Russia’s full-scale assault on Ukraine continues for the third year. The Russian occupation forces have already killed tens of thousands of civilians, including children. They have inflicted multiple damages on the Ukrainian civil infrastructure in violation of international laws, deliberately targeting Ukrainian territories with missiles, vacuum bombs and artillery shells attacking residential areas, kindergartens, hospitals, maternity hospitals and other civil infrastructure. Considering the horrific atrocities unleashed on the Ukrainian population by Russia since the beginning of this aggression, the humanitarian crisis that has been unfolding is unprecedented; it is the largest humanitarian crisis in Europe since the World War II. As the number of people with war-related injuries increases, so does the need for essential medicines. The supply of life-saving medicines for patients with serious infectious and chronic conditions has been affected as well.
These are the circumstances, in which Ukraine is set to revise its intellectual property (‘IP’) strategy 2024-2030. In light of this devastating situation, the main strategic goal of Ukrainian policy during this war must be the protection and strengthening of national security, especially in the field of healthcare, thereby securing the national interests of Ukraine by protecting the life and health of its population. This can be realised by focusing on accelerating access to essential medicines during the war, including (i) eliminating the obstacles for generic competition, (ii) allowing import of affordable medicines, and (iii) facilitating the national production of essential medicines. Importantly, these measures must take into account the relevant legal and financial restrictions during the period of martial law in Ukraine; they also must be in line with Ukraine’s international obligations under the TRIPS Agreement and its EU accession commitments.
The IP system of Ukraine must work to ensure that these goals are achieved. This can be done by revising the current Ukrainian IP law and its implementation that are either ineffective or act as a barrier for generic market entry and access. This includes, among others, the following key issues.
- Removal of patent linkage and broadening the scope of the Bolar exemption
One of the barriers to generic competition and access in Ukraine is patent linkage (see Article 9 of the Law of Ukraine ‘On Medicinal Products’). Generic applicants must certify that the patent rights of third-parties are not infringed by the registration of the generic product, otherwise a marketing authorisation may be refused. Relying on these patent linkage provisions, originators – patent owners – typically sue generic companies once they apply for a marketing authorisation requesting the courts to enjoin them, including by prohibiting the marketing authorisation body to grant an authorisation. To avoid any risks of patent litigation, generics are compelled to apply for marketing authorisation only after the patent protecting the originator’s medicine expires. As a result, this practice enables originators to delay the marketing authorisation of a generic medicine well beyond the patent expiration.
Furthermore, prior to 2020, there was no regulatory review exception (the so-called Bolar exemption) in Ukrainian law, which meant that generic companies were unable to start their bioequivalence studies and obtain the marketing authorisation during the life of a patent protecting a brand-name drug. To remove these artificial barriers for a timely generic competition, a number of reforms have been put in place, including the implementation of the Bolar exemption in Article 31(5) of the Patents Act (the wording of which closely resembles those of the US and EU Bolar provisions). The adoption of the Bolar exemption was a major win of the patient advocacy groups in Ukraine. But these changes unfortunately have had a limited effect due to a restrictive judicial interpretation of this provision. In its recent decisions (see e.g. Merck Sharp & Dohme Corp. v. JSC ‘Farmak’), the Supreme Court of Ukraine has interpreted this exemption very narrowly – it considers it to cover only bioequivalence studies. At the same time, the application for a marketing authorisation and granting of such an authorisation, so that the generic could enter the market immediately after the patent expiration, are not covered by the exemption and thus, are considered to be infringing activities. This significantly delays the generic market entry, as generic manufacturers have to wait until the patent expiry before they are able to commence the process of marketing authorisation.
However, such an interpretation by the Ukrainian courts is not in line with the established law and practices in the leading jurisdictions (e.g. EU and US), as well as contrary to the very essence of this provision. Coupled with patent linkage these provisions allow originators to block generic competition for a significant period of time, and thus extending their monopoly on the market well beyond the expiration of patent protection. This is especially devastating as the recent guidance on the interpretation of the Bolar exemption by the Supreme Court has occurred during the Russian aggression, which has dramatically reduced the possibility of accessing life-saving medicines.
To avoid this artificial extension of monopoly it is crucial to revise the interpretation of this provision by the Ukrainian judiciary following the approaches in the leading jurisdictions. Moreover, since Ukraine has recently commenced the process of accession to the EU and considering the current review of the Bolar exemption and the absence of patent linkage in the EU – moreover, it is considered unlawful and anti-competitive in the EU – Ukraine should follow the EU’s example and revise its provision by broadening the scope of the Bolar exemption, as well as by abolishing the patent linkage provision. This will bring the Ukrainian legislation in line with EU law and the approaches taken by the EU and other leading jurisdictions and will remove the artificial barriers to generic competition enabling better access to affordable medicines for Ukrainian patients. These amendments are especially important and urgent during the ongoing war and will help to facilitate access to life-saving medicines (for more details on the Bolar exemption and patent linkage in Ukraine see here).
