DSpace at VNU: How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam?

DSpace at VNU: How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam? tài liệu, giáo án...

For reprint orders, please contact reprints@future-science.com Perspective Special Focus Issue – Pharmaceutical Patent Law: Expert Perspectives From Around the Globe How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam? Ratification of the Trans-Pacific Partnership (TPP) will attract a large number of foreign drug companies in the coming years to Vietnam It is anticipated to bring investment to Vietnam’s pharmaceutical industries, lead to increased infrastructure and enable the use of more sophisticated technologies for the discovery, development and manufacture of drugs However, with respect to pharmaceutical companies, which are producing generic drugs primarily, the availability of biologic will be reduced Thus, the consequence is, an increase in drug cost resulting in difficulties for patients wishing to procure these drugs This will be particularly detrimental for developing countries, such as Vietnam and Malaysia First draft submitted: 14 February 2016; Accepted for publication: June 2016; Published online: 27 June 2016 Keywords: brand name • data exclusivity • drugs • generic • industry • market • patent • pharmaceuticals • TPP • TRIPS The Trans-Pacific Partnership agreement After years of negotiations, the TransPacific Partnership (TPP) agreement – the world’s largest free trade area, constituting 40% of global GDP [1] , between 12 Pacificbordering nations (namely: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam) – was finally reached on October 2015 It took a long time to unify multiple points of view and, although it has not yet come into effect in these aforementioned nations, the TPP is still assessed as a potential document by its Members It not only governs almost every aspect of international and national policy in each Member States, especially with regards to the economy; but also ensures that the international cooperation between Member States, as well as with the countries outside the agreement, will be undivided and expanded In addition, the TPP may be considered an open agreement, where both the current Members 10.4155/ppa-2016-0008 © 2016 Future Science Ltd and the other countries, which expect to become part of it in the future, may negotiate thereafter [2] On the intellectual property (IP) front, the TPP has imposed stringent measures and more demanding requirements for IP protection, and likewise for the exchange of science and technology However, the TPP also facilitates the introduction of more advanced technologies in less developed member nations, which are vital in today’s world Nguyen Hoa Binh*,1, Pham Ngoc Kieu Anh**,2 & Nguyen Minh Phuong***,3 Daitin & Associates, 19 Hoang Dieu, Dist 4, Ho Chi Minh City, Vietnam Master of Law course S1580107, Major in Economic Law, Law Department, University of Economics and Law, Vietnam National University, Quarter, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Vietnam Ho Chi Minh City University of Food Industry, 140 Le Trong Tan, Tan Phu Dist., Ho Chi Minh City, Vietnam *Author for correspondence: binh@ daitin.com.vn **Author for correspondence: anhpham2292@ gmail.com ***Author for correspondence: phuongnm@ cntp.edu.vn Pharmaceutical patent in the TPP With regard to the provisions outlined in IP (rights) chapter, it is clear that in order to comprehend and comply, the patent system in the TPP Member States has to improve Parties thereby recognize the need to promote innovation and creativity; facilitate the diffusion of information, knowledge, technology, culture and the arts; and foster competition and open and efficient market [3] Throughout the negotiating process, the topic of pharmaceutical patenting was sub- Pharm Pat Anal (2016) 5(4), 261–270 part of ISSN 2046-8954 261 Perspective  Binh, Anh & Phuong ject to much debate before an agreement was met On a basic level, a pharmaceutical patent has to comply with all the requirements of a general patent, for example, a set of rules pertaining to how the patent is protected, changed, maintained and enforced That said, the Member States were involved in extensive discussions regarding provisions in relation to drugs Issues can arise from the length of data protections for new drugs, notably for biologics (large-molecule drugs) and for generic drugs As such, the TPP agreement offers several options that Member States can choose to adhere to For example, one of the options imposes years of exclusivity to a new biologic; while another one requires years of protection to clinical data and years of a half exclusivity, plus the pharmaceutical company has exclusivity over new clinical information relating to the new drug [4] Although it is not much compared with the previous negotiations of 12-year period, the regulation for adjustment of data exclusivity in the TPP Agreement is still the longest term, and will most likely impact the patent rights of drugs TPP: pros & cons to the rights of the pharmaceutical patent It can be easily seen that, the clear regulations, as well as stringent measures on medicine, provide an opportunity for the holder to be guaranteed their rights and other legal interests The strict rules, especially for the enforcement of IP rights in general and pharmaceutical patent in particular, is one of the most effective methods to avoid, detain and handle any future infringement Besides, the TPP also constitutes a legal framework binding all Member States collectively Each Member shall ensure that their legal system provides fair and equitable protection and enforcement for pharmaceutical patents, thereby decreasing potential violations There are three provisions significantly affecting pharmaceutical