Ordinance ushers in compulsory licences for generic medicines

Importation of generic medicines
Exportation of generic medicines

The Hong Kong government has passed the Patents (Amendment) Ordinance 2007. The ordinance implements a protocol to amend the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) in order to facilitate access to generic medicines by developing and less-developed countries facing public health crises. The ordinance, which shall take effect on a date to be appointed by the government, allows Hong Kong to import and export generic medicines under the protocol in limited circumstances. 

Importation of generic medicines
Where there is a public health or threatened public health problem, the chief executive-in-council may declare a period of extreme emergency, during which the director of public health (if he or she considers that the pharmaceutical industry in Hong Kong has insufficient or no manufacturing facilities to make a patented medicine to address the crisis) may grant a non-exclusive and non-assignable importation compulsory licence to any person to import, use, market or stock the medicine, or to do anything that would otherwise amount to infringement of the patent concerned. The compulsory importation licence shall be subject to conditions including:

• a specification stating the quantity of medicine to be imported and the licence’s duration;
• a prohibition against medicine imported under the licence being exported out of Hong Kong; and
• specific labelling, marking, packaging, colouring and shaping to distinguish the medicine imported under the licence from that made under the patent owner’s authorisation.

An obligation to pay remuneration to the patent owner arises only if it establishes, to the director’s satisfaction, that adequate remuneration has not been paid at the exporting end after exhaustion of all legal remedies. The amount of remuneration shall be agreed between the patent owner and the director, and paid by the government. The total amount of remuneration shall not, in any event, exceed 4% of the total purchase price payable by the import compulsory licensee for the medicine. 

Exportation of generic medicines
Where a World Trade Organisation (WTO) member makes a written request for the supply of generic medicine, any person may apply to the director of health for the grant of a non-exclusive and non-assignable exportation compulsory licence to make and export the medicine. Unless the WTO member has notified the TRIPs Council that it faces a national crisis or other circumstances of extreme urgency before making such a request, it must use reasonable efforts to obtain first from the patent owner, on reasonable terms and conditions, a licence to make and export the medicine, and give notice of the intended application. In granting the exportation licence, the director of health may impose conditions similar to those set out above.

The director shall determine the amount of remuneration payable by the export compulsory licensee to the patent owner, taking into account any advice given by the director of intellectual property. However, the amount of remuneration shall not, in any event, exceed 4% of the total purchase price of the medicine payable by the importing WTO member.