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Patents vs Public Health issue won’t go away

By Chakravarthi Raghavan

Geneva, 21 June 2001 - - The issue of TRIPS and Public Health is squarely on the agenda of the World Trade Organization, with a day-long special discussion in the TRIPS Council Wednesday, in what developing countries repeatedly insisted as the ‘start of a process’ to ensure that TRIPS and the WTO do not undermine the legitimate right of countries to formulate and implement  their own public health policies and measures.

Some 40 delegations, participating mostly at the level of their WTO ambassadors (who generally leave the TRIPS Council to be staffed by their technical experts),  intervened in the Special Discussion at the WTO’s Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS). At the end of the day-long debate, the TRIPS Council chairman, Amb. Boniface Chidyausiku was holding consultations on Thursday on how to move the process forward.

The TRIPS Council will hold its next meeting in September, with another day for the Special Discussion.

The discussions showed a hard-line position from the US, in what clearly was full support for the transnational pharmaceutical industry and its lobbies. While in substance, the position of the EU may turn out at the end of the day to be not very different, the EU Commission spoke of ‘flexibility’ and willingness to consult with developing countries to meet their concerns over possible interpretations and their ability to use the ‘flexibilities’ available without fear of litigation.

The African group called for a moratorium on raising disputes over TRIPS, while Norway, the most forthcoming of the industrial world, asked for due restraint. Norway insisted that while other measures, including an attack on poverty were necessary to tackle the health crisis in the developing world, prices of pharmaceuticals were important since, unlike in the developed world, in the developing world, patients had to pay for their own medicines, and thus the cost and affordability were important criteria.

Developing countries said at the end of the meeting that all the issues relating to patents and public health, so far being debated elsewhere, had now been placed on the table, and they could look forward to consultations in order to achieve something tangible in Doha.

Civil society organizations, whose two-year-old campaign, has forced the WTO to discuss the issue, after seeing the texts of positions of various delegations that were distributed outside, were encouraged that the WTO was being forced to address it, but were disappointed with the views of the United States, as well as the gloss put by others on what could be done.

An Oxfam representative said that it was clear that the WTO rules need to be changed, and the campaigning organizations would keep up the pressure, and the issue would not disappear after two or three months.

A Third World Network representative said that unless the basic asymmetries of TRIPS, which went beyond the health issues, were addressed and remedied, the civil society ‘shrink or sink’ campaign against WTO will get strengthened and the system will be increasingly delegitimised.

At a press briefing, Zimbabwe’s Tadeous Chifamba, said that the African countries had put forward their interpretation of the agreement - that nothing in the agreement would prevent members from taking actions to protect public health through compulsory licensing, parallel imports and other safeguards - and that each provision of TRIPS had to be interpreted in the light of the objectives and principle set forth in Art. 7 and 8 of the TRIPS agreement - which require IPR protection to take account of broader social objectives such as transfer and dissemination of technology and need for public health measures. The African position, Chifamba explained, had also been affirmed by other developing countries. The African group would now work towards having this interpretation affirmed by the Doha ministerial conference.

The US position about Art. 31 (compulsory licensing) and tying it to Art. 27.1 (patent rights), was disappointing, in that it sought to limit the flexibility available to governments.

Brazil’s Dr. Paolo Teixera, director of that country’s successful AIDS programme, agreed, and noted further that the US position would prevent use of Art. 31 for national development policies and measures for production of medicine.

India’s Mohan Kumar said that a good sense of the positions had emerged, and India was looking forward to the consultations to achieve something tangible in Doha. Egypt underscored that not only had the issues relative to the inherent flexibilities been discussed, but also the call for moratorium on disputes.

Chifamba said that the process now started at the WTO was not acting in a vacuum, other organizations too were working on the issue to seek long-term solutions. Some of the questions, he added, could also be addressed in terms of other processes within the WTO and TRIPS, like the review process under Art. 71.1.

