IP/C/W/651  
 
1 February  2019 
(19-0585) Page: 1/3 
Council for Trade -Related Aspects of  
Intellectual Property Rights  Original: English  
 
INTELLECTUAL PROPERT Y AND THE PUBLIC INT EREST:  
PROMOTING PUBLIC HEA LTH THROUGH COMPETIT ION LAW AND POLICY  
COMMUNICATION FROM SOUTH AFRICA  
The following communication, dated 31 January  2019, is circulated at the request of the delegation 
of South Africa.  
 
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1.   This communication continues the ad hoc  item on "Intellectual Property and the Public Interest: 
Promoting Public Health Through Competition Law and Policy " that was  introduced by the 
co-sponsors in document s IP/C/6 43 and Add.1 of 24 May  and 29 May 2018 respectively;  IP/C/W/649  
and Add.1 to Add.3, dated 26 October 2018, 7 November 2018 and 19 November respectively.  
2.  The proponent  wishes  to continue the discussion on  the linkage between intellectual property 
and competition  law and policy  based on the documents referenced in paragraph  1 above, with 
specific reference to exploitative excessive pricing and restrictive practices such as reverse payment 
agreements, strategic patenting and more lately , the evolution of niche pricing of off -patent 
pharmaceutical s.  
3.  The discussion has gone through various phases  of debate , based on underlying guiding 
questions. During the TRIPS Council meeting of 5 and 6 June 2018, co-sponsors  endeavoured to 
enhance the understanding of Members of the various appr oaches to competition law and policy and 
how competition norms are used to  prevent or deter practices such as collusive pricing or the use of 
abusive clauses in licensing agreement that unreasonably re strict access to new technology and  
prevent the entry o f generic companies and may result in higher prices for medicine.  
4.  It was pointed out that competition law is one of the least discussed flexibilities w ithin the WTO 's 
TRIPS Agreement,  noting that while the TRIPS Agreement sets "minimum norms " for standard s of 
IP protection that significantly limit Members ' discretion on a large number of IP rights issues, it is 
however not the case with competition law.  Questions discussed during the relevant TRIPS Council 
meeting included issues around the legal basis tha t Members use to address abusive practices in 
their domestic markets; whether Members had established policies to deal with technology transfer 
pricing and other aspects of transfer of technology transactions and whether compulsory licenses 
had been used b y Members ' competition authorities to restore competition in cases involving the 
exercise of IP  rights.  
5.  During the TRIPS Council meeting of 8 and 9 November 2018, co-sponsors intensified the debate 
by pointing out that over the course of time clearer comp etition policy treatment of IPRs has evolved 
through either iterative processes or the evolving practice of competition authorities. This 
development, it was argued, underscored the need for further debate and analysis since competition 
law and policy is n o longer the preoccupation of only a few jurisdictions. Members were encouraged 
to share best practice in respect of the subject of the control and remedies of excessive pricing and 
whether context -specific methodologies were employed by Members to determi ne whether such 
prices were indeed excessive and how such situations where remedied.  
6.  In order to further develop Members ' capacity in this area, co -sponsors posed several questions 
that were designed to assess to what extent technical assistance and capac ity buil ding could IP/C/W/651  
 
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  contribute to the delivery of more effective policies by Members in the field of competition law  in 
order  to address the abuse of IPRs.  
7.  At the meeting of the TRIPS Council of 13 an d 14 February 2019, the proponent  propose s to 
advance the discussion outlined above through questions which are set out herein below. As 
demonstrated before, the TRIPS Agreement explicitly permits WTO Members to employ specific 
measures  in order to protect public health and nutrition, and to promo te the public interest. Various 
flexibilities are provided to Members to adopt measures to prevent abuse of IPRs. In recent times, 
excessive pricing in the pharmaceutical industry has been under the spotlight and there has been a 
number of competition enfo rcement cases regarding exploitative excessive pricing.   
8.  A recent publication of the European Commission entitled "Competition Enforcement in the 
Pharmaceutical Sector (2009 – 2017) " sheds lighter  on the efforts of European competition 
authorities to ensur e affordable and innovative medicine.1  It should be noted that not all jurisdictions 
prohibit exploitative excessive pricing, however excessive pricing models may often be indicators of 
underlying competition problems. Unlike the binding minimum standards  of intellectual property 
protection and enforcement contained in the TRIPS Agreement, there is no equivalent international 
legal instrument for competition law that would provide such minimum standards of protection.  
9.  Competition policy has an important ro le to play in ensuring fair access to medical technology 
and fostering innovation in the pharmaceutical sector.  WTO Members have absolute policy space 
under international law to design their national competition laws in accordance with their domestic 
interests and needs and the level of their development.   
10.  The proponent  once again  urges  Members to share their national experiences and examples of 
how competition law is used to achieve public health and related national objectives. Debate and 
information exch ange could serve to enhance the understanding of Members of various approaches 
to the use of competition law and policy to prevent or deter practices such as : collusive pricing or 
the use of abusive clauses in licensing agreement s that unreasonably restric t access to new 
technology, the use of measures that prevent the entry of generic companies and result in higher 
prices for medicines , reverse payment agreements and strategic patenting , patent thickets and 
product switching .  
11.  Capacity building and technical assistance remain the most important means to enable WTO 
Members to increase their capacity to administer and implement policies that ensure access to 
medicines within the TRIPS flexibilities framework .  
Guiding Questions  
12.  The questions are designed to build on previous question s circulated in document IP/C/W/643  
and IP/C/W/649 . Delegations are invited to share their experiences of using competition law regimes 
to address anti -competitive practices that affect access to medici nes and medical technolog ies or to 
share challenges that they face in the enforcement of competition law issue s that affect access to 
medicines or medical technologies .  
(1) When dealing with exploitative excessive  pricing in the context of anti -trust or c ompetition 
enforcement  in the pharmaceutical and medical technology sector , should competition /anti-trust 
authorities become quasi price regulators ? What are the practices or guidelines that Members have 
followed to address exploitative excessive pricing in their respective markets  with specific emphasis 
on actions undertaken by competition/anti -trust authorities ? 
(2) What examples of best practice  can Members identify on the subject of the control and remedies 
for exploitative excessive pricing? Are there  context -specific methodologies employed by Members 
for determining if prices are excessive, and what mechanisms  are used  to remed y and control pricing 
abuse?  
                                                
1 European Commission "Competition Enforcement in the Pharmaceutical Sector (2009 – 2017) " European 
Competition Authorities working together for affordable and innovative medici ne. (dated 28 January 2019 ). 
http://ec.europa.eu/competition/publications/reports/kd0718081enn.pdf  IP/C/W/651  
 
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  (3) To what extent can abusive practices currently prevalent in the pharmaceutical industry be 
addressed through  improving the patent system, by for example, raising the bar of patentability 
requirements or increasing registration fees? What have Members ' experience s been with these 
types of measures  or other approaches that have been followed ? 
(4) Have any Members recently conducted market inquiries into the pharmaceutical sector to assess 
its impact on access to medicine or more generally the impact of the pharmaceutical  sector on 
competition in particular market segments ? If so, what were the findings and what remedial actions 
were recommend ed or taken?  
(5) To what extent can technical assistance and capacity building contribute to the delivery of more 
effective policies by WTO Members in the field of competition law to address the abuse of int ellectual 
property rights? What role can international organisations play in this regard , including the WTO ? 
 
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