protection in the TPP First, according to the TPP, pharmaceutical companies are allowed to consolidate a granted patent The patent holder can thereby make a minor change in drug formulations in order to extend periods of exclusivity for branded drugs Second, in case of unreasonable or unnecessary delay in the processing of marketing approval application, a provision allowing extended protection is acceptable  [5] And finally, with regard to advanced drugs as biologics, the length of data protection is up to years With the said provisions, the pharmaceutical patent shall be protected at a higher level than previously, in the case of some Member States, even over the Traderelated Aspects of Intellectual Property Rights (TRIPS) Agreement  [6] or other bilateral free trade agreements (FTA) This measure encourages the creativity among brand-name pharmaceutical companies 262 Pharm Pat Anal (2016) 5(4) However, applying for practiced registration in Vietnam, according to the IP laws, a drug can be protected by patent when its active ingredients are still within period of protection – normally lasting 20 years Besides, with regards to the provision of Clause Article 14 of Circular No 44/2014/TT-BYT dated 25 November 2014 on Registration of Drugs, in order to register for the circulation of generic drugs, which are protected by a patent, at least years before the expiry date, a drug registration establishment must submit an application form and relevant documents as proof that the validity period is due to expire [7] Hence, when the TPP is brought into effect, the length of new pharmaceutical product’s data protection in Vietnam should conform with such conditions As a result of a period of protection adjustment, exclusivity rights of pharmaceutical companies in Vietnam will be extended from years to up to at least years Although there are many advantages to this new legislation relating to pharmaceutical patent rights, some challenges may emerge due to extended adjustment of pharmaceutical patent protection, notably for the USA, which are applying, or are going to apply, the shorter patent term extensions with respect to drugs, which is less than or equal to years, compared with Peru, Chile, Malaysia, New Zealand, Australia and Brunei Darussalam [8] With extended term, it means that the patient has to wait longer for generic drugs In addition, Vietnamese pharmaceutical companies will have to invest more since the cost will be much higher The agreement has also received criticism that it will add costs to Pharmac (the Pharmaceutical Management Agency is a New Zealand Crown entity), which will in turn affect the New Zealand taxpayer [9] Additionally, Kenneth Arrow, a Nobel Laureate in economics, has argued that the extended monopolies will not only drive up costs but also reduce the pace of innovation [10] , because ‘it stifles discovery of new or improved biologic treatments’ [11] Scenarios of the pharmaceutical patent sector in Vietnam before the TPP Pursuant to the Law on Intellectual Property No 50/2005/QH11, mutatis mutandis  [12] , with respect to a pharmaceutical patent, there are two types of patent in Vietnam: invention patents and utility solution patents [13] As with general patents, a pharmaceutical patent must be globally novel, involve an inventive step and be industrial capable application [14] A subject matter related to drugs shall be protected if it is: • In a chemical product form (or active ingredient) • A drug substance • Pharmaceutical/drug formulation future science group How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam?  • Method or formulation of dispensing • Method or formulation of extracting active ingredients from pharmaceutics With regards to current IP Laws, the measures of prevention, diagnosis and treatment for human and animal are not protected Additionally, at pharmaceutical patent application, the description section must state the results of clinical trials and pharmaceutical effects, which includes at least the following information [15] : • Used substances/mixtures • Employed trial method (system) • Trial results • Correlation between the result of the pharmaceutical effects obtained in the trials and the practical usage of the pharmaceutical in disease prevention, diagnosis and treatment With regard to the right of pharmaceutical patent, patent holder(s) has/have rights to allow or prevent others from using and/or exploiting a granted pharmaceutical patent [16] Notwithstanding, in some cases, the exceptions can be applied and may restrict the right of patent holders to their inventions [17] It includes: • The use of inventions concerning a pharmaceutical shall have the right to, on behalf of the State, use or permit other organization or individuals to use inventions for public and noncommercial purposes, national defense, disease prevention and treatment and nutrition for the people and to meet other urgent social needs; • The use or exploitation of inventions concerning a pharmaceutical being protected by third party shall have the right to obtain compulsory licensing that was settled by the State; • Parallel imports; • The use of inventions concerning a pharmaceutical for individual or noncommercial purposes These Vietnam IP law provisions are amended to harmonize with the TRIPS agreement, and adapted from the content of Doha Declaration on the TRIPS Agreement and Public Health To access the Vietnamese market, Pharmaceutical products should conform to all the regulation of Drug Administration of Vietnam (DAV), under Ministry of Health (MOH) By adopting the ASEAN Common Technical Dossiers (ACTD) procedure of pharmaceutical product registration, Vietnamese laws request future science group Perspective that the application dossier for a new chemical entity should include four elements: