Materials

Competition Policy and Access to Healthcare: Centre Participation

Pradeep S. Mehta, Secretary General, CUTS International, drew attention to the fact that the flexible provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provide an opportunity to release generics into circulation and maintain competition in the pharmaceutical market.

Arvind Mayaram, Chairman, CUTS Institute for Regulation & Competition, presented the key points of the Toolkit about Competition Policy and Access to Healthcare and admitted to keeping the market competed enforcement alone may not be sufficient and enabling policy environment that promotes competition in the market including the entry barriers and market distortions and easygoing business – is an acritical condition precedent. The quality of universal healthcare must be the aim of public policy. Generic competition in the pharmaceutical markets is highly dependent on the domestic patent laws. The Toolkit has been prepared to keep in view the developments in healthcare over the years. With the development of technology, anticompetitive practices have become complex and sophisticated. Some of these in the pharma sector are arrangements between hospitals, and in-house doctors are incentivized to prescribe drugs of specific brands, excessive and unfair drug pricing, pay-for-delay practice, and practice evergreening that affects generic competition, etc. These practices lead to the loss of innovations. The Toolkit has recommendations for competition enforcement. Some of these are compliance programs for stakeholders to prevent anticompetitive behavior; a caution that doctors should refrain from agreements with a large pharmaceutical company and prescribe generics; compulsory licensing should be resorted to in exceptional circumstances; regular competition assessment of the healthcare sector should be encouraged. At the end of his speech, he stressed that emergencies require a strong competition policy response concerning the recovery of this shocking economy.

Teresa Moreira, Head, Competition and Consumer Policies Branch, UNCTAD, said that the pandemic was really highlighted that access to healthcare is crucial around the world. Speaker outlined key statements from a recent UN Policy Brief: COVID-19 and Universal Health Coverage (October 2020). It is an urgency to the quest for universal health coverage. Health is a fundamental human right, and universal health coverage is a critical tool for achieving health for all. During the pandemic, we saw competition law enforcement by competition authorities to stop anticompetitive practices and abuses of market power. Also, exceptions in cooperation that UNCTAD underlined was significant to ensure essential goods and services for people. Competition Law and Policy as overtime had a key intervention in addressing market inefficiencies and rising healthcare market prices. The other important aspect that needs to be mentioned is intellectual property rights. A balance needs to be struggled between encouraging innovation and receiving benefits. IP owners may restrict the competition using their IP rights through excessive pricing and other practices with essential patents. The TRIPS Agreement affords flexibilities, including the adoption of compulsory licensing. But so far, we have not really observed member states taking considerable advantage of these flexibilities. Because Universal healthcare coverage is in the center of the UN 2030 Agenda for Sustainable Development, because this is a key priority for the policymaker sector, regulators, and competition authorities all over the world, it is crucial even though public interest considerations may a currently oversight other goals and exceptions that are not fully competition-friendly that competition authorities remain involved into regulatory interventions and continue to enforce the law against cartels and abuses practices in the pharmaceutical sector. From a consumer protection view, the United Nations Guidelines for Consumer Protection emphasize the importance of informing consumers about products and services. These can be very relevant regarding the COVID-19 vaccine. From a competition and consumer protection point of view, improving the access, the information, and the quality of services ensure that consumers can also benefit from healthcare services, which is also a project UNCTAD is working with UN regional economic commissions within the context of response of the COVID-19 crisis. During the discussion, Teresa Moreira stated a willingness to continue the dialogue on approaches to the intellectual property regulation at the global level.