“Qatar cannot afford to fail, and the Ministerial Conference must send out a clear and unambiguous message that international patent protection does not prevent Members from taking steps to protect public health and ensure their citizens’ access to medicines,” Chifamba said.

There was a running theme that the provisions of the agreement would need to be interpreted and guided by Articles 7 and 8 of the TRIPS agreement on objectives and principles.

However,  the US view appeared to be that these articles had set out the principles and objectives, which had been spelt out in the subsequent articles (and thus in effect Art. 7 and 8 did not in any way qualify the provisions).

The TRIPS Council, debating the issue in a formal plenary meeting, open to all WTO members and observers (but not to the NGOs or the media), had before it two papers - one by a group of 47 African and other developing countries (Cuba became a cosponsor of the paper, originally tabled by 46 countries), setting out their views about the rights under the agreement and asking for an understanding or clarification by the Doha ministerial, so that there would be no litigation or fear, and an EC position paper that spoke of willingness to consult and clarify so that there could be some certainty.

At the end of a day-long discussion, developing-country diplomats said the US had taken the predictable  hard- line stance and outlined its views on the issue of  limits of compulsory licensing, parallel imports, and the ‘flexibility’ to developing countries (the 5-year transition period for implementing TRIPS, and another 5 years to introduce ‘product patents’, but with exclusive marketing rights in between), while Europe seemed to take a softer and more flexible stance of willingness to consult and dialogue to address some problems.

The US presentation (as that of other industrial countries) dealt much more on aid, the Kofi Annan annual 7-10 billion dollar Global Health Fund initiative, and the US ‘contribution’ of $200 million, and about public health infrastructures in developing countries as the real problem, and not the patents on drugs.

But developing countries made clear that these issues could be considered in the appropriate fora, but not at the TRIPS Council or the WTO, which was solely concerned with the patent and other rights conferred on private parties and its effect on public health, and more so, on the poor.

Also figuring in the discussions was the issue of ‘tiered’ or ‘differential’ pricing held out by some of the industrial world (and the WTO) as a solution, but one that would need to put restrictions on parallel imports and exports.

Most developing countries said they were willing to consider this, but it could not be allowed to be used in any way curtail their rights, including the right to decide parallel imports.

The US presentation focussed on the virtues of the patent system and of the TRIPS agreement striking the proper balance. The US view of the flexibility available was the exception allowed under Art. 30, and the interpretation of this given by the dispute panel in the EC/Canada generic drug dispute  (the Bolar exception, under which generic manufacturers could submit for marketing approval, before expiry of a patent). The US also insisted that the compulsory licensing rights under Art. 31 were subject to the Art. 27.1 patent rights, and underscored the importance of ‘adequate remuneration’ for use of the compulsory licensing prevision under Art. 31 (b). In the US view, Art.  6 (about exhaustion of rights not being available for disputes) did not mean that parallel imports were allowed.

The views about what the TRIPS agreement, and the meaning of various provisions varied in the debate. And while, inside and outside, many delegations made references to and commended the civil society groups (organizations like Oxfam and Medcine Sans Frontier, for their role in focussing on the issues), the United States commended the WTO secretariat and the contents of its website and thought  it was “better than the NGO papers”. The US view would however appear to strengthen perceptions of civil society, that of many developing country delegations and the public as corroborative of the bias in the secretariat and the system.

The EC spoke in terms of drafting some ‘preambular language’ for the Doha Ministerial declaration to express the collective view of Ministers about public health and TRIPS, but made clear that it would not allow any whittling down of the TRIPS - whose global monopoly rights have been now identified by several mainstream and ‘liberal, free-trade’ economists as causing welfare losses for developing countries, and a ‘mistake’ to have been incorporated into the WTO.

However, said several of the Third World ambassadors, who did not want to be identified, they had the uneasy feeling that the EC’s ‘positive’ approach is related to its desire and anxiety not to allow the issue, very much agitating NGOs and other civil society groups, to come in the way of or derail the EC effort (now joined by the US) to launch a new round at Doha with an “ambitious agenda”.