administrative data and product information; quality; preclinical/safety; clinical/efficacy The application dossier for generic drugs, however, need only include the first and second elements [18,19] Currently, Vietnam is endeavoring to improve the rules and strive to strengthen its healthcare systems For product registration, both local manufacturers and foreign pharmaceutical investment companies are eligible to register the product for trading in Vietnam However, before the TPP, Vietnam did not adhere to the ‘patent linkage’ system The patent linkage system, as stated in Article QQ.E.17 of the TPP agreement, generally refers to the system by which a country or territory establishes a relationship between the generic drugs marketing approval process and the patent status of the originator’s product The requirements, thereby, are given that the marketing approval will not be granted for applicants (generic drug manufacturer in other words) if the drug is still protected by a patent, unless the applicant can prove that the patent will not be infringed by a written consent, which is provided by the patent holder Hence, the use of this system reduced the infringement against patent rights, facilitating a competitive market environment In the absence of this system in Vietnam, only until the patent protection validity of brand-name drugs has expired, is marketing approval for the generic version of a brand-name drug granted Therefore, the patent holders are urged to notify the DAV and other relevant authorities of their pharmaceutical patent, under the regulations of Article 14 of Circular No 44/2014/TTBYT  [20] , including new information relating to the quality, safety and effect of the drugs, if the drug is being manufactured or imported, in addition to the expiration of the pharmaceutical patent [21] Potentials & challenges of TPP for the Vietnamese pharmaceutical sector in the field of patent protection TPP not only impacts the rights of the pharmaceutical patent holder as mentioned above, but also significantly effects pharmaceutical patent protection According to the TRIPS Agreement, a patent in Vietnam is protected for 20 years [22] Furthermore, Vietnam’s patent laws provide a 5-year data exclusively period that commences from the date on which a product license is granted, subject to Article 128 of IP Law 2005 of Vietnam When this rule is maintained and TPP has come into effect, it might also cause certain problems Especially with regards to difficulty of approaching brand-name drugs, several local generic drug manufacturers have tried to obtain clinical information, www.future-science.com 263 Perspective  Binh, Anh & Phuong which are being duly protected by laws Meanwhile, the IP law system in Vietnam is still weak and ineffective, especially with regards to the enforcement of patent rights In many cases judges lack the right expertise and legal training to bring fair judgments that are in accordance with Vietnamese law [23] This may be a result of the fact that the competent authorities are not powerful enough to prevent infringements, and the shortage of IP specialists who handle patent infringements  [24] In this case, judges, customs agencies or other enforcement agencies dealing with patent infringements should consult the National Office of Intellectual Property of Vietnam (NOIP), and/or specialist IP rights organizations before taking enforcement actions As the 2014 annual report of the NOIP provided 123 expert comments at the request of IP enforcement agencies; in which, six were in relation to patents and two on utility solutions [25] Therefore, after the TPP come to force, with more stringent provisions of IP implementation and enforcement, the pharmaceutical patent infringement will be reduced However, the length of pharmaceutical data exclusivity protection (up to years) for biologic drugs will lead to huge difficulties for Vietnam’s competent authorities, generic drug companies and the Vietnamese taxpayer Many Vietnamese patients, who are paying large amounts for brand-name drugs, will have to wait a long time to access price-lowering generic drugs The pharmaceutical data exclusivity protection period under the TPP agreement with also restrict local businesses from accessing and manufacturing generic drugs Therefore, after the TPP adoption, Vietnam should amend IP law and regulations, and hopefully, the pharmaceutical patent infringement will be reduced Will TPP cause negative effects to the Vietnamese pharmaceutical industry & generic market? Undoubtedly, in Vietnam, the generic drug industry is very important as it enables access to drugs at a cheaper price This is particularly important with regards to, chronic diseases like diabetes, heart disease and tuberculosis As of 2015, the generic drugs value increased from 19% in 2010 to 86% [26] Therefore, on a micro level, the provisions with respect to years of data exclusively, could lead to cheaper biosimilars – the equivalent of a generic drug The TPP would apply its provisions on high standard generic drugs So, as mentioned above, the restrictions in accessing brand-name drugs and the associated clinical information will lead to delays in the availability of cheaper generic drugs on the Vietnamese market In addition, these regulations allow brand-name companies to extend their exclusiv- 264 Pharm Pat Anal (2016) 5(4) ity over the pharmaceutical for some time until the patent monopoly expires, along with raising the price of the medication, thus limiting consumer access Consumers from developing countries, Vietnam in particular – one of the TPP’s most vulnerable populace – is under significant pressure, since drugs for chronic diseases and HIV might become unaffordable [27] Moreover, the TPP Agreement also discourages the Vietnam government from exerting pressure