analysis of legal aspects of local pharmaceutical...

Trade Programme Division Economic Development and Employment Division Agriculture, Fisheries and Food

Trade Related Aspects of Intellectual

Property Rights

§

TRIPS

Analysis of Legal Aspects of Local Pharmaceutical Production in Rwanda

TRADE MATTERS

Publisher: Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH Dag-Hammarskjöld-Weg 1-5 65760 Eschborn Internet: http://www.gtz.de Trade Programme Sectoral Project Trade Policy, Trade and Investment Promotion Sectoral Project Agricultural Trade T +49 61 96 79-0 Internet: http://www.gtz.de/trade Contact persons: Helmut Albert, Rainer Engels Author: Daniel P Chiwandamira, Désiré Kamanzi Commissioned by: DPC & Associates, 21 Sterling way, Atlantic Beach, Golf Estate, Cape Town, South Africa Eschborn 2006

http://www.gtz.de/

TABLE OF CONTENTS List of Abbreviations ..................................................................................................................... 3 Foreword ........................................................................................................................................ 4 Executive Summary ..................................................................................................................... 5 Introduction .................................................................................................................................... 7

Socio-Political and Economic Background................................................................................. 7 Health Sector Policy .................................................................................................................... 8 Health Policy Objectives ............................................................................................................. 9

Background to the Study ........................................................................................................... 11 Introduction ............................................................................................................................... 11 Terms of Reference ................................................................................................................... 12

Access To Commercial And Industrial Activities In Rwanda ............................................... 14 Analysis Of The Local Patent Law ........................................................................................... 17

Current situation with regards to patents in Rwanda:................................................................ 17 Compliance with the TRIPS Agreement ................................................................................... 18 Planned activities with regard to Intellectual Property Rights .................................................. 19

Review Of Bilateral And Multilateral Agreements .................................................................. 20 Bilateral Agreements ................................................................................................................. 20 Multilateral Agreements............................................................................................................ 20

The African Regional Industrial Property Organization ....................................................... 20 The World Intellectual Property Organization Treaties ........................................................ 21

Local Laws With Respect To Pharmaceutical Production.................................................... 22 Registration Of Medicines......................................................................................................... 23

Current situation .................................................................................................................... 23 Provisions of the Draft Presidential Decree on Drug Registration........................................ 24

Intellectual Property Rights, TRIPS And DOHA: Background And Facts .......................... 26 Intellectual Property Rights....................................................................................................... 26 The TRIPS Agreement .............................................................................................................. 26

The Doha Declaration............................................................................................................ 27 Paragraph 6: A problem left unresolved.................................................................................... 28 TRIPS and Patents..................................................................................................................... 29 TRIPS safeguards and flexibilities ............................................................................................ 29

The Bolar provision............................................................................................................... 30 The parallel importation ........................................................................................................ 30 The compulsory license......................................................................................................... 30

Analysis Of Legal Situation For Foreign Investors ................................................................ 32 The Investment Code................................................................................................................. 32

The Law Establishing RIPA (1998) ...................................................................................... 32 Draft Law Promoting Investments and Exports (likely to be in place by 2006) ................... 33

Incentives to investors ............................................................................................................... 33 Fiscal Incentives and import duties ....................................................................................... 33 Value Added Tax (VAT ........................................................................................................ 34 Non-Fiscal Incentives............................................................................................................ 35 Investment Protection............................................................................................................ 35

Other laws and regulations applicable....................................................................................... 36 Handling charges (commonly called MAGERWA).............................................................. 36 Compulsory Batch Certification of Imports .......................................................................... 36 The ARV procurement system VS the monopoly given to CAMERWA ............................. 36

Conclusion ................................................................................................................................... 38

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Recommendations...................................................................................................................... 41 Bibliography ................................................................................................................................. 43

Official Papers, Publications, Periodicals and Online Materials ............................................... 43 Laws, Treaties and/or Agreements: ........................................................................................... 44

Annex A ........................................................................................................................................ 46 :List of people interviewed ......................................................................................................... 46 Annex B:....................................................................................................................................... 47 Company Registration fees:...................................................................................................... 47 Annex C: CAMERWA monopoly .............................................................................................. 49

Legal Aspects of Local Pharmaceutical Production in Rwanda

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List of Abbreviations ARIPO African Regional Intellectual Property Organization (www.aripo.org) ARV Anti-retroviral ASBL Association Sans But Lucratif (Not for profit organization) ATI African Trade Insurance Agency BO Bulletin Officiel (short form, commonly used for BORU) BORU Bulletin Officiel du Ruanda-Urundi (current Official Gazette of the Republic of

Rwanda, used when Rwanda & Burundi were one territory under the Belgian administration)

CAMERWA Centrale d'Achat de Médicaments Essentiels au Rwanda ASBL CIF Cost Insurance Freight CL Compulsory License FDA Food and Drug Administration (USA) GDP Good Distribution Practices GMP Good Manufacturing Practices GoR Government of Rwanda (www.gov.rw) GTZ German Technical Cooperation (www.gtz.de) ICSID International Center for the Settlement of Investment Disputes IMF International Monetary Fund IPRs Intellectual Property Rights LDC(s) Least Developed Country(ies) MDG Millennium Development Goals MIGA Multilateral Investment Guarantee Agency MoH Ministry of Health (www.moh.gov.rw) MIJESPOC Ministry of Youth, Sports and Culture (www.mijespoc.gov.rw) MINIJUST Ministry of Justice (www.minijust.gov.rw) MINICOM Ministry of Commerce, Industry, Investment Promotion, Tourism and

Cooperatives (www.minicom.gov.rw) MSH Management Sciences for Health (consultancy company: www.msh.org) OGRR Official Gazette of the Republic of Rwanda PEPFAR President’s Emergency Plan for AIDS Relief (USA) R & D Research and Development RIEPA Rwanda Investment and Export Promotion Agency (www.rwandainvest.com) RRA Rwanda Revenue Authority (www.rra.gov.rw) TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights VAT Value Added Tax WB World Bank (www.worldbank.org) WHO World Health Organization (www.who.int) WIPO World Intellectual Property Organization (www.wipo.int) WTO World Trade Organization (www.wto.org)


http://www.aripo.org/

http://www.gov.rw/

http://www.gtz.de/

http://www.moh.gov.rw/

http://www.mijespoc.gov.rw/

http://www.minijust.gov.rw/

http://www.minicom.gov.rw/

http://www.msh.org/

http://www.rwandainvest.com/

http://www.rra.gov.rw/

http://www.worldbank.org/

http://www.who.int/

http://www.wipo.int/

http://www.wto.org/

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Foreword

The German government as part of its commitment to the Millennium Development Goals (MDG) would like to support the production of low cost drugs in Least Developed Countries (LDC). In line with this objective and through its development arm the German Technical Cooperation Agency (GTZ), a study was commissioned to consider in particular, the case of Rwanda and in this instance to analyse the legal implications of setting up a local pharmaceutical production plant. This study was done taking into consideration the World Trade Organisation’s decision of August 30th, 2003 on the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health1. The decision was meant to facilitate access to medicines in developing countries and was the outcome of intense and detailed two year multilateral negotiations. Despite this noble intention, little if any, real progress has been made in LDCs to realise the benefits of improved access to low cost drugs.

The country study was undertaken by Daniel Peter Chiwandamira of DPC & Associates- a business advisory consulting firm based in South Africa and Désiré Kamanzi of Kamanzi, Ntaganira and Associates- a corporate law firm based in Rwanda.

The consultants utilised their knowledge of Rwanda’s economic, legal and socio-political system as well as their regional and international experience to conduct the study. An extensive desk study of various background documents and legal statutes was done in order to gain an insight into the problem. Extensive in-country interviews were held with key stakeholders whose names are shown at an Annex to this report. The consultants have now completed the study and hereby present their report.

The responsibility for any errors and the views expressed in this report rests with the consultants and not GTZ or any of the personnel who were interviewed. The report is confidential and its contents are for restricted use by the recipients, GTZ. Disclosure of any of the report’s contents without authority is strictly forbidden.

1 IP/C/W/405, available at: http://docsonline.wto.org.


http://docsonline.wto.org/

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Executive Summary Rwanda is a Least Developed Country with poor socio-economic indicators, particularly in public health. It has a weak manufacturing base and thus depends significantly upon the importation of products from foreign-based manufacturers. In the case of relatively newer medicines, some of which are covered by intellectual property rights, Rwanda must import from ‘brand name’ manufacturers and where a patent bar does not exist, Rwanda will rely on manufacturers mainly based in India. With respect to antiretrovirals, Rwanda’s HIV/AIDS treatment programme funded by the international community relies most exclusively on fixed-dose combinations generics imported from India. Rwandan patent law is obsolete and not in compliance with the TRIPS Agreement yet the country has adhered to the World Trade Organization and accepted to be bound by all treaties from the WTO. With respect to the TRIPS Agreement, some very important dates, whereby WTO member-countries should be TRIPS compliant, have passed unnoticed for the case of Rwanda. For LDCs (which Rwanda is), a 10-year extension (from 1996) was given to create a viable technological base at the end of which, they would be required to apply the TRIPS provisions. The same provisions stipulate that upon a duly motivated request from an LDC member, the Council for TRIPS shall exempt that member from the 2006-deadline: very little with this regard was done. Due to the absence of a strong manufacturing base and adequate technologies in LDCs, and considering the fact that many of those countries were facing serious issues in the public health domain, another concession was made and LDCs were allowed up to January 2016 the possibility of waiving the general obligation upon which any person wishing to exploit someone else’s invention should remunerate or compensate the ‘inventor’ also known as the patent-holder. All these provisions (known as the TRIPS flexibilities) are built in the TRIPS Agreement and its subsequent declarations and decisions. To be fully applicable however, these flexibilities and safeguards have to be incorporated in the different national laws. In all the interviews held with different stakeholders, it was evident that there was an immense lack of awareness on Intellectual Property Rights, on the TRIPS and their implications for the local economy, the overall legal framework and more directly with regard to access to medicines. Through this report, one could not take the assumption that these laws were known and over the different sections an effort is made to explain the existing laws and the urgent need to update them. The report as well explains the various conditions set by the TRIPS Agreement and their need to be incorporated in national laws. One acknowledges the various efforts that are being made by the Government in putting up a sound and


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conducive framework to attract investors but wish also that broad consultations are done. Where expertise is not available, the Government should call it upon so that the country doesn’t see all these TRIPS flexibilities that could be turned into an investment opportunity fade away. From the analysis of the investment framework , the Government is committed to support such a project and has even made this a priority issue in the current Ministry of Health plans. However, one notes with concern challenges that are being faced by the local pharmaceutical industry mainly due to high import taxes of packaging materials as well as the high cost of energy. It was disturbing to find that the only existing pharmaceutical factory has decided to close shop due to what it termed an unfriendly investment climate. This means that there is an urgent need for stakeholders to meet to consider the challenges that are facing the industry if the goal of ensuring availability of low cost medicines is to be achieved. For ARVs production and other essential drugs, the TRIPS flexibilities can be incorporated in the general drafting of the intellectual property law, to allow possibility to produce such necessary drugs. Other accompanying measures such as the putting in place of a National Drug Authority should be speeded up and its staff properly trained. When all these conditions will be availed, local pharmaceutical production in Rwanda could become a profitable reality for the investor undertaking it and a vital and extremely important tool for the country looking at the welfare of its citizens. GTZ could play a facilitating role in terms of helping the Government of Rwanda to review together with stakeholders investment conditions targeting the pharmaceutical industry as well as the drafting and incorporation into law the TRIPS flexibilities which could be taken advantage of in promoting access to low cost and affordable essential drugs. This is an opportunity to promote Private Public Partnerships in a sustainable way that addresses practical socio-economic problems in developing countries.