“If nothing is done before and at Doha, and if a new round is launched there,” said a developing-country ambassador, the EC and others will not move thereafter on TRIPS and public health, and developing countries would be told that the ‘rule changes’ should be taken up and addressed in the new round.

One result would be that while trade negotiators here, and the trade establishments of governments in the capitals, are attempting the difficult task of squaring the circle - supporting and promoting the “rules-based” WTO trading system and its tasks of “trade

liberalisation”, and getting public and parliamentary support for it, even while trying to cope with the lack of benefits under the Uruguay Round and seeking to deal with them by tackling the ‘implementation  issues’, the issues of like TRIPS and public health and its ill effects, are eroding support from other sections of government, domestic businesses and the public, and the legitimacy of the system made problematic.

While there were repeated references in the debate about the ‘flexibility’ already available to developing countries to be able to assure their people of access to medicines at affordable prices, and the various articles and rules of the TRIPS agreement were cited, a careful reading of the texts of some of the major TRIPS protagonists, showed that in fact they were unwilling to dilute the entrenched position of rights holders.

In the debate in the Council, developing countries, both those who have co-sponsored and presented a submission, and others not signatories, all supported the call for clarifications and interpretations to ensure flexibility for developing countries.

AFRICA’S CALL FOR QATAR SPECIAL DECLARATION CLARIFYING TRIPS

In a statement on behalf of the African group, Zimbabwe’s Chifamba, placed the special discussion in the context of 11 million annual death toll from preventable and infectious diseases in the developing world.  The members should reach a common understanding that asserted and confirmed the balance in the agreement that recognized the importance of patent protection, but enabled governments to adopt all appropriate measures to protect health and lives of their peoples, so that governments could adopt them without fear of litigation, nationally or at the WTO or subject to bilateral pressures. There was a mounting public perception that implementation of TRIPS has hampered people’s access to affordable medicines. By agreeing to the discussion, the WTO members had taken cognisance of increasing public criticism and civil society campaigns and were ready to respond.

The discussion should begin the process of identifying the relevant provisions of the Agreement and exchange views to forge a common understanding. This task could not be completed in one session, and a work programme must be set and completed. The WTO members, at the Qatar ministerial conference, issue a special declaration on TRIPS, affirming that nothing in the agreement should prevent members from taking measures to protect public health.

Rather than as an end in itself, IPR protection should be seen as a means to benefit society as a whole. The mere existence of patents did not necessarily result in fulfilment of objectives of TRIPS; the experience of the past 6 years had provided the clearest evidence. In the context of public health, patent rights should be exercised coherently to mutual advantage of patent holders and users of these medicines, and in a manner conducive to social and economic welfare.  Articles 7 and 8 were key provisions, and each provision of the TRIPS should be interpreted in the light of these objectives and principles.

Compulsory licences were an essential tool for governments to carry out effective public health policies, and were a crucial element in prevention of abuses of patent rights, promotion of domestic manufacturing capacity in pharmaceuticals production, as well as situations of national emergency or extreme urgency. Even the mere existence on the statute book of a prevision for compulsory licencing was often enough to curb anti-competitive practices.

In the African view, the legitimate grounds for issuance of compulsory licences included: for nonworking or insufficient working of a patent, for import of a product under patent protection and for export of a product under patent protection. Members should undertake to recognize and give due effect to a compulsory licence issued by another member, to a manufacturer in their territory for production of goods intended for market of the members issuing the licence. Parallel importation was also an important tool to ensure adequate access to medicines. Under Art. 6, each member was free to decide on incorporation of the principle of international exhaustion of rights in its national law, and no limitation should sought to be set on this right.

And while the Africans favoured differential pricing arrangements, if they were set in a fair manner and within a comprehensive and multilateral framework, “such arrangements must not prejudice rights of members under the TRIPS agreement.”

