On 1 February 2019, the World Trade Organization (WTO) published a submission (IP/C/W/651) by South Africa to the TRIPS Council on Intellectual Property and the Public Interest: Promoting Public Health Through Competition Law and Policy. The South African paper endeavors to kickstart discussions at the TRIPS Council to examine “the linkage between intellectual property and competition law…with specific reference to exploitative excessive pricing and restrictive practices such as reverse payment agreements, strategic patenting and more lately,the evolution of niche pricing of off-patent pharmaceuticals.”
This paper is a follow up to a joint submission by South Africa, China, Brazil and India in May 2018 on the ad hoc item, Intellectual Property and the Public Interest: Promoting Public Health Through Competition Law and Policy. For a read-out of previous discussions at WTO on intellectual property and competition, please see Submission of China and South Africa on Promoting Public Health Through Competition Law and Policy and WTO TRIPS Council: South Africa asks WTO members to share best practices to address excessive prices. The new paper by South Africa will be discussed at the next meeting of the TRIPS Council from 13 February 2019 to 14 February 2019.
South Africa highlighted the recent European Commission study, Competition Enforcement in the Pharmaceutical Sector (2009 – 2017), while noting that not all jurisdictions prohibited exploitative excessive pricing.
A recent publication of the European Commission entitled “Competition Enforcement in the Pharmaceutical Sector (2009 –2017)” sheds light on the efforts of European competition authorities to ensure affordable and innovative medicine. It should be noted that not all jurisdictions prohibit exploitative excessive pricing, however excessive pricing models may often be indicators of underlying competition problems. Unlike the binding minimum standards of intellectual property protection and enforcement contained in the TRIPS Agreement, there is no equivalent international legal instrument for competition law that would provide such minimum standards of protection.
In terms of advancing the TRIPS Council discussions on intellectual property and competition law, South Africa proposed the following guiding questions. South Africa reiterated its commitment to share best practices in relation to remedying excessive pricing and questioned whether “abusive practices currently prevalent in the pharmaceutical industry” could be addressed by “raising the bar of patentability requirements”.
When dealing with exploitative excessive pricing in the context of anti-trust or competition enforcement in the pharmaceutical and medical technology sector, should competition/anti-trust authorities become quasi price regulators? What are the practices or guidelines that Members have followed to address exploitative excessive pricing in their respective markets with specific emphasis on actions undertaken by competition/anti-trust authorities?
- What examples of best practice can Members identify on the subject of the control and remedies for exploitative excessive pricing? Are there context-specific methodologies employed by Members for determining if prices are excessive, and what mechanisms are used to remedy and control pricing abuse?
To what extent can abusive practices currently prevalent in the pharmaceutical industry be addressed through improving the patent system, by for example, raising the bar of patentability requirements or increasing registration fees? What have Members’ experiences been with these types of measures or other approaches that have been followed?
- Have any Members recently conducted market inquiries into the pharmaceutical sector to assess its impact on access to medicine or more generally the impact of the pharmaceutical sector on competition in particular market segments? If so, what were the findings and what remedial actions were recommended or taken?
To what extent can technical assistance and capacity building contribute to the delivery of more effective policies by WTO Members in the field of competition law to address the abuse of intellectual property rights? What role can international organisations play in this regard, including the WTO?
Guiding Questions 12. The questions are designed to build on previous questions circulated in document IP/C/W/643 and IP/C/W/649.Delegations are invited to share their experiences ofusing competition law regimes to address anti-competitive practices that affect access to medicines and medical technologies or to share challenges that they face in the enforcement of competition law issues that affect access to medicines or medical technologies.