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Introduction Socio-Political and Economic Background Rwanda, fondly known as the land of a thousand hills, is located in East-Central Africa. It is bordered by the Democratic Republic of Congo to the West; Uganda to the North, Tanzania to the East and Burundi to the South. With a total surface of only 26,338 square kilometers, the small size of this landlocked country makes it an ideal launching pad for regional trade. Its capital Kigali is only 2-3 hours away from the markets of Southern Uganda, Eastern DRC, Western Tanzania and the whole of Burundi. This close proximity makes Rwanda an excellent choice as a location for business operations targeting these emerging markets. To many an outsider, Rwanda is largely known for its 1994 genocide but since the war and genocide, Rwanda has made significant progress in rebuilding its economical and social infrastructure as well as positioning its various assets in the market place. As a result, the country is now viewed as the most secure place in the region; internationally, it is hailed as the bedrock of good governance; corruption is negligible; the crime rate is low; GDP growth has been strong over the last years, etc. Strong political leadership, driving a vision of a better future, has firmly liberated the country from the shackles of the 1994 nightmare and to the Rwandan people; the years and decades to come are of promise and strong economic development. Rwanda’s economy is still virgin both in terms of industrialization, foreign investment participation and commercial engagement with international markets. About 90% of the population primarily relies on subsistence agriculture as a source of livelihood. Agriculture contributes 46% of GDP while industry and services contribute 20% and 34% respectively. The limited industrial output available generates products for local consumption only. Local manufactured products include cement, beverages, soaps, shoes, plastic goods, garments, cigarettes and a very little portion of pharmaceutical products. Poor investments in economic diversification, coupled with poor management by previous governments derailed the country’s economic development for decades. By 1989, GDP growth was negative and by the time the genocide was over in 1994, the economy was in shambles. No proper policies, no diversity, poor export base, poor infrastructure, etc. Despite these constraints, an economic stabilization and recovery programme was implemented leading to a major economic turn-around between 1996 and 2002. During this period, the Government restructured the country’s external debt through the Paris Club, secured a medium term support from the IMF/WB for its economic recovery programme, abolished export taxes, initiated an investment code, initiated rehabilitation of the banking sector, liberalized trade, currency and wage regimes, achieved full current


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account convertibility, firmed up the independence of the Central Bank and launched the necessary restructuring and privatization of public entities. The harvest from these initiatives was an economy characterized by a dramatic and sustained GDP growth rate and investor confidence. Between 1994 and 1997, GDP growth rate rose by nearly 70%. In the following years, growth remained relatively high (between 6% and 9%) slowing down over the last two years due to the drought and the energy crisis2. Annual average inflation came down to less than 4 percent during 1999-02, but has subsequently risen to over 10 percent during 2004 and early 2005 mainly due to food shortages and rising energy prices. The recovery of the agriculture sector and reconstruction efforts, supported by donor funds, has largely contributed to this positive performance of the economy. While agriculture and construction were the main sources of growth, neither manufacturing nor commerce had regained their 1993 levels by end 2004. Social indicators remain low, with life expectancy of 49 years in 2000. The incidence of HIV/AIDS is high at over 5 percent of the total population (aged 15 to 49). Rwanda has taken significant strides toward improving social services, reducing gender disparities, and initiating a serious effort to attack HIV/AIDS as well as other serious diseases such as malaria and tuberculosis.

Health Sector Policy The government, recognizing the precarious health situation existing in the country and as part of the objective of meeting the MDG goals, a new health sector policy was introduced by the Minister of Health in 2005. This policy which is captured in a document called “Health Sector Policy-Government of Rwanda” February 2005 is the most up-todate policy document which is guiding the overall vision of the government. An analysis of these policies will be conducted in this section to provide a proper context for the study on the setting up of local pharmaceutical production.

According to the government3, health sector outcomes have worsened in the past decade as a result of the 1994 genocide. Life expectancy in good health at birth for the whole population is estimated at 38.3 years, while the percentage of life expectancy lost for men and women is, respectively, 13,3 and 14.11. The maternal mortality rate has risen from 500/100,000 live births in 1992 to 1071/100,000 live births in 2002. Infant mortality rate on the other hand has risen from 85/1000 live births in 1993 to 107/1000 live births in 2004. The principal causes of these levels of mortality in Rwanda remain communicable diseases, which for the majority, can be prevented through better hygiene and behavioural change. AIDS and malaria place the greatest burden on the health system and economy of the country. The prevalence of HIV/AIDS amongst the adult population is estimated at 13.2 percent in Kigali town, 6.3 percent in other urban areas and 3.1 percent in rural zones. Malaria accounts for at least 40 percent of all consultations in health centres; in 2 Growth rate was at 5,1% in 2004 while for 2005, indicators are showing a rise to 7% growth, a substantial improvement from the 2004-2005 figures: Ministry of Finance and Economic Planning, Economic Report: First Semester 2005, MINECOFIN, August 2005 3 Health Sector Policy-Government of Rwanda February 2005.


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2001, malaria was found to have a fatality rate of 10.2 percent in district hospitals and 2.7 per cent in health centres. The government set up a central drug purchasing agency, CAMERWA, to ensure that there is a regular supply of quality, low price drugs. According to the Health Sector Policy document, CAMERWA has contributed to the reduction in the retail price of drugs and the reduction of stock-outs in health facilities. However, the government acknowledges that the problem of accessing essential drugs remains acute due to the low purchasing power of the population and weak pricing regulatory system. The health sector continues to depend heavily on external donor support. Approximately 50 percent of total financial resources in the sector come from international co-operation, 10 percent from the government and 33 percent from the population.4 Contribution of the State to the smooth functioning of the health sector remains limited, receiving an allocation around 8 percent of the national budget, which is equivalent to 2.50 USD/capita/year; this is despite the fact that the budget of the Ministry of Health has increased in nominal terms over the years. The issue of long term sustainability of the health sector without the involvement of co-operating partners remains a key challenge to be addressed by the government. In the case of CAMERWA, they indicated that donors are funding 100 percent the procurement of essential drugs and this funding programme runs until 2009 after which a new plan will be put in place.

Health Policy Objectives The government, in order to implement its health policy has come up with seven policy objectives which are as follows:

(i) To improve the availability of human resources. (ii) To improve the availability of quality drugs, vaccines and consumables. (iii) To expand geographical accessibility to health services. (iv) To improve the financial accessibility to health services (v) To improve the quality of and demand for services in the control of disease (vi) To strengthen national referral hospitals and research and treatment

institutions (vii) To reinforce institutional capacity

In addition the Health Sector Policy document outlines seven programmes which will be undertaken so as to achieve the objectives stated above. For the sake of this study we will focus on one priority intervention which states the following: “Drugs, vaccines and consumables. The policy objective of the second programme is to improve the availability of quality drugs, vaccines and consumables, particularly essential drugs, routine vaccines and family planning products. To reach this policy objective, the Government of Rwanda shall purchase generic and essential drugs so that resources are used optimally and rationally, ensure drugs, vaccines and consumables are available, 4 National Health Accounts


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accessible, affordable and used sensibly by the majority of the population, support the provision of drugs, vaccines and consumables by non-profit associations in the public and not-for-profit sectors and provide locally produced low cost drugs using LABOPHAR and the promotion of other initiatives.” It is clear that the Government is very supportive of the production of low cost drugs and therefore welcomes interventions similar to what the German Government is trying to promote. However, like all well crafted plans the challenge is in the implementation and this is the area where GTZ can add some serious value and assist the Rwandese government in a sector where there is a dire need.


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Background to the Study

Introduction In the context of the commercial law of the World Trade Organization, on April 15 1994 an agreement was made about subjects of intellectual property – the so-called TRIPS agreement (Trade Related Aspects of Intellectual Property Rights). This agreement establishes a minimum standard for patent protection, and constitutes a framework for national implementation. It does not establish a uniform international law, or uniform legal dispositions. Patents refer to products and processes; the period of a patent is at least 20 years. The introduction of TRIPS aims to create stimuli for creativity and innovation, as well as technology transfer through license agreements. However, the introduction of patent protection for products, prescribed by the TRIPS-agreement, will have far-reaching effects on the pharmaceutical markets. Especially, it can affect the provision of the poor population with essential medication in developing countries. Until now, the legal leeway provided for the local production of legally protected medications was hardly perceived. For the implementation of the agreement, different transitional periods were fixed. Developing countries, who are members of the WTO, had to put TRIPS into practice until 2005. The poorest countries, the so-called Least Developed Countries (LDCs), have a transition period until 2016. Countries that already implemented the TRIPS may only continue producing medications of which patent protection has expired without restrictions. If the patent law was only introduced after 1995, the same is valid for medications patented before 1995. For medication introduced between 1995 and the introduction of the patent law, special provisions apply. Exceptions are provided for the case of a danger to public national health. On November 14 2001, the Doha-Declaration concerning the TRIPS-agreement and Public Health was enacted. It refers to the discussion covering patents and prices, and clarifies the TRIPS dispositions. An interpretation and implementation of the TRIPS agreement is demanded, so that the member countries can make use of their right to protect public health, and so that the access to medications is guaranteed. The use of defined protection measures, so-called flexibilities, that conform to TRIPS is confirmed. On August 30 2003, there was a decision about paragraph 6 (compulsory licensing) of the Doha Declaration, in which the conditions for the importation of pharmaceutical products protected by patents is determined. If necessary, important medications may be produced locally even without the agreement of the patent holder, as long as there are no commercial aims. If the country itself doesn’t have sufficient production capability, medications may be imported. The condition is that the TRIPS council be notified, and both the exporting and the importing country must have compulsory licenses. The compulsory license, in this case,


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is limited to the amounts fixed for the export. Re-importation or branching off to third markets must be avoided, and there must be a compensation for the patent holder. Countries who are not WTO members, or who belong to the group of the LDCs, may produce without restrictions at least until 2016 (probably the most important flexibility!). In an effort to reach MDG’s, the German government wants to support the development of local drug production in least developed countries. The purpose is a sustained increase of accessibility to cheap drugs of good quality for public health priority diseases. It concerns first of all, the internationally decided Goal 6 (Combat HIV/AIDS , malaria and other diseases) and Goal 8, target 17 (Ensuring the access to essential drugs at affordable prices, in cooperation with businesses in the pharmaceutical industry) of the millennium development objectives. The establishment of pharmaceutical production facilities in LDCs should be assisted. This should reduce risks, related to investments in these countries and should secure the compliance with international quality standards.

Terms of Reference Objectives of the study

In the light of the background and ongoing processes the German government through its development agency GTZ perceives an urgent need to support local pharmaceutical production in Rwanda to facilitate the provision of essential drugs to a broad population.

The objective of the study is to analyse the situation in the country in respect of pharmaceutical production. This includes several aspects related to the topic. The main ones are the legal and political circumstances within the country. This should include especially the background for use of the foreseen flexibilities in the TRIPS-agreement. Risks and alternatives should be evaluated as well. Scope of Work and Tasks 1. Legal analysis

In depth analysis of the local patent law including relevant bilateral and multilateral agreements Possibilities of usage of TRIPS-flexibilities Analysis of local law relative to aspects of pharmaceutical production Registration of medicines Analysis of legal situation for foreign investors


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2. Specific questions

To evaluate the overall justification in the context of the targets of the German development cooperation. To analyse similar activities and results of studies To coordinate the conduct of the study with UNCTAD.

Expertise required

The consultant should have a well-founded understanding and knowledge of legal matters. Furthermore a basic knowledge about the pharmaceutical sector in the county is required.

The study should be delivered in English. Timing

It is estimated that a total input of 45 person days will be required. This includes deskwork followed by a fact finding mission in the country. The deskwork should serve for the identification and evaluation of relevant documents and background information and to prepare the fact finding mission in the country. The travel to the country is required to conduct interviews, to obtain missing information and to get an idea of the actual situation. Furthermore to have discussions with MoH and other institutions and donors active in the given field in the country (GTZ: Health and WIRAM (Economy reform and market development, etc.)). The study as described should be completed within 60 days.


