More Generic Drugs for the Indonesian Public
28 November 2012
Indonesian President Susilo Bambang Yudhoyono has issued a decree authorizing government use of patents for seven HIV/AIDS and Hepatitis B medicines held by companies including Merck, GlaxoSmithKline, Bristol-Myers Squibb, Abbott and Gilead to “meet the urgent need for antiviral and antiretroviral treatments.” The decree has the effect of creating compulsory licenses for the drugs. The decree took effect on September 3, 2012.
Januar Jahja, managing partner at Januar Jahja & Partners in Jakarta, tells Asia IP that Yudhoyono issued the decree because treatment of those illnesses is considered urgent in Indonesia. “Out of a population of 240 million, it is estimated that Indonesia has approximately 13 million citizens affected by Hepatitis B,” he adds. “While the official figure is 330,000 people currently infected by HIV and AIDS, it is thought that the actual number is higher.”
The decree follows the implementation of compulsory licenses in other developing countries. “Following decisions in India and Thailand, as well as China’s revisions to its IP laws to establish a compulsory license scheme, Indonesia’s decision clearly establishes a trend among Asian nations to use compulsory licenses to address pressing public health issues,” says Jahja. “There are now approximately 2.9 billion people, or 42% of the world’s population, living in Asian countries that have established compulsory licensing regimes.”
Counterfeit drugs remain an issue in the market, but more genuine drugs are expected in government clinics. “Counterfeit pharmaceuticals are widely available in the Indonesian market. It is one of the main reasons why Indonesia remained on the US government’s Priority Watch List for IPR violations in 2012,” says Andrew Diamond, a foreign legal consultant at Jahja’s firm. “It is therefore unlikely that the decree, however implemented, will have any effect on the availability of counterfeit drugs in Indonesia. The decree could potentially increase access to genuine versions of the seven covered drugs through established government channels, such as government-run hospitals or health centres.”
The decree is vital for improving public health, but not for patent laws. “While clearly important to the millions of Indonesians suffering from Hepatitis B, HIV and AIDS, as well as negatively affecting the patent holders themselves, the decree on compulsory licensing does little to affect the day-today practice of patent law in Indonesia,” says associate, Prudence Jahja.
“The Indonesian government still views the further development of its patent system to be important to continue economic growth and stability,” Jahja says. “Current and prospective patent holders should continue to look to Indonesia as an important jurisdiction to register and enforce their patents.”
The decree states that the generic companies will have to pay a royalty of 0.5% of the net sales revenue of the generic drugs to the drug companies which own the patents.