on price control in the pharmaceutical market Therefore, these new regulations may allow companies to participate in and affect the payment policy of the health insurance system Regarding the biologic drugs, the TPP could drive up costs and restrict access from the generic companies Currently, biologics are known as one of the most expensive drugs on the market, thereby it may cost up to 22 times more than nonbiologic drugs Avastin, a cancer drug, can cost more than US$50,000 a year, while the rheumatoid arthritis drug Remicade can cost up to US$2500 per injection [28] In order to explain why these biologic drugs have higher prices than other drugs, it is necessary to consider their constituents and production method;, biologic drugs are therapeutics from a biological source, including vaccines, gene therapies, antitoxins, proteins and blood, blood component, protein [29] A biologic is typically much larger and more structurally complex than other drugs, and these medicines are also more difficult and costly to develop and manufacture Therefore, for important biologic drugs, the developed countries, especially the USA, aim to encourage pharmaceutical companies to perform research in this area For example, the USA currently provides 12 years exclusivity for new biological products under the Biologics Price Competition and Innovation Act (BPCIA) [30] The data exclusivity rights in the USA are, therefore, much stronger than the rights for other pharmaceutical patents; in particular, there are no exceptions or flexibilities, which allow governments to tailor the law according to national circumstances, such as compulsory license The USA has tried to use the TPP to export this system to other Pacific Rim nations, which have much lower bars for biosimilars, ranging from years in Brunei to a maximum of years in Japan, according to Brookings Institution  [28] But, because of objections from other Member States, this provision was not accepted However, when the TPP takes effect, a provision of at least years for biologic exclusivity will be enforced which, although shorter than the previous request of United States Trade Representative (USTR), will drive cost up for some important medicines, as well as making them more difficult to access in other developing countries Hence, these provisions will have damaging outcomes from a public health perspective future science group How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam?  Notwithstanding, although along with some of other Member States, where the length of new pharmaceutical product’s data exclusivity is less than or equal to years, the Vietnam pharmaceutical industry is only at the level of 3–4 out of a 5-level scale [31] The domestic manufacturing industry is small and most drugs or drug materials are still imported, so the price of medicines is relatively high in Vietnam When the TPP takes effect, an important provision relating to duties on pharmaceuticals will reduce the tariff barrier, from the current 2.5–0% [32] Currently, pharmaceutical companies worldwide participate on equal terms with domestic companies, and these equal terms and an increase in international companies setting up in Vietnam will lead to absolute advantage As such, when foreign generic drugs companies hit the market, prices of local brand-name medicines, as well as imported generic drugs, shall fall Simultaneously, although the new stringent provisions of IP protection will generate short-term negative impacts, if Vietnamese IP laws and related laws are implemented well, the TPP will give rise to opportunity for the pharmaceutical industry and hopefully the Vietnamese consumers can buy the high-quality product at lower prices in the near future Vietnam pharmaceutical companies face the competitions derived from TPP Currently, Vietnam has been identified as one of the fastest growing pharmaceutical markets in Southeast Asia Vietnam has 178 large organizations operating in pharmaceutical industry, with more than 300 small organizations who manufacture traditional medicines in which, the local companies are occupying over 85% of total pharmaceutical companies in Vietnam [33] Furthermore, Vietnamese pharmaceutical market value has increased from US$3.81 billion in 2014 to US$4.17 billion in 2015; ranked 13th among 175 countries with the highest growth in medicine spending, about US$200 per year per capita [34] In addition, Global Data also predicted that the value will materially surge over the next years and reach a net worth of US$8 billion by 2020 [35] In the period 2010–2013, the pharmaceutical industry in Vietnam maintained an average growth rate of 20%; wherein, the proportion of generic drugs was highest, over 51%, had grown up to 22% [36] Through these statistics, Vietnam is one of the most attractive markets for companies looking to invest in the sector of private healthcare in the region However, although the growth of pharmaceutical market in Vietnam is rapid, the local pharmaceuticals account for only 0.11% of the total revenue in the industry  [31] One of the most difficult challenges for local pharmaceutical companies is importing drugs future science group Perspective and raw materials In the first months of 2015, the imports of raw materials reached US$199.4 million, primarily from China, accounting for 56.6% of the imports of raw materials [37] Besides, there is still an absence of advanced technology investments on the drug developing and manufacturing Notably, after the ratification of TPP agreement, in order to protect local industry and the reputation of drug quality, technical barriers present an important challenge in research, development and production In the meantime, the cutting down of tariffs on imported pharmaceuticals into Vietnam will facilitate investment by foreign