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Medicines won’t be cheaper under TRIPS and Public Health decision

Geneva, 31 Aug (Chakravarthi Raghavan) - The WTO General Council adopted Saturday a decision on implementing paragraph 6 of the Doha Ministerial Declaration on TRIPS and Public Health after the GC Chairman made a statement a Statement of Understanding, purportedly to remove patent obstacles to import of cheap drugs by countries that have no manufacturing facilities and cannot use the “flexibilities” said to be available under TRIPS.

Both the text of the Decision and the Statement of Understanding are available on the WTO website.

The adoption of the text, despite the several statements at the General Council, will not enable any poor country badly in need of medicines at affordable prices to import them quickly or easily from generic manufacturers.

All that the decision will perhaps do is to enable the United States and its President (if he plans to go to Cancun) to do so without facing the opprobrium it has invited so far from civil society groups within the US and elsewhere over its stand and support for the Big PhRMA.

Perhaps the only explanation, provided in private by some of the key delegations and their ambassadors for this outcome, is that it removes the item from hanging over the Cancun Ministerial, where it could be used as a ‘trade off’ by the US, to get ‘concessions’ from the major developing countries for its demands, and the ability of the US to use pressures from the poor countries on the bigger developing countries.

This explanation, unfortunately, does not stand much scrutiny, notwithstanding the arguments at the informal General Council on Friday, and the formal on Saturday, where several African delegations spoke up in calling for quick adoption by talking of the hundreds or thousands suffering from or dying in their countries as a result of AIDS.

None of these delegates appear to have spoken out like this at the WTO, when the US on behalf of its Big PhRMA (which had generously funded the Bush and Republican campaigns) had held up for almost a year now, implementation of para 6 of the Doha declaration and the decision adopted Saturday, which had been negotiated by the Chairman of the TRIPS Council in 2001, Amb. Edouardo Perez Motta of Mexico.

The Motta text had been cleared by December 2002, by all WTO members save the US. That decision itself - for issuance of compulsory licence by an importing country and another by an exporting country from which the importing country seeks to obtain generic drugs at reasonable and affordable costs - was a very complicated process and effectively ensured no quick availability of a needy medicine.

If the WTO and the trade establishments had been really sincere and serious, the easiest and most straightforward way would have been for the exporting country to make a limited exception from the patent privilege under Article 30 - a right that is still in the TRIPS agreement, but which countries seem to be hesitant to use, without an authoritative interpretation, since no one wants to go against the US and its powerful PhRMA perhaps.

Soon after Doha, several of the non-government organizations and experts specializing in this area, who were trying to provide technical help to Africans on how paragraph 6 of the Doha text could be implemented, without too much bureaucracy and problems, provided advice for using Article 30.

However, the US and others, with promises of supply of cheap AIDS drugs (yet to materialize) and other help, persuaded some of the key African countries that the Article 30 route would only benefit a few like India and Brazil to export ‘generics’ and advised the Africans, that in order to get cheap drugs and get investments and a drug industry established, they should use the (cumbersome) Art. 31 route.

And when everyone worked with Motta to evolve a decision on this basis, the US did not join the consensus and blocked it. It lifted its objections only after the Statement of Understanding that its lawyers had drafted and evolved, that would enable the US and the US pharmaceutical industries to apply pressures on any exporting country with a generic industry capacity not to issue compulsory licences or produce and export such generic drugs at cheaper prices.

At the WTO while all the Africans and others were pressing or appealing to the US to lift its objections to the consensus over the Motta text, no one has been reported as officially raising or blaming the US, its President George W Bush or the USTR and its officials, for blocking the text, while thousands on the continent and elsewhere were dying due to AIDS and other diseases.

None of the African voices at the TRIPS or the General Council who were complaining about the Philippines or the Argentines and others raising objections to the ‘Statement of Understanding’ that the new TRIPS Council Chair, Amb.Vanu Gopala Menon, produced (as other trade diplomats said privately, after apparently prolonged talks with the US and its lawyers) are known or have been reported in WTO briefings, official or unofficial, to have voiced what they were reported to have done over the last few days.

However, such voices were very loudly raised, and relayed to the media over the last week, when Vanu Gopala Menon’s effort to get a Statement of Understanding, as representing the ‘shared understanding’ of all members, and purported to have been ‘negotiated’ in a small group that included India, Brazil, South Africa and Kenya, was being held up for clarifications or changes.

Even an EC’s internal paper on the Motta text and the draft Statement of Understanding, obtained from a member-country by the NGOs, showed that at one stage the EC thought that the Motta text and the Understanding seemed unlikely to be adopted and would be sent on to Cancun for decision. The EC noted that the Motta text was itself a compromise and should not be “undermined” by a Chairman statement that adds “further onerous obligations and requirements” for eligible importing countries or generic producers, and that “reopens the delicate negotiating balanced reached in the text.”

At the General Council, the WTO head, Dr. Supachai Panitchpakdi, after the adoption of the Motta text and the Statement of Understanding, claimed it to be a “historic agreement” for the WTO, that the agreement reached at Doha was now “complete and operational”, and of particular value to the “smaller and poorer countries” among WTO members in Africa and elsewhere, and that it demonstrated that “the WTO is committed to pursuing its trade mandate in a way which fully respects and protects humanitarian concerns.”

