6 December 2005

Members OK amendment to make health flexibility permanent

WTO members on 6 December 2005 approved changes to the intellectual property agreement making permanent a decision on patents and public health originally adopted in 2003. This General Council decision means that for the first time a core WTO agreement will be amended.

> Text of the decision
> Chair's statement

The decision directly transforms the 30 August 2003 “waiver” into a permanent amendment of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). That waiver made it easier for poorer countries to obtain cheaper generic versions of patented medicines by setting aside a provision of the TRIPS Agreement that could hinder exports of pharmaceuticals manufactured under compulsory licences to countries that are unable to produce them.

This will now be formally built into the TRIPS Agreement when two thirds of the WTO’s members have ratified the change. They have set themselves until 1 December 2007 to do this. The waiver remains in force until then.

The latest decision comes a week after WTO members agreed to extend the transition period for least-developed countries, allowing them until 1 July 2013 to provide protection for trademarks, copyright, patents and other intellectual property under the WTO’s agreement. Least-developed countries had already been given until 2016 to protect pharmaceutical patents.

“The agreement to amend the TRIPS provisions confirms once again that members are determined to ensure the WTO’s trading system contributes to humanitarian and development goals as they prepare for the Hong Kong Ministerial Conference,” Director-General Pascal Lamy said.

“This is of particular personal satisfaction to me, since I have been involved for years in working to ensure that the TRIPS Agreement is part of the solution to the question of ensuring the poor have access to medicines,” Mr Lamy said.

The amendment is designed to match the 2003 waiver as closely as possible. Other procedures used in 2003 are also matched, including a statement read out by the General Council chair. In order to achieve this, delegations have been involved in intricate legal discussions aimed at ensuring that the legal meaning and weight, and the hierarchy of provisions, are preserved as exactly as possible.

The amendment completes a process that began with the declaration on TRIPS and health that ministers made at the Doha Ministerial Conference in November 2001. The deadline for least-developed countries to protect pharmaceutical patents revised in June 2002. This was followed by the waiver in August 2003, which itself called for the eventual amendment.

The decision

Article 31(f) of the TRIPS Agreement says that production under compulsory licensing must be predominantly for the domestic market. The concern was that this could limit the ability of countries that cannot make pharmaceutical products from importing cheaper generics from countries where pharmaceuticals are patented.

As with the 2003 waiver, the permanent amendment will allow any member country to export pharmaceutical products made under a compulsory licence for this purpose. They may need to change their own laws in order to do so.

So far, Norway, Canada and India have informed the WTO that their laws are complete, while the Republic of Korea and the EU have said their new laws are on the verge of coming into force.

A group of developed countries are listed as announcing that they will not use the system to import.

A number of other countries announced separately that if they use the system as importers it would only be for emergencies or extremely urgent situations. They are: Hong Kong China, Israel, Korea, Kuwait, Macao China, Mexico, Qatar, Singapore, Chinese Taipei, Turkey and United Arab Emirates.

A separate statement by General Council chair Amina Mohamed, Kenya’s ambassador, is designed to provide comfort to those who feared that the decision might be abused and undermine patent protection.

The statement describes members’ “shared understanding” on how the decision is interpreted and implemented. It says the decision will be used in good faith in order to deal with public health problems and not for industrial or commercial policy objectives, and that issues such as preventing the medicines getting into the wrong hands are important.

The amendment

The amendment itself is in three parts. Five paragraphs come under Article 31 “bis” (i.e. an additional article after Article 31). The first allows pharmaceutical products made under compulsory licences to be exported to countries lacking production capacity.

Other paragraphs deal with avoiding double remuneration to the patent-owner, regional trade agreements involving least-developed countries, “non-violation” and retaining all existing flexibilities under the TRIPS Agreement.

A further seven paragraphs are in a new annex to the TRIPS Agreement. These set out terms for using the system, and cover such issues as definitions, notification, avoiding the pharmaceuticals being diverted to the wrong markets, developing regional systems to allow economies of scale, and annual reviews in the TRIPS Council.

An “appendix” to the annex deals with assessing lack of manufacturing capability in the importing country. This was originally an annex to the 2003 decision.

The new Article 31 “bis” and annex of the TRIPS Agreement are attached to a protocol of amendment. This in turn is attached to a General Council decision, which adopts the Protocol and opens it for members to accept it by 1 December 2007.

Find out more on the WTO website:

> The 6 December 2005 texts and the 2003 decision