Brazilian Supreme Court Refuses To Judge Its Biggest Case On IP And Access To Medicines, And Benefits Big Pharma With Undue Monopolies

By Marcela Fogaça Vieira and Pedro Villardi

The Brazilian Supreme Court (STF) has mysteriously cancelled the judgment of the most important case regarding intellectual property and health ever to be decided by the court. On 28 June, the date of the judgment was set for 6 September. The cancellation occurred on the eve of the judgment, something very rare in the practice of the Court. The lack of decision on the case only benefits the transnational companies awarded with hundreds of undue monopolies. Just a few days before, the President of the STF – judge Carmem Lucia – had a meeting with Interfarma, the association of multinational pharmaceutical companies in Brazil^[1].

Carmem Lucia, President of the Supreme Court, in a meeting with Antonio Britto, President of Interfarma at the time. December 2017. Credit: Luiz Silveira/Agência CNJ/ Flickr CNJ_oficial)

The judgment of ADI 4234 would represent a historic moment to correct one of the greatest legislative errors in the recent history of Brazil and would allow the Supreme Court the opportunity to discuss abuses of the intellectual property system and its unacceptable obstacles to access to essential goods, public health and the right to life, as well as the technological and economic development of the country. The case was presented by the Attorney General of the Republic (PGR – Procuradoria Geral da Republica) in 2009, following a representation filed in 2007 by FENAFAR, the national federation of pharmacists, as a member of GTPI/Rebrip – Intellectual Property Working Group of the Brazilian Network for Integration of the Peoples, a group of public interest civil society organizations created in 2003.

The direct action of unconstitutionality (ADI) questions the validity of a mechanism (known as “pipeline”) of the Brazilian patent law which allowed for the revalidation of patents granted in other countries that were already in the public domain in Brazil. Those were patents covering alimentary or chemical-pharmaceutical substances, which were excluded from patentability in the country prior to 1996.

The main argument for invalidation is that those patents are not promoting the social interest and the technological and economic development of the country, as determined by the Brazilian Constitution when it talks about the grant of temporary privilege of use for industrial creations (article 5, XXIX). There are patents whose priority date goes back as far as 1977, and all of them were already part of the public domain, as national legislation of the time did not allow for their private appropriation by the granting of patents.

The “pipeline” mechanism was adopted by the national Congress when Brazil changed its patent law in 1996 to become TRIPS-compliant. It should be noted, however, that such mechanism was not mandatory under TRIPS. Actually, similar provision was proposed by the US during the negotiations of the Agreement, but was rejected by the negotiating countries. Therefore, the pipeline mechanism was a “unnecessary concession” of Brazilian parliamentarians, as stated by the Minister of Health in office at the time^[2]. It is also worth recalling that, under TRIPS, Brazil was not obliged to grant patents in those areas until 2005.

A PhD thesis conducted by Renata Reis^[3] about the approval of the 1996 patent law reveals that many parliamentarians didn’t actually understand what was being discussed and there was an intense lobby from the private sector for the approval of the pipeline mechanism. On the other side, the researcher points out that public interest groups had very limited resources and access to the parliamentarians. Furthermore, she recalls that the bill was proposed in the framework of the golden times for the neoliberal ideology, where the multilateral agencies’ prescription for Latin America, which became known as the Washington Consensus, included among its 10 famous points the strengthening of rules related to intellectual property.

A total of 1,182 patent applications were filed in the one-year window opened by the law for filing applications through the pipeline mechanism. Out of those, over 800 were granted, with a period of validity of 20 years counting from the first filing date in the country of origin. Amongst the main patent holders are the giants of the pharmaceutical, agrochemical and food industry: Sanofi-Aventis, (52 patents), Abbott (33), GlaxoSmithKline (30), Roche (26), Pfizer (22), Novartis (22); BASF (22); MerckSharpDhome (21); Boehringer Ingelheim (16), Eli Lilly (15), Dow Chemicals (14), Monsanto (13), Ajinomoto (12), Otsuka Pharmaceuticals (12), Bristol-Myers-Squibb (11).

The patents were granted without any analysis of their merits by the Brazilian patent office (INPI), which only analysed if the formal criteria established by the law were met by the applicant. One of those criteria is that the related product could not be yet on the Brazilian market, but should be only in the pipeline of the company, that is in earlier states of development previous to commercialization, therefore the name by which the revalidation mechanism is called in Brazil. Patents related to medicines such as lamivudine (HIV/Aids) and paracetamol (pain relief) were rejected under that criteria. Others were abandoned by the applicant, as in the case of the medicine paclitaxel (cancer).

