NGOs demand ‘pro-public health’ interpretation of TRIPS

by Chakravarthi Raghavan

Geneva, 19 June 2001 - A group of leading non-governmental organizations have called on the World Trade Organization and its members to adopt a “pro-public health” interpretation of the TRIPS agreement through a flexible use of existing safeguards and exceptions, including the right of countries to grant compulsory licences for local manufacturing, import and export, and allow parallel imports.

The call came in a statement by the NGOs at a press conference in Geneva, on the eve of the special meeting of the WTO’s TRIPS Council Wednesday which is to discuss Patents and Access to Affordable Medicines..

The joint statement, coordinated and drawn up by Medicins sans Frontier, Oxfam and the Third World Network and posted on networks, and with already over 100 signatures in less than a week, has asked for actions by the WTO, at the Special discussion at the TRIPS Council on the public health crisis.

The NGOs underscored that the issue would not go away, and the special discussion at the TRIPS council should not be seen as a one-off affair. There would be a global action on this issue next September, to coincide with the next session of the TRIPS Council, and further on leading to the Doha ministerial meeting, a representative of Oxfam said at the press briefing.

The NGOs said that while the pharmaceutical companies had begun to have a dialogue, and were becoming aware of the great damage they were doing to their own reputations and public perceptions, they were still the least sensitive to the issues. On the other hand, said an Oxfam representative, some of the investment houses have begun to show greater sensitivity, and were planning to ask the Chief Executive Officers of these pharmaceutical corporations about their plans to meet this public health and public interest issue.

The Third World Network said that while they were focussing attention on the need for immediate actions to deal with the health crisis, the various civil society groups of the South with which the TWN was in touch saw the intellectual property regime and its being safeguarded by TRIPS inside the WTO as being essentially anti- development, and felt it should be taken out of the WTO and lodged elsewhere.

The TWN representative, Ms. Cecilia Oh, cited in this connection, the stand (in a letter in the Financial Times) by US academic and free trade ideologue, Prof Jagdish Bhagwati that it was a mistake to have lodged the TRIPS in the WTO and it should be put elsewhere.

Oxfam’s Ruth Mayne, Dr. Chris Ouma of Kenya Action Aid and MSF’s Ellen’t Hoen rejected the dichotomy sought to be created in terms of ‘prevention’ vs ‘treatment’ by access to affordable medicines, and said both need to go hand-in-hand. In the case of AIDS, said Ouma, Kenya had tried, for several years, screening and prevention, but had seen an AIDS crisis in the shape of 2.8 million AIDS cases.

It was only when patients could be assured that there would be no stigma and those identified to be HIV positive could be assured of treatment, would they have an incentive to come forward, Dr. Ouma said.

Ruth Mayne said that it was not only in the AIDS case, but in other diseases too, only when prevention was combined with treatment, did it have any effect.

In their statement for immediate actions, the NGOs called for:

·        Adoption of a pro-public health interpretation of the Agreement through the flexible use of existing safeguards and exceptions, including upholding the right of countries to grant compulsory licenses for local manufacturing, import and export, and the right of countries to implement parallel import measures;

·        Strengthening the existing public-health safeguards within TRIPS to ensure that governments have the unambiguous right to override patents in the interests of public health;

·        Remove the burdensome conditions that governments have to fulfil in the issuing of compulsory licences, so that licences can be granted on a ‘fast track’ basis for public-health purposes; * Extend the implementation deadlines within TRIPS for developing countries in relation to patent protection (both product and process) for medicines;

·        Agree not to exert bilateral or regional pressure on developing countries which take measures to exercise their rights under TRIPS to protect public health and promote access to medicines, nor to pressure them to implement unnecessarily strict and potentially harmful intellectual property protection standards or ‘TRIPS-plus’ measures.

·        Observe, with immediate effect, a moratorium on dispute settlement action against developing countries which hinders their ability to promote access to medicines and protect public health (including the use of compulsory licence and parallel importation measures).

