Abstract
Biodiversity has never ceased to be an imminent topic, and healthcare and the pharmaceutical sector have remained in the spotlight in recent years. On one hand, the pharmaceutical sector is often concerned with promoting access to medicinal products, many of which are products of biodiversity – from plants, and animals to microorganisms. On the other hand, the legal instruments governing biodiversity are created with a view to regulate the sustainable use of components of the ecosystem and its resources, with the end goal of conserving it and further enhancing biodiversity. The interaction between these two sides does not need to be restrictive but could spur mutual development. With this principle in mind, the article at hand attempts to explore the interaction between The Convention on Biological Diversity (CBD), the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits (hereinafter “Nagoya Protocol” or “the Protocol”) and the pharmaceutical sector in the Vietnamese context.
The pharmaceutical (or recently, biopharmaceutical) sector is experiencing an ever-growing tendency to turn to more cutting-edge therapy products, such as personalized medicines, the heightened importance of vaccines, and biologics. In 2022, the United States Food and Drug Administration’s (US FDA) approvals for biologics (made up of new modalities such as antibody-drug conjugates, bispecific proteins, and cell and gene therapies) broke even with those of small molecules for the first time. Notably, in a year when the US FDA dropped, approvals for biologics accounted for about a third of the total number of approvals. This signals the growing significance of instruments governing biodiversity and benefits from it, such as the CBD and Nagoya Protocol in the pharmaceutical sector. Upon examining how the CBD and the Nagoya Protocol are currently applied in Vietnam, the author took note that Decree 59/2017 was drafted with the 2016 Pharma Law as one of its foundations. However, no article of the existing Pharma Law elaborates further on managing access to genetic resources in the pharmaceutical sector, despite obviously being one of the targeted parties of the CBD and the protocol. It is evident that there is a gap in current Vietnam’s legislation on the entanglement of biodiversity, access to it and benefit sharing, and the pharmaceutical sector.
The article will address three aspects:
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The Convention on Biological Diversity (CBD), The Nagoya Protocol and its significance
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Vietnam’s biodiversity and relevant domestic legislations & Vietnam’s emerging pharmaceutical sector and its aspirations for the future
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The author’s analysis, observations, and recommendations on the way forward
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The Convention on Biological Diversity (CBD), The Nagoya Protocol and its significance
The Convention on Biological Diversity
The Convention on Biological Diversity (CBD) is the international legal instrument for “the conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources”. The CBD entered into force on 29 December 1993. Until now, the Convention is the only international instrument comprehensively addressing biological diversity and has been ratified by 196 nations. The Convention on Biological Diversity covers biodiversity at all levels: ecosystems, species, and genetic resources. It also covers biotechnology – all possible domains that are directly or indirectly related to biodiversity and its role in development, ranging from science, politics, and education to agriculture, business, culture, and much more.
The Convention’s three objectives are:
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The conservation of biological diversity
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The sustainable use of the components of biological diversity
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The fair and equitable sharing of the benefits arising out of the utilization of genetic resources.
The Nagoya Protocol
The Nagoya Protocol was adopted in October 2010, in Nagoya, Japan, and entered into force on 12 October 2014 with the view to further advancing the third goal “fair and equitable sharing of the benefits arising out of the utilization of genetic resources” of the CBD. October 2024 will see the 10th anniversary of The Protocol marking one step further into the shift towards countries, especially those abundant in biodiversity, asserting their recognized sovereignty over their resources at a national level.
The Protocol’s goals are to “conserve biological diversity, sustainably use its components, and further enhance the contribution of biological diversity to sustainable development and human well-being”. In its preamble, the protocol alludes to the International Health Regulations (2005) of the World Health Organization and the importance of ensuring access to human pathogens for public health preparedness and response purposes.
The CBD and the Nagoya Protocol, with their objective and subject matters, have made substantial impact on private actors, specifically the pharmaceutical sector, who frequently engage with genetic materials non-commercially and commercially.
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Vietnam’s biodiversity and relevant domestic legislations & Vietnam’s emerging pharmaceutical sector and its aspirations for the future
Biodiversity
Vietnam’s biodiversity is far from modest. Its wealth in nature has been extensively featured by the media and recognized in scientific research. According to the 2022 Biodiversity Report of the Vietnam Ministry of Natural Resources and Environment, Vietnam is one of the 30 areas with irreplaceable biodiversity in the world, and within 6 prioritized biodiversity areas with 62.600 identified species. With this comes a considerable source of natural biodiversity, endemic species, genetic resources, local plants and livestock genetic resources.
