Balancing innovation and access to medicines: Considerations for a public interest derogation to patent rights in the EU

By Lisa Noort

Affordable medicines are a decisive factor in access to treatment in the European Union (EU). Drug prices are highly influenced by a medicine’s patent protection, which is argued to stimulate medical innovation to bring patients the medicines they need. In Europe, patients enjoy the right to healthcare as part of the Charter of Fundamental Rights. Tension arises when the public interest demands affordable and accessible healthcare, and innovation at the same time, while the interest of the patent holder needs to be respected.

Sofosbuvir, a highly effective and expensive medicine to treat Hepatitis C has brought this tension into focus in Europe. Two recent applications for compulsory licenses for Sofosbuvir in France and Romania would allow the generic production of the medicine to provide more affordable treatment. These examples from EU Member States raise the question of whether there should be a public interest derogation to EU-wide patent protection, particularly if patients have insufficient purchasing power to buy life-saving and/or life-prolonging drugs. Such a decision to balance innovation and access to medicines would raise important legal, economic and ethical questions.

This study explored a potential public interest derogation on an EU level to patent rights in these situations. Basically, there are three considerations relevant in restoring the balance between innovation and access to medicines.

First, there is a legal consideration. The Court has not applied ‘public interest derogation’ to patent rights yet, although they were applied in other cases concerning the right to family and the free movement rules. Derogations should be applied on EU level to patent cases as well to restore the balance in the context of this study. The TRIPs Agreement provides an adequate legal basis for such derogation that indicates that the right to healthcare may prevail over patent rightsin specific cases. Furthermore, legal certainty is a vital aspect; without it, drug manufacturers claim to have reduced incentive to invest in research and innovation. The compulsory licensing system of Article 31 TRIPs provides both a balance between patent rights and the right to healthcare, and between the fruits of creation and the enjoyment of innovation. For the sake of legal certainty, a narrow and uniform approach throughout the EU is essential. Therefore, the EU Commission should create interpretation guidelines on TRIPs that bind EU Member States and secure uniform application of public interest derogation to patent rights throughout the EU.

Second, there are economic considerations, which argue that competition in the market enhances both innovation and access to healthcare. By stimulating competition, an economically appropriate balance can be found. Competition can be enhanced by the following two ways. First of all, a public EU database on patents, combined with an obligation for drug manufacturers to register their patents, will give insight into what has already been discovered and invite parties to develop this further. Additionally, the production of super generics, which are improved versions of the original patented pharmaceuticals, perhaps on the basis of Article 30 TRIPs, and marketing them will stimulate competition and limit the monopolistic price setting of patentees. Super generics differ from originators in formulation or method of delivery and they are produced either during the patent term or after it has expired.

Third, a moral or ethical consideration in this regard is that access to patented medicines for chronic diseases should not be hampered due to their high prices, which are essential economic gains. These economic gains should be secondary to accessible treatment of patients with chronic diseases. A public interest derogation to patent rights contributes to an appropriate balance between innovation and access to medicines and can save people’s lives.

About the author: Ms. Lisa Noort is an LL.M. Graduate in International and European Law from the University of Groningen and her thesis on this topic was written under supervision of prof. dr. H.H.B. Vedder and a second reader, prof. dr. B.C.A. Toebes. It benefited from input from Katrina Perehudoff.