Developing countries needed longer time frame to put in place legislation to comply with TRIPS, including for providing for parallel imports, compulsory licensing and the like, and adopt measures to implement them.

It was hence necessary to extend the transition period for implementation, adopt through a Ministerial declaration a moratorium on raising TRIPS disputes against measures to protect public health, and any dispute settlement action against a developing country member that hinders its ability to promote access to medicines and protection of public health (including compulsory license and parallel imports).

EU’S SOFTER, FLEXIBLE APPROACH

In an  intervention on behalf of the EC, Amb. Carlo Trojan said the EC took note of the view of the smaller economies that they could not make use of compulsory licensing for medicines, because of lack of production facilities or a small market, and said the EC was willing to examine the issue to find solutions.

On the question of data protection (Art. 39.3) - which requires that data submitted by an enterprise seeking marketing approval  be kept confidential, but which many developing countries view as coming in their way of getting generic or other producers to provide data for marketing approvals that could be tested against the yardstick already available - the EC agreed that the provisions should not be allowed to be interpreted in a way to weaken or nullify rights of members, such as ‘fast-track’ procedure of compulsory licensing for emergencies or extreme urgency.

As for parallel imports and Art. 6, the EC did not want to question this right, but nevertheless saw the need for some clarification so that the products supplied to a market under ‘tiered pricing’ remain on that market.

TRIPS SHOULD NOT RUN COUNTER TO PUBLIC HEALTH PROTECTION

Amb. Celso Amorim for Brazil, as one of the cosponsors, congratulated the Africans for taking the lead in bringing the issue up. The developing country paper represented the reading of TRIPS by 50 developing countries, and in the consultations leading to its tabling, all countries had contributed actively. The document was the result of a team work. The confirmation in the debate that TRIPS should not run counter to the protection of public health was crucial to provide clear guidance to members, and avoid explicit or implicit threats of using dispute settlement mechanisms to enforce “restrictive, imbalanced and indeed incorrect interpretations.”

“Flowing from the special discussion, and without prejudice to other actions, the Ministerial Conference in Qatar would be the best opportunity to confirm in an unambiguous and unconditional way, the right of members to formulate their own public health policies and implement measures. It would go a long way to building the confidence between developed and developing countries for any future negotiations.  It would also send a powerful signal to growing sectors of civil society in the North and the South, which sees the WTO as a soulless organization at the service of the rich and powerful,” said Amorim.

Briefly outlining the Brazilian success in dealing with the HIV/AIDS crisis, Amorim said the experience showed that the basis of the programme, universal distribution of  medicine required both local production of the medicines and negotiations with the industry. Local production of pharmaceuticals was often crucial in developing countries to ensure that medications were readily available at affordable prices.  Brazil also called for affirmation of the principle of parallel imports and international exhaustion of rights. This was crucial and significant for LDCs and smaller economies. Brazil welcomed the EC declaration that differential pricing should not impinge on the right of members in regard to parallel imports.

“PRICE DOES MAKE A DIFFERENCE”, SAYS NORWAY

Norway agreed that prices was not the only issue for access, but “price does make a difference”. This was partly because most poor people in developing countries must pay for health care, including for drugs out of their own pockets. Last year, modestly though, the pharmaceutical industry had started providing antiretroviral and other medicines to some developing countries at preferential prices.

Differential pricing could be one way of increasing availability and affordability of medicines to developing countries. But, “neither differential pricing nor such methods should be used as an argument for not interpreting the TRIPS agreement as flexibly as possible in the area of public health.”

The aim of the first discussion on TRIPS should be to seek more legal clarity. In doing so, the Council must examine closely the relevant provisions of the agreement, taking account of the fundamental principles and objectives of the agreement.