pharmaceutical companies These companies will have the same status in the market as the local pharmaceutical companies In an effort to grow pharmaceutical product domestically, nowadays, foreign investors may enter into Vietnam pharmaceutical market by joint venture (JVEs) or foreign-owned business (FOEs), or business cooperation contracts (BCCs) [38] Moreover, a major challenge for local pharmaceutical companies is caused by most of their existing products, which are generic drugs In addition to this, the provision of extended biologic exclusivity would restrict local companies from accessing and manufacturing new medicines While, the world’s biggest pharmaceutical companies, such as Pfizer, Merck [39] , etc might ‘break the law’ by making minor changes in biologic drug formulations in order to enhance their exclusivity  [40] Simultaneously, foreign pharmaceutical companies have more potential than local ones because, in general, imported drugs are preferred by the consumer It will create heavy competition problems for local companies, with some of them likely to be forced out of the market ‘If Vietnam does not adopt special measures, foreign pharmaceutical companies will gain an even larger market share’, Mr Nguyen Thanh Binh, General Director of the Hanoi CPC1 Pharmaceutical JSC (Hanoi CPC1) said [41] Even without taking into account the type of drugs, the risk of losing pharmaceutical market share is aggravated by the fact that the small and medium-sized enterprises (SMEs) are not paid sufficient with respect to their cooperation The absence of linkage might lose the local’s capable competition Moreover, main issues also come from counterfeiting, lack of drug price control and inadequate IP protection Key points for a strong pharmaceutical industry in Vietnam Vietnam is a potential market for both local and foreign-made drugs In accordance to the BMI Report, Vietnam market in the field of pharmaceutical has several factors in order to attract foreign investment, such as the risk index is 48.4 out of the maximum 100; www.future-science.com 265 Perspective  Binh, Anh & Phuong and the country scored above average for overall market expenditure and sector value growth [34] However, because of shortcomings in the State’s policies and limitations of government, the investors and/or entrepreneurs have to spend so much time on their research of the Vietnamese drug market Meanwhile, according to experts, the TPP agreement will be a wide door for both pharmaceutical industry and companies To take advantage of this, the pharmaceutical company will likely aim to attract more investments, diversify and innovate, standardize production line and drug quality Consequently, for sake of increasing the competitiveness of Vietnamese market, as well as building up a strong pharmaceutical industry in Vietnam, either local business or foreign business or State should be moving in the right direction Local pharmaceutical companies in particular, should invest inbiologics instead of generic drugs, as this will generate more opportunity for meeting domestic demand and for exporting to foreign markets Moreover, to seize the opportunities that will arise from the TPP agreement, the domestic pharmaceutical enterprises need to upgrade their manufacturing plants to reach international standards, such as PIC/S-GMP and EU-GMP [42] When the domestic pharmaceutical production lines serve the general criteria for manufacturing drugs, they will have enough capability to cope with the stiff competition Hanoi CPC1 provides proof of this: ‘Pharmaceutical producing companies have prepared for this game for many years by investing in modern production machines and technologies of the world Hanoi CPC1 invested US$3 million to build production lines, powered by BFS (Blow-Fill-Seal) technology, to manufacture distilled water, injection and paraffin in plastic pipes This move has enabled us to manufacturing outstanding products, secured the market leadership in this segment and created a new trend of replacing glass pipes with plastic pipes We not only meet the domestic market but also export to other markets’  [31] As did Hanoi CPC1, many Vietnamese companies with strong foundations like Mediplantex, Traphaco, Imexpharm and DHG Pharmaceutical JSC are also seizing opportunities arising from the TPP, such as the DHG has completed the construction of a new pharmaceutical manufacturing plant, while Imexpharm has built a new penicillin manufacturing plant in southern Vietnam [41] In parallel with this, the TPP agreement is also expected to guide domestic pharmaceutical companies and assist them in exploiting their strengths in order to benefit research, investment and production, in addition to providing protection, although it is not a simple path The improvement of IP rights protection shall attract investments into the field of biologics, 266 Pharm Pat Anal (2016) 5(4) especially for vaccines [43] When the linkage of foreign investment is established and completed, the National Expanded Program on Immunization (EPI) and epidemic prevention would mark a new milestone in the country’s vaccine production industry [44,45] , in which vaccines will be produced locally instead of imported – making them national products, as opposed to foreign ones As Vietnam represents a key manufacturer of vaccines (specifically 12 type of vaccines, of which ten are used in the National EPI [46]), the potential in researching and producing vaccines, as well as sharing advances in technology in vaccine production serving domestic demands and export, is possible With respect to the foreign drug companies, under the TPP agreement they are able to challenge the laws in Member countries (and Vietnam in particular) that might cut into the companies’ profits [47] Specifically, that provision allows