Better not trip up on TRIPS – Navigating TRIPS for pharmaceuticals
09 Jul 2025
For parallel imports, it is permissible for authentic branded goods initially sold in one country at a lower price to be imported into another country and subsequently sold again. This is due to the concept of exhaustion of rights. As implied by the name, the rights of the IP owner are exhausted upon the first sale of the IP protected goods. Both exhaustion of rights and parallel import are provisions of an international agreement known as the Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Amidst rising healthcare costs, could pharmaceuticals be parallel imported for a more affordable healthcare system?
When the TRIPS agreement came into force on 1 January 1995, substantive provisions on intellectual property rights were introduced into trading systems, which bind all members of the World Trade Organization (WTO).
Relevant to pharmaceuticals, the TRIPS agreement provides minimum standards1 related to patents, including the following:
a) patentability criteria;
b) subject matters excluded from patentability;
c) exclusive rights and principle of exhaustion;
d) sufficiency of description;
e) compulsory licence; and
f) term of protection.
TRIPS Flexibilities2,3
Notwithstanding the above, WTO members retain some degree of flexibility in adapting their IP law and policies to comply with the TRIPS provisions, and in areas not covered by TRIPS provisions. Such flexibilities, also known as TRIPS flexibilities, are regarded as opportunities to limit patent protection and monopoly.
Referring to a), Article 27.1 of the TRIPS agreement provides that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application”. However, it is within the WTO members’ discretion to define and apply these criteria. For instance, the stringency with which the inventive step requirements are applied, especially for pharmaceuticals, can vary. Of note, when India was obliged to recognise patent protection for pharmaceuticals in order to comply with the TRIPS agreement, it also introduced a controversial clause (Section 3(d) of the India’s patent law) that excludes from patentability new forms or new uses of a known substance without significant differences in efficacy in efforts to thwart evergreening patents in India and to keep costs of life-saving drugs low.
In addition to subject matters excluded from patentability under Article 27.2 and Article 27.3 of the TRIPS agreement, members can also decline protection for new uses of a known product. For example, in Vietnam, medical uses of a known product are considered non-patentable subject matter.
Further, in recognition of the special needs and constraints of least developed countries (LDCs), at present, LDCs are exempted from fully implementing the provisions of the TRIPS agreement.
TRIPS-plus
Meanwhile, at the opposite end of the spectrum, TRIPS-plus provisions that seek to enhance IP protection and enforcement have been increasingly introduced into free trade agreements. Examples of TRIPS-plus provisions4 include:
i) protection for new uses or methods of using a known product;
ii) test data exclusivity periods;
iii) patent term extension for “unreasonable” regulatory or marketing delays;
iv) limits on compulsory licence; and
v) limits on parallel import.
In Singapore, TRIPS-plus provisions listed in i) -v) above are in place. In particular, protection for new uses or methods of using a known product is provided due to the Trans-Pacific Partnership Agreement, and parallel importation of pharmaceuticals products is subject to certain requirements due to the US-Singapore FTA.
Conclusion
In drafting patent applications and developing a robust patenting strategy for pharmaceuticals, consideration ought to be given to the TRIPS flexibilities adopted and the existence of TRIPS-plus provisions in key jurisdictions. Patent applications can then be drafted to optimise the chances of obtaining patents in the respective key jurisdictions, and the commercial potential of the patents can also then be maximised.
References
1. WTO | intellectual property (TRIPS) - agreement text - standards
2. Meaning of Flexibilities
3. Advice on Flexibilities under the TRIPS Agreement
4. https://www.unsgaccessmeds.org/final-report