In relation to Art. 31 (compulsory licensing), in principle patented medicines should be produced or marketed through voluntary licensing agreements. Hence the ‘research-based industry’ must conclude with applicants licensing agreements. Resort to Art. 31 (non-voluntary) licensing should be only a last resort, But it is an important provision and the mere fact of its availability as an option could increase the likelihood of concluding voluntary agreements. For voluntary licenses on ‘reasonable commercial terms’, the interests of the patent holder as well as that of the applicant and the consumer should be taken into account. As for use in ‘national emergencies’, in Norway’s view it was necessary that this be due to sudden or unforeseen events, but could encompass a continuing crisis like the AIDS pandemic in some sub-Saharan African countries. As for ‘adequate remuneration’ to the rights holder under Art. 31 (h), the remuneration may be less than the minimum the rights holder could have requested under voluntary licensing. And if they are urgent, life-saving medicines, it will have an effect on the level of remuneration.

TREAT MEDICINES FOR LIFE-THREATENING DISEASES DIFFERENTLY FROM COSMETICS

India’s Amb. S. Narayanan, endorsing the Zimbabwe statement and the views of Brazil, said there should be clarity on the mandate and scope of the discussion: while it was legitimate to talk about patents and compulsory licensing, neither the WTO nor the TRIPS council was the place to talk of health infrastructure in developing countries, or even of the global fund being set up for acquiring and distributing medicines.

In considering the issue, while IPRs have contributed to R&D and investments, in looking at the rights of holders of IPRs, “a distinction has to be made between exclusive rights granted for life-threatening diseases on the one hand and say beauty-enhancing and cosmetic drugs on the other,” Narayanan said. Firstly, not enough R & D would appear to be targeted in tackling diseases afflicting people in the poor countries. Secondly, due to price in elasticities, particularly for essential drugs, manufacturing pricing decisions were unrelated to the market. And taking account of the market exclusivity of a patent, a situation is created whereby access to medicines is difficult, if not impossible.

TRIPS, under Art. 8, gave members the  right to adopt measures to protect public health and nutrition, but it adds that such measures should be consistent with the other provisions of TRIPS.

Narayanan contrasted this “rather curious formulation” with the way the health exception provision of Art. XX of GATT was worded, enabling measures to be taken (provided the chapeau of that Article was satisfied) that could be totally inconsistent with other provisions of the GATT.

The most vehement criticism against TRIPS comes from those who see it as placing protection of public health at a lower level of priority and giving pre-eminence to protection of rights of IPRs holders. “This needs to be remedied,” India said.

Under Art. XX of the GATT, members could depart from fundamental obligations to protect human health, but TRIPS required that in all circumstances the measures taken must conform with TRIPS. In the very same organization,  the way protection of human health was dealt with under GATT and TRIPS was different, and must be looked into.

It was also necessary for members to have a common understanding of what constituted “consistency” with TRIPS, a condition required for all measures. Could a measure taken in good faith by a member in its own territory to protect public health , be considered to be not consistent by another and taken to dispute settlement?

The Special Discussion should be seen as the beginning of a process to reach a common understanding among WTO members. It was an issue too important to be left either to chance or to future panels.

In India’s view every provision in TRIPS must be read, understood and interpreted in the light of Art. 7 and 8 of TRIPS. IPRs are not an end in themselves, but a means to achieve public policy objectives - balance between private rights and public policy objectives, and between producers and users of technological knowledge.

“The real concern, both in international civil society and in national jurisdictions is that the TRIPS agreement in its current form may be misinterpreted by promoting one at the expense of the other. This concern must be taken seriously by the TRIPS Council.”

While India did not disagree that patents are needed to promote R&D, there were huge implications of conferring a patent on a drug, especially for the most vulnerable. A patent generally ensured there were no alternative or substitutes for the period of the patent. For another, generic competition is prevented. As a result the price of a patented drug is exorbitantly high. And patents are now for 20 years, with this life being extended by the socalled ‘selection patents’ and ‘evergreen patents’. This refers to the practice of new small addictions and formulations being patented anew, or new uses (already known) for a patented drug to get another longer-lease.