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Access To Commercial And Industrial Activities In Rwanda Starting a business in Rwanda requires a number of procedures and steps to be followed. The following section outlines the procedures which are applicable and looks, in particular at the statutory requirements for setting up a pharmaceutical production facility in the country.

A. Incorporation of a business entity For a company to carry out business in Rwanda, it has to be incorporated under the laws in force. Nobody can carry out trade in the Republic of Rwanda without being registered with the trade registry5. The application for registration can be done by natural persons or moral persons, addressed to the clerk of the court of first instance6 where they want to carry out trade. The application for registration is addressed to the court clerk and a copy given to the Minister having commerce in his portfolio and the Commissioner General of the Rwanda Revenue Authority. Individuals are supposed to provide the following documents:

- Application letter; - Two passport size photographs; - Proof of the consent of the spouse in case of marriage with a settlement based on

joint ownership of property; - An application letter for registration should indicate the following;

Names; Place & date of birth; Domicile & residence; Nationality; Sex; Marital status; Name of the spouse & their matrimonial regime; Proof of the consent of the spouse in case of marriage with a settlement

based on joint ownership of property; Name of the business enterprise & trade mark if possible;

5 The trade registry (registre de commerce) is organized by Law no 36/91 of August 5th, 1991 (Official Gazette, 1995, p. 1150), also found within the Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 350 6 With the new country’s demarcations, what used to be called a Court of 1st Instance is now called Court of (City where the Court sits)


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Commercial activities to be carried out; The headquarters of the business enterprise; Judgments rendered by Rwandan courts or foreign courts to the applicant

regarding bankruptcy; Trade marks, patents… deposited before the state, indicating the place and

date of deposit. With regard to moral persons, the application letter must be written on behalf of the company by a person in charge of administration or management and indicate the following information:

- Name of the company; - Objectives of the company; - Amount of capital, number and value of the shares; - Initial capital; - Headquarters of the company and branches (if any); - Names of the managers of the company; - An act nominating persons given the powers of signature; - Judgments rendered by Rwandan courts or foreign courts regarding bankruptcy to

a company applying for registration; - Trade marks, patents… deposited before the state, indicating the place and date of

deposit. Most of the above information is found in the memorandum and articles of association that the shareholders of the company have to submit alongside with the application letter. Depending on the type of company to be put in place, a company will, either, be a Limited Liability Company7, a Public Limited Company8, Limited Partnership9 or a General Partnership10 as provided for by the Company Law11. Sole proprietorships are not regulated as such by the company law but there are numerous cases of individual companies, de facto sole proprietorships, registered with the trade registry in Rwanda. Likewise, depending on the chosen type of company and the objectives for which the company is established, starting capitals, minimum number of shareholders, management of the company… will differ. When the conditions stipulated by law n° 36/91 of August 05th, 1991 organizing the trade registry are fulfilled, the court clerk has to register the applicant within 30 days from the date of application. Every company that is registered has to pay a proportional tax of 1.2% of the starting capital. On top of that every company that presents its articles and memorandum of association before the clerk of Court of First instance has to pay 5,000

7 Société par Actions à Responsabilité Limitée (SARL) 8 Société Anonyme (S.A.) 9 Société en Commandite Simple 10 Société en Nom Collectif 11 Loi no 06/1988 du 12 février 1988 portant Organisation des Sociétés Commerciales, (Official Gazette, 1988, p. 437), also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 352 – 373.


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RwF (five thousand francs) approximately nine US$ 12 and a set registration fee (depending on the activity/ies the company intends to undertake)13 at the public treasury. A company obtains a legal personality on the day of its registration in the trade registry.

B. Undertaking pharmaceutical production Upon incorporation with the trade registry, a company is entitled to start doing business in Rwanda. However, depending on the objectives of the company and the fact that the activities intended are ‘special’ or would have a harmful impact on either the environment or the lives of the citizens of the country, some safeguards have been put in place through additional regulations and/or regulatory agencies. A company intending to produce medicine for example will have to seek authorizations from the ministry having health and pharmacies in its portfolio prior to starting its activities as well as an operating license from the Ministry having industries14 in its portfolio. The matter on which MINICOM bases its intervention (dangerous, troublesome and unsanitary factories) is regulated by an ordinance15 enacted in 1956. The law on pharmaceutical art16 has set provisions regulating pharmaceutical production establishments. It defines (art. 32) a pharmaceutical production establishment as ‘[…] any establishment in which are carried out on industrial scale, activities of manufacturing, analysis of drugs and other pharmaceutical products and control of their conformity to the standards required by laws and regulations in force in the country as well as their conditioning with the aim of marketing them on the national and international markets […]’ On the condition that technical responsibilities are confided to a pharmacist, an individual or legal entity would be authorized to open and run a pharmaceutical production unit (article 33). The head pharmacist has to record in an appropriate register all detailed phases of manufacturing, control analysis, results found and sign the conclusions drawn from them. That register has to be kept up to date and presented to Pharmacies’ inspectors from the MoH or any authorized personnel whenever requested to do so. The register will be kept, at least, for ten years after its closure (article 34) and sample products will, for at least five years, be kept at the MoH inspectorate’s disposal in sufficient quantities to allow necessary analyses (article 37). The authorization to manufacture drugs has to clearly indicate the pharmaceutical form for which the products are valid and the manufacturing site (article 35). All facilities, from personnel to the equipment of the manufacturing entity, have to comply with good manufacturing practice standards recommended by the World Health Organization (article 36). 12 560RwF=1 USD as of 24 January 2006 13 See Annex C on company registration fees 14 Eventually, MINICOM and MoH may seek advice from the Ministry in charge of land and environment for some specific matters. 15 Ordonnance du Ruanda-Urundi no 41/78 du 28 Mai 1956 portant Établissements Dangereux, Insalubres ou Incommodes, BORU, 1956, p. 442 also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. III, p. 1660 - 1673 16 Law no 12/99 of July 2nd 1999 relating to the Pharmaceutical Art


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Analysis Of The Local Patent Law The recent history seems to show that technology and knowledge are important factors for economic growth and development. Since the creation of the first mechanism to protect inventions in the 15th century17, the patent system has evolved with a view to promote innovation and encouraging economic development. By offering exclusive rights for a limited period, an inventor may recover R & D costs and investments. It also promotes investment to commercialize and market new inventions so that the general public can enjoy the fruit of the innovation. Further the system is designed to disseminate knowledge and information to the public through publication of patents applications and granted patents. Many countries, in particular LDCs, have only begun to address the challenges of setting up an appropriate patent system in place to reap economic and social benefits. The development of these countries’ resources and infrastructure and their capacity to benefit from the rapid growth of intellectual property as a valuable economic asset in the world economy remain an urgent concern.

Current situation with regards to patents in Rwanda:

Patents are organized in Rwanda by a law on patents18 enacted in 1963 and a ministerial decree putting in application the (above said) law on patents19. According to the Law on patents, the (then) Minister of Economy (now Minister of Commerce, Industry, Investment Promotion, Tourism and Cooperatives) determines the conditions to be followed by whoever seeks a patent registration and protection for his invention. Three types of patents are found in Rwanda: invention patents, import patents and improvement patents. They all have a lifespan of twenty years though the duration of an import patent cannot go beyond the duration of the foreign patent and with a limitation to twenty years. The Law further says that whoever will have deposited first the description of his invention will enjoy, in Rwanda, exclusive rights for its exploitation. Whoever seeks any sort of patent makes an application to the Minister of Commerce, Industry, Investment Promotion, Tourism and Cooperatives. The application is accompanied by

17 Economic Development and Patents: http://www.wipo.int/patentscope/en/developments/economic.html, accessed on January 4th, 2006 18 Loi du 25 février 1963 sur les brevets (Official Gazette, 1963, p. 148) also found in Codes et Lois du Rwanda, 2nd edition, V. III, p. 1564 – 1566. 19 Arrêté Ministériel no 5/10/67 du 5/10/1967 portant mesures d’exécution de la Loi sur les Brevets (Official Gazette, 1967, p. 214)


http://www.wipo.int/patentscope/en/developments/economic.html

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- a full description of the invention, - the drawings, patterns or samples necessary for a full understanding of the

invention, and - a summary detailing in a precise manner what constitutes the novelty or

originality of the invention. There are no application forms, the applicant (either the owner or anybody with due power of attorney) is just requested to mention his names, profession and residence when applying. When the patent is for import, the applicant will mention the date and duration of the original patent and the country where it was issued. Upon handing in one’s application, a receipt bearing the date and hour on which the invention was deposited is given to the depositor and the date of the patent is the application date. The issuance of the patent is done without any further examination or enquiry to the risks of the applicant and with no guarantee of the realty, novelty or industrial applicability of the invention and without prejudice to third parties rights. This statement is equally put on the patent. It clearly appears that the Ministry does not have the needed infrastructure to handle such examinations hence basing patents’ issuance on minimal conditions. The 1963 law says that issuance of a patent is done upon payment of a 5,000 FRw (approx. 9 $US) but, recently, that fee has been raised to the equivalent of 150.00 US$. Patents issued have to be published in the Official Gazette of the Republic of Rwanda and the Ministry bears the cost of this publication.

Compliance with the TRIPS Agreement Article 189, al. 2 of the Constitution of the Republic of Rwanda20 states that ‘[…] peace treaties and treaties or agreements relating to trade and international organizations and those which commit state finances, modify provisions of laws already adopted by Parliament or relate to the status of individuals, can only be ratified after authorization by Parliament’. Article 190 of the same Constitution goes further and says that ‘ Upon their publication in the official gazette, international treaties and agreements that have been conclusively adopted in accordance with the provisions of law shall be more binding than organic laws and ordinary laws except in the case of non-compliance by one of the parties’. At the time the patents law was enacted (1963), the TRIPS Agreement was inexistent. Rwanda being a member of the WTO (as we will explain later), it agreed to be bound by its various agreements including the TRIPS. 20 The Constitution of the Republic of Rwanda, OGRR, Year 42, special no, June 04th, 2003


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Looking at the provisions of the 2003 Constitution, Rwanda would just need to publish a given treaty in its official gazette to get it applicable and binding in the country. However, being a ‘framework agreement’, TRIPS needs to be materialized via country’s national laws, an activity which has not been done for Rwanda. Only basing on what’s available in terms of patent protection, the Rwandan patent law would prevent the country from accessing the flexibilities provided for by the TRIPS Agreement as the law clearly says that only a patent holder should enjoy the use and exploitation of his invention.

Planned activities with regard to Intellectual Property Rights Over the last five years, MINICOM has been busy trying to put in place a law protecting intellectual property rights. The draft law has been shared with a few stakeholders as well as the WIPO for these to bring in their inputs and enrich the draft. The law has been even tabled in Cabinet last year and MINICOM was asked to thoroughly review the law and bring it again for discussions. According to MINICOM, a Commission comprising of the Ministry having Culture in its portfolio (MIJESPOC), MINICOM, Ministry of Justice (MINIJUST), some academics, the private sector … will sit to review the said draft law. The draft law is made of chapters focusing on different IPRs such as patents, copyrights, industrial designs, etc… and has the advantage of organizing all of them under one ‘roof’ instead of the many laws that become difficult to trace and that make many duplications when trying to regulate those rights. We were, however, able to have a look at the draft law on intellectual property rights21 and very little if no consideration was given to the TRIPS agreement and its flexibilities.22

Rwanda plans as well in the very near future to adhere to regional and international bodies for the protection of IPRs. It is believed that the ARIPO’s observer status that Rwanda enjoys will be turned into a full membership and that a Cabinet Paper to adhere to the Madrid Treaty23 and to the Patent Cooperation Treaty (PCT) should follow.24

21 We can’t reasonably tell at this moment, the draft’s advancement stage 22 The TRIPS agreement and its flexibilities will be developed further in this study. 23 The Madrid treaty refers to ‘the Madrid Agreement Concerning the Registration of Marks’ 24 Interview with the Acting Director for Industries (MINICOM)


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Review Of Bilateral And Multilateral Agreements Bilateral Agreements Due to the fact that Rwanda was a Belgian colony, treaties to which the Kingdom of Belgium would adhere, would see Rwanda bound by them. Belgium signed a Convention with the Philippines on trademarks on February 05th, 1957 and this is the only bilateral agreement on trademarks which is in force.25Ever since 1957, Rwanda has not gone into any bilateral or multilateral agreement with any other country.