Implementation of the CBD and Nagoya Protocol
Vietnam ratified the CBD in November 1994. In 2014, it ratified the Nagoya Protocol. In 2018, the Biodiversity Law, amending the 2008 Biodiversity Law, was amended. It also issued Decree No. 59/2017/ND-CP ON Management of Access to Genetic Resources and Benefit Sharing arising from their Utilization in 2017. The Decree sets out the parties’ responsibilities, detailed procedures on access and management of genetic resources in Vietnam, as well as scope of commercial and non-commercial use of such materials. Most importantly, it thoroughly recognizes key principles and incorporates key mandates of the CBD and the Nagoya Protocol. The Ministry of Natural Resources and Environment is the national focal point for implementing the Nagoya Protocol.
Vietnam’s key rules for managing access to genetic resources and benefit sharing arising from their utilization
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Vietnam shall exercise sovereignty over all genetic resources in its territory.
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The foreign user is only entitled to engage in access to genetic resources as duly permitted.
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Encourage Vietnamese organizations and individuals to participate in research and development on genetic resources.
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The benefit sharing arising from the utilization of genetic resources shall be fair and equitable among relevant parties and shall contribute to the effective management of biological resources, promote the scientific research and the commercialization of genetic resources and focus on the role of indigenous and local communities in conservation and sustainable utilization of genetic resources.
A national database for biodiversity data has also been set up, which also lists approved licenses of access to genetic resources issued by the MONRE.
Besides the above-mentioned legislations, Vietnam is currently party to several international conventions and protocols concerning biodiversity.
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Cartagena Protocol on Biosafety
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Convention on International Trade in Endangered Species of Wild Fauna and Flora
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Ramsar Convention on Wetlands
Vietnam issued Decision 149/QD-TTg 2022 – its National Strategy until 2030 on Biodiversity with a vision to 2050 in 2020. In this strategy, Vietnam reiterates its commitment to promote the implementation of the Nagoya Protocol on access to genetic resources and benefit-sharing and enhance the legal framework for the implementation of the law on access to genetic resources.
The Pharmaceutical Sector in Vietnam
The pharmaceutical market in Vietnam has been growing steadily. The report of the Drug Administration of Vietnam – DAV (Ministry of Health) also shows that the total value of Vietnam’s pharmaceutical market has increased from 2.7 billion USD in 2015 to 7 billion USD in 2024, with a forecasted growth rate of 11% per year to reach more than 10 billion USD by 2026. In recent years, Vietnam has put forward strategic legislation with orientation and mandate aiming to propel the country’s pharmaceutical industry. A few notable documents are listed in chronological order below:
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Decision No. 376/QD-TTg in 2021 Decision by the Prime Minister Approving Development Program for Pharmaceuticals Industry And Domestically Produced Herbal Ingredient Until 2030 And Vision To 2045
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Resolution 36/NQ-TW in 2018 On Development and Application of Biotechnology for The Sustainable Development of The Country In The New Situation
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Decision No. 1165/QD-TTg in 2023 on the National Strategy for the Development of Vietnam’s pharmaceutical industry in the period to 2030 and a vision to 2045
The most recent, Decision No. 1165 of the Prime Minister, devises an ambitious action to bring Vietnam’s aspiration of becoming the hub for manufacturing innovative medicines in ASEAN and becoming a nation with a developed biotech industry in the world. Among other things, these two items are relevant to the article’s discussion:
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Enable policies to support to manufacture and grow pharmacognosy and encourage the development of the traditional medicine sector in a sustainable manner.
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Become the regional manufacturing hub of the region of high-value medicines (with concrete KPIs on capacity building, technology transfer, and contract manufacturing)
At the time of writing this article, the most crucial law for the pharmaceutical industry – the Pharma Law (latest 2016) of Vietnam is being tabled at the National Assembly. It has been garnering overwhelming attention not only within Vietnam but also internationally, and anticipation for it to install tangible and quantifiable guiding regulations and incentives to achieve the two abovementioned objectives.
The latest official draft, the revised Pharma Law (public draft in May 2024) tentatively provides for a combination of incentives for the sector development. The article will cover the following for relevance of the discussion:
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Responsibilities of the Ministry of Science and Technology in the application of science and technology to develop the industry; responsibilities of the Ministry of Finance in allocating funds for programs on the development of the pharmaceutical industry; responsibilities of the Ministry of Agriculture and Rural Development in management of selection and breeding, cultivating and collecting medicinal herbs; disseminate techniques for cultivation, prevention and control of diseases on medicinal plants and animals.