Dismissing the oft-familiar argument of the US, the pharmaceutical industry and proponents that not all essential drugs were under patent, Narayanan said this may be true. But future, ground-breaking inventions like vaccines for AIDS, or to counter malaria and TB would be, and they will be beyond the reach of those needing it.

As for the flexibility said to be available under Art. 31, and whether this wold be ‘adequate’  would be clear only when available flexibility was clarified. It was also necessary to provide ‘absolute legal certainty’ in this regard - the point so forcefully made by Brazil.

The TRIPS Council should hence reaffirm that a member can resort to Art. 31 on any grounds; the terms ‘reasonable commercial terms’ and ‘within a reasonable period of time’ for efforts to obtain voluntary licence, before a compulsory can be issued, should be interpreted flexibly.

A related issue was that compulsory licence to import and export needed to be interpreted flexibly and broadly. In developed countries, the stipulation about licence predominantly for the domestic market did not matter, since they had a large market and scales of production could be economic. But this condition for small countries with small domestic markets and purchasing power would not work. The EU submission had referred to a “possible interpretation” for a compulsory licence by a country to a manufacturer in another, a view that the EC notes, may or may not be accepted by a panel or the AB.

“This issue is far too important to be left to panels and the AB, and should be decided by members, and not through jurisprudence.”

India also called for reaffirmation of the principles of Art. 6 and for enabling parallel imports as an important way in which a member can protect public health. When a product is in the public domain in another country and available and or produced under compulsory licensing, the WTO members must have full freedom to have parallel imports. Also, the exceptions under Art. 30, for public non-commercial activity should be read as an exception to patents, and not in conjunction with Art 27 as suggested by some, said Narayanan.

[The WTO website makes such a suggestion.]

India also raised the question of how biological resources are dealt with under Art. 27.3, and the fact that biological and genetic resources from the South end up in the North where they are patented.  There is in such cases not only misappropriation, but also affects access to the drugs. Hence India’s proposal, in another context (implementation, and Art. 27.3 review) for patent jurisdictions requiring such applicants to identify the source and country of origin of their biological resource, and when prior informed consent was obtained, and to provide for benefit sharing.

Referring to the review of Art. 64.2 (non-violation complaints) and the call for its review under Art. 64.3 for a recommendation to the ministerial conference - a review that had not taken place because the scope of such complaints was not clear - India said it would be extraordinary that measures taken by members for protection of public health could be sought to be attacked as a non-violation complaint.

EXPAND ‘PERMISSIBLES’, REDUCE INFLEXIBILITIES, SAYS EGYPT

Egypt’s Prof. Baha Fayez said the TRIPS agreement had some some flexibilities, such as those in Articles 7 & 8, allowing governments to adopt measures necessary to protect public health and nutrition, and prevent the abuse of IPRs, including the resort to anti-competitive practices. These flexibilities, however, were restricted, but not totally neutralized, by the requirements that they must be consistent with the provisions of the Agreement. Egypt also referred to provisions of Art. 6, on the exhaustion of rights, and the footnote to Article 28, qualifying the title-holder’s exclusive rights to Art. 6, and said these allowed parallel imports. But such ‘permissibles’ of TRIPS were somewhat counterbalanced by the pressures imposed in other places in the Agreement.

Referring to Art. 30, allowing limited exceptions, which has been used in Canada under the Bolar exception, Egypt said:

“A set of selected exceptions can thus provide a breathing space and some degree of freedom of action, which would necessarily differ from country to country.” But the exceptions were not carte blanche.  Egypt also referred to the Canadian drug pricing mechanism, operated through the Patented Medicines Prices Review Board, and said such a mechanism in a highly developed,  wealthy country, showed the concerns there about the prices of medicines available to the average citizen.

In the context of the discussions in the TRIPS Council, there was a need to explore the permissible exceptions, both candidly and in depth, and see how they could be prudently conceived.