foreign investors to sue State parties for violating broad investor protections contained in the agreement [48] These provisions were leaked in a chapter of the TPP about ‘investor-state dispute settlement’  [49] Until now, the ISDS was regulated in over 60 agreements between Vietnam and other countries, or areas, including both the Bilateral Investment Treaty (BIT) and FTA However, in comparison with the provisions for ISDS, requirements under TPP are broader and more flexible For example, in the BIT agreements, the people who have the right to initiate lawsuits only include investors who have investment projects in Vietnam, the defendant is a competent authority, the applicable law is the Vietnamese legal system and related BIT provisions For TPP, the procedures used in a lawsuit are made easier to follow, consultations are not required as the first and mandatory step in the ISDS settlement process, nor does it require written approval from the competent authority that was the defendant, broadening the scope of subject matter that allowed foreign investors to sue States Besides, the TPP also clearly provides the particular profits that could be obtained by investors Hence, foreign investors shall snatch any opportunities that come from such provisions in order to protect their interests in Vietnam Of course, apart from the efforts of pharmaceutical companies, the State’s policies are always an important point to build up strengths in Vietnam’s pharmaceutical industry Those policies include both capital and technology supports together with the long-term growth orientation for companies The expectation of further integration & compatible amend in the Vietnamese IP law It has taken more than years for the TPP Member States to reach a unified agreement Although it has future science group How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam?  been predicted that Vietnam would benefit most out of the TPP, there still exist many challenges for Vietnam’s pharmaceutical industry too At present, the biggest challenge is how to implement the TPP Agreement post ratification effectively, as well as how to bring the IP system into line with both TRIPS and TPP, or including other international conventions To overcome this challenge, Vietnamese IP Laws and relative regulations, not only have to amend imperfections, shortcomings and even illegal terms to the international agreements, but also supplement with more cobeneficial provisions There are three purposes of amendment: ensure the implementation of TPP’s provisions for drugs protection in Vietnam; integrate and harmonize with the stringent rules of TPP, especially for drug exclusivity; and endeavor to improve and boost the provisions on IP enforcement If the said adjustment is conducted, it will make a positive impact on both Vietnamese IP legislation and pharmaceutical market Thus, it also reduces the risks of infringement for investors Potential challenges aside, opportunities for Vietnam are significant Its products will enjoy fair treatment on the international market, which will help Vietnam to boost exports, expand pharmaceutical industry and attract investment and technology from the TPP Member States Furthermore, the National Strategy for the Pharmaceutical Industry Development to 2020 and Vision to 2030 [50] , which was approved by the government, outlines plans for developing and supporting pharmaceutical companies This demonstrates a confidence of Vietnam’s pharmaceutical industry and indicates that they are ready for the upcoming race Conclusion Although Vietnam’s pharmaceutical industry is a young market with high potential for growth, it is still remains challenging for both local and foreign investors Over and above, when the TPP agreement is ratified, the provisions on IP rights protection, pharmaceutical exclusivity in particular, will generate short-term negative impacts (kindly note that the aforementioned impacts on biologics will be delayed because of 5-year term extensions for data exclusivity and patent for Vietnam in Article 18.83(f) of the TPP agreement) However, parallel to challenges, we believe that many opportunities will arise when TPP comes into effect With regards to Vietnamese people, the TPP agreement facilitates access to biologic drugs and even the cheaper generic drugs than before Vietnamese IP Laws and drug companies should implement the TPP’s provisions well, not only building up the Vietnam pharmaceutical industry but also setting up a huge potential market for foreign investors Therefore, future science group Perspective Vietnam needs to endeavor in improving the rules and regulations to achieve pharmaceutical regulatory harmonization and offer a faster and more stable growing market in the future Future perspective Ratification of the TPP will attract a large number of foreign drug companies in the coming years in Vietnam Of course, it will bring investment in Vietnam’s pharmaceutical industries According to the BMI Research, it is forecasted that the pharmaceutical sales in 2019 will be at US$6.715 billion and the health spending will be US$16.925 billion [34] , which will lead to infrastructure and engineering development in the pharmaceutical industry Simultaneously, many of the advanced technologies will be applied in researching and manufacturing drugs, with the modern production lines However, with respect to the pharmaceutical companies, which are producing generic drugs primarily, the availability of biologics will be reduced Thus, the consequence is an increase of drug costs and difficulty for patients accessing drugs, especially in developing countries, such as Vietnam and Malaysia Together with the growth of economy and pharmaceutical industry, the IP legal systems will also be changed appropriately in order to ensure the