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Governments share interpretations on TRIPS and public health

Unusually frank and detailed interpretations of the WTO’s intellectual property agreement characterized the 20 June 2001 discussion on “Intellectual Property and Access to medicines” in WTO’s Council on Trade-related Aspects of Intellectual Property Rights (TRIPS). Member governments said they are committed to ensure that the TRIPS Agreement is part of the solution for the health crises in the world’s poorest nations.



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Trade-Related Aspects of Intellectual Property Rights (TRIPS)

Following the seven-and-a-half-hour session, member governments will now consider how to proceed, including whether to draft a statement for ministers to issue at the November Ministerial Conference in Doha. Most speakers described the discussion as a first step, and not a one-off event.

The special discussion on Intellectual Property and Access to Medicines was one item on the agenda of this week’s regular meeting of the WTO Council on Trade-related Aspects of Intellectual Property Rights (TRIPS). It was held at the request of the African Group, i.e. all African members of the WTO.

Two papers were circulated for the meeting: one from the European Union and another from a group of around 50 developing countries.

(These papers can be found here, along with a statement from WTO Director-General Mike Moore. For a background explanation of some of the issues, including the provisions cited here, see the WTO fact sheet on TRIPS and pharmaceuticals.)

Over 40 delegations spoke. A wide range of issues were discussed, some for the first time ever in the TRIPS Council. Among the main items were:


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1. Overall principles  

Virtually all speakers said patent protection is needed as an incentive for new pharmaceuticals to be invented. All agreed that the TRIPS agreement contains flexibilities allowing governments to deal with public health.

TRIPS should not be part of the problem but part of the solution, many delegations said.

So the discussion focused on the overall objectives and principles of the TRIPS Agreement (Articles 7 and 8) and the flexibilities included in the agreement to deal with specific circumstances.

Several delegations said that patent protection is only one issue among many that relate to the health problems of poor countries. Among the other issues are public health infrastructure and pricing policies. But several delegations also said these should be discussed in organizations that are more directly responsible for these issues, and not in the TRIPS Council.

Many developing countries argued that Articles 7 and 8 mean that the TRIPS Agreement should be understood to allow governments the freedom to meet public health objectives. Some called for this interpretation to be underscored by a political declaration at the forthcoming Ministerial Conference in Doha, which would allow governments to pursue health policies in the secure knowledge that they would not be violating TRIPS. No one objected to a declaration in Doha. Some said they are willing to discuss the contents.

Several delegations said governments should not be put under pressure bilaterally or in the WTO to limit their use of the flexibilities built into the TRIPS Agreement. Some countries (African Group, Norway) urged WTO members, particularly developed countries, not to take legal action under the WTO dispute settlement procedure on TRIPS and public health issues.

Some developing countries also called for deadlines for implementing the TRIPS Agreement, particularly provisions related to public health, to be postponed — the transition period for developing countries in general ended on 1 January 2000, and for least-developed countries it ends on 1 January 2006.

The US argued that patent protection for pharmaceuticals serves public health policies because it creates new medicines. Switzerland said that if there were no patents, there would be no new medicines, and there would therefore be no discussion on affordable medicines.

Speakers broadly took the view that the TRIPS Agreement contains enough flexibility to allow governments to pursue public health objectives. Some developing countries echoed the view of the developing countries’ group’s paper, that this should be clarified, and if that proves insufficient, members should consider amending the agreement.


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2. Flexibility — compulsory licensing  

Several delegations said that governments are free to set their own justifications for compulsory licensing because the TRIPS Agreement does not spell out all the possible reasons.

On one criterion mentioned in the TRIPS Agreement (national emergency), most delegations, including developed countries such as the US, EU, Japan, said the current HIV/AIDS epidemic is clearly an emergency in sub-Saharan Africa and other countries in similar circumstances.

A particular subject raised for the first time in the TRIPS Council, and one that was discussed a lot, was the scope to produce for export under compulsory licensing, in order to supply a poor-country market.

This was considered important because many smaller developing countries may want to use compulsory licensing for import rather than local production. The TRIPS Agreement says products made under compulsory licences should be “predominantly for the domestic market”. Many participants indicated their desire to ensure that the agreement does not stand in the way of countries using compulsory licenses for import.

There was some discussion of the details of when this might or might not be possible. Most developing countries called for the provisions to be interpreted leniently.

Some developing countries argued that compulsory licensing could be used to develop local production — which they said is necessary for public health and technology transfer — if a patent-holder does not produce the medicine in the country. The US and Switzerland said this would be an industrial development policy (strengthening local industry) and not a health policy.


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3. Flexibility — parallel imports  

Developing countries said parallel imports are clearly allowed under Article 6 and that it is essential to ensure prices are as low as possible. The EU, US and Switzerland warned that this could undermine “differential pricing” (companies selling at lower prices in poorer markets) if cheaper products flow into developed countries’ markets.


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4. Other issues  

Test data: Article 39.3 of the TRIPS Agreement says governments have to protect confidential test data — used to decide whether “new chemical entities” are safe for public consumption — against “unfair commercial use”.

In the meeting, the EU, Switzerland, US and Japan said the most effective way of implementing this provision is to provide a period of exclusive use of the data for the company that developed it. Some developing countries contested this interpretation. The EU, Switzerland and Japan said that their interpretation should not impede compulsory licensing of patented pharmaceuticals, notably under the fast-track procedures where a national emergency is involved.

Differential pricing: Many developed and developing countries said differential pricing is also a suitable method for access to medicines although some developing countries said this should be discussed elsewhere because it is not part of the WTO’s mandate.


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5. What next?  

The chairperson will consult with members. Then, on Friday morning the TRIPS Council will meet informally to discuss whatever is proposed. A decision on next steps could be reached on Friday.