Multilateral Agreements The African Regional Industrial Property Organization Rwanda has an observer status with the African Regional Industrial Property Organization (ARIPO) and is, hence, not party to different treaties and conventions regulated by the Organization. The ARIPO Protocol on Patents and Industrial Designs26 would be very interesting for Rwanda as a patent filed under this system will be, automatically, filed in the sixteen member countries of ARIPO, namely Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

As the ARIPO was formed to pool resources together to avoid duplication of both human and financial resources, Member States would have advantage of economies of scale. This in turn releases scarce resources for the Member States to spend on more pressing needs of their citizens.

The ARIPO regional industrial property system covers a total area of nearly 7 million square kilometers with a population of over 200 million inhabitants. Membership to ARIPO therefore opens up new markets for its member states while at the same time improving their investment climate and encourages access to technical information particularly that contained in patent documents.

Moreover, the ARIPO regional system compliments the national industrial property system of its Member States. The sovereignty of Member States is therefore preserved but applicants are given more choice as to route of filing their applications and where to obtain protection. 25 Convention de Manille, avec les Philippines, concernant les marques de fabrique et de commerce (BO, 1957, p. 1992) 26 Available at www.aripo.org


http://www.aripo.org/

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The World Intellectual Property Organization Treaties a. The WIPO Convention Since February 198427, Rwanda is a member to the WIPO Convention, the constituent instrument of the World Intellectual Property Organization (WIPO) that was signed at Stockholm on July 14, 1967, entered into force in 1970 and amended in 1979. WIPO is an intergovernmental organization that became in 1974 one of the specialized agencies of the United Nations system of organizations.

WIPO has mainly two objectives. The first is to promote the protection of intellectual property throughout the world through cooperation among States and, where appropriate, in collaboration with any other international organization. The second is to ensure administrative cooperation among the intellectual property Unions established by the treaties that WIPO administers.

b. The Paris Convention Since March 1984, Rwanda is part 28 of the Paris Convention for the Protection of Industrial Property of March 1883 as revised and amended to date. This is believed to be the oldest text in this area and it had tried to regulate the field of industrial property before the existence of any international convention.

c. The Berne Convention Since March 198429, Rwanda adhered to the Berne Convention on Literary and Artistic Works. As we are focusing on patents and somehow the field of industry, we will not develop more here. VII. 2. 3. The World Trade Organization Treaties

a. The Agreement on Trade Related Aspects of Intellectual Property (TRIPS)

Rwanda is a member of the WTO and agreed to be bound by its various treaties. It became member and signatory to the TRIPS agreement since May 1996. We will have a full chapter on the TRIPS agreement and won’t develop more here.

27 Rwanda adhered to the WIPO Convention by Law no 16/1983 of 18/08/1983 (OGRR, 1983, p. 667) 28 Rwanda adhered to the Paris convention by Law no 17/1983 of 18/08/1983 29 The then Ruanda-Urundi’s (Belgian colonies) adhesion was notified on December 14th, 1951 and the law no 15/1983 of 18/08/1983 (OGRR, 1983, p. 624) confirmed the same adhesion.


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Local Laws With Respect To Pharmaceutical Production The main law regarding pharmaceutical production in Rwanda is the ‘Law on Pharmaceutical Art’30 especially from its articles 32 to 38. Article one defines ‘pharmaceutical art’ as “… any act aimed at preparing, manufacturing, quality controlling, conditioning, preserving, and dispensing, even without charge, of drugs or other pharmaceutical products.” The 3rd section of the above law regulates ‘pharmaceutical production establishments’ and defines what it understands by a pharmaceutical production establishment’ (article 32) and how one can undertake the activities of producing medicines (article 33) and the conditions and qualifications that are expected from the person in charge of technical operations. The same section requires from those entities to comply with Good Manufacturing Practices (GMP) as recommended by the World Health Organization (article 36) and puts in place control mechanisms as to check the standards and quality of the products emanating from pharmaceutical production entities. Another very important regulatory text shall be the one resulting from the conditions provided for by article 42 and 44 of the law on pharmaceutical art. Article 42 states that a national commission responsible for drug registration is put in place and article 44 says that registration methods shall be determined by Presidential Order. This is a very important provision that is unfortunately not functioning very well since there is no drug authority. Such conditions would be the ones helping a given manufacturing entity to be able to sell its products as they would then be certified and ‘blessed’ to go on the market. In discussions with the Pharmacies’ Unit within the Ministry of Health, we were informed that the Presidential Order determining the modalities for drug registration was finished and that it would very soon be taken to Cabinet for adoption. The same sources told us that in the new public service reform, the Pharmacies’ Unit does not exist anymore in the MoH organogramme and that, most likely, the staff, equipment, etc of this directorate will be transferred to the National Drug Authority, to be created soon.31

30 See supra note 10 31 Interview with the Pharmacies’ Unit Director and a Consultant from MSH within the Unit. At the drafting time, Cabinet has adopted a new structure for all government ministries and there is Pharmacies’ Unit within the MoH. See cabinet decision of January 27th, 2006 on www.gov.rw/government/newsupdate


http://www.gov.rw/government/newsupdate

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Registration Of Medicines

Currently while the country awaits signature of the presidential order determining the modalities for drug registration, there is no drug registration that is done as such. What happens is that, due to the lack of the necessary laboratories to control medicine and qualified technicians and pharmacists to perform the necessary tests, the Ministry of Health allows in the country medicines that have proven that they are licensed elsewhere or that have the WHO certification.

Current situation The Law on Pharmaceutical Art provides that ‘Any import of drugs and other pharmaceutical products shall require a prior visa issued by the Minister responsible for Health’32. The same article goes further and states that ‘any effective entry of drugs and other pharmaceutical products on the national territory shall be subject to the presentation of an import license issued by the Minister responsible for Health after he/she has seen certificates of quality control of pharmaceutical products issued by the manufacturer. The […] same requirements also apply to the pharmacists who import directly for their customers’ needs as well as to the non governmental organizations and other institutions unless […] specific conventions signed with the Government of Rwanda’33. Following the provisions of the above article, a Ministerial Directive on drug importation 34 established the conditions and documents requested from any drug importer. When applying for a visa (art. 30, al. 1), the importer submits:

- a proforma invoice with each product’s manufacturer’s name, country of origin, signature and stamp of exporter,

- a manufacturing license or pharmaceuticals wholesaler’s license from the exporter’s health authorities,

- a medical equipment wholesale registration certificate from the exporter’s authorities,

- GMP certificate for pharmaceuticals production from the exporter’s authorities, - GDP certificate for pharmaceuticals wholesale from exporter’s authorities

Note: When a product is only for export (and not to be used on the domestic market –EC-) a registration certificate for export should be submitted as well. In the case of an application for an import license, the importer submits to the Ministry of Health:

- the proforma invoice with the visa from the MoH, - a bill of lading, - a final invoice,

32 Article 30, al. 1, Law on Pharmaceutical Art 33 Article 30, al. 2 & 3, idem 34 Ministerial Directive no 20/709/DPH/03 of April 23rd, 2003, made effective starting July 1st, 2003


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- a certificate of analysis of the pharmaceutical product issued by a manufacturer, - a packing list with batch numbers, manufacturing and expiry dates, quantities

exported and country of origin. Note: The expiry date should be at least 2/3 of the product’s shelf life. On arrival at the point of entry, the products are inspected to ensure their compliance with the claimed specifications.

Provisions of the Draft Presidential Decree on Drug Registration A draft presidential decree determining modalities for drug registration 35 is set to determine the modalities of granting a marketing license of pharmaceutical products, its renewal and transfer.36 It defines ‘drug registration’ as

“a set of procedures of examination of documentations of a pharmaceutical product, which can lead or not to obtaining a Marketing License of that product. It allows to appreciate this product according to the criteria of safety, effectiveness, quality and possibly price”.

It goes further and defines marketing license as

“an official document issued by the official concerned by pharmaceutical regulation, which authorizes the marketing of a pharmaceutical product by specifying:

- its composition and its detailed pharmaceutical formulation; - pharmacopoeia standards or other recognized standards to which the

finished product and its components must refer; - details relating to packaging, labeling, use, notice, and expiry date; …”37

For one to be issued a marketing license for a given drug, he has to make an application accompanied by a report containing (i) an information sheet, (ii) an administrative file, (iii) a pharmaceutical, chemical and biological file and (iv) a clinical, toxicological and pharmacological file. The applicant is requested to hand in three copies of this application.38

However, for generic drugs, the manufacturer will be allowed to present a bibliographical documentation replacing the report on the pharmacological, toxicological and clinical tests, when the effects of drug for which marketing license is sought, including its adverse effects are sufficiently known and appear in the exhibited documentation. In addition to this, the manufacturer must submit bio-equivalence studies.39

35 This decree is in its final stages; it has been discussed, suggested changes have been added and it just awaits signature to come into force. 36 Article 1, draft presidential decree on drug registration 37 Article 2, idem 38 Article 3, ibidem 39 Article 4, ibidem


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Any request for registration as well as the accompanying documentation must be written in one of the official languages of the country. It is addressed to the Minister of Health by the manufacturer (or a representative with due power of attorney) who is responsible for marketing the pharmaceutical product.40

From the reception of the file (valid request) and its transmittal to the responsible services,41 the latter will notify their opinion to the Minister in a period of 180 days (maximum).42 It is during this period that the Committee conducts all tests, consults specialized laboratories and seeks additional information from the applicant on whatever issue they have with the drug. When all the tests are completed and results have been obtained, the Committee makes an evaluation report with comments on the results of the analytical, pharmacological, toxicological and clinical tests of the drug. The report is transmitted to the Minister of Health for a final decision. The decision of the Minister is addressed to the applicant within a time not exceeding two hundred and ten (210) days from the introduction of a valid request.43

The registration of medicines will be granted for five (5) renewable years and application for renewal will have to be done three months before the registration’s expiry. Renewal won’t be automatic and will be subject to prior examination of an updated file of the information communicated before, especially the results of the pharmacovigilance and other relevant information concerning drug monitoring.44

When a request for registration relates to a pharmaceutical product already registered and licensed for being marketed in another country, the Minister of Health can, on request of the National Committee for Drug Registration, exempt the applicant from undergoing a pharmaceutical, pharmacological, toxicological and clinical files’ examination. 45

The Minister of Health, after an opinion from the Commission, will define a list of pharmaceutical products that can temporary be marketed for 5 years maximum. When this decree comes into force, all drugs regularly marketed and not registered on that list, will have a six months deadline to conform to the provisions of this decree.46

40 Article 13, ibidem 41 The draf law talks of a National Committee for drug registration as stated in article 42 of the law on pharmaceutical art but it’s believed that this will most probably be the National Drug Authority as the Directorate of Pharmacies does not exist anymore 42 Article 14, draft presidential decree on drug registration 43 Article 18, idem 44 Article 21, ibidem 45 Article 28, ibidem 46 Article 30, ibidem