·        Allow developing countries the option of excluding medicines from patenting on humanitarian or public-health grounds, in order to meet the objectives of saving lives, countering and controlling epidemics, and ensuring that the poor obtain access to essential medicines for the treatment of poverty-related diseases.

At another press conference in the morning, the spokesman of the transnational pharmaceutical lobby, Mr. Harvey Bale insisted that ‘patents’ was not the issue, but rather, funding for access to medicines. The issue of patenting of vaccines, he said, had disappeared from the agenda, when a global fund to provide vaccines for the poor countries was set up. Similarly, he was hopeful that the Global Health Fund envisaged by the UN Secretary- General Kofi Annan would get enough funding from governments to enable use of the funds to supply the AIDS drugs to the poorer developing countries. Bale also referred to the initiative of some of the corporations in donating such drugs or offering to provide them at differential pricing.

Bale said, hitherto most of the debate had occurred in the WHO and elsewhere, and the health experts who had debated it did not know enough about trade and international agreements and rules. He welcomed the issue being debated by ‘trade experts’ so that the debate would be well-informed. Reopening old debates about TRIPS would have the effect of discouraging new research and development, and this would not be in the interests of the developing world. Asked to cite ‘curative’ medicines, as different from palliatives, that had been developed as a result of higher patent protection, Bale mentioned the drugs developed to deal with secondary infections arising from respiratory infections. He also mentioned the case of the AZT, originally discovered in anti-cancer research by a publicly funded research programme, but which had been patented for AIDS treatment.

The NGOs said they were glad that health experts from developing countries were now attending the TRIPS meeting. Hitherto, said Ouma from Kenya, trade and health ministries were not talking to each other, and TRIPS was being dealt with as a pure trade issue. The focus on the affordable medicines and the special discussion had brought all the ministries together, and the civil society welcomed it..

Ellen t’Hoen of the MSF said that of the 1393 new chemical entities ‘discovered’ between 1975 (when current patent norms became common in the industrial world) and 1999, only 13 were for tropical diseases. The main market for these drugs were in the industrial world, and even with the patenting, it was not likely that much research would be invested on diseases in the poorer countries. T’Hoen and Mayne of Oxfam both noted that much of the research activities were publicly funded. That was why they were demanding that more should be spent on public sector health research.

The NGOs also complained that the pharmaceutical corporations and the United States were applying pressures on countries to have TRIPS-plus laws, and not have compulsory licensing in their domestic laws.

“Though TRIPS allows for compulsory licensing, unless countries have provisions for it in their domestic laws, it cannot be invoked or used,” the MSF said.

Cecilia Oh said that even the fact of existence of compulsory licensing provisions in domestic laws, and the ability of countries to invoke them, would help restrain the anti-competitive behaviour of the patent rights holders, and persuade them to voluntarily license the production in the developing country.  At the moment only a few developing countries had the capacity to have a generic drug industry. Unless others were able to do so, they could not offer cheaper drugs, and the ability of these countries to develop a domestic industry was inhibited by lack of licensing and/or local working.

Oxfam said they fully supported Brazil in the dispute over the issue with the US at the WTO, and said it was only when Brazil was able to authorise the domestic production of the retrovirals and other AIDS treatment drugs, were they able to bring down dramatically the mortality due to the disease. Oxfam saw the dispute at the WTO as much a landmark case as that fought recently in South Africa (where the pharmaceutical companies went to court to prevent compulsory licensing, and then withdrew their case under global public pressure). If the US were to win its case against Brazil, it would be a major public health setback.

Ellen t’Hoen said that already the countries of the South lacked access to affordable medicines. “And when the TRIPS agreement enters into effect fully on 1 January 2006, it would have further serious adverse consequences. Essential medicines are not like other commodities. TRIPS rules governed medicines in exactly the same way it dealt with CD-ROMS or any other consumer product.

