Malaysia-EFTA Economic Partnership Agreement (MEEPA) Would Tie Malaysia’s Hands on Access to Medicines
Brook K. Baker, Prof. Emeritus, Northeastern U. School of Law, Senior Policy Analyst, Health GAP The MEEPA is a tentatively concluded trade agreement between Malaysia and EFTA (the European Free Trade Association of Iceland, Liechtenstein, Norway and Switzerland) that may soon be signed by the Malaysian government. Malaysian negotiators have accepted intellectual property (IP) protections above those required by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which will adversely and needlessly affect affordable and equitable access to medicines in Malaysia for generations. The Malaysian government should instruct its negotiators to reject all of the TRIPS-plus measures discussed below. The TRIPS-plus demands of EFTA are in line with similar demands from the European Union and the United States in their trade agreements that seek to extend monopoly power for Northern biopharmaceutical companies. These companies seek to expand IP that prevents competition so that they can impose exorbitant (and often secret) prices on middle-income countries like Malaysia. The result is gross profiteering at the expense of governments, insurers, and patients, who are often priced out of the market. Contrary to MEEPA Article 7.1, Malaysia Should be Permitted to Retain its Existing Right to Issue Compulsory Licences for Failure to Work a Patent Locally Article 7.1 of MEEPA would prevent Malaysia from relying on Section 49 of its Patent Law to issue compulsory licences for failure to work the patent through local manufacture when such manufacture is feasible. Article 7.1 of MEEPA states: ‘In line with TRIPS Article 27 (1), importation and offering on the market shall be considered a way of exploiting the patent in the country of importation. Accordingly, a compulsory licence may not be granted on the sole ground that a product protected by a patent or a product incorporating a patented process is being imported and not locally produced or used.’ In contrast, Section 49(1) of the Malaysian Patents Act states: At any time after the expiration of three years from the grant of a patent, or four years from the filing date of the patent application, whichever is the later, any person may apply to the Registrar for a compulsory licence under any of the following circumstances: (a) where there is no production of the patented product or application of the patented process in Malaysia without any legitimate reason; (b) where there is no product produced in Malaysia under the patent for sale in any domestic market, or there are some but they do not meet public demand without any legitimate reason. Article 5A(2) of the Paris Convention, which is incorporated by reference into the TRIPS Agreement via Article 2.1, authorizes countries to provide for compulsory licences in case of failure by the patentee to work the patent domestically. [1] There are time limits affecting when such licences can be issued: the last of either four years from the filing of the patent application or three years after it grant. Although the scope of working rules is not without some controversy,[2] an interpretation that local working requires at least some degree of in-country manufacturing and is TRIPS compliant, at least with respect to the issuance of compulsory licences, has broad support.[3] India, Brazil, Malaysia itself, and other countries, including the Philippines, still have laws allowing compulsory licenses when a patent is not worked via local manufacture or licensed to a local producer.[4] Likewise, Malaysia should fight to retain the right to issue compulsory licences on the grounds that a patent is not manufactured locally even though it is economically feasible to do so. Allowing compulsory licenses for failure to manufacture locally enables Malaysia to secure technology transfer, to expand its biopharmaceutical manufacturing capacity, and to help ensure security of supply, including it cases like the COVID-19 pandemic when foreign producers preferentially supplied high-income country demand. Contrary to MEEPA Article 7.3(a), Malaysia Should Maintain the Right to Have an Exception to Patent Rights for Therapeutic Uses of Patented Products. Article 7.3(a) of the MEEPA IP Chapter permits excluding methods of treatment from patentability: “Each Party may also exclude from patentability: any invention of a method for treatment of the human or animal body by surgery or therapy or for diagnostic methods practised on the human or animal body.” But subsection (a) also adds a disabling exception to this exclusion that would ultimately require Malaysia to issue evergreening use patents on biopharmaceutical products: “This provision (i.e. the exclusion) shall not apply to products, in particular substances or compositions, for use in any of these methods.” Article 27.3(a) of the TRIPS Agreement allows each WTO Member State, including Malaysia, to exclude from patentability: “diagnostic, therapeutic and surgical methods for the treatment of humans or animals.” This exclusion has been consistently interpreted to allow countries to disallow patents on uses, including new uses, of previously patented biopharmaceutical products. As a result, many countries limit patents on new or additional uses of known substances (in the pharmaceutical context new indications), and many experts and expert reports have recommended that low- and middle-income countries adopt per se exclusions for patents on new uses or methods of use.[5] Exclusion of new use or method of use patents is expressly permitted by Article 27.3(a) of the TRIPS Agreement, which permits exclusions of patents on “diagnostic, therapeutic and surgical methods.” Under this approach, “there is no real difference between patent claims relating to the use of a substance and those relating to a therapeutic method: in both cases a new medical activity is claimed, i.e. a new way of using one or more known products.”[6] Andean Community patent law explicitly stipulates that both products and processes already patented and included in the state of the art may not be the subject of a new patent on the sole ground of having been put to a use different from that originally contemplated by the initial patent. India explicitly prohibits patenting of all new uses and methods of use under section 3(d) of its Amended (2005) Patents Act as does Argentina, Pakistan, and the