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Intellectual Property Rights, TRIPS And DOHA: Background And Facts Intellectual Property Rights Patents and Intellectual Property Rights (IPRs) are in general used to give a certain exclusionary right that cannot otherwise be given to the owner of intangible property on a competitive market.47 The inventor or owner is given this right since the nature of the property otherwise allows it to be used by several manufacturers at the same time, as the property is not individually appropriable. One of the defences for this argument is the moral right an inventor has to use his own invention.48 Today, however, the argument for protecting IPRs derives mainly from a financial perspective, since the R&D cost is often very high, while the cost of distributing the knowledge from an owner to a manufacturer outside the owner’s control is insignificant. Those using this financial argument for the protection of IPRs believe, not undisputedly, that the protection of innovation is required for economic growth. 49 History shows, however, that many of the countries with the most innovative pharmaceutical industries did not have patents until their industries had already grown to a significant size.50 Since the pharmaceutical R&D costs are extremely high and the market for pharmaceutical products is highly competitive and international, the arguments given above lie at the very heart of the debate on pharmaceutical patents. The modern protection for intellectual property rights developed first as national legislation in developed countries, followed by international agreements such as the Paris Convention,51 the Berne Convention52 and other co-operations, eventually leading to the TRIPS Agreement. The TRIPS Agreement The Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) is an integral part of the World Trade Organization (WTO) agreements which create binding international obligations among WTO Member States. The TRIPS Agreement is undoubtedly the most significant development in intellectual property in recent years, perhaps even in the 20th century, together with the creation of the World Intellectual Property Organization (WIPO) at the 1968 Stockholm 47 P Torremans, Holyoak and Torremans Intellectual Property Law, 3rd edn (2001) at 13 (P Torremans, Intellectual Property Law). 48 S Picciotto, in Drahos and Mayne (eds), Global Intellectual Property Rights – Knowledge, Access and Development (2002), 225 (Drahos and Mayne (eds), Global Intellectual Property Rights). 49 P Torremans, Intellectual Property Law, at 14-15. 50 For example France, Germany, Italy, Sweden and Switzerland resisted providing pharmaceutical product patents for a long time. During the time when the US industry was still young and developing, the US also refused to respect international IPRs, on the grounds that copying was entitled in furtherance of its social and economic development. See W Pretorius, in Drahos and Mayne (eds), Global Intellectual Property Rights, 184. 51 Paris Convention for the Protection of Industrial Property 1883. 52 Berne Convention for the Protection of Industrial Property 1886.


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Conference.53 TRIPS, which sets the minimum standard for IPR protection among the WTO members, became final after many negotiations between 1986 and 1994. The TRIPS Agreement is subject to the WTO’s dispute settlement mechanism, which may, as a last resort, allow Member Countries to apply trade sanctions against a non-compliant Country, thereby ensuring enforcement of the WTO’s rules and agreements.

The Doha Declaration

When the WTO met in November 2001, pharmaceutical patents were again on the agenda and the wealthy countries were more defensive due to some cases that opposed them to countries like India, South Africa and Brazil. 54 Eventually, the WTO approved a statement, the Doha WTO Ministerial Declaration on TRIPS and Public Health (The Doha Declaration), adopted on 14 November 2001, which affirmed the right of all countries to protect public health. In the general Ministerial Declaration of the Doha Conference,55 Article 17 states that the WTO countries realize the importance of the implementation and interpretation of TRIPS in a manner supportive of public health. It further points to the separate declaration, the Doha Declaration on TRIPS and Public Health. The Doha Declaration does not amend the rights and obligations laid down in TRIPS, but provides guidance for the interpretation of the relevant parts of the Agreement. According to paragraph 1 of the Doha Declaration the member states recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/Aids, TB, malaria and other epidemics.56 The Declaration further points out the need for the TRIPS Agreement to be part of actions to address these problems, and that IP protection is important for the development of medicines, but that the effects on prices is concerning.57 Therefore, the parties to the Declaration agreed that the TRIPS Agreement should not prevent measures to protect public health.58 This is developed in paragraph 4, which provides that the TRIPS Agreement “can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all”.59

53 D Gervais, The TRIPS Agreement: Drafting History and Analysis (1998) at 3 (D Gervais, The TRIPS Agreement). Along with the creation of WIPO, the 1968 Conference also adopted revised Berne and Paris Conventions. 54 These cases have brought a very high public criticism and made people in wealthy countries ashamed as it was perceived that the greed of the North and its industry was killing millions of people in the South. 55 Doha WTO Ministerial Declaration of the Ministerial Conference, Fourth Session, Doha, 9-14 November 2001, adopted on 14 November 2001. 56 Ibid para 1. 57 Ibid paras 2-3. 58 Ibid para 4. 59 Doha Declaration, Art 4, emphasis added.


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In order for countries to have flexibility in using the TRIPS agreement, paragraph 5 goes on to state, inter alia, that TRIPS shall be read in light of the object and purpose of the Agreement, found in Articles 7 and 8 of TRIPS, and that each member has the right to grant compulsory licences and the freedom to determine the grounds for such a licence.60 When using compulsory licensing in accordance with TRIPS Art 31, the Doha Declaration further gives the member states the right to determine what constitutes a national emergency or other circumstances of extreme urgency, which are conditions to issue compulsory licences.61 Article 5 also leaves each member free to establish its own regime for the exhaustion of intellectual property rights without challenge.62 Recently, on 30 August 2003, a decision was reached in the WTO regarding new rules for the export of pharmaceutical products under compulsory licences. This decision, and the debate leading up to it, and the debate which will surely follow it, derives from Article 6 of the Doha Declaration.63 The article, cited in full, reads:

We recognize that WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council.64

Paragraph 7 of the Declaration provides, inter alia, an extension to the transition periods for LDCs as regards the pharmaceutical products, until 2016. It appears that one main area of debate since the Doha Conference has been paragraph 6 of the Declaration, which addresses the effective use of compulsory licensing.

Paragraph 6: A problem left unresolved If a developing country does not have the industrial capacity to produce a particular medicine itself under a compulsory license, or if it has insufficient capacity, it has no recourse but to import the drug. However, if it wishes to import a generic drug that is produced under compulsory license, the amount of product that is available for export is limited by the “predominantly for the supply of the domestic market” condition in paragraph (f) of article 31 of the TRIPS Agreement. Countries like India and Brazil, which have domestic generics industry, constitute (by themselves) large markets, and hence the “non-predominant part” of production

60 Doha Declaration, Art 5a) and b). The objectives of the TRIPS Agreement, found in Art 7, are, inter alia, to promote intellectual property in a manner conducive to social and economic welfare, and to a balance of rights and obligations. The principles, found in Art 8, state that members may adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development. 61 Doha Declaration, Art 5c). It is understood that public health crises, including HIV/Aids, TB, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency. 62 Doha Declaration, Art 5d). 63 The Decision on implementation of Article 6 of the Doha Declaration on TRIPS and public health. The decision is analysed in section 4. 64 Doha Declaration, Art 6, emphasis added.


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authorized under a compulsory license could still be substantial65. Any export of that non-predominant part would not be affected by the Paragraph 6 Decision. However, that amount may not be sufficient enough to satisfy all needs if many developing countries start importing drugs in large quantities, which appears to be virtually inevitable as they are faced with an ever growing need to provide access to essential medicines.66 Likewise, companies in other countries, developing or industrialized, that have the capability to produce quality generics may wish to manufacture expressly for export to developing countries. To allow the flow of such medicines to developing countries, mainly two limitations of article 31 had to be waived. Those limitations were in relation to (1) the ‘predominantly for the domestic limitation market’ limitation and (2) the adequate remuneration requirement.

TRIPS and Patents The TRIPS agreement attempts to strike a balance between the long term social objective of providing incentives for future inventions and creation, and the short term objective of allowing people to use existing inventions and creations. The Agreement covers a wide range of subjects, from copyrights to trademarks, to integrated circuit designs and trade secrets. Patents for pharmaceuticals and other products are only part of the agreement. The TRIPS Agreement has to a large extent harmonized the standards for patents. It makes it mandatory for countries to ensure that patent protection is available in all fields of technology, for both process and product inventions. Thus, it is no longer possible for countries to exempt pharmaceuticals from patent protection (as many did before the TRIPS came into force) nor can countries (like India) continue to limit pharmaceutical patents to process patents only. If a product is patented, only the patent holder may make or sell that product; nobody else may do so, unless the patent holder has given permission (a license). In the case of a process patent, nobody may make that product by using the process that is protected.

TRIPS safeguards and flexibilities

Being a framework agreement, TRIPS is to be operationalized via countries’ national laws. TRIPS contains some (limited) flexibility as well as safeguards which can be used to mitigate the anticipated negative impact on drug prices and access to drugs.

65 The TRIPS Agreement patent regime became applicable to India as of January 1st, 2005. Brazil amended its law to provide for pharmaceutical product patent protection effective May 15th, 1997. 66 F. M. Abbott & R. V. Van Puymbroeck, Compulsory Licensing for Public Health: A Guide and Model Documents for Implementation of the Doha Declaration Paragraph 6 Decision, Washington, DC, IBRD/World Bank, July 2005


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The most important safeguards and flexibilities are (i) compulsory licensing, (ii) parallel importation and (iii) provisions for early working (a.k.a. ‘Bolar provision’)

The Bolar provision

This provision allows testing and regulatory approval of generic versions of a drug before its patent expires; thus allows generic producers to get ready, so that they can start the production and sale of a generic drug as soon as its patent expires67. The Bolar provision facilitates generic competition.

The parallel importation

Parallel importation refers to importation, without the consent of the patent holder, of a patented product that is marketed in another country. Parallel importation allows one to ‘shop around’ for a good price. The TRIPS Agreement states that parallel importation cannot be challenged before the WTO Dispute Settlement Mechanism, thus de facto leaving countries the freedom to choose whether or not to allow parallel importation. Moreover, during the WTO’s ministerial meeting in November 2001, the Ministers clarified, in the Doha Declaration on the TRIPS Agreement and Public Health, that countries are free to use parallel importation.

The compulsory license

A compulsory license is a legal vehicle whereby a government grants to itself or to a third party the right to produce or to import a patented product without authorization of the patent holder or right holder. Their issuance is the subject of detailed conditions. For WTO member countries, a mandatory set of conditions is set out in article 31 of the TRIPS agreement. A compulsory license can be used to allow the production and sale of generics before expiry of the patent thus increasing opportunities for competition. The basic rationale for a compulsory license is that, since a patent is a privilege granted by the government, the government reserves the right to limit that privilege if necessary. Many countries, including developed countries, have provisions for compulsory licenses in their national laws, and compulsory licenses are allowed under TRIPS. The TRIPS Agreement mentions that a compulsory license can be issued for reasons of national emergency, public non-commercial use and other reasons. Though it does not limit the grounds or reasons for issuing a compulsory license, it specifies the conditions to be imposed by governments when issuing a compulsory license: 67 In the absence of such a provision, generic manufacturers can only start the time consuming process of testing and registration after the expiry of the patent. This can easily delay the marketing of generic drugs to 2-3 years after patent expiry.


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- case by case decision, - first try to obtain a voluntary license (on reasonable terms and conditions)68, - adequate remuneration to the patent holder69, - predominantly for the supply of domestic market70 - compulsory license to be non-exclusive and non-assignable.

While these conditions have made the process somewhat cumbersome, it is possible to issue a compulsory license in a TRIPS-compliant way: government use or compulsory license for public non-commercial use. TRIPS imposes less stringent conditions in this case hence countries finding using this mechanism as much easier and faster than compulsory licensing. However, these flexibilities can only be used when incorporated in the national law. It is therefore important that Rwanda designs and enacts legislation which allows him to protect the public interest, including the public health interest.

68 TRIPS Agreement: Article 31 (b) 69 TRIPS Agreement: Article 31 (h). Adequate remuneration is defined with respect to circumstances of each case, ‘taking into account the economic value of the authorization’ 70 TRIPS Agreement: Article 31 (f). The predominant ‘supply of domestic market’ requirement does not apply to compulsory licenses granted to remedy anti-competitive practices (TRIPS Agreement, article 31 (k)). When an exporting member grants a compulsory license to remedy anti-competitive practice, it does not act under the paragraph 6 of the Decision because it does not take advantage of the waiver of article 31 (f) established by the Decision. It instead acts under a pre-existing right in the TRIPS Agreement to authorize exports to address anti-competitive practices. In such cases, the importing member does not need to comply with the notification and other requirements set out in the decision.