implementation of the TPP provisions, especially for the term of exclusivity extensions It is necessary if Vietnam wants to attract more investments and strengthen its pharmaceutical industry Therefore, it can be easily seen that in 2- to 3-year periods, the IP laws in Vietnam will have significant adjustments in general IP and patent in particular Acknowledgements The authors are extremely thankful to Takeshi S Komatani, Patent Attorney at SHUSAKU·YAMAMOTO, for his encouragement and recommendation to write this article They also acknowledge their sincerest thanks to Nguyen Thanh An, the Senior Consultant at Mission International Patent & Trademark Office for his precious help in reviewing and completion of this article Financial & competing interests’ disclosure The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties No writing assistance was utilized in the production of this manuscript www.future-science.com 267 Perspective  Binh, Anh & Phuong Executive summary • Trans-Pacific Partnership (TPP) agreement: Vietnam is one of 12 members of the TPP agreement the current world’s largest free trade area • Pharmaceutical patent in the TPP includes provisions on pharmaceuticals and adjustment on drug exclusivity, especially for biologics • TPP: pros and cons to the rights of the pharmaceutical patent – enhances enforcement, facilitates brand-name drug companies, drives up cost of drugs and may reduce the pace of innovation • The status of the pharmaceutical patent sector in Vietnam before the TPP: the pharmaceutical patent is governed in Vietnam’s Intellectual Property Law 2005, mutatis mutandis in 2009, and harmonized with the Trade-Related Intellectual Property Rights; the pharmaceutical trade is governed by the Drug Administration of Vietnam • Potential outcomes and challenges of TPP for Vietnam’s pharmaceutical patent sector: protects brand-name drugs, reduces infringement; however, restricts access to biologics • Effects to Vietnamese pharmaceutical industry and generic market: makes generic medicines more difficult to access in developing countries because of exclusive protection, which in turn drives up costs; increases competition between local and foreign drug companies because of the cutting down of tariff barrier • Competition between pharmaceutical companies: the issues come from absence of advanced technology in order to produce biologics, favor of Vietnamese people, overloading of imported drugs and ‘wide door’ policies of government to investors; besides, from counterfeiting, lack of drug price control and inadequate intellectual property • Key objectives to ensure a strong pharmaceutical Industry in Vietnam: investment in biologics instead of generic drugs; upgrade of manufacturing plants; focus on pharmaceutical sector’s key strengths for example vaccines; implementation of investment policies for foreign investors • The expectation of further integration and compatible amendments in the Vietnamese intellectual property law: amend shortcomings and even illegal terms to other treaty; supplement with more cobeneficial provisions; implement the national strategy for the pharmaceutical industry development to 2020 and Vision to 2030 Overview Life Sciences Multi-Jurisdictional Guide 2015/16, (2015) References Paper of special note has been highlighted as: • of interest; •• of considerable interest 268 Highlight from Chapter 4: Potential implications of the Trans-Pacific Partnership World Bank, (2016) Giới thiệu chung Hiệp định TPP (a general introduction for the TPP agreement) Ministry of Foreign Affairs NCIEC, MUTR AP (2015) www.mofahcm.gov.vn Article 18.4 Section A Chapter 18 The Trans-Pacific Partnership agreement Article 18.50, Article 18.52 Subsection C Section F Chapter 18 The Trans-Pacific Partnership agreement • These provisions provided a new adjustment of data exclusivity – one of the most causal elements for many advantages, as well as disadvantages, which will have an impact on the pharmaceutical sector later Article 18.48 Subsection C Section F Chapter 18 The Trans-Pacific Partnership Agreement • This provision allows extended protection in some specified cases that have not been regulated in the TradeRelated Intellectual Property Rights agreement before This results in drastic changes in patent adjustment term Article 70 Part VII The Trade-Related Aspects of Intellectual Property Rights Huong Lan Nguyen, Tu Ngoc Trinh, Hien Thi Thu Vu Pharmaceutical IP and Competition Law in Vietnam: Pharm Pat Anal (2016) 5(4) Monika Ermert Pull up your socks – The TPP is done Intellectual Property Watch (2015) www.ip-watch.org Radio New Zealand TPP: key admits medicine costs will rise (2015) www.radionz.co.nz 10 Laurence J Kotlikoff Biosimilars, Data Exclusivity, and the Incentives for Innovation: Response to Grabowski BU Working Paper, (2009) • Clearly proves that the extended data exclusivity will drive up cost and even reduce the pace of innovation As a result, these impacts will lead to a difficult situation for the pharmaceutical market, and then significantly affect people’s lives 11 Kenneth Arrow Economic Welfare and the Allocation of Resources for Invention C.o.E.G.o.t.S.S.R.C (Ed) Universities-National Bureau Commitee for Economic Research Vol The Rate and Direction of Inventive Activity: Economic and Social Factors Princeton University Press, 619 (1962) 12 Law No 36/2009/QH12 of 19 June 2009, amending and supplementing a number of articles of the Law on Intellectual Property 13 Article 58 Section Chapter VII Part III Law No 50/2005/QH11 dated 29 November 2005, on intellectual property future science group How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam?  14 Clause Article 58 Section Chapter VII Part III Law No 50/2005/QH11 dated 29 November 2005, on intellectual property 30 Section 7002 (m)(2) Subtitle