The analysis of the patentability criteria under national standards is one of the most important measures that countries can adopt in the framework of the TRIPS Agreement to protect public national interest, including public health and nutrition, the areas most affected by the pipeline mechanism. Brazil adopts national patentability guidelines that far from being the best to avoid granting of patents that are not really innovative, are still stricter than those adopted by most of the countries from which the patents were revalidated.

Furthermore, it should be noted that many patents granted abroad are granted in error even by the countries’ own standards. As example, a recent study shows that 43% of the patents granted in the US for FDA-approved medicines are invalidated when challenged by generic companies because they do not meet the patentability criteria and were granted in error^[4]. In India, another recent study reveals that 7 out of 10 pharmaceutical patents granted by the IPO are likely granted in error^[5].

Headquarters of the Brazilian Supreme Court in Brasília. Credit: U.Dettmar/SCO/STF, Banco de Imagens)

Hundreds of the patents granted under the pipeline mechanism are related to medicines, most of which are part of the Brazilian Essential Medicines List and are supplied in the public health system (SUS). Others, besides not distributed by SUS, are amongst the most purchased medicines by the population in Brazil. A study conducted by GTPI/Rebrip identified 259 medicines covered by “pipeline” patents, out of which 54 are distributed in the public health system. Amongst those are medicines used in the treatment of HIV/Aids (lopinavir/r, efavirenz, abacavir), many types of cancer (imatinib, bevacizumab, rituximab, trastuzumab), high blood pressure (bosentan, sidelnafil), heart diseases (clopidrogel, sinvastatine, tenectaplase), psychiatric disorders (olanzapine, quetiapine, ziprasidone), high cholesterol (atorvastatin, the best-selling drug of all times), and many others. Among the ones not in the public system, we can list fexofenadine (antihistamine), loperamide (antidiarrheal), drospirenone+ethinyl estradiol (contraceptive), prucalopride (chronic constipation), tiotropium bromide (lung diseases), and the list goes on.

It is impossible to calculate the negative impact the pipeline mechanism had in Brazil. In terms of economic and technological development, the adoption of the pipeline mechanism led to an accelerated deindustrialization of the country in the pharmaceutical sector, since the laboratories that were manufacturing generic medicines could no longer do so, generating unemployment and counteracting economic and technological development. A study conducted by the Brazilian Ministry of Development, Industry and Trade shows that the commercial opening made by the federal government throughout the 1990s, without establishing any period of adaptation to new market situation generated by the granting of intellectual property rights in the area of pharmaceutical and fine chemistry, led to the closure of 1096 units of production, as well as the cancellation of 355 new projects^[6].

In what relates to health, it is impossible to calculate the losses in terms of life, health and dignity of all the persons that could not have access to their treatment because of the high prices of the patented medicines. It is also impossible to measure the financial losses generated by pipeline patents to the public health system. But some case studies may be illustrative.

GTPI/Rebrip did an estimation of the losses caused by 3 medicines which had patents granted by the pipeline mechanism. The calculation considered the period of the patent pipeline for each drug and the volume purchased by SUS in the same period, and compared the price paid in Brazil with the price of the generic available in other countries. The losses only with those 3 medicines amount to over 3 billion reais (about USD 775 mi).

In short, the pipeline mechanism did not bring any benefits to the Brazilian society, but opposed them frontally, reducing the well-being of some – the society in general – and privileging that of others – the companies which benefited from the monopolies generated by the pipeline patents. The overspending of public resources with undue monopolies is overwhelming, and if calculated for all the medicines covered by pipeline patents the amount would be astronomical.

In 2016, when judge Carmem Lucia became the President of the Brazilian Supreme Court, she stated that the pipeline case was one of the two most important cases in the agenda of the Court. She has been the one in charge of the case since it was filed in 2009, but only in 2016 did she release it to be judged by the Court. The date of the judgment was finally scheduled at the end of June 2018 to take place on 6 September. On 5 September, It was cancelled without any justification and no new date for the judgment. It is clear who benefits from the lack of judgment of the case – and for sure it is not the public interest.

Nine years after the filing of the case at the Supreme Court, all the patents granted under the pipeline mechanism have already expired. But that does not make the case any less important. It can repair an historical error of the past and set the bases for similar errors not to be committed again. The decision of the Court could open the way for demanding billions to be paid back to the public health system.