As for compulsory Licensing (TRIPS Article 31),where a degree of flexibility was available for application whenever necessary such as in difficult and harsh times - and “no times can be more difficult or harsh than when a life-saving medicine is denied or when the price is prohibitive” - a reading or  re-reading of the language of Art. 31 (f) about compulsory licensing to supply “predominantly” the domestic market, would lead to permitting the use of a locally produced medicine to alleviate adverse health situations in another country. There were other flexibilities, not so straight-forwardly pronounced in the Agreement, that deserved attention:

·        Differential pricing policies and practices, where drug selling prices are influenced by the per capita income in different countries.

·        Refraining from the practices of requiring expansions or extensions to the exclusive rights of the right-holder, such as demanding prolongation of the patent term, pipeline protection, and evergreening of patents.

·        Refraining from those restrictive forms of patenting in the area of pharmaceutical products, that are either useless or harmful, such as what has come to be known as broad-blocking patents and sleeping patents.

·        A strict, but  fair reading of TRIPS Article 27.1 along with 27.3(a) would mean that the use, even if it is a new use of a known pharmaceutical product is not in itself patentable.  Such new use is certainly a valuable scientific finding, maybe a genuine discovery, that deserves every appreciation and needed to be brought to the attention of the medical profession, but should be more appropriately seen as a method of therapy of the kind indicated in Article 27.3(a) (and thus not patentable).

·        The historical role of R & D in the health area, particularly the area of fighting against or protecting from communicable diseases, cannot be overemphasized. What needs now to be emphasized, however, is the need to persuade R & D - most of which is conducted in the developed countries and particularly in the laboratories of the TNCs - to pay greater attention to the health problems of the poor in the developing world. Such contributions will pay great dividends in the long run and will certainly help in dismantling the wall of fear and suspicion that is sometimes visible.

·        The principle of working a patent locally - i.e. the actual implementation to produce the patent-protected product or the actual use of the patent-protected process - is historically cardinal in the general philosophy of the patent system What is meant by working of a patent is it. As the WIPO Model Law for Developing Countries says “working is the reward that the society deservedly receives in exchange for conferring complete and strict protection of the IPRs.” This goal would be defeated if working occurs only through importation of the patented product.  In the Paris Convention, non-working is a kind of abuse of the exclusive rights enjoyed by the title-holder, and thus a ground for a compulsory license.

·        Major manufacturers of those medicines that have fallen into the public domain can do a lot of good to the peoples of developing countries. Encouraged by their governments, such as through the award of incentives (of the type envisaged in Article 66.2), these manufacturers could transfer technology and manufacturing know-how relevant to medicines of importance to receiving developing countries against reduced prices, or perhaps at no cost at all.

Egypt said the World Health Organization (WHO) should be involved in all future review or revision functions (of TRIPS) as it related to or affecting the area of medicines. It was also necessary to go into the question of WHO ‘essential drugs’ list and how it is constructed and updated, and how best it can be utilized in the context of the TRIPS and Public Health deliberations, to provide real and effective relief for the poor in the developing world.

Egypt also supported the idea of a moratorium on dispute settlement actions in matters related to medicines, and said the duration of such a moratorium could be discussed and decided by general agreement.

LDCS WANT ‘HUMANE, AGREED COMMON INTERPRETATION’

Speaking for the LDCs, Tanzania’s Amb. Ali Mchumo said it was a great anomaly that while NGOs and others had been expressing their concern at the negative impact of TRIPS on public health and the greatest tragedy of the times, the AIDS pandemic, the WTO had been remaining silent. 17 million lives were being lost every year in sub-Saharan Africa alone due to AIDS, TB and Malaria. Tanzania alone had 2 million infected people, and one million orphaned children.

The LDCs fully supported the statement of Zimbabwe for the African group, and the call for the Doha ministerial to issue a special declaration to facilitate easier access to medicines and ensuring that TRIPS did not prevent members from taking measures to protect public health.