The Special Discussion at the TRIPS Council was a welcome sign of political awareness at the problems resulting from the way TRIPS dealt with the issue, and the need for flexibility. The pharmaceutical companies had begun to react to the public concerns, but they need to go further, she said.

Inadequate access to medicines is already a major cause of suffering in the developing world, and TRIPS and its patent regime makes the situation worse, Ruth Mayne said. The WTO should enable generic drug production and competition to bring down the prices. While the HIV/AIDS issue has helped focus attention, there were many other serious diseases,.like TB, Malaria etc, where lack of affordable medicines was a major health crisis in the developing world, she said.

They were not against patents as such, but against the extremely high levels of patent protection imposed on the poor countries by the WTO and its TRIPS regime.  Even when the TRIPS allows these countries to have some flexibility, the big companies were using pressures and threat of invoking trade sanctions to force the developing world to have strict laws, and even TRIPS-plus laws.

Ms Oh said the high levels of protection granted under WTO-TRIPS regime had encouraged anti-competitive behaviour and the big pharmaceutical companies were trying to eliminate the generic producers. Contrary to claims at the time the agreement was negotiated, TRIPS was coming in the way of technology transfers and industrialization of the developing world. These were important questions, and would need long-term solutions in terms of revisiting the TRIPS. However, the immediate focus was on saving lives, and actions that could be taken now by the WTO, and hence the call for action now.

The NGOs agreed that the TRIPS and patent regime, created to deal with a possible market failure due to lack of protection and incentives for innovation, had now created another market failure by the high levels of global protection.  As a result, the pharmaceutical companies had an incentive to undertake innovative R & D for products that would be palliative and keep revenues flowing in, rather than invent curative medicines.

Hence their demand for public sector research and funding for it. Much of the research is even now by public sector institutes and universities, and the research should be made more easily available, they said.

Domestic laws, as in the US, require that those research and patents flowing out of them should be licensed for production by domestic firms, and not abroad.

Oxfam noted that a year ago, the EC was not even willing to discuss compulsory licensing issues. It had now come a long way, and in its background document was willing to talk about it.

The EC document, to be presented and discussed at the Special meeting Wednesday, while speaking of the Art. 31 compulsory licensing provision and the flexibility it allows, including for public health reasons, and the “freedom” it gives to WTO members “to determine the grounds for granting compulsory licenses”, nevertheless seeks to qualify it by making references to the other provisions of the Agreement.

In a legal position paper that the Commission had drawn up and provided to the EU members, it has in effect taken the position that the Art. 31 compulsory licensing rights is somehow qualified by the Art. 27.1 provision requiring grant of patents (rather than the other way around as any non-WTO treaty interpreter would interpret).

The EC in its paper has conceded that the provision in Art. 31 that such compulsory licensing could only be issued “predominantly for supply of the domestic market” could prevent smaller developing countries that have no production facilities of their own to obtain cheap medicines from abroad. In the EC view, a WTO member would even now be free to grant a compulsory licence for import of goods under patent in its territory provided it was produced in a country where it was not patented or where the term of protection had expired.  But the EC was willing to discuss the matter further to reach a consensus (rather than leave it to panels and the appellate body, which may or may not agree with such a view) to enable a WTO member to issue a compulsory licence to a manufacturer in other another country, provided the government of that country would recognise such a licence, and all the goods so manufactured were exported to the country granting the licence.

The NGOs in their statement said that the deepening health crisis in many developing countries has raised public concern about the lack of access of poor people to affordable medicines. Public outrage over the exorbitant prices of HIV/AIDS drugs has also put the spotlight on the negative effects of global patent rules on the price and affordability of essential and vitally-needed medicines.

Around the world, public concern was mounting at how the introduction of strict patent regimes in developing countries required by the WTO’s TRIPS Agreement was causing the price of patented drugs to be set at high, often exorbitant levels.  The effective monopolies granted by TRIPS allowed pharmaceutical giants to suppress competition from alternative, low-cost producers and to charge prices far above what was reasonable. This was done at the expense of many ordinary consumers who were too poor to afford treatment. Before the establishment of the TRIPS in 1994, countries were allowed more options to exclude sectors from patent rules in their national laws. Approximately 50 countries (both developed and developing) excluded pharmaceutical products from patenting. However, with the implementation of the TRIPS Agreement, member countries were no longer allowed to do this.

