TRIPS and public health: the situation in late 2005

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Background   

Now largely settled is the question of how to ensure that patent protection for pharmaceutical products does not prevent people in poor countries from having access to medicines — while at the same time maintaining the patent system’s role in providing incentives for research and development into new medicines.

The remaining task is to convert a General Council decision of 30 August 2003 into a permanent amendment of the TRIPS Agreement.

Underlying the deliberations are flexibilities such as “compulsory licensing” that are written into the TRIPS Agreement — governments can issue compulsory licenses to allow a competitor to produce a patented product or use a patented process without the permission of the patent holder, under certain conditions aimed at safeguarding the legitimate interests of the patent holder.

Parallel importing is also possible. This is where a product sold by the patent owner more cheaply in one country is imported into another without the patent holder’s permission. Countries’ laws differ on whether they allow parallel imports. The TRIPS Agreement states that governments cannot bring legal disputes to the WTO on this issue; the Doha declaration on TRIPS and public health clarified that this means countries are free to set up their rules and procedures dealing with parallel imports.

(These flexibilities do not have to be put into practice to have an effect. They are sometimes used as a means of bargaining. For example the threat of a compulsory licence can encourage a patent holder to reduce the price.)

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The Doha mandate 

Before the 2001 Doha Ministerial Conference, some governments were unsure of how these flexibilities would be interpreted, and how far their right to use them would be respected. The African Group (all the African members of the WTO) took the lead in pushing for clarification.

A large part of this was settled when WTO ministers issued a special Declaration on TRIPS and Public Health at the Doha meeting in November 2001, alongside their main Doha Declaration.

In the main declaration, they stressed that it is important to implement and interpret the TRIPS Agreement in a way that supports public health — by promoting both access to existing medicines and the creation of new medicines.

In the separate declaration, they agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health.

They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement, in particular compulsory licensing and parallel importing.

And they agreed to extend exemptions on pharmaceutical patent protection for least-developed countries until 2016. (The TRIPS Council completed the legal drafting task on this in mid-2002.)

On one remaining question, they assigned further work to the TRIPS Council — to sort out how to provide extra flexibility, so that countries unable to produce pharmaceuticals domestically can import patented drugs made under compulsory licensing. (This is sometimes called the “Paragraph 6” issue, because it comes under that paragraph in the separate Doha declaration on TRIPS and health.)

The issue arises because Article 31(f) of the TRIPS Agreement says products made under compulsory licensing must be “predominantly for the supply of the domestic market”. This applies directly to countries that can manufacture drugs — it limits the amount they can export when the drug is made under compulsory licence. And it has an indirect impact on countries unable to make medicines — they might want to import generics made in countries under compulsory licence, but find that Article 31(f) poses an obstacle to other countries supplying them.

The TRIPS Council was instructed to find a solution and report to the General Council on this by the end of 2002. However it was not until 30 August 2003, shortly before the Cancún Ministerial Conference, that consensus could be reached.

The agreement takes the form of a General Council decision to waive provisions of Article 31(f) subject to certain conditions. It enables countries with production capability, to export drugs made under compulsory licence to countries that cannot manufacture them.

The waiver will last until the TRIPS Agreement is amended. It includes provisions on transparency (which give a patent-owner some opportunity to react by offering a lower price), and special packaging and other methods to avoid the medicines being diverted to other markets. An annex describes what a country needs to do in order to declare itself unable to make the pharmaceuticals domestically.

Over 30 developed countries have made a commitment within the decision not to import under this decision. And, as recorded in a statement by the General Council chairperson, a number of others stated they will only do so in emergencies or extremely urgent situations.

Consensus was achieved with the aid of a Chairman’s statement, made at the time the waiver was adopted, which sets out a number of shared understandings about the waiver.

The decision refers to drugs needed to address the public health problems recognized in Paragraph 1 of the original declaration that ministers issued in Doha. This says: “We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”

  

Since then …  

The final step is to convert the waiver into a permanent amendment of the TRIPS Agreement. The decision said members would complete this by the end of June 2004, but consensus has not yet been reached on how to achieve this. Part of the discussion is about the best way to handle the text, for example how much to put in Article 31 itself and how much in an annex to the TRIPS Agreement.

But members also differ on how closely the amendment should follow the waiver and how to handle the separate chairperson’s statement made at the time the General Council adopted the decision. Some developing countries want to drop provisions that they consider to be unnecessary for an amendment. Some developed and other countries say the waiver was so difficult to negotiate that it should be translated directly into an amendment in order to avoid further delays.

Although the waiver is temporary, so long as there is no agreement on a permanent amendment the waiver will continue to be in force.