There should be a “humane, agreed common interpretation” of Art. 7 of TRIPS, so that while innovation would be rewarded, “private profit is not allowed to threaten human lives.” When life-saving anti-retrovirals were made available for 10-15 thousand dollars, it was “a coded message to the poor that they may as well die if they cannot afford to pay the price that will make the boardrooms of the pharmaceuticals happy.” Such prices had no rational relationship to the cost of R & D. It was also well known that the cost of research for most such drugs were met by public funds and not from private companies who reaped windfall profits.

Also Art 8 should be so interpreted as to provide maximum flexibility, and in the context of the basic need to uphold primacy of human life.  There should be the same level of flexibility in interpretation of Art.  31. The justification for compulsory licencing should not be limited by a strict interpretation, but must be flexible enough to enable developing countries to meet the challenges of preserving human lives.  And since LDCs don’t have facilities or technological capacity to manufacture, they should be able to invoke compulsory licensing in favour of a manufacturer in another country.

It was also essential to preserve the right of parallel importing, Tanzania said, and cited the case of 100 tablets of Zantac being sold for $2 in India, $77 in Canada, $150 in South Africa and $97 in Tanzania. There were similar situations for other drugs.

TRIPS COUNCIL MUST DISCUSS PATENTS, NOT HEALTH INFRASTRUCTURE

Thailand said that whether or not essential drugs were under patent was beside the point. The task of the Council was to discuss the problem of making available drugs under patent, and problems caused by lack of clarity in the TRIPS. The questions of health infrastructure was not addressed by TRIPS and so “the TRIPS Council has no business discussing them at the expense of devoting precious time to the relationship between patents and health,” Thailand said.

While TRIPS had some built-in flexibilities, due to lack of charity, developing countries seemed reluctant to take measures that they could be entitled to and this was very unfortunate.

Members should hence attempt to identify and explore the available flexibilities.

It should be confirmed that each member is free to decide for itself grounds for granting compulsory licences under Art. 31, and insist that the article should be read in the light of Art. 7 and 8.

The provisions of Art. 27.1 on patent rights did not restrict grounds for granting such licences. The obligation to consider applications for compulsory licences on individual merit, when exercised under Art. 31, overrides the non-discrimination provisions of Art. 27.1, Thailand said in rejecting the contention of the US (and the WTO secretariat in its notes on the website).

The fact that TRIPS specifically said that Art 6 shall not be used to address exhaustion of IPRs, meant that each member was free to adopt its own scheme and as a result, permit parallel imports.

In certain circumstances, members should be able to grant compulsory licences to producers in another country to supply its own market.

The TRIPS Council should recommend to the General Council to take a decision interpreting the relevant TRIPS provisions and putting beyond doubt the measures that governments might take to tackle the problem and, if found necessary, amend the TRIPS, Thailand said.

US PROMOTES RESTRICTIVE VIEW OF TRIPS

The US said that IPRs, particularly patents and trade secrets, enabled an environment for new drug development. The TRIPS provided a proper balance. And the two documents on the WTO website highlighted how the balance has been struck and the members should use these documents as useful explanations and “avoid documents circulated by other individuals and organizations lacking the WTO expertise.”

The TRIPS contained significant flexibilities for developing countries in terms of time frame for implementation, and even more time for LDCs.

In the US view, Art. 31 must be read in the light of Art. 27.1, which prohibited discrimination in enjoyment of patent rights.

Also, in the US view, a compulsory licence can be issued by a country to a producer in another to manufacture and supply its own market, only if that product is not under patent in the manufacturer’s country.

The compulsory licensing could not be used as a mechanism for directing industrial development. The WTO system envisaged free trade to remove inefficiencies in global trade; hence the provisions against local content, import substitution and local production requirements. The non-discrimination clause of Art.27.1 was built on this, the US claimed.

As for parallel imports, while Art. 6 denied the use of dispute settlement to deal with the issue, it did not authorize parallel imports, and did not alter the substantive obligations of TRIPS, particularly Part II (standards and use of IPRs). – SUNS4920

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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