The statement uses some extravagant language for making the claim while quietly advancing the WTO agendas and the remit of its bureaucracy to further big corporate interests in developing countries, but as many civil society organizations like Medicine Sans Frontier and Oxfam and others have pointed out, it would not help to bring down prices of essential drugs, nor help governments to tackle the public health emergencies.

Among the procedural problems that held up the adoption of the Motta text and the Statement of Understanding were the objections to allowing the Philippines and Argentina and others to make their own statement of understanding, not only of the points covered by the Vanu Gopala Menon draft, but other points of theirs that had figured at earlier informal discussions.

Trade officials said in briefings that at the General Council India (one of the 5 said to have been involved in talks with the TRIPS Council chair on the statement of understanding) had made a detailed statement explaining the statement itself. Brazil and South Africa too made shorter statements.

In a statement at the General Council, Amb.K.M. Chandrasekhar of India said it was “a major landmark” in the short history of the WTO, that it recognized “primacy of public health needs and the sensitivity of this organisation to the problems faced by the poor in less developed countries.”

The Indian representative said that the “apprehensions” of some sections of the pharmaceutical industry about the Doha declaration and the Motta text were “largely misplaced”, that it sought to address public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics, that it recognised the importance of intellectual property protection for the development of new medicines, and emphasised that the TRIPS Agreement did not and should not prevent Members from taking measures to protect public health and, in particular, to promote access to medicines for all. The Declaration recognised the right of each Member to grant compulsory licences and the grounds upon which such licences are granted and also the right to determine what constitutes a national emergency or other circumstances of extreme urgency.

In India’s view, there were no grounds also for doubts regarding the manner in which the system established under paragraph 6 of the Declaration would be utilised. This system is intended for use by WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector to address public health problems. Countries with some manufacturing capacity would resort to use of this mechanism only when their domestic industry was unable to meet their needs.

The TRIPS Agreement already had flexibility for issue of compulsory licences and wherever the domestic industry could fully meet at reasonable cost public health needs arising as a consequence of the kind of problems alluded to in the Decision, it would make no commercial sense to import products. Such countries would, however, need to use this facility whenever their domestic industry is incapable of meeting their requirements at reasonable cost or when it is found that domestic capacity is insufficient.

The Motta text of 16 December 2002, India said, had dealt with problems of possible diversion of products and the misuse of the mechanism. India therefore felt there was really no ground for any doubts regarding the operation of the system. The 16 December text was sufficient in itself to deal with all such problems. It was intended to be a temporary mechanism until amendment of the TRIPS Agreement and that work on preparation of such an amendment was to commence by the end of 2003 with a view to its adoption within six months.

India also noted that in order to promote transparency and avoid controversy, notifications under paragraph 2(a)(ii) of the Decision would include information on how the Member in question had established, in accordance with the Annex that it had insufficient or no manufacturing capacity. It had been clarified to India during the consultations that this did not involve provision of a great deal of technical or other information but only to indicate briefly and concisely the methodology for determination of insufficient capacity and the conclusions that were drawn on the basis of available data.

As for reasonable measures taken to prevent diversion of medicines - special packaging, labelling and/or colouring to be used to distinguish products produced under the Decision, it was the general understanding that special packaging and/or special colouring or shaping should not have a significant impact on the price of pharmaceuticals. In regard to packaging of active ingredients, it had been clarified to India during the consultations that special labelling including indication of the destination country would meet the requirements.

While this essentially was an attempt to respond to special circumstances, any production process would necessarily have a commercial dimension since it involved buying and selling of products. India expected pharmaceutical companies in all parts of the world to contribute to this noble cause by paring their costs and making available pharmaceutical products at the lowest possible cost to the ailing populations and expected that the results accruing from this mechanism would not be negated by the creation of cumbersome systems that would lead to huge delays in reaching across medicines at reasonable cost to those that need them or discourage Members from using the system for the benefit of the people.

To make the system successful, sincere collective effort was required on the part of all Members and the entire pharmaceutical industry.

Brazil’s Amb. Luiz Felipe de Seixas Correa said that the statement of understanding was not intended to overburden the operation of the Paragraph 6 mechanism, nor to place additional hurdles in the way of countries seeking to use TRIPS provisions to protect public health. Members had the sovereign right to determine whether they had insufficient or no manufacturing capacity in the sector, and that this should be done in good faith and in a transparent manner, as set out in the Chairman’s Statement. But this process must not constitute a burden for the importing countries.

The best practices guidelines to prevent diversion of products did not correspond to the real Paragraph 6 decisions, but were “purely illustrative”, to be taken into account only inasmuch as they actually applied to the pertinent Paragraph 6 situations. The use of special packaging, labelling and/or colouring should be feasible and need not have a significant impact on prices, Brazil added.

Argentina in a short statement, and in a paragraph it delivered in English, said: “... the shared understandings in the Statement by the Chair do not detract from the terms and conditions of the Decision (Motta text) just adopted.  In particular, the references to ‘Any Member may bring any matter related to the interpretation or implementation of the Decision, including issues related to the diversion, to TRIPS Council for expeditious review, with a view to take appropriate action’ is consistent with footnotes 2 and 8 of the Decision.

Therefore, the notifications referred to in those footnotes are made only for transparency purposes and do not need to be approved by a WTO body in order to use the system set out in the Decision.” – SUNS5409

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