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Promote R&D, technology transfer and manufacturing of drug raw materials, “high-tech” drugs, “biotech” drugs via clear incentives and support for investment in developing several types of medicines, namely new drugs, vaccines, biologics, rare drugs, drugs for prevention and control of social diseases, medicinal drugs and traditional medicines produced from Vietnamese medicinal herbs bearing national brands; new drugs from domestic endemic medicinal herbs; preservation of rare and endemic medicinal genetic resources in the country, create new varieties from domestic medicinal genetic resources…
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The author’s analysis, observations and recommendations on the way forward
It is often commented by industry experts, the media, as well as the Ministry of Health that despite Vietnam’s fast-developing economy, sizable biodiversity, as well as long-standing traditional knowledge associated with medicinal herbs and animal-derived products on land and underwater, there is much to desire for in terms of pharmaceutical sector development, especially the domestic pharmaceutical market. This part of the article attempts to chart out preliminary recommendations, based on the author’s understanding and experience.
Cross-ministerial coordination is key
Considering the state of play of Vietnam’s pharmaceutical industry, its focus on traditional medicines, and its ambitions, the relevant Ministries: Ministry of Natural Resources and Environment, Ministry of Health, Ministry of Science and Technology, Ministry of Agriculture and Rural Development, and the Ministry of Finance could take this opportunity to form concrete policies that are interconnected, coherent and benefit their relevant sectors. For consideration, the starting point could be the previously introduced Decision 1165 and Decision 149/2020 – its National Strategy towards 2030 on Biodiversity with a vision to 2050 in 2020 where Vietnam reiterates its commitment to promote the implementation of the Nagoya Protocol on access to genetic resources and benefit-sharing and enhance legal framework for the implementation of the law on access to genetic resources.
Communication and collaborative plans between Ministries are not uncommon in Vietnam but need strengthening. It is observed that fragmentation in legislation, specifically those that are multi-sectoral, remains a challenge faced by companies in their course of operation. To actualize national strategies, several national steering committees have been established throughout the years, but challenges remain in the execution phase or the strategies are replaced quickly without concrete results upon new management. Besides developing a new framework for effective implementation, it is also highly recommended that cross-ministerial collaboration and coordination be reinforced, in terms of resolving existing issues and with the view to actualising potential policies. In the authors’ experience, most dilemmas faced by the private sector can be traced back to the dissimilarity between authority agencies when it comes to interpreting cross-sectoral legislation, thus, different guidance and requirements, in the execution stage. Meanwhile, authorities have found it challenging to act outside their respsective scope of work of responsibility. With a view to attain the goal of developing the pharmaceutical sector, at the same time, deliver goal (1) as noted above, resolving pending coordination challenges is crucial.
The following considerations are relevant to Goal (2)
A. Enabling legal framework and supervision of Research & Commercial activities
Pharmaceutical companies and research institutes, specifically those based within the European compliance, often have Access Benefit Sharing (ABS) Guidelines that they adhere to when accessing genetic resources – this is referred to as “Nagoya compliance”. Meanwhile, ABS requirements in Vietnam’s Decree 59 cover not only access to genetic resources, but also derivatives for R&D, which means Vietnam will have grounds for an ABS claim if a product originating from a Vietnamese genetic matter enables the discovery of a new chemical entity, for example. The scope of Decree 59 also concerns both commercial and research activities, so parties wishing to conduct clinical trials and collaborative research activities should keep regulations concerning the CBD and the Protocol in mind. Fortunately, Vietnam has issued detailed guidance on how to obtain relevant permits to access Vietnamese genetic resources, and set up the digital procedures on the National public service portal. and a corresponding database of parties who have successfully registered for permits.
Going one step further, the role of the CBD and the Protocol could potentially be visible in M&A deals and will be even more relevant for herbal and traditional medicines companies considering lively M&A in Vietnam’s healthcare sector, as non-compliance with the Nagoya Protocol could significantly impact the value, and even the viability of the deal.
B. Technology transfer
Technology transfer is one of the buzzwords of the Pharma Law revision, since Vietnam’s policymakers are convinced that it will be the key factor to an advanced pharmaceutical sector that is able to manufacture high-value medicines, enabling a self-dependent domestic market. Both the CBD and the Nagoya Protocol address technology transfer to the provider of the genetic resources. The CBD frames “access to and transfer of technology” as an essential obligation among Contracting Parties, provided that such activities are under “fair and most favourable terms”. The Nagoya Protocol takes a slightly approach, rendering technology transfer as a contractual, returning benefit one party offers to the party of from whom the genetic resources come, under fair and most favourable terms.
The CBD defines “technology” and “biotechnology” as below:
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“Technology” includes biotechnology.
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“Biotechnology” means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use.
Leveraging such generously defined terminologies, the CBD and the Nagoya protocol may enable a gateway to a wide range of technology of therapy products that stem from its genetic resources, which would benefit several stakeholders.