Hardin Ratshisusu, Deputy Commissioner, South African Competition Commission, expressed the view to competition regulation for a growing and inclusive economy. The following issues were considered: a global overview, competition law and policy issues, the impact of access to healthcare during COVID-19, intervention in ARVs in South Africa, policy developments and trade-related issues, recommendations. It was outlined that significant competition problems during the pandemic are information asymmetry, unequal bargaining power, ‘creeping mergers.’ The speaker drew attention that in 2018 South Africa adopted an Intellectual Property Policy with an initial focus on public health with other areas to be determined in subsequent phases. The policy objectives in South Africa are anchored on the Doha Declaration on TRIPS and Public Health. The policy focuses on such key areas as local manufacture and export in line with industrial policy, patents. Reforms such as those being adopted in South Africa are necessary to ensure inclusive healthcare.

Carlos Correa, Executive Director, South Centre referred the first place to the freedom that every country has to decide the competition policy. Governments have the flexibility to define what objects of competition laws and policies are. Is this to protect the competitors? Is this also to protect the consumers? Is it social-economic welfare? Is it getting access to affordable medicines? Developing countries may devise doctrines and principles under which they apply competition laws according to national interests, including the healthcare sector. One of the main issues also was intellectual property rights. The European Court of Justice argues that competition law can apply concerning the extra-size intellectual property rights, patents, and nor the acquisition asset. But in some cases of acquisition of patents, for instance, these practices should also be subject to competition scrutiny (to wit, the case of Ritonavir). The speaker made a conclusion regarding the use of intellectual property, according to which the control of excessive prices is not always a subject of regulatory prices policies, but also of competition law.

Alexey Ivanov, the Director of the International BRICS Competition Law and Policy Centre, drew attention to the fact that currently we are faced with the need to re-think the approach to this type of global crisis and our attitude, our tools which we use to fight possibly market flows in the healthcare sector. The Toolkit developed by CUTS International and CUTS Institute for Regulation & Competition (CIRC) on Competition Policy and Access to Healthcare issues is essential because we need to structure and think out of the box where the appropriate competition law and policy tools for fighting this health crisis. In the pharma sector, we used to think that big pharma companies are basically producers of the drugs we all need for fighting main diseases. But currently, we are having a kind of stagnation in producing new drugs. And this stagnation even declines in the production of medicines necessary for treating major diseases and fighting the healthcare crisis. We see that the industry focuses more on preserving the status-quo using their IP protection rather than coming with breakthroughs. The COVID-19 pandemic is a characteristic of this problem. Because what we see is that the healthcare system all around the world was not prepared for fighting this global crisis. Authorities in the institutional structure we are having for encouraging innovation in the sector also did not cope with their task. Most of them worldwide were considering the big pharma companies as subjects we can’t touch. But most innovative drugs are developed by start-ups, not big pharma that is more like focusing on the marketing part of the story. Big pharma companies acquire governmental research institutions, start-ups that invent breakthroughs, patent, and promote them. They also may close the acquired research project to prevent the product from entering the market (‘killer acquisition’). Several published studies analyzed M&A in the pharmaceutical sector for the last 20 years with the conclusion that in most of the cases, mergers suppressed innovations, R&D dynamics. This does not allow to bring new products to the pharmaceutical market. This is one of the problems that competition authorities need to focus on changing how to regulate this concentration happening in the pharmaceutical market. In the Toolkit, authorities had to re-think the type of analyses used in cases of mergers. It is also important to re-think the meta script of intellectual property protection, all the instruments we are supporting in stimulating innovation. What role do they play in developing healthcare products in the global context? And this is a critical focus that competition authorities have to keep in mind. In Russia, these initiatives already adopted in other BRICS countries and mentioned in Toolkit to change intellectual property protection attitude still not supported.

Antony Taubman, Director of the IP, Government Procurement and Competition Division, World Trade Organization, stressed the need for global solidarity for cooperation, open dialogue, and support at this critical time. Antitrust authorities play a significant role in the advocacy function. There is a concern to develop legislative regulation in the new conditions in a pro-competitive manner. The Toolkit is a valuable contribution to the new competition policy. When developing new approaches to antitrust regulation, it is necessary to take into account that IP systems under the TRIPS agreement imply a balance between IP rights and broader public interest. IP rights are not absolute.