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Analysis Of Legal Situation For Foreign Investors The Investment Code

The Law Establishing RIPA (1998) Rwanda enacted an Investment Code in 198771 and this one was repealed by the Law no 14/98 of 18/12/1998 establishing the Rwanda Investment Promotion Agency72 which is today, the law regulating the situation of foreign investors in Rwanda. To be able to access the incentives contained in the investment code, a business entity has to be registered under the laws of the Republic of Rwanda and invest at least 50,000 US$ for a national of Rwanda or a COMESA citizen and a minimum of 100,000 US$ for a foreign investor.73 All sectors of activity are eligible and though some priority sectors74 do exist in the country’s strategy for investment promotion, they all enjoy the same benefits and facilities 75 offered by and through the Rwanda Investment and Export Promotion Agency (RIEPA). To get registered with RIEPA, the investor (or his representative) addresses an application letter to the Director General of RIEPA specifying all the details about the company, the nature of the planned activities as well as the planned capital investment, the estimated number of jobs to be created, the planned measures to protect the environment and public health in case his enterprise would be generating some hazardous waste and the nature of support and facilitation he is seeking from RIEPA (article 16). To that application letter, the investor attach a detailed business introducing the business promoter and background and specifying some investment projections, projected profits and losses statements, market analysis, etc… showing that a person is investing in a business he understands and believes in. For additional details on the business entity, the investor attaches a certified copy of his articles and memorandum of association. The file is ready and can be submitted to the Agency for investment registration. The law (article 18) says that a registration certificate is issued to the investor in maximum ten days but practice has shown that a certificate can be issued in less than ten

71 Law n°21/87 of August 5, 1987 establishing an Investment Code 72 Available at http://www.rwandainvest.com/pdfs/investment_code.pdf and hereinafter referred to as the ‘investment code’. The Rwanda Investment Promotion Agency (RIPA) became in 2004 the Rwanda Investment and Export Promotion Agency (RIEPA). 73 See article 1 on the definitions and differences between a local and a foreign investor. 74 Priority sectors for Rwanda are : tourism, ICT, human resource development, mining, agro-based industries and agriculture, manufacturing, re-export trade, research and infrastructure development 75 Except some additional advantages offered to the tourism sector (mainly hotels and restaurants) at the time they are starting their activities, and some construction projects of a certain size in importing finishing materials duty free, the other sectors of activities enjoy the same advantages under the investment code.


http://www.rwandainvest.com/pdfs/investment_code.pdf

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days as the Management was allowed by the Board of Directors to issue certificates when necessary and report back to the Board.

Draft Law Promoting Investments and Exports (likely to be in place by 2006)

A draft law promoting investments and exports was supposed to be enacted by parliament for early 2006 but up to now has not. We believe, however, that this should not take long as some of its provisions are referred to in the newly enacted law on Direct Taxes on Income (the fiscal law)76. Under that law that should repeal the 1998 ‘investment code’, the ‘foreign investor’ will be the non-national and non-COMESA citizen investing at least 250,000$ and the local investor, 100,000$; and except some other facilitation services offered by the One Stop Center of RIEPA, all other fiscal incentives will have to be found in the (now enacted) law on direct taxes on income and in the Customs Law (not yet enacted)77.

Incentives to investors The law defines incentives (article 1, (k)) as fiscal and non-fiscal inducements and concessions including tax relief, concessional tax rates which may be accessed by an investor under this (investment code) Law, and the Law n°8/97 of 26th June 1997 on the Code of direct taxes on different profits and professional income78, and any other law for the time being in force.

Fiscal Incentives and import duties Article 29 of the Investment Code provides for a single flat fee (5%) of the CIF value of the imported items in lieu of all taxes, including import duties, sales tax (replaced by the VAT) and others which would normally be imposed on such goods. This incentive would mainly arrange manufacturing companies as the duties and taxes imposed on imported goods easily reach almost 65% of the CIF value.79

In the situation of a pharmaceutical plant, this incentive would mean a lot if competing products were being taxed. In Rwanda, finished medical drugs and products are exempted and do not pay those taxes which would render producing medicines after importing raw materials not competitive.80

76 Gazetted on January 1st, 2006. 77 The very first wish from the business community as well as the public sector was that those 3 laws (fiscal law, investment code, customs law) be enacted at the same time but only the fiscal is now in place. 78 This law was repealed by law nº 16/2005 of 18/08/2005 on direct taxes on income, OGRR of January 1st, 2006 79 When calculating those duties and taxes, the method used reaches 65%: Entry duties= 30% of CIF value; Handling charges = 4% of CIF; VAT= 18% of CIF + 30% of CIF + 4% of CIF; Withholding tax= 5% of CIF + 30% of CIF + 18% of CIF and the cost of a Clearing Agent that is close to 1% of the CIF value. 80 From the discussions we had with Mr Manzoor Hussein, the Managing Director of a pharmaceutical plant called S&R Pharmaceuticals, this situation obliged them to cease their activities as they could barely survive. Later on, however, the situation improved and raw materials were allowed duty free in the market.


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Being aware of this situation and after discussions with the stakeholders, the government has agreed that raw materials necessary for the production of medicines be allowed duty free in the country.81 Among the main incentives provided for by the fiscal law, we might mention Article 26 that provides for […] an investment allowance (that) becomes fifty (50%) if the registered business is located outside Kigali or falls within the priority sectors determined by the Investment Code of Rwanda. Article 27 of the same law provides for incentives on R&D as all training and research expenses incurred and declared as agreed by a taxpayer and declared and earlier agreed [upon] and which promote activities during a tax period are considered as deductible from taxable profits in accordance with provisions of Article 2182.

Article 41 states that the taxable business profit is taxable at a rate of 30% and provide for additional incentives for a business entity that operates in a free trade zone. When operating in a free trade zone (exporting 80% of total production) a company pays no corporate income tax, is exempted from withholding tax and pays no tax on repatriation of profits.

Additional discounts are provided for companies employing between 100 and 200 rwandans (2% tax discount), 5% discount (between 201 and 400), 6% (between 401 and 900) and 7% when employing more than 900 rwandans. These employees have to be maintained at least for 6 months during a given tax period and should be at least earning 30.000 FRw per month83.

If a taxpayer exports commodities or services that bring to the country between 3 and 5 million US dollars in a tax period, he or she is entitled to a tax discount of 3%. When those exports are more than 5 million, the discount is of 5%.84

Value Added Tax (VAT) T

The VAT was introduced in by Law n° 06/2001 of 20/01/2001 on the Code of Value Added Tax. Since 2001 several amendments were gazetted. At present there are three rates i) exempted; ii) zero; iii) 18%.

81 A list of hundreds of products has been drafted and agreed upon by the different stakeholders and it has appeared to us that the GoR is keen to cooperate and support the sector. The said list is to be periodically updated. 82 Article 21 provides for deductible expenses and stipulates that “In determining profits on business activities, a deduction for all expenses shall fulfil the following, if: 1° they are incurred for the direct purpose of, and in the normal course of the business; 2° they correspond to a real expense and can be substantiated with proper documents; 3° they lead to a decrease in the net assets of the business; 4° they are used for activities related to the tax period in which they are incurred. 83 The bracket between 0 and 30.000 FRw as a monthly income is rated at 0% though a casual laborer would be subject to tax at a special rate of 15% unless when the income does not exceed 30.000 FRw per month. 84 Article 42 of the direct taxes on income


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In 2004, paragraph 13 of article 86 of the VAT law was modified and completed providing for VAT exemptions for business entities with an investment certificate (registered with RIEPA). Plant and machinery for industries, raw materials, building and finishing materials imported by an investor fulfilling the requirements determined by the Minister of Finance, refrigerated vehicles and tourist vehicles, vehicles for foreign investors and expatriate staff, equipment for hotels and amusement parks, importation of goods and services into the free economic zone. For plant and machinery for industries as well as raw materials, the same amendment was extended even to business entities not necessarily possessing an investment certificate.

Non-Fiscal Incentives In addition to the various fiscal incentives provided for the fiscal law, investors registered with RIEPA enjoy another array of facilities through the Agency’s One Stop Center (OSC). Currently, the OSC has different officers from the Customs Department of the Rwanda Revenue Authority, the Immigration Department as well as the Ministry of Labour. These officers have been deployed by their different institutions to come and assist investors and smoothen all investors’ applications when requiring visas, work permits, clearing their goods from the Customs etc… With the support of the OSC, the long delays in securing different authorizations have disappeared and investors appreciate the assistance they get from the agency. In addition to these specific facilities, the investor is required (by law) to submit all sorts of facilities he/she would like to obtain from the Agency and the latter deals with it on behalf of the investor. Issues with regard to land, securing preferential rates, waving some applicable fees, have been successfully dealt with in the past.

Investment Protection Article 38 of the investment code provides for investment protection as it stipulates that ‘Business enterprises owned by investors cannot be subject to discriminatory measures whether through legislation, decree-laws, by-laws or orders regulating activities of commercial and industrial enterprises.’ In case disputes arise between an investor and either the agency or the government, all efforts are made to amicably settle the dispute failure to which an investor is left with the possibility to take the matter before international arbitration forum of the investor’s choice and to which the government is party.85

In addition to the above articles, Rwanda is a member of the International Centre for the Settlement of Investment Disputes between States and Nationals from other Member 85 Article 40 of the 1998 investment code


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States, the Multilateral Investment Guarantee Agency (MIGA) and a founding member of the African Trade Insurance Agency (ATI) covering political and credit risks. Other laws and regulations applicable

Handling charges (commonly called MAGERWA) MAGERWA normally stands for Magasins Généraux du Rwanda (Rwandan Bonded Warehouses). MAGERWA is responsible for handling all goods that enter the country. The system applied is ad valorem and not specific as the only reference that will be used will be the value of the good, yet the activity to be done is handling (weight would make more sense here as the heavier the product is, the more it should pay being difficult to carry or handle). This situation has been criticized and hopefully, the Government would consider changing it. The rate applied is a 4% flat tax applied on the CIF value of the imported good and it is said that the MAGERWA get only 1% and the 3% are perceived by the Government. A special arrangement should be negotiated with the GoR as there are companies that pay only 1% of the CIF value of the goods.

Compulsory Batch Certification of Imports The Government of Rwanda established a National Bureau of Standards in 2002.86 The former pre-shipment control (previously undertaken by a Swiss company called SGS and later on by a British company called ITS) was abandoned. The Rwanda Bureau of Standards (RBS) controls all goods at import. In December 200487 a batch certificate fee equivalent to 0,2 % of the Cost and Freight was introduced and has to be paid by any importer (or his agent) to the RBS in addition to a non-refundable application fee payable upon filling the application forms where necessary and transport, board and lodging costs of the RBS inspectors during the inspection and sampling of the shipment if the inspection and sampling is done outside the official station.88

The ARV procurement system VS the monopoly given to CAMERWA For a business intending to produce drugs and especially ARVs, it is important to know that CAMERA was given a monopoly by the GoR for importation of ARVs for both public and private sectors89 as the business will definitely have to deal with CAMERWA for the sale of its production.

86 Law no 03/2002 of January 19th, 2002 establishing the Rwanda Bureau of Standards; OGRR no 06 of March 15th, 87 ‘The RBS instruction no 01/2004 setting up regulations for compulsory batch certification of imports’ (Standards Instruction 2004) signed on the 19th of October 2004 and gazetted in December 2004 (OGRR no 23 of December 1st, 2004) 88 Article 15 of the ‘Standards Instruction 2004’ 89 See Annex C: Annexture to a MoH instruction determining conditions and modalities of providing therapeutic care to persons living with HIV/AIDS


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In order for the government to coordinate the various HIV/AIDS programmes, monitor the distribution and use of ARVs, ensure that imported ARVs are of appropriate quality and standards as set through the national treatment guidelines, there was an obvious need to put these activities in one institution’s hands and it was the CAMERWA. Due to the fact that the various schemes existing with regard to access to HIV/AIDS drugs are supported by various donors, the latter have put some conditions on the quality of ARVs they want to purchase. It is in an attempt to solve such situations that a programme called ‘common basket’ or a coordinated procurement was put in place to quantify the country’s needs in terms of ARVs (generic and specialties as there are some drugs that do not exist in generic forms). The procured drugs have to be affordable and complying with quality requirements of the WHO (pre-qualification) and the (US) Food and Drug Administration for those to be supplied through the PEPFAR. A domestic preference of 15% does exist in CAMERWA tender procedures and this is an advantage that can be given to a local producer when tendering to supply drugs to CAMERWA. Keeping in mind the delays in drugs supply that CAMERWA gets sometimes, the contacts at CAMERWA mentioned their interest in getting a solution to this. The availability of a local production facility would definitely guarantee the supply.