Furthermore, it is currently in discussion in Brazil the approval of a mechanism to automatically grant patent applications without any analysis of its merits. That is unacceptable and cannot be adopted under the rules set by the Constitution and national legislation. There are also proposals to extend the period of validity of patents, some proposals say indefinitely, as a bill currently in discussion at the National Congress. Talking about extension of patent term, apart from new measures under negotiation on the framework of the EU-Mercosur FTA, another ADI (5529) that questions the validity of the extension measure already adopted by Brazilian patent law (article 40, sole paragraph) also awaits judgment at the Supreme Court since May 2016. Let’s hope that one has a better chance in the priorities of the Court.

For now, Brazilian society still waits for the Supreme Court to invalidate a clearly unconstitutional mechanism that was approved by the National Congress only for the benefit of private transnational companies. The deafening silence of the Supreme Court, through the actions of its President and rapporteur of the case – Carmem Lucia, echoes that the highest institution of the Brazilian judiciary system it not willing to defend the values of the Constitution when it comes to challenging the undue privileges of those whose make profits out of a crime against access to medicines and fundamental human rights.

About the authors:

Marcela Fogaça Vieira is a graduate of Law (2006), who specialised in Intellectual Property Law (2010) and holds a master’s degree in Health Policy (2015). She has been working with access to medicines and intellectual property issues in Brazil since 2005 as a member of GTPI, and is one the lawyers acting in the pipeline case before the Brazilian Supreme Court. She is currently a consultant for the accessibsa project: Innovation & Access to Medicines in India, Brazil & South Africa.

Pedro Villardi is a graduate of International Relationships, he holds a master’s degree in Public Health and Bioethics and is a PhD candidate on Social Sciences and Health. Currently, he is coordinator of GTPI/Rebrip – Intellectual Property Working Group of the Brazilian Network for Integration of the Peoples, which is at the origin of the pipeline case at the Brazilian Supreme Court.

^[1] STF, Agenda da Presidente do STF, Ministra Carmem Lucia, para esta quinta-feira (23). Available at: http://www.stf.jus.br/portal/cms/verNoticiaDetalhe.asp?idConteudo=387625&caixaBusca=N.

^[2] José Serra, Direitos privados versus interesses sociais. Disponível em: <http://www.inpi.gov.br/noticias/Panorama/setembro2001/mat_5.htm>. Apud BARBOSA, Denis Borges. Inconstitucionalidade das patentes pipeline. Disponível em <http://denisbarbosa.addr.com/pipeline.pdf>. 2006. p.53.

^[3] Reis, Renata Camile Carlos. Redes invisíveis : grupos de pressão na Câmara dos Deputados – o processo de aprovação da Lei de Propriedade Industrial brasileira. Orientadora: Claudia Inês Chamas. Tese (doutorado) – Universidade Federal do Rio de Janeiro, Instituto de Economia, Programa de Pós-Graduação em Políticas Públicas, Estratégias e Desenvolvimento, 2015. Available at: http://www.ie.ufrj.br/images/pos-graducao/pped/dissertacoes_e_teses/renata_camile_carlos_reis_dsc_2015.pdf.

^[4] The study, entitled, “The Generic Drug Industry Embraces a Faster, Cheaper Pathway for Challenging Patents,” was published in “Applied Health Economics and Health Policy.” The authors are: Jonathan J. Darrow, S.J.D., J.D., M.B.A., Reed F. Beall, Ph.D., and Aaron S. Kesselheim M.D., J.D., M.P.H. From “Study: Generic Drug Industry Embraces Faster, Cheaper Pathway For Challenging Patents. New William, 06/09/2018”. Available at: http://www.ip-watch.org/2018/09/06/study-generic-drug-industry-embraces-faster-cheaper-pathway-challenging-patents/

^[5] Pharmaceutical patent grants in India: how our safeguards have failed, and why the system must be reformed. Dr. Feroz Ali, Dr. Sudarsan Rajagopal, Dr. Venkata S. Raman & Roshan John. Accessibsa: Innovation & Access to Medicines in India, Brazil & South Africa. April 2018. Available at: https://www.accessibsa.org/media/2018/04/Pharmaceutical-Patent-Grants-in-India.pdf

^[6] “Cronologia do desenvolvimento científico, tecnológico e industrial brasileiro – 1938-2003”, Brasília, Ministério do Desenvolvimento, Indústria e Comércio Exterior, 2005. Apud VIEIRA, Marcela Cristina Fogaça. Proteção patentária para produtos e processos farmacêuticos: a questão da inconstitucionalidade das patentes pipeline. Trabalho de conclusão de curso (pós-graduação). Fundação Armando Álvares Penteado – FAAP, 2010. Available at: http://bit.ly/pipeline2010.