C. Capability building
Aside from providing access to technology, the forms of cooperation in the CBD will provide several enablers, as well as incentives for the country’s scheme to sustainably conserve its genetic materials, with a view to gaining opportunities to build their capability. Under Article 18 of the CBD, a Contracting Party shall promote technical and scientific cooperation with other Contracting Parties, in particular developing countries, in implementing this Convention, inter alia, through the development and implementation of national policies, with focus on human resources development and institution building. Furthermore, parties, through national legislation and policies, encourage and develop methods of cooperation for the development and use of technologies, including indigenous and traditional technologies, as well as promote cooperation in the training of personnel and exchange of experts. In the Annex of the Nagoya Protocol, these forms of collaboration are clarified as non-monetary benefits that shall be shared with the Party providing genetic resources.
Moving on from the discussion on the CBD, Nagoya protocol and Vietnam’s goals in the Pharma Law, the intersection between these instruments and other topic of interests for the pharmaceutical sector will be touched upon.
D. The CBD and the Nagoya Protocol and public health
With the increasing significance of genetic resources, the interaction between the pharmaceutical sector, public health challenges, the CBD and the Nagoya Protocol is deemed to become more prevalent. One that has been highlighted in the last decades is the access to pathogens – considered a genetic resource under the scope of the CBD and the Nagoya Protocol.
Due to the unclear scope of “derivatives” of genetic materials in both the CBD and the Nagoya Protocol, it is highly advised that “access and benefit sharing” must not be construed in a rigid manner and not read without caution. The author is of the position that a “quid-pro-quo” to benefit sharing approach should leave out pathogens (bacteria, viruses, etc…), meaning, party is not advised to reject access to such pathogen without benefit-sharing (whether in forms of reciprocating technology transfer or financial return) commitment from the other party. Therefore, an overbearing interpretation of access-benefit sharing will end up taxing innovation, which is by no means, the objective of the CBD and Nagoya Protocol or the CBD. Common good narrative aside, unconditional access to pathogens and relevant data the country in possession may have documented, will help minimise delays in a timely development of countermeasures, in situations such as in global epidemics, when every second closer to finding a solution counts, as well as support risk assessment. A due regard to cases of present or imminent emergencies that threaten or damage human, animal or plant health, as determined nationally or internationally. Being deployed reasonably with a structured approach to pathogen sharing, the Nagoya Protocol has the potential to lead to coordinated networks that share common public health goals and approaches and even contribute to legal certainty regarding pathogen sharing.
E. Interaction with IP
Specifically concerning the subject of technology transfer, the interaction with IP laws is inevitable, due to the obvious connection with the proprietary nature of technologies (considering the broad terminologies mentioned above). Moreover, scrutinization of policy and implementation of intellectual property management, especially among cooperative framework for research, development, and collaboration in both commercial and non-commercial context. The CBD also sets out that in the case of technology subject to patents and other intellectual property rights, access to the transfer of such technology shall be consistent with the adequate and effective protection of intellectual property rights in Article 16. This could also render international instruments, such as the TRIPS Agreement relevant, but due to certain limitations, the article will not touch on this interaction.
E. Interaction with IP
The CBD indicates the most preferred forum is negotiation, then mediation, and after that comes arbitration under the CBD and submission to the ICJ. Biodiversity litigation has been on the rise in the recent decade, but not much literature or jurisprudence has been documented regarding disputes arising under the CBD and the Nagoya protocol, or specifically related to access-benefit sharing, to the best of the author’s awareness. If a case arises in the near future, it will certainly attract keen interest, due to the sheer complexity of subject matters in terms political, cultural, scientific and even moral aspects as well as potential parties involved.
Conclusion
At the end of the day, it is important to strike a balance, between appealing incentives and efficient, reasonable management of the country’s genetic resources, and prospective benefits stemming from them. This requires lawmakers to approach with ample agility requires and be able to avoid the pitfall of rigidly constraining themselves with rigid interpretation. With a fitting legal framework and efficient cross-institutional and multi-actor collaboration, the advance of the pharmaceutical industry can generate shared benefits for biodiversity reservation and vice-versa, appropriate management of access to nature’s endowments can benefit innovations in healthcare. The crossover between Biodiversity and Healthcare, particularly the pharmaceutical sector, is expected to maintain its relevance, in the face of deteriorating environmental outlook, and volatile epidemic occurrences.
Disclaimer:
The article only reflects the author’s viewpoints, not those of her affiliations or employer.
About the Author:
Huyen Do is holds a LL.M from the University of Cambridge, and is currently serving as a Policy Officer at the Pharma Group, Vietnam.
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