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Conclusion After having gone into the current regulatory framework of establishing a pharmaceutical production plant in Rwanda it appears clearly that the matter has not, for a long period, been of any interest be it to the government or the private sector. It is true that the country (through RIEPA and probably other institutions) has received some enquiries on the state of the pharmaceutical industry in Rwanda but the agency, in its efforts to attract investors did try to show to prospective investors that there was an interesting market but very little was done with respect to improving the regulatory framework of this specific sector. On the same line, enquiries about intellectual property rights have been sent to the Ministry of Commerce but apart from informing back that the country is part to various multilateral agreements that palliate the absence of a local law on intellectual property rights and that efforts have started into bringing such law into reality, the country has not seen any big move in the area of intellectual property rights. This is due partially to the number of those enquiries (little), to the number of inventions seeking protection (insignificant) and to the numerous other priorities the country has to face hence making hard choices that have made secondary the issue of intellectual property rights. This situation is not unique to Rwanda and is rather shared by many, if not all, of the least developed countries. It’s basing on this situation that they have negotiated (of course such movement is led by quite advanced countries among the LDCs that have put to practice those international agreements) a different status allowing them to enjoy a longer period after which they should comply with the provisions of the agreements. Technicalities such as what every country has to do with regard to implementing those international decisions are often badly known to LDCs and these countries happen to lose many opportunities because of this situation. There are no strategies currently in place to respond to the 2005 expiry of the grace period for the granting of pharmaceutical product patents in key generic-producing countries and neither is there any current initiative to develop such a strategy. For Rwanda, this is mainly a problem relating to the situation in India as the major source of imported generic drugs, in particular those affected by intellectual property rights. Even if Rwanda establishes an effective legal framework for existing public sector projects, it is still going to need to amend its national law so to be able to take advantage of the August 30 paragraph 6 implementation agreement. Even though it’s an LDC and thus automatically eligible to use paragraph 6 implementation agreement to import medicines, the implementation agreement imposes


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obligations on it both with respect to notifications and with respect to issuing compulsory licenses to import. To the extent that Rwanda intends to source newer medicines from countries like India that have become TRIPS-compliant in 2005, those countries will ordinarily need to issue Paragraph 6 implementation agreement compulsory licenses for export but can only do so if Rwanda, likewise, abides by the Agreement. Admittedly, non-predominant quantities might be imported via standard compulsory licenses granted in India and unlimited quantities might be imported via competition-based licenses but the major route of future importation may well be pursuant to paragraph 6 implementation agreement provisions. Rwanda has adhered to the TRIPS agreement and there are conditions and requirements that the country has to put in its legislation to fully benefit from a better and negotiated status for least developed countries and flexibilities built in the agreement. The country has not done that and the period for which the country would’ve enjoyed that status is reducing considerably. Considering the above remarks, putting up a pharmaceutical production facility in Rwanda is feasible and can be considered as a good investment opportunity:

(1) the market is available in Rwanda and the neighboring countries; (2) the cost of labor is very competitive, cheap and available (qualified, semi-

qualified and occasional laborers)90; (3) the government through agencies like RIEPA, and ministries like MINICOM and

the Ministry of Health, Ministry of Finance would totally support this project; (4) interesting fiscal and non-fiscal incentives are available to investors; (5) the local investment code (article 31) clearly provides for the possibility for an

investor to obtain additional incentives and facilities because of the nature of his project, national importance, location, volume of capital investment and when he feels he would not get meaningful benefits from the incentives and facilities offered by the 1998 investment code

(6) various assistance schemes can be obtained from developed countries for an investor intending to put up such project in an LDC91;

(7) governments being aware that those assistance schemes providing affordable HIV/AIDS drugs won’t always be there, would be keen to support such a long term and sustainable project;

Concerning the regulatory framework, if we keep in mind the projects already in pipeline like the drafting of a law on intellectual property, the establishment of a National Drug Authority, the redraft exercise of the major business laws to improve the general business 90 Rwanda is one of the rare countries of the region with a Faculty of Pharmacy 91 Article 67 of the TRIPs Agreement on Technical Cooperation: ‘In order to facilitate the implementation of this Agreement, developed country Members shall provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in favour of developing and least-developed country Members. Such cooperation shall include assistance in the preparation of laws and regulations on the protection and enforcement of intellectual property rights as well as on the prevention of their abuse, and shall include support regarding the establishment or reinforcement of domestic offices and agencies relevant to these matters, including the training of personnel.


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regulatory framework, it will just be a matter of speeding up the process, assisting and contributing to these efforts to include all issues pointed out in this study so that such prospective investor can start operating a pharmaceutical production plant in Rwanda. To easily achieve this, the following recommendations are addressed to the different stakeholders involved in boosting the pharmaceutical sector


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Recommendations The recommendations provided here do not stand alone, they supplement and complement substantive points raised in the various sections of this study. In the context of facilitating real pharmaceutical production in Rwanda various points should be considered and are addressed to the different stakeholders involved in the promotion of the pharmaceutical sector. First and foremost, the country needs to undertake a thorough awareness-raising programme as very few public agencies or officers are currently aware of the interactions between intellectual property rights and access to medicines. The real impact and sense of the various agreements to which the country is part are not properly understood. A very common mistake that most countries make in understanding the terms and conditions of the January 1st, 2016 – TRIPS extension is that this extension does relate ONLY to pharmaceutical product patents and not to all general TRIPS obligations which are enforceable by January 2006! Having not sought any extension to the TRIPS council (another possibility that existed), Rwanda is supposed to be TRIPS compliant since January 2006, a situation which is far from being the reality. Rwanda needs some technical support with regard to the completion of the projects already on the pipeline such as the drafting of the overall intellectual property law and its compliance with applicable regional and international agreements, the amendment of the patent law, the establishment of a national drug authority, the redraft exercise concerning the ongoing business regulatory framework, etc. There is a short-term need to comprehensively review the patents act and ensure that Rwanda has expressly included the maximum range of flexibilities for accessing medicines. These flexibilities should include:

(1) prospective repeal of patent protection for pharmaceutical products at least through 2016,

(2) rights of parallel importation re presently patented medicines, (3) explicit rights to import and export under a compulsory license or under

government use re presently patented medicines, (4) procedures for utilizing Paragraph 6 Implementation Agreement Flexibilities,

including necessary notifications and (5) due to the fact that we could not tell whether there were pharmaceutical product

patents registered with the patent office at MINICOM, revocation (upon compensation) of those patents should be considered

The patents office needs to be strengthened with qualified and trained staff, adequate equipment etc. Technical assistance can be found through institutions such as the WIPO,


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the WTO, the COMESA, ARIPO, … and where possible, regional approaches might facilitate many of those assistance schemes. Considering that the supporting donors with regards to accessibility of ARVs drugs might not always be there, the government needs to rethink its anti-retroviral therapy as the donors’ disappearance would be a disaster for the country and the dependant HIV/AIDS patients. Establishing a local pharmaceutical plant has to be turned into an investment opportunity as the possibility to benefit the GOA provisions was portrayed by various high ranking officials of the country so that potential investors come to enjoy those flexibilities. In encouraging that opportunity, economies of scale could happen and investments into other sectors like the packaging industry, the production of active ingredients, done to complement the pharmaceutical plant. Relations between foreign manufacturers and Rwandan manufacturers of drugs should be encouraged and the issue of the WHO prequalification assessed and the necessary put in place. International cooperation appears to be the most effective approach as similar situations affect a number of various developing countries with limited or no manufacturing capacity within or beyond Africa. Availing facilities such as easy access to land, various tax exemptions, support from the government and having put in place the basics needed for the establishment of pharmaceutical plants, Rwanda should spearhead and initiate the establishment of a regional plant that would cover the whole region and avoid duplication of efforts


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Bibliography

Official Papers, Publications, Periodicals and Online Materials

1) (AIPA) The African Institute of Policy Analysis and Economic Integration: The Rwandan

Economy : A strategy for investment, Vol. II, 2002, Cape Town, Report Compiled for the Rwanda Investment Promotion Agency

2) ABBOTT M. Frederick and VAN PUYMBROECK V. Rudolf, Compulsory Licensing for

Public Health: A Guide and Model Documents for Implementation of the Doha Declaration Paragraph 6 Decision, World Bank Working Paper no 61, July 2005

3) CARSTEN Fink, Intellectual Property and Public Health: The WTO’s August 2003

Decision in Perspective in Trade, Doha and Development: A Window into the Issues

4) HIV/AIDS ANTI RETROVIRAL NEWSLETTER: TRIPS, Intellectual Property Rights and Access to Medicines, Issue no 08, December 2002

5) LETTINGTON L. Robert and BANDA Chikosa, A Survey of Policy and Practice on the

Use of Access to Medicines-Related TRIPS Flexibilities in Malawi, DFID Health Systems Resource Centre, September 2004

6) LETTINGTON L. Robert and MUNYI Peter, Willingness and Ability to Use TRIPS

Flexibilities: Kenya Case Study, DFID Health Systems Resource Centre, September 2004

7) PKF Consulting Ltd, The Kenya’s Pharmaceutical Industry 2005, Report compiled for the Kenya Export Processing Zones Authority

8) DFID, Increasing People’s Access to Essential Medicines in Developing Countries: A

Framework for Good Practice in the Pharmaceutical Industry: A UK Government Policy Paper, March 2005

9) ALSEGARD, Erik, Global Pharmaceutical Patents After the Doha Declaration: What

Lies in the Future, 2003

10) The WIPO Handbook on Intellectual Property Rights

11) Privatisation Magazine: Une Véritable Opportunité d’Affaires: le LABOPHAR

12) LOVE James, Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies, Health Economics and Drugs, TCM (Technicacl Cooperation for Essential Drugs and Traditional Medicine) Series no 18, WHO 2005

13) World Trade Organization, Declaration on the TRIPS Agreement and Public Health

(Adopted on 14 November 2001), WT/MIN(01)/DEC/2


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14) WTO, TRIPS and Pharmaceutical Patents, Fact Sheet, September 2003

15) World Health Organization, Antiretrovirals and Developing Countries, Report by the Secretariat, 115th Session of the Executive Board, Provisional Agenda Item 4.9, EB115/32, 16th December 2004

16) Access to HIV/AIDS Drugs and Diagnostics of Acceptable Quality, 29th version, 21st

December 2005

17) WTO Press Releases: Decision removes final patent obstacle to cheap drug imports, Press/350/Rev.1, 30 August 2003

18) TORREMANS Paul, Holyoak and Torremans Intellectual Property Law, 3rd edn (2001)

at 13

19) DRAHOS Peter and MAYNE Ruth (editors), Global Intellectual Property Rights – Knowledge, Access and Development, Palgrave Macmillan, Hampshire and New York, 2002

20) GERVAIS Daniel, The TRIPS Agreement: Drafting History and Analysis (1998) at 3 (D

Gervais, The TRIPS Agreement).