- Revision of the compulsory licensing mechanism to make them more effective
The compulsory licensing mechanism in the Ukrainian legislation is very cumbersome and inefficient that makes it unsuitable for the currently unfolding health crisis. Article 30(3) of the Patent Act of Ukraine provides that ‘to ensure public health, state defence, environmental security and other public interests, the Cabinet of Ministers of Ukraine may allow the use of a patented invention (utility model) to a person designated by the Cabinet without the consent of the patent owner.’ There is also a separate legislative act, the Decree of the Cabinet of Ministers of Ukraine N 877, that clarifies the procedure on granting a compulsory licence for medicines and medical products (‘Procedure’), which the Cabinet of Ministers of Ukraine (‘CMU’) would need to follow when issuing a compulsory licence on a medicine. According to this Procedure, the CMU may grant a permission to a designated person if this person can prove (by providing relevant documentary evidence) that the following two grounds are met: (a) the patent owner cannot satisfy the need in a relevant medicinal product with the abilities and capacities that are normally used for the production of such a medicinal product; and (b) the patent owner has groundlessly refused the applicant’s request to issue a licence to use the invention (utility model).
This provision raises several challenges, which affect the efficient use of this mechanism, especially during the war. First, the Procedure requires that a third party should request the grant of a compulsory licence. This potentially means that the government of Ukraine is not able to issue a government use licence upon its own initiative, as it is permitted by Article 31(b) of the TRIPS Agreement. In addition, the second ground for issuing a compulsory licence requires that prior to requesting the government to grant a compulsory licence, the interested party must first request a licence from the patent holder, and only after the patent holder rejects the request to issue a licence, the interested party has the right to apply for a compulsory licence. At the same time, under Article 31 TRIPS the requirement of prior negotiations could be waived in the case of ‘public non-commercial use’ and in the case of national emergency. Therefore, in the context of this war, Article 31 TRIPS allows the Ukrainian government to grant compulsory licences/government use of patents related to medicines and medical products without negotiating with the patent holders. However, Ukrainian law does not contain relevant provisions permitted by TRIPS. As a result, the current requirement of prior negotiations in Ukrainian law significantly limits the possibility of an efficient and speedy grant of a licence.
Moreover, the law does not provide any limitations on the period that the applicant needs to wait before it may be considered that the patent holder has rejected the applicant’s request to grant a licence. The patent holder may simply ignore the request, and therefore, the applicant will not be able to provide any evidence that its request was rejected and so it will not be possible to meet the second requirement for granting a compulsory license. It is also difficult to calculate how much time this procedure may take, as it includes quite a few state authorities (the Ministry of Health, the IP Office, the CMU). There is also a requirement that the calculation of the compensation to the patent holder must be confirmed by a special state authority, which has not been identified in the law. Finally, there is a possibility that the CMU decision may be suspended by the court as part of the interim injunction while the patent holder’s lawsuit challenging this decision is being considered by the court. The resolution of this dispute and its review by the higher judicial instances may take several years.
All this may result in significant delays in granting a compulsory licence (if it can be granted at all), which in the context of the war is clearly unacceptable. Therefore, Ukraine must revise its compulsory licensing/government use mechanisms to make it effective and speedy; this would allow accelerated access to essential medicines when needed.
- Adoption of the security exception under Article 73 TRIPS and Article 143 of the EU-Ukraine Association Agreement
While the humanitarian aid has stabilised the supply of live-saving medicines during the war, it is a short-term and fragile solution. How long will Ukraine be able to rely on the humanitarian aid, especially if the war continues for a long period of time and the need for such medicines will only increase? The Ukrainian government is currently forced to purchase such drugs using money from the state budget and the financial support from its Western allies, which adds a significant pressure as considerable finances are desperately needed to support the army and the defence of the country. Therefore, to ensure access to life-saving medicines during the war, Ukraine should develop a long-term solution by utilising all the existing domestic production capacities, as well as explore any potential opportunity to import essential drugs from abroad. For this, it is necessary to remove all the barriers, including in the form of intellectual property (IP) rights and regulatory barriers, which can protect many essential medicines that Ukraine urgently requires.
This may be possible by relying on the specific security exception provided in Article 73 TRIPS that allows a WTO member to implement measures to protect its essential security interests ‘taken in time of war or other emergency in international relations’. Scholars suggested the use of the security exception to address public health needs in the context of the COVID-19 pandemic. Today, the essential security interest of Ukraine is the protection of life and health of its people. Relying on this Article 73 TRIPS exception, Ukraine can suspend certain IP rights that protect life-saving medicines and medical devices during the war; this, in turn, will allow domestic production and import of generics and biosimilars without the risk of infringing any IP rights. Such measures will also be consistent with the EU-Ukraine Association Agreement, Article 143 of which mirrors the provision of Article 73 TRIPS and allows Ukraine to take actions for the protection of its essential security interests taken in time of war.
During emergencies (such as wars and pandemics) public health concerns must prevail over private interests, and countries at national, EU and global levels must utilise all tools available in international law to protect their people. Considering the gravity of the situation with the supply of essential medicines during the ongoing illegal Russian aggression against Ukraine, these measures are necessary, proportionate and justifiable, as well as in line with the domestic and international obligations of Ukraine. More importantly, these measures will help to save tens of thousands of lives, both military and civilian.
The measures discussed in this article have been included in the draft IP strategy of Ukraine 2024-2030. The working group of the ‘IP and pharma sector’ has been advised by the international experts, including the author of this article, Olga Gurgula, as well as Ellen ‘t Hoen, Frederic Abbott, Carlos Correa, Mohammed El-said, Erika Dueñas Loayza, and Daria Kim.
To know more about the proposals and to sign the open letter in support of the new IP strategy of Ukraine 2024-2030 – please see here: https://peoplesmedicines.org/resources/letters/open-letter-from-ukraine/
