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WTO NEWS: 2000 NEWS ITEMS

11 October 2000
An ‘appropriate balance’ for public health
Speech by WTO Deputy Director-General Miguel Rodríguez Mendoza

“The challenge that we all face is how to reach an appropriate balance between sharing the high costs associated with research and development activities and, at the same time, sharing the results of these activities, in terms of access to new drugs to treat the diseases prevalent in different countries. Intellectual property rights are a necessary part of finding that balance.”

High Level Round Table on accelerated action targeted at major communicable diseases within the context of poverty reduction
Organized by the European Commission and co-sponsored by WHO and UNAIDS, Brussels, 28 September 2000.

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I would like to make a few remarks on behalf of the Director-General of the Word Trade Organization. I would like to start by saying how much we welcome this initiative taken by the Commission of the European Communities. The need for enhanced action to deal with the major communicable diseases, in particular HIV/AIDS, malaria and tuberculosis, is not only important for the people who suffer from these diseases, but also for the development prospects of their countries and for the international community at large. It is indeed one of the major challenges facing us today.

We welcome in particular the fact that the Commission is taking an integrated and interdisciplinary approach to this problem in its new policy framework. Clearly co-operation is required between different departments within governments, between different countries, both rich and poor, and between different intergovernmental organizations. From this perspective, let me say a few words about the role of the WTO, starting first with the issue of intellectual property rights.

It is important to address this question both from the angle of providing adequate incentives to research and development and from the angle of affordable access to new drugs. The challenge that we all face is how to reach an appropriate balance between sharing the high costs associated with research and development activities and, at the same time, sharing the results of these activities, in terms of access to new drugs to treat the diseases prevalent in different countries.

Intellectual property rights are a necessary part of finding that balance. They have an essential role to play in providing incentives for research and development. No company will invest the resources required for research and development without a promise of some degree of exclusivity in exploiting the results of its efforts. At the same time, it is also clear that the intellectual property system itself will not be sufficient to provide incentives for research and development into the diseases which mainly afflict the poor in developing countries, with limited purchasing power. We thus very much welcome the growing worldwide recognition of this and the initiatives being taken to fill this gap, involving as they do intergovernmental agencies, national governments and private foundations as well as the industry itself. The Commission’s Communication is an important contribution in this connection.

We could say that all WTO Members have committed themselves in some measure to support the global research and development effort, by virtue of their acceptance of the TRIPS Agreement. In this connection, it should be noted that the TRIPS Agreement does not stand in the way of that support being modulated to take into account the capacity to contribute of different countries and the populations within them. It is encouraging that, increasingly, companies are willing to price their patented products at levels which take into account this factor and we note the support in the Commission’s Communication for further use of differential pricing of pharmaceuticals. This is an area that we in the WTO Secretariat have been discussing in the context of our cooperation with the World Health Organization, and we are jointly preparing a workshop involving all interested parties which would seek to examine the legal, institutional and political environment that would favour widespread use of differential pricing.

The TRIPS Agreement also represents an effort to find an appropriate balance between the need to promote research and development and the need to ensure affordable access to the fruits of these activities. This balance is reflected in a large number of provisions, the details of which I will not go into now, but which provide flexibility to governments so as to enable them to implement their intellectual property regimes in a manner that takes account of underlying public policy objectives.

Moving beyond the intellectual property rights issue, let me join the Commission in underlining that the vast majority of drugs that are essential to treat major communicable diseases are not under patent protection anywhere. They are in the public domain. The fact that these drugs and other inventions are far from fully exploited indicates that national and international efforts to improve financing, distribution and healthcare infrastructure are vital. While most of these areas are outside the competence of the WTO, we are looking, in co-operation with other intergovernmental organizations, at the impact of customs tariffs on the prices of pharmaceuticals and other items important for public health, such as bednets. We are also keen to cooperate to maximize the extent to which the provisions of the TRIPS Agreement relating to counterfeit products can assist in the fight against the marketing of substandard or even dangerous counterfeit pharmaceutical products, as is all too often the case in some developing countries.

In this sense, let me say that we, at the WTO, are fully convinced that there is a very strong relationship between trade, poverty and health. We fully acknowledge that efforts to promote basic public health as well as public education have a vital role to play in facilitating development. But, by the same token, development and the increased resources that it provides are vital for promoting public health. And an open trading system is a key component of development efforts.