Laws, Treaties and/or Agreements:

21) The Constitution of the Republic of Rwanda, OGRR, Year 42, special no, June 04th, 2003 22) Law no 36/91 of August 5th, 1991 (Official Gazette, 1995, p. 1150), also found within

the Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 350 23) Loi no 06/1988 du 12 février 1988 portant Organisation des Sociétés Commerciales,

(Official Gazette, 1988, p. 437), also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 352

24) Ordonnance du Ruanda-Urundi no 41/78 du 28 Mai 1956 portant Établissements

Dangereux, Insalubres ou Incommodes, BORU, 1956, p. 442 also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. III, p. 1660 – 1673

25) Law no 12/99 of July 2nd 1999 relating to the Pharmaceutical Art

26) Loi du 25 février 1963 sur les brevets (Official Gazette, 1963, p. 148) also found in

Codes et Lois du Rwanda, 2nd edition, V. III, p. 1564 – 1566.

27) Arrêté Ministériel no 5/10/67 du 5/10/1967 portant mesures d’exécution de la Loi sur les Brevets (Official Gazette, 1967, p. 214)

28) Convention de Manille, avec les Philippines, concernant les marques de fabrique et de

commerce (BO, 1957, p. 1992)


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29) Rwanda adhered to the WIPO Convention by Law no 16/1983 of 18/08/1983 (OGRR, 1983, p. 667)

30) Rwanda adhered to the Paris convention by Law no 17/1983 of 18/08/1983

31) Ministerial Directive no 20/709/DPH/03 of April 23rd, 2003, made effective starting July

1st, 2003

32) Law n°21/87 of August 5, 1987 establishing an Investment

33) Law no 03/2002 of January 19th, 2002 establishing the Rwanda Bureau of Standards; OGRR no 06 of March 15th

34) ‘The RBS instruction no 01/2004 setting up regulations for compulsory batch

certification of imports’ (Standards Instruction 2004) signed on the 19th of October 2004 and gazetted in December 2004 (OGRR no 23 of December 1st, 2004)


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Annex A :List of people interviewed

Contact address Name Institution Position E-mail Phone

Comments

1. Aline

MUKERABIRORI CAMERWA Technical

Director [email protected] 08587458

2. Mireille MUHIMPUNDU

CAMERWA Responsible, Quality Assurance

[email protected] 08530175

3. Chantal I. MURENZI SUNSHINE Pharmacy

Managing Director


4. Annoncée KURADUSENGE

MINICOM Acting Director for Industries


5. Manzoor HUSSEIN S & R Pharmaceuticals

Managing Director

575768

6. Védaste MUNYANKINDI

MoH Director Pharmacies


7. Faustin MUNYANKINDI

MoH Head, Inspection of Pharmacies

08625191

8. Viateur MUTANGUHA

MoH Consultant [email protected] 08652464

9. Spencer BUGINGO MoH Legal Advisor


10. Inès MPAMBARA MoH/Rwanda Center for Health Communications

Director [email protected] 08308306

10. Hormisdas R. KAMBANDA

LABOPHAR Managing Director


11. Alexis RUZIBUKIRA RIEPA Deputy Managing Director


12. James KAMANZI RIEPA Director for Investment Facilitation


13. Innocent NTAGANZWA

Consultant Former Director for Industries


14 Athanasie MUKESHIYAREMYE

Rwanda Bureau of Standards

Head of Standards Dvpt Unit


15 Liliane KAMANZI Rwanda Bureau of Standards

Head of Info & Doc Service


16 Antoine GATERA MSH Senior Technical Advisor

08350065


mailto:[email protected]














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Annex B: Company Registration fees:

Category & Activity Fees (Rwf) I. IMPORTER 60,000 II.EXPORTER 20,000 III. PRODUCER

- Farming & Breeding Company 20,000 - Farm-produce industry: Tea, coffee, factories, Rice-growing, wheat, Sugar cane, tomato, milk, fish & banana 100,000 - Textile & leather industry 100,000 - Wood, paper & print industry 100,000 - Metals, mechanical Industry 100,000 - Chemical, plastic industry 100,000 - Non metallic building materials factory (cement, bricks, tiles) 100,000 - Other factories 100,000 - Mines & quarries 20.000

IV. RETAILER WITH DIRECT IMPORT 100,000

1. Type A Activities (general trade) One single tax : 12,000

- Clothing - Local products - Cosmetics & beauty products - Groceries - Chemical fertilizers - Phytosanitary products - Office furniture - Kitchenware - Bakery & pastry making - Bakery & pork meat trade - Slaughtering & driving animals - Hardware store - Stationery trade - Bookshop - Video & record library - Wood & charcoal - Leathers - Pharmacy - Glasses & optical instruments

- Gold, precious metals & silver/gold plate selling counter 100,000 - Ore selling counter 100,000


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- 2. Type B Activities with a special tax - Public works 60,000 - Garages: - with representation 100,000 - Without representation 60,000 - Service station (lubricants) 30,000 - Local road transport 30,000 - International road transport 50,000 - Air transportation 20,000 - Lake transportation 100,000 - Hotels & comparable institutions 100,000 - Restaurant 100,000 - Bars & pubs 50,000 - Snack-bar 20,000 - Entertainment Centres (cinema, sports, leisure activities) 12,000 - Banks 100,000 - Insurance companies 100,000 - Forex Bureau 100,000 - Travel agencies 30,000 - Real estate agencies 30,000 - Brokerage firms 20,000 - Tourism Agency 50,000 - Customs Agency 50,000 - Consulting firms 50,000 - Freight forwarders 30,000 - Brokers 30,000 - Security firm 50,000

3. Other retailers 12,000


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Annex C: CAMERWA monopoly ANNEXTURE TO THE MINISTERIAL INSTRUCTION N° 01 OF 03rd December 2003 DETERMINING CONDITIONS AND MODALITIES OF PROVIDING THERAPEUTIC CARE TO PERSONS LIVING WITH HIV/AIDS The Minister of State in Charge of HIV/AIDS and Other Epidemics in the Ministry of Health;

Given the Law N° 10/98 of 28/10/1998 establishing the practice of the Art of Healing; Given the Presidential Order N° 02/01 of 16/01/2001 on the establishment, management and operations of the National AIDS Commission as modified and completed to date; Considering the need to have uniformity in the procurement of Antiretroviral drugs (ARVs) in order to ensure their proper dispensation and distribution, and to serve as many patients as possible; HEREBY INSTRUCTS AS FOLLOWS: Article one: This annexure is an integral part of the Ministerial Instruction N° 01 of 03rd December 2003, determining the conditions and modalities of providing therapeutic care to persons living with HIV/AIDS. Article 2: This annexure makes reference to and expands upon Article 8 of the Ministerial Instruction, providing, “Importation, stocking and distribution of drugs for MOI/P, STD/P and LR/P at national level shall be undertaken by the Essential Drugs Procurement Centre in Rwanda (CAMERWA).”

Article 3:

Procurement of ARVs will be coordinated by CAMERWA, with technical assistance from TRAC and the Pharmacy Directorate of the Ministry of Health. There will be one National Procurement for all large ARV programs. The large ARV programs are defined to be the Global Fund for HIV/AIDS, Tuberculosis and Malaria (GFATM), the World Bank Multisectoral HIV/AIDS Project (MAP), the President’s Emergency Plan for AIDS relief (PEPFAR), and any other project or program dully authorised by the Minister responsible for HIV/AIDS control to the National Program, “Long-term National Programme for access to medical care by persons living with HIV/AIDS” (hereinafter ”National Program”) as defined in the Ministerial Instruction.


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Article 4: The National Procurement will encompass all ARVs purchased for the National Program, defined in Article 3. under the Procurement, CAMERWA exclusively will place orders for all ARVs. Contributions to the Procurement will be made by the programs receiving the ARVs, in accordance with the number of patients they plan to treat.

Article 5: CAMERWA is the sole procurement and distribution institution currently approved to order or import ARVs. The Minister responsible for HIV/AIDS control may authorise other procurement and distribution institution to procure and distribute ARVs.

Article 6: The Procurement policy will be to use generic ARVs where they are available, WHO approved and easy for patients to use. Branded drugs ill be used only in the case where a less expensive, WHO approved, and easy to administer generic formulation is not available. All ARV procurement must follow the treatment protocols of the Government of Rwanda, as defined by the TRAC. Article 7: The original text of this annexure shall be English. Article 8: The present annexture shall enter into force on the date of its signature.

Done In Kigali, on …………………………… 2004.

The Minister of State in charge of HIV/AIDS and Other Epidemics.

Dr. NYARUHIRIRA Innocent

92 The trade registry (registre de commerce) is organized by Law no 36/91 of August 5th, 1991 (Official Gazette, 1995, p. 1150), also found within the Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 350 93 With the new country’s demarcations, what used to be called a Court of 1st Instance is now called Court of (City where the Court sits) 94 Société par Actions à Responsabilité Limitée (SARL) 95 Société Anonyme (S.A.) 96 Société en Commandite Simple 97 Société en Nom Collectif 98 Loi no 06/1988 du 12 février 1988 portant Organisation des Sociétés Commerciales, (Official Gazette, 1988, p. 437), also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 352 – 373. 99 Eventually, MINICOM and MoH may seek advice from the Ministry in charge of land and environment for some specific matters. 100 Ordonnance du Ruanda-Urundi no 41/78 du 28 Mai 1956 portant Établissements Dangereux, Insalubres ou Incommodes, BORU, 1956, p. 442 also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. III, p. 1660 - 1673 101 Law no 12/99 of July 2nd 1999 relating to the Pharmaceutical Art 102 Economic Development and Patents: http://www.wipo.int/patentscope/en/developments/economic.html, accessed on January 4th, 2006


http://www.wipo.int/patentscope/en/developments/economic.html


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92 The trade registry (registre de commerce) is organized by Law no 36/91 of August 5th, 1991 (Official Gazette, 1995, p. 1150), also found within the Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 350 93 With the new country’s demarcations, what used to be called a Court of 1st Instance is now called Court of (City where the Court sits) 94 Société par Actions à Responsabilité Limitée (SARL) 95 Société Anonyme (S.A.) 96 Société en Commandite Simple 97 Société en Nom Collectif 98 Loi no 06/1988 du 12 février 1988 portant Organisation des Sociétés Commerciales, (Official Gazette, 1988, p. 437), also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. I, p. 352 – 373. 99 Eventually, MINICOM and MoH may seek advice from the Ministry in charge of land and environment for some specific matters. 100 Ordonnance du Ruanda-Urundi no 41/78 du 28 Mai 1956 portant Établissements Dangereux, Insalubres ou Incommodes, BORU, 1956, p. 442 also found in Codes et Lois du Rwanda, 2nd edition (1995), Vol. III, p. 1660 - 1673 101 Law no 12/99 of July 2nd 1999 relating to the Pharmaceutical Art 102 Economic Development and Patents: http://www.wipo.int/patentscope/en/developments/economic.html, accessed on January 4th, 2006 103 Loi du 25 février 1963 sur les brevets (Official Gazette, 1963, p. 148) also found in Codes et Lois du Rwanda, 2nd edition, V. III, p. 1564 – 1566. 104 Arrêté Ministériel no 5/10/67 du 5/10/1967 portant mesures d’exécution de la Loi sur les Brevets (Official Gazette, 1967, p. 214) 105 The Madrid treaty refers to ‘the Madrid Agreement Concerning the Registration of Marks’ 106 Convention de Manille, avec les Philippines, concernant les marques de fabrique et de commerce (BO, 1957, p. 1992) 107 Available at www.aripo.org 108 Rwanda adhered to the WIPO Convention by Law no 16/1983 of 18/08/1983 (OGRR, 1983, p. 667) 109 Rwanda adhered to the Paris convention by Law no 17/1983 of 18/08/1983 110 The then Ruanda-Urundi’s (Belgian colonies) adhesion was notified on December 14th, 1951 and the law no 15/1983 of 18/08/1983 (OGRR, 1983, p. 624) confirmed the same adhesion. 111 See supra note 10 112 In the absence of such a provision, generic manufacturers can only start the time consuming process of testing and registration after the expiry of the patent. This can easily delay the marketing of generic drugs to 2-3 years after patent expiry.

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