This study shows that the TRIPs Agreement contains provisions which, on the one hand, will orient amendments to patent legislation in many developing countries in the direction of broadening and reinforcing the protection of pharmaceutical products. On the other hand, the Agreement will «freeze» the level of protection at a high standard that cannot be changed until the Agreement is revised.
The adoption of the Agreement has undoubtedly involved a major concession on the part of those countries which refused to grant patents for drugs in order to avoid the effects of market monopolies derived from exclusive rights. The information available, briefly referred to in the last section of this document, shows that the universalization of pharmaceutical patents will not lead to increased R&D on new drugs by large companies nor to the possibility that this will be carried out to any significant degree in developing countries. Neither will developing countries receive increased flows of direct foreign investment or transfer of technology.
Countries which, on the date the Agreement enters into force, did not confer protection still have the possibility of limiting the introduction of pharmaceutical patents under the conditions laid down in the Agreement. Even though the transitional period for pharmaceutical and agricultural chemical products is ten years for developing countries, it has been made subject to the ambiguous notion of «exclusive marketing rights» which, incorrectly interpreted, could cancel out the advantages of the transitional period. In this connection, it is important to specify the scope of such rights and distinguish them sufficiently from the rights conferred by patents28.
28 This is likely to be one of the first issues to be tackled by the Council for TRIPs established under the Agreement to monitor its implementation.
The effect of introducing pharmaceutical patents will undoubtedly depend on the degree of competition existing in the therapeutic/products categories concerned and the forms of production of formulations and competition existing in each domestic market. The form in which patent rights are implemented will also have a decisive impact. This is why it is particularly important that, when incorporating the provisions of the TRIPs Agreement in domestic legislation, countries should consider the following measures «inter alia»:
a) including in domestic legislation a series of compulsory licences to act as an effective deterrent to monopolistic practices and encourage access to licences by local companies under reasonable conditions;
b) guaranteeing the import of products legitimately sold on the principle of international exhaustion;
c) excluding from patentability (because they do not meet the requirement of «an inventive step») substances which exist in nature, including biotechnology-based drugs;
d) restricting reversal of the burden of the proof to process patents for new chemical entities.
In incorporating the provisions of the Agreement, attention must be paid to the principles of Article 8 in order to regulate intellectual property in a manner that is compatible with the interests of public health and minimizes the economic and social costs which such changes might have for the production and marketing of drugs and access thereto.