Lamivudine – Brief Summary


Proceeding no. 000006
Applicant: Acromax Laboratorio Quimico Farmaceutico S.A.

Patent No.: PI-08-1913
Denominatio
n: “Una Nueva Sal”

Patent Holder: Glaxo Group Limited

Ecuadorean Institute of Intellectual Property (IEPI)—National Office of Intellectual Property

Quito, November 12, 2012

On June 15, 2012, Acromax Laboratorio Quimico Farmaceutico S.A., a local pharmaceutical manufacturing firm, requested a compulsory license for non-commercial public use of lamivudine+abacavir, a product protected by patent PI-08-1913. Glaxo Group Ltd. applied for the patent on May 14, 1998. This patent was issued on January 5, 2007. The patent term will reach expiry on May 14, 2018. Maria José Zurita, Acromax’s attorney, states that abacavir+lamivudine is an “antiretroviral combination, under the nucleoside reverse transcriptase inhibitor drug class, whose pharmacological action is the treatment of the HIV/AIDS disease, it is necessary for the manufacture of combination medicines required for the treatment of patients with [HIV/AIDS].”

On July 18, 2012, Glaxo Group Ltd. requested that IEPI hear arguments related to the license application. On August 23, 2012, Glaxo claimed Acromax would not pursue public non-commercial use, but according to IEPI, they did not provide evidence supporting the claim.  Glaxo apparently cited TRIPS Article 31(b) to suggest a prior negotiation requirement, but failed to note that public non-commercial use is among the listed exceptions to this requirement. IEPI stated that this omission contravened the moral and practice principals contained in the Code of Professional Ethics.[1]

In accordance with the licensing protocol, IEPI sought confirmation from the Ministry of Health that abacavir+lamivudine was a priority medicine for the treatment of diseases that affect the Ecuadorean population. The Deputy Minister of Public Health confirmed this on August 20, 2012.

The following legal justifications were considered:

  • Article 32 of the Constitution of the Republic establishes that health is a right guaranteed by the State;
  • Article 3.1 of the Constitution of the Republic of Ecuador provides that it is a fundamental duty of the State to guarantee, without any discrimination, the effective enjoyment of the rights established in the Constitution and in international instruments, and particularly, constitutionally recognized rights, such as health;
  • Article 363 No. 7 of the Constitution of Ecuador provides that, for the attainment of the good living regime (“el regimen de buen vivir”), it is an obligation of the State, with regards to health, to “guarantee availability and access to medicines of quality that are safe and efficacious, to regulate their commercialization, and to promote the national production and the use of generic medicines that correspond to the epidemiological needs of the population.”; 
  • Article 25 of the Universal Declaration of Human Rights provides among other things that every individual and their family are guaranteed the right to an adequate level of life, health and well-being;
  • Article 31 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization, provides for the right of countries to issue compulsory licenses for pharmaceutical patents on the grounds of public interest;
  • The Doha Declaration on the TRIPS Agreement and Public Health states, “Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted” and that “the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all”.
  • Article 2 of the Presidential Decree 116 of November 16, 2009 in accordance with Article 61 of Decision 486 of the Commission of the Andean Community and Article 154 of the Law of Intellectual Property which taken together establish that a compulsory license can be issued at any time for reasons of public interest, emergency, or national security.
  • Article 1 of Presidential Decree No. 118 of November 16, 2009 which “declares of public interest, access to medicines used for the treatment of diseases that affect the population of Ecuador and that are priorities for public health.” The article also specifies that compulsory licenses can be issued for patents protecting medicines for human use that are necessary for the treatment of such diseases.
  • Article 8 of Resolution No. 10-04 P-IEPI of January 15, 2010, published in the Official Registry No. 141 of March 2, 2010 provides guidelines for issuing compulsory licenses on pharmaceutical patents and expressly states, “Once the documentation is examined and the patent holder is notified, IEPI, through the National Office of Intellectual Property (Dirección Nacional de Propiedad Industrial, DNPI), will request the Ministry of Public Health to indicate whether the object of the request is a medicine that is used for humans for the treatment of diseases that affect the Ecuadorean population and are a priority for public health.”


The National Office of Intellectual Property granted a non-exclusive compulsory license for non-commercial public use to Acromax Laboratorio Quimico Farmaceutico S.A. for the import and production of abacavir+lamivudine for the remaining duration of the patent term until May 14, 2018. The license does not prevent the patent holder from continuing the exploitation of its patent.

The Ecuadorean Institute of Intellectual Property, in accordance with Article 31 of TRIPS, ordered Acromax to provide adequate remuneration to the patent holder based on the “Tiered Royalty Method”.

The royalties that will be paid to Glaxo are set on a rate of 5% of the price of each unit of Lamivudine+Abacavir 300 mg + 600 mg. [PC note: Royalties are derived from an industry standard base royalty of 5%. The U.S. price is applied in an effort to reflect the therapeutic value of the product. More information on the Tiered Royalty Method is available here:
www.who.int/hiv/amds/WHOTCM2005.1_OMS.pdf
]

This figure is multiplied by the ratio of the GDP per capita in Ecuador to GDP per capita in the United States. The ratio is obtained by dividing the GDP per capita in Ecuador by the GDP per capita in the United States. The GDP per capita figures come from World Bank data.
 

Acromax must comply with the terms of the compulsory license. Pricing its products higher than established prices, failing to pay royalties in a timely manner, and using the license for purposes other than non-commercial public use will result in the immediate revocation of the license. The license terms can also be terminated if the conditions upon which the license was issued are no longer present and are not likely to return or if the licensee fulfils the conditions for which the license was granted. Should the license be contested, the licensee’s rights will not be affected nor will the patent holder fail to receive its economic compensation.



[1] DECIMO CUARTO.- Que como bien señala Glaxo Group Limited en su escrito de 23 de agosto de 2012, la Declaración relativa al Acuerdo sobre los ADPIC y la Salud Pública en su articulo 31 literal b) señala que: “Solo podrán permitirse esos usos, cuando antes de hacerlos, el potencial usuario haya intentado obtener la autorización del titular de los derechos en terminos y condiciones comerciables razonables y esos intentos no hayan surtido efecto en un plazo prudencial. Los Miembros podrán eximir de esta obligación en caso de emergencia nacional o en otras circunstancias de extrema urgencia...


Sin embargo Glaxo Group Limited omite mencionar que la norma también prevé que los miembros podrán eximir de esta obligación a los caso de uso público no comercial contraviniendo de esta manera un principio moral y de buena práctica prefesional contenido en el articulo 4 del Código de Ética Profesional avellan Ferres, que expresamente dispone: “El abogado no podrá aconsejar actos dolosos, afirmar o negar con falsedad, hacer citas inexactas, incompletas ni realizar acto alguno que estorbe la buena administracion de justicia.





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