The Agreement did allow member countries to take compensatory measures to counter the effective monopolies of companies owning patents. Two of the most important measures were the issuance of compulsory licences, and allowing parallel imports. Since TRIPS did not limit the grounds on which compulsory licences could be given, a country should not be prevented from issuing compulsory licenses on other grounds that it may consider necessary to meet public health and other public interest objectives.

However, complained the NGOs, pressures had been put on many developing countries by governments and companies in some developed countries not to exercise their rights to compulsory licensing or parallel importation. Recent examples of harassment faced by developing countries include the case brought by 39 pharmaceutical companies against the South African government over its Medicines and Related Substances Control Amendment Act, and the dispute settlement case lodged by the USA against Brazil in the WTO in relation to its Industrial Property Law.

People everywhere, in developing and developed countries, are outraged at these kinds of pressures imposed on poor countries to prevent them from using the flexibility of TRIPS to improve the access of ordinary people, particularly the poorest, to medicines.

Growing public reaction to the “scandal of patents and high medicine prices” provides the background to the one-day Special Discussion on patents and access to medicines proposed by the African group and supported by many others, and to be held on 20 June.

The NGOs welcomed the decision to hold a special discussion and regarded it as an important opportunity for the urgent consideration and resolution of the negative impacts of the TRIPS Agreement on health and access to medicines. In agreeing to the Special Discussion, WTO member countries had taken the first step towards clarifying the role of intellectual property rights and interpreting the TRIPS Agreement in such a way that IPR property protection did not hinder access to vitally needed medicines.

The special discussion represented an opportunity to shift the balance of global patent rules in favour of public interest and the protection of public health.  In developing countries, the TRIPS Agreement has exacerbated conflicts between private corporate interests, and the public interest including public health.  The controversy over access to medicines had highlighted just one aspect of the imbalances within the TRIPS Agreement, which was too heavily tilted in favour of private rights holders and against the public interest.

The NGO statement said: “There is growing evidence of social and economic problems caused by the introduction and enforcement of stricter intellectual property rights, which developing countries are obliged to implement as part of their obligations under TRIPS. This has resulted in calls for a re-assessment of the Agreement itself.

“The key principle that should guide the discussions in the WTO is that access to essential and vitally-needed medicines is a fundamental human right. Poor people have the right to good health, and therefore to medicines for the treatment of poverty-related diseases. Protecting people’s health and saving their lives must take precedence over the strict protection of intellectual property and the very high profits which drug companies derive from this.  Governments need a permanent guarantee that they can put public health and the welfare of their citizens before patent rights, without having to face the kind of legal pressures or threat of trade sanctions experienced by South Africa and Brazil.”

In listing their seven points for action by the WTO now, the NGO signatories said they would use these recommendations as the yardstick to judge the decisions and actions taken by the WTO TRIPS Council and higher bodies of the WTO, and whether the process initiated by the Special Discussion on TRIPS and medicines has been a success or a failure. .

“People all over the world will be watching whether WTO member countries meet the challenge of tackling the global health crisis, and demonstrate their commitment and contribution to the prevention of further unnecessary deaths,” the NGOs said. “We also call on governments in developed countries not to be influenced by any attempts by multinational drug companies to block clarifications of, or changes to, the TRIPS Agreement which are needed to make medicines affordable to the poor.

“We also call on the governments of developing countries to stand firm in putting forward proposals that affirm and strengthen their rights under TRIPS (especially in relation to compulsory licensing and parallel importation).

Discussions on schemes such as ‘differential pricing’, or a global fund for AIDS, should not distract from, or be a substitute for, the need for action on patents and the TRIPS Agreement.” – SUNS4918

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

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