A Title VII 42 US Code 262, Biologics Price Competition and Innovation Act of 2009 H.R 3590–3701 15 Clause 10 Article 3.I.1.23 Section 23 Circular No 01/2007/TT-BKHCN dated 14 February 2007, was amended and supplemented by Circular No 13/2010/TT-BKHCN dated 30 July 2010 31 Thu Ha, Giang Tu Opportunities for Pharmaceutical Industry Vietnam Chamber of Commerce and Industry, Vietnam Business Forum (2015) www.vccinews.com 16 Clause Article 123 Section Chapter IX Part III Law No 50/2005/QH11 dated 29 November 2005, on intellectual property 32 Annex 2-D Vietnam Tariff Elimination Schedule The Trans-Pacific Partnership agreement 33 17 Clause Article 133 Section Chapter IX Part III Law No 50/2005/QH11 dated 29 November 2005, on intellectual property TPP – Pros & Cons to Vietnam Pharmaceutical Industry V.V.M.R Consultants (2014) •• Proves that the reduction of the tariff barrier is one of the most important provisions related to duties on pharmaceuticals that will increase competitive advantage 34 Summary Vietnam Pharmaceuticals & Healthcare Report B Research (2015) 35 Global Data: Vietnam’s Pharmaceutical Market Value to Hit $8 billion by 2020 (2014) 36 Ngành duợc thiết bị Y tế: Cơ hội M&A áp lực cạnh tranh (Pharmaceutical Industry and Medical Aids: M&A Opportunities and Competitive Pressure) R.V Research (2015) 37 Le Kim Lien Ngành Duợc Việt Nam đón đầu hội từ Hiệp định TPP (Vietnam’s Pharmaceutical Industry catches up the opportunities derived from the TPP Agreement) Cong Thuong E-Newspaper (2015) www.baocongthuong.com.vn 18 Tilleke & Gibbins Vietnam pharma update 4–5 (2014) http://tilleke.com 19 Article 6, Article Chapter II Circular No 03/2012/TTBYT dated February 2012, provides guidance on clinical trials •• This Article of Circular provides the necessary elements by which the application dossier for generic drug needs notice while accessing Vietnam’s pharmaceutical market 20 Clause Article 14 Chapter II Circular No 44/2014/TTBYT dated 25 November 2014, on registration of drugs 21 Clause 2(g)(h) Article Chapter I Circular No 22/2009/TT-BYT dated 24 November 2009, on registration of drugs 22 Clause Article 93 Section Chapter VIII Part III Law No 50/2005/QH11 dated 29 November 2005, on intellectual property 38 23 Vietnam Intellectual Property Factsheet A.I.S Helpdesk (2013) Section Chapter IV Law No 67/2014/QH 13 dated 26 November 2014, on investment 39 • Through this statistic report, the reader will clearly understand that the currently enforced measures against intellectual property infringements in Vietnam have shortcomings and are ineffective Liyan Chen 2015 Global 2000: The World’s Largest Drug and Biotech Companies Forbes (2015) 40 Article 18.53 Subsection C Section F Chapter 18 The Trans-Pacific Partnership agreement 41 24 N.T.H.A Dang The Duc Vietnam: enforcing patent rights IAM (IP Value 2014), 162 (2014) www.iam-magazine.com TPP poses problems for local pharma companies Vietnamnet Online Newspaper (2015) www.vietnamnet.vn 42 25 NOIP Vietnam Intellectual Property Activities Annual Report 2014 S.a.T.P House (2014) Vietnam Business Review Seiko Ideas Corporation, (41), (2015) 43 26 Le Nguyen TPP – Cơ hội thách thức: Nhiều thách thức với ngành duợc (TPP: pros & cons: many cons to pharmaceutical industry) Tien Phong Online Newspaper (2015) (Vietnamese) www.tienphong.vn Hai vấn đề ngành duợc quan tâm tham gia TPP (Two issues which the pharmaceutical industry concerning post TPP) Bac Giang Online Newspaper (2015) (Vietnamese) www.baobacgiang.com.vn 44 Vietnam produce 12 vaccines for humans Vietnam Breaking News (2015) www.vietnambreakingnews.com 45 Draft Regional Framework for Implementation of the Global Vaccine Action Plan in the Western Pacific World Health Organization Western Pacific Region Section 2.7.2 Annex (WPR/RC65/8), 39 (2014) 46 Nguyen Van Trang Experience With Rotavin-M1: Review of the Vaccine Development, Pre and Post Marketing Evaluation and Future Plan A.V.C.A. 9 (2015) 47 Chapter 9: Investment: Overview US Trade Representative (2015) http://medium.com • Gives the reader a complete analysis of the challenges to the pharmaceutical industry in Vietnam through actual statistical assessment 27 The Bubble Online Magazine TPP: Pros & cons (2015) www.thebubble.org.uk 28 Elizabeth Richardson Health Policy 101: How the TransPacific Partnership will impact prescription drugs The Bookings Institution (2015) www.brookings.edu 29 Section 351 of the Public Health Service Act 42 US Code 262 Regulation of Biological Products future science group www.future-science.com Perspective 269 Perspective  Binh, Anh & Phuong 48 270 Lise Johnson, Lisa Sachs TPP would let foreign investors bypass the Canadian public interest The Globe and Mail (2015) www.theglobeandmail.com 49 Section B Chapter IX The Trans-Pacific Partnership agreement 50 Decision No.68/QD-TTg dated 10 January 2014 of the Prime Minister approving the national strategy on Vietnam Pharm Pat Anal (2016) 5(4) pharmaceutical industry’s development to 2020 and with the vision to 2030 • This decision has provided an appropriate orientation for the Vietnam pharmaceutical industry, and even had a positive influence on Vietnam’s intellectual property legal system future science group ... Additionally, at pharmaceutical patent application, the description section must state the results of clinical trials and pharmaceutical effects, which includes at least the following information [15]... substance • Pharmaceutical/ drug formulation future science group How might the Trans-Pacific Partnership impact on the pharmaceutical sector in Vietnam? • Method or formulation of dispensing • Method... rules pertaining to how the patent is protected, changed, maintained and enforced That said, the Member States were involved in extensive discussions regarding provisions in relation to drugs