Responses to Points Raised on Issues Surrounding Medicines, Intellectual Property Rights and Investment under TPPA

1. I would like to thank members of the public, various NGOs and individuals for their comments on the publicly released final TPP text. The two main issues raised today focused on the price of medicine and the Investor State Dispute Settlement (ISDS) mechanism.

2. I would like to clarify and correct some of the misconceptions that appear to colour some of these comments.
   On affordable medicines

3. It has been argued that participating in TPP will prevent Malaysians' access to affordable medicines because of the clause on patent extension. The allegation that the patents extension clause will result in the price of medicine increasing because of TPP is not accurate. The patent protection for pharmaceutical drugs remains at 20 years, consistent with the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Only in the event there is an unnecessary delay in patent or marketing approval will the patent period be extended.

4. Let me state clearly that Malaysia's current process of patent and marketing approval for drugs is efficient and hence the likelihood of patent extension will not arise. Therefore, the allegation that the patents clause will result in the price of medicine increasing because of TPP is not accurate.
   On intellectual property rights and biologics (non-chemical*)

5. Malaysia has had a pharmaceutical data protection process in place since 2011, where the test data will be protected for a period of 5 years. The Government has agreed to extend similar data protection to biologics products, so as to provide non-discriminatory treatment.

6. The test data protection (or data exclusivity) regulation in Malaysia, however has conditions that must be met by the innovator. For example, the innovator has to apply for registration of pharmaceuticals in Malaysia within 18 months from the date the product obtained its first marketing approval in any other country.

7. The purpose of this condition is to encourage pharmaceutical companies to market their new drugs early to Malaysia. This would enable Malaysians to have early access to innovative drugs and also create a pathway for more affordable generic drugs to be brought into the market early.
   Patenting of new uses

8. All discoveries, including new uses, will meet the exact scrutiny of patent office examination for novelty and obvious use. Regardless of whether subsequent patents relating to the known product can be applied for, no later-granted patents can extend the term of an earlier one. Therefore the claim that there is evergreening is unfounded.
   On investment and ISDS

9. It is not true that ISDS will override national sovereignty. The investment chapter in the TPPA is not meant to grant foreign investors greater rights but rather to signal a conducive environment for foreign investors and the assurance of having access to arbitration in the event there is a dispute. We must also bear in mind that there are many Malaysian companies which operate overseas and they will also require this protection.

10. The ISDS is not new to Malaysia as it is also found in 74 Bilateral Investment Treaties (BITs) and 8 Free Trade Agreements (FTAs) that Malaysia has signed. To date, only two cases have been taken against Malaysia under the ISDS, one of which has been decided in favour of the Government and the other was annulled.

11. It should also be noted that a number of additional safeguards have been incorporated into the ISDS mechanism. These include:
    expedited review and dismissal of claims without merit (frivolous claims) and investors will have to pay for the attorney fees and costs for frivolous claims.

    1. consolidation of claims arising from same events or circumstances

    2. claims cannot be made after more than 3 years and 6 months have elapsed

    3. pre-requirement to ATTEMPT to resolve a claim through consultation and negotiation before elevating IT to a formal TRIBUNAL;

    4. decision not to issue, renew or maintain a subsidy is not an expropriation; and

    5. Tobacco control or any health measure cannot be made under the ISDS mechanism

Dato Sri Mustapa Mohamed
MITI